CELESTICA ANNOUNCES THIRD QUARTER 2026 FINANCIAL RESULTS
CELESTICA INC (CLS) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 FOR IMMEDIATE RELEASE (All amounts in U.S. dollars) October 26, 2026 CELESTICA ANNOUNCES THIRD QUARTER 2026 FINANCIAL RESULTS AND WILL HOLD 2026 INVESTOR AND ANALYST DAY Q3 2026 revenue and non-GAAP adjusted EPS* above the high end of our guidance ranges; 2027 outloo
How this was made
The 30-second read
Why it matters
The raised guidance signals strong demand for AI and data‑center infrastructure, likely prompting short‑term buying pressure.
Market read
The earnings beat and raised outlook position CLS as a beneficiary of the AI infrastructure supercycle, potentially lifting the broader tech hardware sector.
What to watch
capital expenditure of up to $2 B in 2027 could pressure free cash flow
Q3 2026 revenue and non-GAAP adjusted EPS above the high end of guidance; 2026 outlook increased and 2027 outlook calls for accelerating revenue growth and adjusted operating margin expansion.
Q3 revenue of $5.83 billion and adjusted EPS of $3.30 both exceeded the high ends of their guidance ranges, while revenue grew 83%, adjusted operating margin reached a new high of 8.5%, and the company increased its 2026 revenue and adjusted EPS outlook.
Actuals vs. the company’s prior outlook
from its previous release| Metric | Guided | Reported | Verdict |
|---|---|---|---|
| Q3 2026 revenue | $5.25 to $5.55 billion | $5.83 billion | above |
| Q3 2026 adjusted operating margin (non-GAAP) | 8.4% at the mid-point of revenue and adjusted EPS (non-GAAP) guidance ranges | 8.5% | above |
| Q3 2026 adjusted EPS (non-GAAP) | $2.88 to $3.08 | $3.30 | above |
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 revenueGAAP | $5.83B | – | 83% |
| Q3 2026 gross profitGAAP | $640.8M | – | – |
| Q3 2026 gross profit as a percentage of revenueGAAP | 11.0% | – | – |
| Q3 2026 adjusted gross profitnon-GAAP | $652.4M | – | – |
| Q3 2026 adjusted gross profit as a percentage of revenuenon-GAAP | 11.2% | – | – |
| Q3 2026 selling, general and administrative expensesGAAP | $118.2M | – | – |
| Q3 2026 research and developmentGAAP | $51.2M | – | – |
| Q3 2026 earnings from operationsGAAP | $460M | – | – |
| Q3 2026 GAAP earnings from operations as a percentage of revenueGAAP | 7.9% | – | – |
| Q3 2026 adjusted operating earningsnon-GAAP | $496.1M | – | – |
| Q3 2026 adjusted operating marginnon-GAAP | 8.5% | – | – |
| Q3 2026 net earningsGAAP | $397.2M | – | – |
| Q3 2026 adjusted net earningsnon-GAAP | $402.1M | – | – |
| Q3 2026 diluted EPSGAAP | $3.26 | – | – |
| Q3 2026 adjusted EPSnon-GAAP | $3.30 | – | 109% |
| Q3 2026 GAAP effective tax rateGAAP | 13% | – | – |
| Q3 2026 adjusted effective tax ratenon-GAAP | 18% | – | – |
| Q3 2026 cash provided by operating activitiesGAAP | $389.7M | – | – |
| Q3 2026 purchase of property, plant and equipment, net of sales proceedsGAAP | −$262.2M | – | – |
| Q3 2026 free cash flownon-GAAP | $127.5M | – | – |
| Q3 2026 GAAP ROICGAAP | 60.0% | – | – |
| Q3 2026 adjusted ROICnon-GAAP | 64.7% | – | – |
| First nine months of 2026 revenueGAAP | $14.58B | – | – |
| First nine months of 2026 gross profitGAAP | $1.66B | – | – |
| First nine months of 2026 gross profit as a percentage of revenueGAAP | 11.4% | – | – |
| First nine months of 2026 earnings from operationsGAAP | $1.19B | – | – |
