Abstract

Celestica will report second-quarter 2026 results on July 27, 2026, Post-Mkt, with the market looking for robust year-over-year growth led by AI-centric programs and management aiming to sustain momentum after strong first-quarter execution.

Market Forecast

Consensus points to second-quarter revenue of 4.37 billion US dollars, up 63.12% year over year, adjusted EPS of 2.30, up 85.31% year over year, and EBIT of 349.80 million US dollars, up 79.52% year over year; the company’s own guidance from the prior report framed revenue at 4.15–4.45 billion US dollars and adjusted EPS at 2.14–2.34. No formal gross-margin or net-margin forecast has been provided. Within the main business mix, delivery schedules for high-speed data-center hardware remain the headline driver, with the company signaling continued strength in orders and profitability across programs supporting AI buildouts. The most promising segment remains Connectivity and Cloud Solutions, which generated 3.24 billion US dollars last quarter; year-over-year growth at the segment level was not separately disclosed, but management underscored accelerating demand.

Last Quarter Review

Celestica delivered first-quarter 2026 revenue of 4.05 billion US dollars (up 52.80% year over year), a gross profit margin of 10.80%, GAAP net profit attributable to shareholders of 212.00 million US dollars with a net profit margin of 5.25%, and adjusted EPS of 2.16 (up 80.00% year over year). A notable financial highlight was the scale-up in profitability alongside growth, evidenced by higher operating leverage and outperformance versus consensus on both revenue and EPS. In business mix, Connectivity and Cloud Solutions contributed 3.24 billion US dollars and Advanced Technology Solutions 806.00 million US dollars; segment-specific year-over-year growth was not disclosed, although management reported improved profitability and accelerating demand from the CCS customer base.

Current Quarter Outlook

Connectivity and Cloud Solutions

This quarter’s revenue trajectory hinges on the continued rollout of high-speed switching and computing platforms for hyperscale-scale workloads and enterprise AI deployments within the Connectivity and Cloud Solutions portfolio. The prior quarter’s mix showed CCS at roughly four-fifths of the company’s total revenue, and current-quarter consensus implies further scaling of CCS-led programs as orders convert and production ramps stabilize. With management previously noting accelerating growth from CCS customers, the pace of deliveries, the breadth of program ramps across networking and server platforms, and the cadence of customer acceptance milestones will be decisive to sustaining the year-over-year growth embedded in consensus. Profitability sensitivity in CCS is likely to stem from three levers: product mix between networking (which tends to carry richer margins in the current cycle) and server builds; manufacturing learning-curve effects as next-gen products scale; and the timing of cost pass-through mechanisms in supply agreements. The prior quarter’s gross margin of 10.80% and net margin of 5.25% benefited from improved scale and program profitability; for this quarter, margin direction will depend on whether higher-value platforms and higher-yield production offset any transitional costs from new product introductions. Execution on volume linearity through quarter-end is another focus, as quarter-close shipments can influence mix and margins. Beyond the headline AI infrastructure, CCS breadth across networking, storage, compute, and rack-level integration offers multiple lanes of contribution. The key for this quarter is whether networking hardware ramps align with planned schedules and whether server and interconnect content per system holds as architectures standardize at higher bandwidths. The company’s operations track-record suggests an ability to align capacity with customer schedules; investors will still look for commentary on cycle times, lead-time normalization, and whether supply bottlenecks in certain components have eased in a way that supports both revenue capture and margin consistency.

AI Networking and Rack-Scale Programs

The company’s AI-focused networking and rack-scale programs remain the most promising engine for both near-term revenue growth and margin accretion, given the mix shift into higher-complexity platforms. Programmatically, orders linked to 800G switching, the initial transition to 1.6T-class networking, and rack-scale AI systems are pacing demand; the availability of the DS6000-series 1.6TbE switches to order underscores the breadth of next-gen design activity that can translate into scaling volumes through the back half of the year. Visibility into ramp schedules, customer acceptance, and run-rate conversion is likely to be a central topic on the call. Strategic partnerships around rack-scale AI are an additional swing factor. Collaboration with major chip and system ecosystems to accelerate deployment of high-performance network fabrics and integrated racks for AI training and inference clusters is a core contributor to the quarter’s setup. Investors will focus on whether the company can maintain its engineering and manufacturing velocity on these complex programs—especially with customer qualification gates and yield learning still ongoing for cutting-edge platforms. Commentary around liquid cooling integration, high-speed optical interconnect readiness, and the ability to support customer deployments at scale will frame how durable the growth runway looks beyond the quarter. Program complexity can influence both margins and working capital. As new platforms scale, early-phase inefficiencies and higher inventory positioning typically normalize as yields improve and procurement cycles stabilize. This quarter, indicators to watch include any sequential movement in operating margin and cash conversion as ramp-phase dynamics evolve. If execution keeps pace with customer schedules while minimizing expedite and rework, the quarter could see favorable drop-through, aligning with consensus EPS gains. If ramp frictions or parts tightness emerge, margins may track closer to the lower end of the company’s historical range until mix and yields improve.

