Celestica Guided 2027 Revenue to $40 Billion. Its 2026 Cash Outlook Fell $140 Million.
Celestica’s adjusted EPS (non-GAAP) of $3.30 for the third quarter of 2026 came in above the high end of the company’s own guidance and 11.5% ahead of the $2.96 analyst consensus Yahoo Finance carried for the quarter. Revenue of $5.83 billion also cleared the top of guidance. Celestica reports in US dollars.
In the same release, out Monday October 26 after the close, the company gave a first 2027 outlook of $40.0 billion in revenue and cut its 2026 free cash flow outlook to $460 million from $600 million. Four sessions later the shares closed at C$369.32 on the TSX, 6.4% above their pre-release close and 22.4% below where they sat a year earlier.
The beat, against the company’s own range and against consensus
Two benchmarks apply here and they are different things. The stronger one is first-hand. Percentage changes in this piece are our arithmetic on the figures shown, except where noted as the company’s own.
| Measure (USD) | Q3 2026 actual | Q3 2026 company guidance |
|---|---|---|
| Revenue | $5.83bn | $5.25bn to $5.55bn |
| Adjusted EPS (non-GAAP) | $3.30 | $2.88 to $3.08 |
| Adjusted operating margin (non-GAAP) | 8.5% | 8.4% at the mid-point |
Celestica put the beat down to “higher than anticipated customer demand and strong operational execution”, with “stronger than anticipated operating leverage” carrying the margin past the mid-point, in its Q3 2026 results filed with the SEC. It also came in ahead of the consensus Yahoo Finance carried in each of the last four quarters, by 7.3%, 2.1%, 10.0% and 11.5% in turn, so this quarter’s margin is the widest of the four. That is a record, not a forecast.
Revenue grew 83%, and the reported earnings line understates it
Revenue of $5,829.7 million compared with $3,194.0 million a year earlier, up 83% on the company’s own statement, and adjusted EPS (non-GAAP) of $3.30 compared with $1.58, up 109%. Diluted weighted-average shares rose to 121.8 million from the 115.7 million to 116.9 million range held since the end of 2024, so that 109% came on a count about 5% higher and adjusted earnings in dollars grew faster still.
Celestica revenue by quarter in USD millions, from the company’s own earnings releases, Q4 2024 through Q3 2026.
Then the reported figures seem to disagree. GAAP diluted EPS was $3.26 against $2.31, up 41%, and the GAAP operating margin fell to 7.9% from 10.2% while the adjusted operating margin rose to 8.5% from 7.6% and set a company high. One thing explains both. Celestica holds a total return swap on its own shares, and the fair-value movements on it are GAAP income that the non-GAAP measures strip out: the swap added a positive $0.98 per share pre-tax in Q3 2025 and took away $0.03 in Q3 2026. That is also why adjusted EPS sits below reported diluted EPS in five of the last eight quarters. Last year’s reported earnings were flattered by a gain that did not recur, so on the operating business the 109% adjusted comparison is the cleaner of the two.
Reported diluted EPS and adjusted diluted EPS (non-GAAP) by quarter in US dollars, from the company’s own earnings releases, Q4 2024 through Q3 2026. The reported line is the jagged one because the total return swap runs through it. Q3 2026 is the first quarter to carry the August 7 share issuance.
Connectivity & Cloud Solutions did the work, growing 102% to $4,872.3 million at an 8.9% segment margin against 8.3%. Advanced Technology Solutions grew 23% to $957.4 million. CCS is 83.6% of total revenue by our arithmetic, and inside it Hardware Platform Solutions revenue was approximately $2.3 billion, up 70%. Few Canadian listings with an AI story attached have that mix, which is why Celestica sits first in our ranking of Canadian AI stocks, ranked on how much of the build-out reaches the income statement.
The 2027 outlook and the cash cut were one decision
Celestica raised its 2026 outlook to $21.0 billion of revenue from $20.5 billion and to $11.55 of adjusted EPS from $11.30, growth it puts at 69% and 91%. And it cut 2026 free cash flow to $460 million from $600 million.
Then it put a number on 2027 for the first time: revenue of $40.0 billion, which the company states is up 90%, adjusted EPS (non-GAAP) of $21.50, an adjusted operating margin of 9.0% it calls a record, and capital expenditures of $1.5 billion to $2.0 billion. Each of those is Celestica’s own forecast, published before fiscal 2027 has begun, and the company expressly declines to reconcile its forward non-GAAP measures to GAAP.