| First nine months of 2026 GAAP earnings from operations as a percentage of revenueGAAP | 8.2% | – | – |
| First nine months of 2026 adjusted operating earningsnon-GAAP | $1.21B | – | – |
| First nine months of 2026 adjusted operating marginnon-GAAP | 8.3% | – | – |
| First nine months of 2026 net earningsGAAP | $978.3M | – | – |
| First nine months of 2026 diluted EPSGAAP | $8.30 | – | – |
| First nine months of 2026 adjusted EPSnon-GAAP | $8.03 | – | – |
| First nine months of 2026 cash provided by operating activitiesGAAP | $1.16B | – | – |
| First nine months of 2026 free cash flownon-GAAP | $412.5M | – | – |
| First nine months of 2026 adjusted ROICnon-GAAP | 56.7% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Connectivity & Cloud Solutions (CCS)Hardware Platform Solutions revenue of approximately $2.3 billion increased 70% compared to Q3 2025. | $4.87B | – | 102% |
| Advanced Technology Solutions (ATS)ATS segment margin was 6.6%, compared to 5.5% for Q3 2025. | $960M | – | 23% |
| Hardware Platform SolutionsReported within the CCS segment. | approximately $2.3 billion | – | 70% |
Q4 2026, 2026 annual outlook and 2027 annual outlook outlook
- RevenueQ4 2026: $6.275 to $6.575 billion
- Tax rateQ4 2026 adjusted effective tax rate (non-GAAP): approximately 20%; 2027 adjusted effective tax rate (non-GAAP): approximately 21%.
- NoteQ4 2026 adjusted operating margin (non-GAAP): 8.7% at the mid-point of revenue and adjusted EPS guidance ranges.
- NoteQ4 2026 adjusted EPS (non-GAAP): $3.37 to $3.57.
- NoteQ4 2026 guidance excludes a negative $0.21 to $0.27 per share (pre-tax) aggregate impact on net earnings on a GAAP basis for employee stock-based compensation expense, amortization of intangible assets (excluding computer software), and restructuring charges.
- Note2026 annual revenue: $21.0 billion, previous outlook $20.5 billion.
- Note2026 annual adjusted EPS (non-GAAP): $11.55, previous outlook $11.30.
- Note2026 annual free cash flow (non-GAAP): $460 million, previous outlook $600 million.
- Note2026 annual adjusted operating margin (non-GAAP): 8.4%, unchanged.
- Note2027 annual revenue: $40.0 billion.
- Note2027 annual adjusted EPS (non-GAAP): $21.50.
- Note2027 annual adjusted operating margin (non-GAAP): 9.0%.
- Note2027 capital expenditures: between $1.5 billion and $2.0 billion.
- Note2027 outlook anticipates revenue growth of 90%.
Capital returns
- Completed the previously announced public offering for aggregate gross proceeds of $3.45 billion.
- Proceeds from issuance of capital stock under public offering, net of issuance costs, were $3,391.3 million for the first nine months of 2026.
- Repurchase of capital stock for cancellation was $(22.6) million for the first nine months of 2026.
- Purchase of treasury stock for SBC plans was $(37.6) million for the first nine months of 2026.
- Celestica intends to file a notice of intention with the TSX to commence a new NCIB in Q4 2026 after its current NCIB expires on November 2, 2026.
- If accepted by the TSX, Celestica expects to be permitted to repurchase for cancellation up to 2.5% of the public float during the twelve months following acceptance.
What drove it
- Revenue exceeded the high end of Q3 guidance due to higher than anticipated customer demand and strong operational execution.
- Stronger than anticipated operating leverage drove adjusted operating margin above the midpoint of the revenue and adjusted EPS guidance ranges.
