Third-quarter revenue rose 83% to $5.83 billion, above the top of its own guidance. The company raised its full-year forecasts but cut its free-cash-flow target to fund growth.
Celestica had a good quarter. Its forecast for next year is what moved the stock.
The electronics manufacturer reported third-quarter revenue of $5.83 billion, up 83% from a year earlier and above the top of its $5.25 billion to $5.55 billion guidance range. Adjusted earnings were $3.30 a share, against guidance of $2.88 to $3.08, and an adjusted operating margin of 8.5% was a record.
Then it introduced a 2027 outlook: revenue of $40.0 billion, roughly 90% above its raised 2026 forecast of $21.0 billion, adjusted earnings of $21.50 a share and an adjusted operating margin of 9.0%. The company said customers' demand forecasts for 2028 are "meaningfully higher" than its 2027 outlook.
Celestica shares had fallen 5.23% to $246.40 in regular trading before the release. In extended trading they were about 16% higher, near $285.
Where the growth is
The Connectivity and Cloud Solutions segment drove the quarter. Its revenue doubled to $4.87 billion, with a margin of 8.9%. Advanced Technology Solutions, the rest of the business, grew 23%.
Chief Executive Rob Mionis cited "a demand environment that continues to strengthen" and described the company as positioned for the "AI infrastructure supercycle."
The one number that went down
Celestica raised its full-year revenue forecast to $21.0 billion from $20.5 billion and adjusted earnings to $11.55 a share from $11.30. It also cut its free-cash-flow forecast to $460 million from $600 million, saying it will invest working capital to prepare for 2027. Capital spending next year is expected at $1.5 billion to $2.0 billion.
That is the cost of the outlook. Doubling revenue in a year means buying components, building inventory and adding capacity before customers pay. The company has also completed a $3.45 billion equity offering.
Two readings
One reading is that Celestica has unusually clear visibility into AI hardware demand. It beat its own guidance by a wide margin, raised the year, and is putting a firm number on 2027 with customers already pointing higher for 2028.
The other is that a forecast to nearly double revenue rests on its customers keeping their data-center spending plans intact. Cash generation is being cut to fund growth, capital spending is rising sharply, and any pause in data-center budgets would land on a company that has already bought ahead.
What to watch
Tuesday's regular-session trading, customer concentration disclosures on the call, and capital-spending commentary from Microsoft and Alphabet on Wednesday and Amazon on Thursday.