The consensus Yahoo Finance now carries for 2027 is $21.76 in adjusted EPS across seven analysts, up from $19.36 sixty days ago and $19.53 ninety days ago, on $40.19 billion of revenue against the company’s $40.0 billion. For 2026 it is $11.56 against the company’s $11.55. The Street has moved to within a rounding error of Celestica’s own numbers, and a consensus that restates guidance is no independent check on it.
What the market will pay for that forecast is visible on the NYSE, where Celestica trades in the currency it reports in. The US line closed at US$265.53 on October 30, about 23.0 times the company’s own 2026 adjusted EPS guide of $11.55 and about 12.4 times the $21.50 it guides for 2027, by our arithmetic. The whole gap between those two multiples is the forecast, and both rest on a forward measure the company declines to reconcile to GAAP. The TSX close of C$369.32 is the same stock in a different currency and does not belong over a US dollar earnings figure.
Evidence for the demand from outside the company landed two days before this piece. Our coverage of Alphabet’s third quarter, where cloud revenue rose 103% and capital spending more than doubled to $51.4 billion in a single quarter, also in US dollars, is the clearest available read on the budgets this outlook is built on.
The growth is being funded, not harvested
The income statement and the cash flow statement tell different stories this quarter, and the gap between them is the interesting part of the report. If that distinction is new, our guide to reading a company’s financial statements covers why earnings and cash are not the same number.
Start at the operating line, which moved the opposite way from the headline. Cash provided by operations over the nine months was $1,156.9 million against $408.9 million a year earlier, up 183%, against net earnings up 73.2%. Conversion improved sharply.
Most of that improvement has a name. Celestica sells receivables, and the program scaled by two orders of magnitude this year: $2,176.9 million sold across the nine months against $22.1 million a year earlier, with the facility raised in September 2026 to $1,000.0 million from $450.0 million. Proceeds from those sales sit in operating cash flow. So the $700.8 million of sold receivables outstanding at September 30 is cash already collected that would otherwise still be in receivables. Set the whole of that balance aside and underlying operating cash flow is roughly $456.1 million against $408.9 million, at least 11.5% more on 67% more revenue. That growth rate is a floor rather than a point, because the subtraction treats the balance carried in at December 31, 2025 as immaterial, which is our inference from the $22.1 million sold across the whole of the prior-year nine months. The compression sits at the operating line and appears only once the program is stripped out.
Free cash flow, which Celestica defines as operating cash flow less purchases of property and equipment net of surplus asset sale proceeds and reports on Schedule 1, grew more slowly again.
| Nine months (USD) | 2026 | 2025 | change |
|---|---|---|---|
| Revenue | $14,575.3M | $8,736.0M | +66.8% |
| Net earnings | $978.3M | $565.0M | +73.2% |
| Free cash flow, company stated | $412.5M | $302.4M | +36.4% |
The distance between operating cash flow up 183% and free cash flow up 36.4% is capital spending, and that is a step change rather than a business that stopped converting. Capital expenditures ran $767.4 million over the nine months against $106.5 million a year earlier, the gross figures the 10-Q’s own management discussion uses; Schedule 1 deducts them net of $23.0 million of asset sale proceeds, at $744.4 million, which is what reconciles to the free cash flow above. It is direct about where they go next: “We continue to anticipate capital spending for 2026 to be approximately $1 billion.” The 2027 range of $1.5 billion to $2.0 billion sits on top of that.
The working capital build, meanwhile, is being financed rather than drained. Payables, accrued and other current liabilities and income taxes payable supplied $3,590.5 million of cash over the nine months against $504.8 million, more than covering the $2,321.7 million absorbed by inventories and the $1,125.0 million absorbed by receivables. That is why net invested capital rose only about 20%, to $3,220.4 million at September 30 from $2,676.5 million, while revenue rose 83%. And the capital is earning: adjusted return on invested capital (non-GAAP) was 64.7% annualized on the quarter against 37.5% a year earlier, and on a GAAP basis 60.0% against 50.4%, all four annualized and all four the company’s own Schedule 1 figures.
Which leaves the outlook as the pressure point. The $460 million of 2026 free cash flow Celestica now guides is essentially the $458.3 million it reported for fiscal 2025, in a year it expects revenue to grow 69%. Our subtraction from that outlook implies roughly $47 million in the fourth quarter against $155.9 million a year earlier, on revenue guided at $6.275 billion to $6.575 billion versus $3,654.9 million. On the year after, the company does not leave it to inference: “We expect a net use of cash in 2027 driven by higher working capital requirements and capital expenditures to support our business growth.”