- The company cited favorable profit mix and a discrete tax benefit for the 18% Q3 adjusted effective tax rate, below its approximately 20% anticipated estimate.
- Management described the demand environment as continuing to strengthen and very robust, supporting its 2027 revenue outlook.
- The 2026 revenue and adjusted EPS outlook increase was driven by strong Q3 results and expected demand improvements for Q4 2026.
Concerns
- Q3 2026 GAAP earnings from operations as a percentage of revenue was 7.9%, compared to 10.2% for Q3 2025.
- Q3 2026 GAAP gross profit as a percentage of revenue was 11.0%, compared to 13.0% for Q3 2025.
- The 2026 free cash flow outlook was reduced to $460 million from $600 million, primarily due to targeted working capital investments to support accelerating growth in 2027.
- Q3 inventories increased to $4,509.7 million at September 30, 2026 from $2,188.0 million at December 31, 2025.
- Q3 operating cash flow included $(1,108.0) million of inventory changes and $(424.9) million of accounts receivable changes.
What to watch
- Q4 2026 revenue guidance of $6.275 to $6.575 billion.
- Q4 2026 adjusted operating margin guidance of 8.7% at the midpoint of the revenue and adjusted EPS guidance ranges.
- Delivery against the 2026 annual outlook of $21.0 billion of revenue, $11.55 of adjusted EPS, 8.4% adjusted operating margin and $460 million of free cash flow.
- Execution against the 2027 outlook for $40.0 billion of revenue, 9.0% adjusted operating margin, $21.50 of adjusted EPS and capital expenditures between $1.5 billion and $2.0 billion.
- Working capital investment and capital expenditure requirements associated with anticipated growth in 2027 and customer demand forecasts for 2028.
- TSX acceptance and implementation of the proposed new NCIB.
Balance sheet and cash flow
- Cash and cash equivalents at September 30, 2026 were $3,961.3 million, compared to $595.6 million at December 31, 2025.
- Accounts receivable, net at September 30, 2026 were $3,763.1 million, compared to $2,638.1 million at December 31, 2025.
- Inventories at September 30, 2026 were $4,509.7 million, compared to $2,188.0 million at December 31, 2025.
- Current portion of borrowings under credit facility and finance lease obligations at September 30, 2026 was $27.3 million.
- Long-term portion of borrowings under credit facility and finance lease obligations at September 30, 2026 was $791.5 million.
- Q3 2026 net cash provided by operating activities was $389.7 million.
- Q3 2026 purchase of property, plant and equipment was $(274.1) million and proceeds from sale of assets were $11.9 million.
- Q3 2026 free cash flow (non-GAAP) was $127.5 million.
- First nine months of 2026 net cash provided by operating activities was $1,156.9 million.
- First nine months of 2026 purchase of property, plant and equipment was $(767.4) million and proceeds from sale of assets were $23.0 million.
- First nine months of 2026 free cash flow (non-GAAP) was $412.5 million.
Analysis
Celestica reported a strong Q3 2026, with revenue of $5.83 billion, up 83% from $3.19 billion in Q3 2025. Revenue exceeded the high end of the company’s $5.25 to $5.55 billion guidance range, which management attributed to higher than anticipated customer demand and strong operational execution. CCS revenue of $4.87 billion rose 102%, while ATS revenue of $0.96 billion increased 23%. Hardware Platform Solutions revenue was approximately $2.3 billion, up 70% from Q3 2025.
Profitability was mixed on a GAAP basis but improved materially on the company’s adjusted measure. GAAP gross profit margin was 11.0%, compared with 13.0% in Q3 2025, and GAAP operating margin was 7.9%, compared with 10.2%. Adjusted operating margin rose to 8.5% from 7.6%, reached a new high for the company and exceeded the 8.4% midpoint embedded in prior guidance. Management cited stronger than anticipated operating leverage, alongside higher revenue, as the driver of the adjusted result.
