TLDR
- Celestica Q2 revenue climbed 62% to $4.70 billion, beating company guidance.
- CLS stock gained 4.25% before rising another 5.75% in overnight trading.
- Adjusted EPS reached $2.54 as operating margins expanded to record levels.
- Celestica raised 2026 revenue, earnings, margin, and free cash flow forecasts.
- Strong cloud infrastructure demand supports faster revenue growth expected in 2027.
Celestica Inc. (CLS) shares gained 4.25% to close at $318.24 before climbing 5.75% overnight to $336.53. The move followed stronger-than-expected second-quarter financial results and a higher full-year outlook. The company also projected faster growth in 2027 as demand for data center infrastructure continued to strengthen.
Revenue Growth Beats Guidance as Margins Expand
Celestica reported second-quarter revenue of $4.70 billion, representing a 62% increase from $2.89 billion one year earlier. The result exceeded the company’s guidance range of $4.15 billion to $4.45 billion. The stronger performance reflected higher customer demand and improved operational execution.
GAAP earnings from operations reached 9.8% of revenue, improving from 9.4% in the same quarter last year. Meanwhile, adjusted operating margin increased to 8.2% from 7.4% during the prior-year period. The company achieved another quarterly margin record through stronger execution and operating leverage.
GAAP earnings per share increased to $3.17 from $1.82 a year earlier. Adjusted earnings per share climbed to $2.54 from $1.39 during the same period. The adjusted result also exceeded the company’s guidance range of $2.14 to $2.34.
Data Center Business Drives Stronger Annual Outlook
Celestica raised its 2026 financial outlook following stronger first-half performance and improved customer forecasts. The company now expects full-year revenue of $20.5 billion instead of its previous $19.0 billion estimate. It also increased adjusted earnings per share guidance to $11.30 from $10.15.
The company raised its adjusted operating margin forecast to 8.4% from 8.1%. It lifted projected free cash flow to $600 million from the previous $500 million estimate. Management attributed the higher outlook to stronger customer demand and improved component availability.
Third-quarter guidance also exceeded earlier expectations. Celestica expects revenue between $5.25 billion and $5.55 billion during the quarter. It also projected adjusted earnings per share between $2.88 and $3.08 with an adjusted operating margin of 8.4% at the midpoint.
The company expects revenue growth in 2027 to exceed the projected 65% growth anticipated for 2026. It also expects adjusted earnings per share to increase faster than revenue. New customer programs and stronger long-term demand supported the updated forecast.
Segment Performance Reflects Broad-Based Expansion
The Connectivity and Cloud Solutions segment generated $3.81 billion in revenue during the quarter. That represented an 84% increase from the same period last year. Segment margin improved to 8.7% from 8.3%, while Hardware Platform Solutions revenue reached approximately $1.9 billion.
The Advanced Technology Solutions segment produced revenue of $890 million, increasing 8% year over year. Segment margin improved to 6.3% from 5.3% during the prior-year quarter. Growth continued across aerospace, defense, industrial, healthcare, and capital equipment operations.
Celestica stated that stronger demand, expanding visibility, and new program wins supported its longer-term expectations. The company also reported favorable operating leverage during the quarter. Those factors contributed to stronger profitability and higher financial guidance for the remainder of 2026.
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