Key Stock Price Swing Factors

Three factors are likely to matter most for the stock around the print: magnitude of top-line upside versus the 4.37 billion US dollars consensus, the direction of margin indicators, and the precision of second-half commentary tied to program ramps. Upside on revenue, paired with even modestly better margins, would support the consensus EPS improvement of 85.31% year over year. Conversely, any signal that mix, yield learning, or program timing will compress margins could temper EPS leverage even if revenue meets expectations. Second-half execution checkpoints will also guide sentiment: investors will want updates on the pacing of next-generation networking transitions, delivery schedules for complex rack-scale systems, and the stickiness of the current order book. The company’s prior guidance framework for second-quarter revenue of 4.15–4.45 billion US dollars and adjusted EPS of 2.14–2.34 sets a corridor; consensus sits near the upper half on revenue and above the midpoint on EPS, implying that the buy side may be leaning toward stronger mix and execution. Any commentary that reaffirms momentum into the third quarter—particularly on 1.6T ramps and incremental AI deployments—could be supportive for the multiple. Finally, operating discipline remains a focal point as the scale of programs expands. Investors will scrutinize how the company balances growth with working-capital management, capital deployment, and return metrics. Evidence of continued cost control, program-level profitability, and timely cash conversion would reinforce the margin and EPS trajectory underpinning current estimates. If the company shows it can sustain growth while protecting balance-sheet flexibility, that could improve conviction in the durability of earnings beyond this quarter.

Analyst Opinions

Bullish views currently dominate the published research we tracked over the last six months, with roughly 62.50% of the opinions in the positive camp based on rating distributions and target updates. Notably, RBC Capital has maintained a Buy rating with price targets cited at 400.00–440.00, highlighting confidence in execution and the durability of AI-driven demand within the product mix. Goldman Sachs has reiterated a Buy with a 475.00 target, emphasizing disciplined growth, expanding AI networking demand, and improving profitability as core reasons for upside versus current expectations. Barclays has also maintained a Buy with a 391.00 target, focusing on continued momentum in AI-centric programs and the company’s ability to convert a strong backlog into revenue and earnings. The bullish case centers on three pillars. First, the scale and cadence of AI-related orders, including high-speed switching and rack-scale systems, appear sufficient to sustain the year-over-year revenue growth implied by consensus. Second, the company’s demonstrated operating leverage in the prior quarter supports the notion that incremental revenue, especially from higher-complexity networking and integrated systems, can yield favorable EPS conversion if execution remains on track. Third, the breadth of customer programs suggests that the order pipeline is not dependent on a single platform or node, which can mitigate lumpiness across any one ramp. Bullish analysts also point to the second-quarter setup as a reasonable springboard for the back half. With consensus modeling 4.37 billion US dollars in revenue, 349.80 million US dollars in EBIT, and adjusted EPS of 2.30—all with high double-digit year-over-year growth—buy-rated research argues that the company retains multiple levers to meet or exceed these marks: mix shift to higher-value networking, continued cost discipline, and rapid learning-curve benefits as next-generation programs mature. They also highlight management’s track record of guiding within achievable ranges and then delivering execution that skews to the higher end as supply-chain and yield constraints ease through a ramp. In short, the majority institutional view anticipates that Celestica can deliver on consensus revenue and EPS, underpinned by AI-networking momentum and rack-scale deployments, while progressively protecting margins through mix and process improvements. Bulls expect that a clean beat-and-raise scenario remains possible if networking volumes and product mix trend favorably into quarter-end and if management provides constructive commentary on next-gen ramp timing and second-half visibility.