Q3 GAAP net earnings were $397.2 million and diluted EPS was $3.26, compared with $267.8 million and $2.31, respectively, in Q3 2025. Adjusted net earnings were $402.1 million and adjusted EPS was $3.30, compared with $183.1 million and $1.58. The adjusted effective tax rate was 18%, below the approximately 20% anticipated estimate due primarily to favorable profit mix and a discrete tax benefit. GAAP EPS included a negative $0.03 pre-tax impact from the total return swap agreement.
Cash generation remained positive but expansion required substantial working capital and investment. Q3 operating cash flow was $389.7 million and free cash flow was $127.5 million, while purchases of property, plant and equipment were $(274.1) million. Inventory changes used $(1,108.0) million of cash and accounts receivable changes used $(424.9) million. The company reduced its 2026 free cash flow outlook to $460 million from $600 million, specifically citing targeted working capital investments to support accelerating 2027 growth. Cash and cash equivalents were $3,961.3 million at September 30, 2026, following the public offering that generated $3,391.3 million of net proceeds in the first nine months.
The guide is notably higher for revenue and earnings. Celestica raised its 2026 revenue outlook to $21.0 billion from $20.5 billion and its adjusted EPS outlook to $11.55 from $11.30, while retaining its 8.4% adjusted operating margin outlook. For Q4, the company guided to $6.275 to $6.575 billion of revenue, 8.7% adjusted operating margin at the midpoint and $3.37 to $3.57 of adjusted EPS. Its initial 2027 outlook calls for $40.0 billion of revenue, 9.0% adjusted operating margin, $21.50 of adjusted EPS and capital expenditures between $1.5 billion and $2.0 billion, supported by management’s statement that customer demand forecasts for 2028 are meaningfully higher than the 2027 revenue outlook.
Management, verbatim
Celestica’s strong momentum continued in the third quarter, achieving revenue of $5.83 billion and adjusted EPS (non-GAAP)* of $3.30, up 83% and 109%, respectively.
Rob Mionis, Chair of the Board and CEO of Celestica
Our adjusted operating margin (non-GAAP)* of 8.5% represents another new high for the company, demonstrating the strength of our operational execution.
Rob Mionis, Chair of the Board and CEO of Celestica
Celestica is well-positioned to continue to support leading hyperscalers and frontier AI labs through the ongoing AI infrastructure supercycle. The demand environment continues to be very robust, supporting our 2027 revenue outlook, with customer demand forecasts meaningfully higher for 2028.
Rob Mionis, Chair of the Board and CEO of Celestica
Not in the filing
stated, not guessed- Dividend amount and dividend policy were not reported.
- Q3 2026 segment income for CCS and ATS was not reported in the press release.
- Q3 2026 revenue, earnings and cash-flow sequential changes were not reported.
- Forward GAAP revenue-to-GAAP earnings reconciliations for non-GAAP guidance were not provided because the company stated it could not provide such reconciliations without unreasonable effort.
- Forward gross-margin guidance and operating-expense guidance were not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Celestica Inc. (NYSE: CLS) released its Q3 2026 earnings via an SEC Form 8‑K, highlighting record revenue growth and an upward revision to its 2026 outlook.
Ticker impact
raised guidance after reporting Q3 2026 results with revenue of $5.83 B and adjusted EPS of $3.30
likely upward pressure as investors price in the raised guidance
Revenue jumped 83% YoY and adjusted EPS more than doubled, prompting management to increase the 2026 revenue and EPS outlook, which typically drives buying interest.
Market effects
reinforces bullish outlook for data center and AI infrastructure providers
supports Canadian tech sector sentiment
adds to broader AI‑related growth narrative
Counterpoint
some investors may question sustainability of 90% revenue growth into 2027
Key entities
- companyCelestica Inc.
Global provider of data‑center infrastructure and advanced technology solutions
