Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 27, 2026 · Beat 7 of last 7 quarters
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Celestica's accelerating growth and raised guidance underscore the ongoing AI infrastructure buildout, with hyperscaler demand for networking and compute continuing to outpace supply. The new OpenAI partnership and AMD Helios engagement signal expanding rack-scale opportunities, which could drive further demand for advanced manufacturing capacity and components.
Celestica delivered Q2 revenue of $4.70 billion, up 62% YoY, and adjusted EPS of $2.54, up 83% YoY, both above the high end of guidance. CCS revenue grew 84% to $3.81 billion, driven by 62% growth in communications (800G switches) and 167% growth in enterprise (AI/ML compute). ATS revenue grew 8% to $888 million. Adjusted operating margin expanded 80 bps to 8.2%, with CCS margin at 8.7% and ATS margin at 6.3%. The company generated $147 million in free cash flow, with CapEx of $264 million. Three customers each accounted for 10%+ of revenue, at 32%, 17%, and 14%.
Management raised full-year 2026 revenue guidance to $20.5 billion (from $19 billion), representing 65% growth, and raised adjusted EPS guidance to $11.30 (from $10.15), implying 87% growth. They also raised the adjusted operating margin outlook to 8.4% (from 8.1%) and increased free cash flow guidance to $600 million (from $500 million). For 2027, they expect revenue growth to accelerate beyond the 65% expected in 2026, driven by continued 800G scaling, 1.6T ramps, and new AI compute programs. They also announced a new partnership with OpenAI and Broadcom for custom racks, with mass production planned in 2027. Management emphasized strong demand visibility, with capacity plans in place for 2027, but noted that component supply remains a constraint, with demand exceeding the revenue figures shared.
“We are once again raising our full year 2026 annual outlook driven by our strong first half performance and strengthening second half customer forecast supported by improved component supply.”
on FY2026 guidance raise
“Later this year, we expect to commence initial deliveries of custom racks for our digital native customer whom we are pleased to share is OpenAI.”
on OpenAI partnership
“The demand does exceed the revenue figures that we've been sharing.”
on Supply constraints
Could you talk about how much new programs (OpenAI, AMD, 1.6T CPO) are contributing to 2027 growth?
Rob Mionis highlighted scaling of 800G and 1.6T switch programs, continued 400G growth, next-gen AI/ML compute ramps, and new customer deployments with OpenAI and AMD, both multibillion-dollar opportunities in 2027. He noted the AMD Helios scale-up platform pipeline continues to grow.
How are supply constraints tracking, and are they still limiting guidance?
Rob Mionis said demand continues to outpace component supply, but they are appropriately hedged for 2026 and 2027. Mandeep Chawla added that capacity is in place, but materials are the constraint, and demand exceeds the revenue figures shared.
What changed most significantly to raise the 2027 growth outlook?
Rob Mionis cited significantly increased AI/ML compute demand for 2026 and 2027, growing demand for AMD next-gen racks, and dramatically increased 800G networking demand for 2027. Mandeep Chawla added that extended lead times (some >52 weeks) required solidifying demand outlook with orders now in place.