Key Highlights

  • CLS shares are trading up 12.56% to $277.62, against a prior close of $246.65.
  • Third-quarter revenue rose 83% to $5.83 billion, above the high end of the $5.25 billion to $5.55 billion guidance range.
  • Adjusted EPS was $3.30, up 109% from $1.58 and above the $2.88 to $3.08 guidance range.
  • The 2027 outlook calls for revenue of $40.0 billion and adjusted EPS of $21.50.
  • 2026 free cash flow guidance was cut to $460 million from $600 million.

Record Third Quarter Beats the Top End of Guidance

Celestica (NYSE:CLS) shares are trading up 12.56% to $277.62 after the company reported third-quarter results that topped its own guidance and issued its first 2027 outlook. Revenue rose 83% to $5.83 billion, and adjusted EPS of $3.30 was up 109% from a year earlier. Volume is more than twice average, and the rally follows a drop of roughly 32% in October.

Adjusted operating margin reached a record 8.5%, up from 7.6%, while GAAP operating margin fell to 7.9% from 10.2%.

Celestica, headquartered in Toronto, is a global provider of hardware platform and supply chain solutions. Its Connectivity & Cloud Solutions segment, which covers networking plus compute and storage products such as data center switches and servers for AI, cloud and hyperscaler customers, generates most of its revenue. The company is also collaborating with Advanced Micro Devices (NASDAQ:AMD) on the Helios rack-scale AI platform.

2027 Outlook of $40 Billion Sits Well Above Consensus

Management guided 2027 revenue to $40.0 billion, up 90%, with a record adjusted operating margin of 9.0% and adjusted EPS of $21.50. Consensus revenue sits near $35.7 billion. The company says customer demand forecasts for 2028 are meaningfully higher than its 2027 outlook, and 2027 capital expenditure is guided to $1.5 billion to $2.0 billion.

For 2026, revenue guidance rose to $21.0 billion from $20.5 billion, and adjusted EPS guidance rose to $11.55 from $11.30.

Segment Strength, Inventory Build and a Lower Free Cash Flow Outlook

Connectivity & Cloud Solutions revenue rose 102% to $4.87 billion with a segment margin of 8.9%, and hardware platform solutions revenue of about $2.3 billion increased 70%. Advanced Technology Solutions revenue rose 23% to $0.96 billion at a 6.6% margin.

Offsetting factors include a cut to 2026 free cash flow guidance to $460 million from $600 million, which the company attributed to working capital investments supporting 2027 growth. Inventories reached $4.51 billion at the end of September, versus $2.19 billion at year-end, and investors are weighing AI financing concerns.

Celestica completed a public offering with gross proceeds of $3.45 billion and ended September with $3.96 billion in cash. It also intends to launch a new share buyback of up to 2.5% of its public float after the current program expires on November 2. The stock has a market cap of $35.01 billion and a 52-week range of $244.51 to $474.03.

The State Street Technology Select Sector SPDR ETF is trading higher as AI-linked large-cap tech sentiment improves, with investors focused on Anthropic's IPO filing, major tech earnings due this week and fresh AI infrastructure announcements around holdings such as NVIDIA (NASDAQ:NVDA), AMD and Broadcom (NASDAQ:AVGO). The move follows a recent rotation out of AI infrastructure names, and fund flow data showing broad trims across the ETF's holdings do not appear to be the main driver.

Investor Day and Hyperscaler Earnings Test the 2027 Ramp

Celestica holds its 2026 Investor and Analyst Day today alongside the results call. Investors will watch how management supports the $40.0 billion 2027 target, how working capital and capital spending evolve, and what hyperscaler earnings later this week say about demand.