Celestica Inc.

Q2 revenue was $4.70 billion, up 62% year over year and above the high end of guidance. Adjusted EPS was $2.54, up $1.15 or 83% year over year. Adjusted operating margin was 8.2% and adjusted gross margin was 11.5%, down 20 basis points due mainly to CCS mix. Segment revenue was $3.81 billion for CCS, up 84%, and $888 million for ATS, up 8%; CCS margin was 8.7% and ATS margin was 6.3%. For Q3 2026, revenue guidance is $5.25 billion to $5.55 billion and adjusted EPS guidance is $2.88 to $3.08, with adjusted operating margin expected to be 8.4% at the midpoint and tax rate around 20%. Full-year 2026 guidance was raised to $20.5 billion revenue, $11.30 adjusted EPS, 8.4% adjusted operating margin, and $600 million of free cash flow, with approximately $1 billion of planned CapEx. Management said CCS revenue should grow about 85% in 2026 and ATS revenue about 10%.

Rob Mionis emphasized that Celestica is seeing sustained and accelerating momentum across the portfolio, with record demand in CCS and improving profitability in ATS. He highlighted strong demand from hyperscale customers, rapid networking and AI compute upgrade cycles, and significant new programs expected to launch in the second half of 2026 and into 2027. His tone was notably upbeat and confident, especially on 2027, where he said revenue growth should accelerate versus the already strong 2026 outlook.

Mandeep Chawla focused on execution, margin expansion, and disciplined capital allocation. He cited Q2 adjusted operating margin of 8.2%, adjusted gross margin of 11.5%, adjusted ROIC of approximately 55%, free cash flow of $147 million in Q2 and $285 million year-to-date, and cash of $536 million versus gross debt of $740 million. He also said inventory ended at $3.4 billion, cash cycle days improved to 47, and the company still expects about $1 billion of 2026 CapEx while maintaining about $2.3 billion of available liquidity.

Analysts focused on the sources of 2027 acceleration, gross margin durability, supply constraints, 1.6T and CPO ramp timing, and whether regional manufacturing demand is changing. Management said growth is being driven by scaling 800G, 1.6T switch programs, AI/ML compute ramps, and multibillion-dollar opportunities with OpenAI and AMD, while stressing that material supply remains the main constraint but is manageable and already reflected in guidance. On margins, management said gross margin should stay around the mid-11s through 2026 and that operating profit should keep expanding in 2027, with mix and operating leverage helping offset some lower-margin business.