Celestica (CLS) Q3 & Investor and Analyst Day 2025 earnings summary

Executive summary

• Q3 2025 revenue reached $3.194 billion, up 28% year-over-year, with adjusted EPS of $1.58, up 52%, and GAAP EPS of $2.31, up 208% year-over-year, both exceeding guidance.

• GAAP earnings from operations margin rose to 10.2% from 5.5% in Q3 2024; adjusted operating margin hit a record 7.6%.

• Strong demand in Communications and CCS, especially in data center networking and AI infrastructure, drove outperformance and led to raised annual outlooks for 2025 and 2026.

• HPS business revenue grew 79% to $1.4B, fueled by 800G switch program ramps for hyperscaler customers.

• Strategic investments in R&D, design engineering, and global capacity underpin growth, with major expansions and a robust multi-year outlook in AI data center infrastructure.

Financial highlights

• Q3 2025 gross margin was 13.0% (up from 10.4% in Q3 2024); adjusted gross margin was 11.7%.

• Adjusted ROIC reached 37.5%, up from 29.0% in Q3 2024.

• Free cash flow for Q3 2025 was $89M; YTD free cash flow totaled $302M; operating cash flow for YTD 2025 was $408.9M.

• Inventory at quarter-end was $2.05B, up $226M year-over-year; inventory turns improved to 5.6x; cash cycle days stable at 65.

• Net debt stood at $728M with a gross debt to adjusted EBITDA leverage ratio of 0.8x and total liquidity of ~$1.1B.

Outlook and guidance

• Q4 2025 revenue guidance: $3.325B–$3.575B; adjusted EPS: $1.65–$1.81; adjusted operating margin: 7.6%.

• 2025 outlook raised: revenue $12.2B (26% growth), adjusted EPS $5.90 (52% growth), free cash flow $425M, non-GAAP operating margin 7.4%.

• 2026 outlook: revenue $16.0B (31% growth), CCS revenue up ~40%, non-GAAP operating margin 7.8%, adjusted EPS $8.20 (39% growth), free cash flow $500M.

• 2027 expected to see continued strong growth, with major program ramps and digital native customer contributions.

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