Celestica (CLS) Q4 2024 earnings summary

Executive summary

• Full year 2024 revenue reached $9.65 billion, up 21% year-over-year, with Q4 2024 revenue at $2.55 billion, up 19% year-over-year; adjusted EPS for Q4 was $1.11, the highest to date.

• GAAP EPS for 2024 was $3.61, up from $2.03 in 2023; adjusted EPS was $3.88, up 58% year-over-year.

• Free cash flow for 2024 was $306 million, up 50% year-over-year, exceeding outlook.

• Major new AI-optimized networking and rack solution wins with hyperscaler and digital native customers, ramping in 2026.

• Transitioned from IFRS to US GAAP reporting in 2024, with no material impact on results.

Financial highlights

• Q4 2024 adjusted operating margin was 6.8%, up from 6.0% in Q4 2023; Q4 adjusted gross margin was 11.0%.

• Q4 2024 GAAP earnings from operations were $202.6 million (8.0% margin), up from $109.2 million (5.1%) in Q4 2023.

• Q4 2024 adjusted ROIC was 29.1%, up from 23.6% in Q4 2023.

• Inventory reduced to $1.76 billion, down $344 million year-over-year; inventory turns improved to 5.0x.

• Ended Q4 with $423 million in cash and $1.2 billion in total liquidity.

Outlook and guidance

• 2025 revenue outlook raised to $10.7 billion (11% growth), adjusted EPS to $4.75 (22% growth), and free cash flow to $350 million.

• Q1 2025 revenue guidance: $2.475–$2.625 billion; adjusted EPS: $1.06–$1.16.

• Non-GAAP operating margin outlook for 2025 is 6.9%; adjusted effective tax rate expected at 19%.

• ATS segment revenue expected to be flat in 2025; CCS segment to see mid-double-digit growth, especially in communications.

• Enterprise end market expected to recover in H2 2025, supported by AI/ML compute program ramps.