The balance sheet is built for that. Cash stood at $3,961.3 million at September 30 against $305.9 million a year earlier, after Celestica sold 11.1 million common shares on August 7 for $3.45 billion in gross proceeds, recorded at $3,391.3 million net of issuance costs. Management expects cash from operations, cash on hand “(including the net proceeds of our recent public offering)” and its credit facilities to fund planned capital investments and working capital requirements “without the need for additional capital”. So the next leg is being funded from the balance sheet rather than from operating cash. Celestica pays no dividend and says its board “does not anticipate paying any dividends at this time”, and the Normal Course Issuer Bid the TSX accepted on October 30 covers up to 3,132,127 shares, less than a third of the 11.1 million just issued.
Read alone, the cash outlook looks like strain. Set beside the returns it is buying, it looks like the opposite: a business earning 64.7% annualized on its invested capital has a better use for cash than handing it back. What that figure does not tell you is what the next $1.5 billion to $2.0 billion will earn, and the payables that financed this quarter’s working capital are part of why the capital base it is measured against rose only about 20%. So the open question is not whether Celestica can fund the ramp, but whether the new capital earns anything like what the existing base does.
The market’s answer took four sessions, and the last session was the chip complex
The shares went into the print badly, falling 18.98% across the three sessions from C$428.26 on October 21 to C$346.97 on October 26, the last close before the release, while the S&P/TSX Composite lost 1.05%.
The earnings call was the next morning, Tuesday October 27 at 8:00 a.m. ET, and Celestica’s 2026 Investor and Analyst Day was held the same day, so the first session able to price the quarter priced it together with the investor day. The stock rose 11.92% to C$388.33 and reached C$420.54 on October 28, 21.20% above the pre-release close. Then it gave most of it back, to C$396.12 on October 29 and C$369.32 on October 30, down 12.18% from the peak.
That last session has a sourced cause and it was not Celestica. Intel guided fourth-quarter revenue to $15.0 billion to $16.0 billion against $16.5 billion delivered in the third, and the chip complex sold off worldwide. The Philadelphia Semiconductor Index, which is quoted in US dollars, fell 7.2% to 10,688.80. Celestica’s NYSE line fell 6.09% in US dollars, slightly less than the semiconductor index; the TSX line fell 6.77% in Canadian dollars. The S&P/TSX Composite fell 1.74% to 35,620 that day, though our account of that session puts the largest single drag on gold rather than chips.
Net of all of it, the stock sits 6.44% above its pre-release close and 13.76% below where it traded on October 21. At C$369.32 it is 43.4% below its 52-week high of C$652.82, set June 2, 2026, and the twelve-month return is negative 22.4% from C$475.87 on October 30, 2025. Prices are Yahoo Finance daily closes, data as of the October 30, 2026 close.
What the next four quarters will settle
Celestica’s own forward-looking statements condition the 2027 outlook on “multiple large new programs” progressing “in line with expected timelines, specifications, qualification requirements and production schedules”. The concentration behind that is first-hand: the top ten customers were 85% of third-quarter revenue against 80% a year earlier, and three individual customers each exceeded 10% of the quarter, at 35%, 17% and 14%, against 30%, 15% and 14% in the same quarter last year. The company does not name them, and does not say they are the same three.
So there are two things to watch rather than predict. Whether the fourth quarter delivers free cash flow near the roughly $47 million the company’s own outlook implies. And whether a 90% revenue increase, guided for a year that begins in two months, arrives on the capital now being committed to it.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Every Celestica figure comes from the company’s own filings: the third quarter 2026 earnings release filed with the SEC on October 26, 2026 as Exhibit 99.1 to its Form 8-K under accession 0001030894-26-000049, the Form 10-Q for the quarter ended September 30, 2026 filed the same day under accession 0001030894-26-000050, the Form 8-K of October 30, 2026 under accession 0001030894-26-000054 carrying the TSX acceptance of a new normal course issuer bid, and the Forms 10-K for fiscal 2025 and fiscal 2024. Celestica is a US domestic filer despite being an Ontario corporation: it reports in US dollars while trading on the TSX in Canadian dollars, and every figure here is labelled. Adjusted EPS, adjusted operating margin and free cash flow are the company’s own non-GAAP measures on its own stated definitions, taken from its own reconciliation tables; free cash flow is operating cash flow less purchases of property, plant and equipment net of sale proceeds, which is how Celestica defines it. Analyst consensus is from Yahoo Finance and is labelled as consensus wherever it appears. Share prices and index levels are Yahoo Finance closes, data as of the October 30, 2026 close. Percentages and subtractions Celestica does not itself publish are labelled as our arithmetic.
