Q2 2026 Celestica Inc Earnings Call Transcript
Key Points
- Celestica Inc (CLS) reported a significant revenue increase of 62% year-over-year, reaching $4.7 billion, surpassing the high end of their guidance.
- The company achieved a record adjusted operating margin of 8.2%, indicating strong operational execution.
- Revenue in the CCS segment grew by 84%, driven by strong demand in communications and enterprise end markets.
- Celestica Inc (CLS) raised its full-year 2026 revenue outlook to $20.5 billion, representing a 65% growth, and increased its adjusted EPS outlook to $11.30.
- The company anticipates continued strong growth into 2027, driven by new program ramps and strong demand visibility, particularly in AI/ML compute and networking.
- Adjusted gross margin decreased by 20 basis points to 11.5%, primarily due to mix changes in the CCS segment.
- Inventory levels increased significantly, with a $1.5 billion rise compared to the prior year, driven by scaling to support growth in the CCS segment.
- The company faces ongoing supply chain constraints, particularly in AI data center infrastructure, which could limit growth potential.
- Capital expenditures increased to $264 million, representing 5.6% of revenue, compared to 1.1% in the prior year, indicating higher investment requirements.
- Despite strong performance, Celestica Inc (CLS) did not repurchase shares during the quarter, prioritizing reinvestment in business growth over shareholder returns.
Hello, everyone. Thank you for joining us, and welcome to the Celestica second-quarter 2026 financial results and conference call. After today's prepared remarks, we will host a question-and-answer session. (Operator Instructions)
I will now hand the conference over to Matthew Pallotta, Head of Investor Relations. Please go ahead.
Good morning, and thank you for joining us on Celestica's Q2 2026 financial results conference call. On the call today, we have Rob Mionis, Chair of the Board and Chief Executive Officer; and Mandeep Chawla, Chief Financial Officer.
Please note that during the course of this call, we will make forward-looking statements, including statements relating to the future performance of Celestica, our business outlook, guidance for the third quarter of 2026, our 2026 annual outlook, and anticipated trends in our industry and their anticipated impact on our business. These are based on management's current expectations, forecasts, and assumptions as of July 27.
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