Shares of Celestica (CLS +8.21%) surged 10% in Monday's after-hours trading, following the Canada-based electronic manufacturing services (EMS) provider's release of its third-quarter 2025 report.
The stock's gain is attributable to the quarter's revenue and earnings easily beating Wall Street's estimates, management raising its full-year 2025 guidance above the Street's estimates, and management issuing full-year 2026 guidance that came in higher on the top and bottom lines than analysts had been expecting.
Celestica is benefiting from the massive buildout of artificial intelligence (AI) data centers. Its customers include the top five hyperscalers, generally considered to be Amazon, Microsoft, Alphabet, Meta Platforms, and likely Apple. (Hyperscalers are companies that operate massive AI-focused data centers, often to support their cloud computing services.)
Image source: Getty Images.
Celestica's key numbers
| Metric | Q3 2024 | Q3 2025 | Change |
|---|---|---|---|
| Revenue | $2.50 billion | $3.19 billion | 28% |
| GAAP operating income | $138 million | $325 million | 136% |
| GAAP net income | $89.5 million | $267.8 million | 199% |
| Adjusted net income | $123.8 million | $183.1 million | 48% |
| GAAP earnings per share (EPS) | $0.75 | $2.31 | 208% |
| Adjusted EPS | $1.04 | $1.58 | 52% |
Wall Street was looking for Q3 adjusted earnings per share (EPS) of $1.49 on revenue of $3.04 billion. So, the company easily exceeded both expectations. Both results also surpassed the high end of the company's guidance ranges.
In Q3, Celestica generated cash of $126.2 million from running its operations, up 3% year over year. Free cash flow was $88.9 million, up from $76.8 million in the year-ago period.
NYSE: CLS
Key Data Points
Segment results
| Segment | Q3 2025 Revenue | YOY Change | Q3 2025 Adjusted Operating Margin | YOY Change |
|---|---|---|---|---|
| Connectivity & cloud solutions (CCS) | $2.41 billion | 43% | 8.3% | Up from 7.6% |
| Advanced technology solutions (ATS) | $0.78 billion | (4%) | 5.5% | Up from 4.9% |
| Total | $3.19 billion | 28% | 7.6% | Up from 6.8% |
Data source: Celestica. YOY = year over year.
Within CCS, hardware platform solutions revenue soared 79% year over year to $1.4 billion. This subsegment primarily includes servers and storage solutions for the enterprise market. It's a fast-growing business due to the booming global buildout of AI data centers.
The ATS segment includes the company's aerospace and defense, industrial, health tech, and capital equipment businesses.
What the CEO had to say
Here's part of what CEO Rob Mionis had to say in the earnings release:
Furthermore, we are announcing our 2026 annual outlook with revenue of $16.0 billion and non-GAAP adjusted EPS of $8.20, representing growth of 31% and 39% respectively. The demand outlook from our largest customers, who continue to make significant investments in AI data center infrastructure, remains strong, supporting our 2026 annual outlook with indications of these dynamics continuing into 2027. [Emphasis mine.]
Guidance
Management raised its full-year 2025 guidance and issued full-year 2026 guidance.
For 2025, management expects:
- Revenue of $12.2 billion, up from $11.55 billion. This outlook equates to annual growth of 26%.
- Adjusted EPS of $5.90, up from $5.50. This outlook equates to annual growth of 52%.
Going into the release, Wall Street had been expecting 2025 revenue and adjusted EPS of $11.7 billion and $5.62, respectively. So, Celestica's outlook beat both expectations.
For 2026, management expects:
- Revenue of $16.0 billion.
- Adjusted EPS of $8.20.
Going into the release, Wall Street had been expecting 2026 revenue and adjusted EPS of $14.1 billion and $7.22, respectively. So, Celestica's outlook breezed by both estimates.
I'll end with the same conclusion as in my September article highlighting Celestica stock: "In short, if you're a growth stock investor, Celestica stock is worth considering buying -- or at least putting on your watchlist."
