A Canadian electronics maker that designs and builds the servers, networking switches, and storage powering cloud data centers for the world's largest hyperscalers, plus regulated manufacturing for aerospace, industrial, health, and medical markets. Born in 1994 as IBM Canada's manufacturing arm in Toronto, it spun off and was bought by Onex before going public. Its name comes from the Latin "caelestis," meaning "of the sky" — fitting for a company that helps run the cloud.
Celestica's Q2 revenue rose 62% to $4.70B as hyperscaler AI demand accelerated, and net income rose 75% to $369M.
The hyperscaler AI buildout accelerated again. rose 62% to $4.70 billion and rose 75% to $369 million, driven by an 84% increase in the Connectivity & Cloud Solutions as data center networking demand and an AI/ML compute program ramp combined. The company is spending $1 billion this year to keep up.
Key takeaways
rose 62% to $4.70 billion, driven by an 84% increase in the Connectivity & Cloud Solutions (CCS) , which benefited from hyperscaler demand for data center networking and the ramp of an AI/ML compute program.
rose 75% to $368.8 million, and rose 74% to $3.17, as a $325.4 million increase in more than offset higher SG&A and a less favorable than the prior-year quarter.
declined 0.5 points to 12.3% from 12.8% a year ago, which management attributed to mix dynamics within the CCS business, even as rose by $206.5 million.
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue surged 62% to $4.70B driven by hyperscaler demand in CCS, with net earnings up 75% to $369M.
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Total Q2 2026 increased 62% to $4.70 billion, driven by an 84% surge in the Connectivity & Cloud Solutions (CCS) , particularly from data center networking and an AI/ML compute program ramp.
rose 170% to $410.9 million, and rose 23% to $147.1 million, as higher earnings and an increase in were partially offset by of $263.8 million in the quarter.
The Advanced Technology Solutions (ATS) margin improved to 6.3% from 5.3% a year ago, driven by a better product mix and , even as the segment's was flat .
The company amended its in April 2026, upsizing the revolving facility to $1.75 billion and extending maturities to 2031, with $1.74 billion available for future borrowings at quarter-end.
What changed
The Enterprise end market, which had been declining through 2025 as an AI/ML compute program transitioned, returned to growth in Q1 2026 and continued to ramp in Q2, contributing to the CCS 's 84% increase.
The CCS margin, flagged in prior quarters as a key watch item, was 8.7% in Q2 2026, up from 8.3% a year ago and 8.6% in Q1 2026, as from the hyperscaler ramp offset mix dynamics that pressured the company-wide .
The ATS margin reached 6.3%, extending the improvement to 6.0% in Q1 2026 and above the 5.3% level of Q2 2025, as the benefit of discontinuing a margin- Aerospace & Defense program and a more favorable mix continued to take hold.
for the first half of 2026 were $493.3 million, putting the company on track for the planned ~$1 billion in full-year capex, which management had flagged as a risk to and asset utilization if hyperscaler demand or customer roadmaps change.
What to watch
Whether the company-wide , which declined 0.5 points to 12.3% despite a 62% increase, stabilizes or continues to face pressure from the evolving mix of hyperscaler programs within CCS.
The pace and return on the ~$1 billion in 2026 , and whether the resulting asset base generates sufficient growth to avoid margin pressure or underutilized assets if customer roadmaps shift.
The quarterly direction and magnitude of TRS fair value adjustments, given the agreement's $1.3 million sensitivity to a $1 move in Celestica's share price and the $94.3 million unrealized gain at quarter-end.
Any financial impact from new or increased U.S. tariffs and export controls, which the company flagged as creating material uncertainty for customer demand, costs, and manufacturing transfers.
CCS expanded to 8.7% from 8.3% a year ago on , while ATS segment margin improved to 6.3% from 5.3% due to better product mix and operating leverage.
declined to 12.3% from 12.8% in Q2 2025, primarily due to mix dynamics within the CCS business, despite a $206.5 million increase in .
Net for 1H 2026 was $767.2 million, a significant increase from $282.7 million, driven by higher earnings and favorable changes, mainly an increase in .
for 1H 2026 were $493.3 million, primarily to support CCS growth, and the company anticipates full-year 2026 capex of approximately $1 billion.
The company amended its in April 2026, increasing the revolving credit facility to $1.75 billion and extending maturities to 2031, with $1.74 billion available for future borrowings at quarter-end.
Quantitative and Qualitative Disclosures About Market Risk
The company manages currency, equity, and interest rate risks through derivatives, with sensitivity figures provided for equity and interest rate exposures.
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Foreign currency forward and swap contracts hedge operating costs and cash flows, resulting in a net unrealized loss of $26.3 million at June 30, 2026.
A on 1.25 million common shares creates equity price risk, with a $1 share price decrease reducing the TRS value by $1.3 million.
The TRS fair value was an unrealized gain of $94.3 million at quarter-end, up from $7.2 million at year-end 2025.
Interest rate swaps partially hedge variable-rate Term Loan borrowings, with a net unrealized gain of $3.6 million at June 30, 2026.
A one-percentage-point rate increase would raise annual by $3.9 million including swaps, or $7.4 million without them.
The TRS also carries interest rate risk because its interest payments are based on a variable rate.
For information regarding our legal proceedings, see note 16 to our Q2 2026 Interim Financial Statements, and "Operating Results — Income taxes and tax contingencies" in Part I, Item 2 above for a description of the ongoing Romanian income and value-added tax matter and Thailand…
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For information regarding our legal proceedings, see note 16 to our Q2 2026 Interim Financial Statements, and "Operating Results — Income taxes and tax contingencies" in Part I, Item 2 above for a description of the ongoing Romanian income and value-added tax matter and Thailand tax matters, which are incorporated herein by reference.