Celestica (CLS) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue reached $2.89 billion, up 21% year-over-year, with adjusted EPS of $1.39 (up 54%) and GAAP EPS of $1.82 (up 128%), both exceeding guidance, driven by strong demand in CCS, ATS, and hyperscaler networking.

• Gross margin improved to 12.8% from 10.6% year-over-year, with adjusted operating margin at 7.4% and GAAP operating margin at 9.4%.

• Free cash flow for Q2 was $120 million, with $214 million year-to-date, and total liquidity at $1 billion.

• Share repurchases totaled 0.6 million shares for $40 million in Q2 2025; $115 million YTD under NCIB.

• Notable developments include the acquisition of NCS Global, a new incentive plan, and a positive TRS fair value adjustment impacting GAAP EPS.

Financial highlights

• Adjusted gross margin was 11.7% for Q2 2025; GAAP gross margin was 12.8%.

• Adjusted operating margin reached 7.4%, up from 6.3% year-over-year.

• Adjusted ROIC for Q2 2025 was 35.5%, up from 26.6% a year ago; GAAP ROIC was 45.0%.

• Free cash flow for Q2 was $119.9 million; net cash from operating activities was $152.4 million.

• Cash balance at quarter-end was $314 million, with $1 billion in total liquidity.

Outlook and guidance

• Q3 2025 revenue guidance: $2.875–$3.125 billion; adjusted EPS: $1.37–$1.53.

• 2025 annual outlook raised: revenue $11.55 billion (20% growth), adjusted EPS $5.50 (42% growth), free cash flow $400 million.

• Guidance assumes no material changes to tariffs, trade restrictions, or macroeconomic trends.

• Communications revenue projected to increase in the low sixties percent year-over-year in Q3 2025; Enterprise expected to decrease mid-twenties percent.

• Capital spending for 2025 estimated at 1.5% to 2.0% of revenue.