Tech

Celestica Forecasts $40 Billion in 2027 Revenue as AI Data Center Demand Lifts Q3 Sales 83%

Celestica's Q3 revenue rose 83% to $5.83 billion, it raised its 2026 outlook to $21.0 billion and set a 2027 revenue target of $40.0 billion; shares jumped about 17% after hours.

Oct 27, 2026 - 07:16

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Celestica, the Toronto-based maker of data center hardware, reported third-quarter results after the market close on Monday, October 26, 2026, that exceeded the top of its own guidance ranges, raised its full-year outlook and issued a first forecast for 2027 that calls for revenue to nearly double. Revenue for the quarter ended September 30 rose 83% to $5.83 billion from $3.19 billion a year earlier, the company said.

Shares of Celestica, which trade on the New York Stock Exchange and the Toronto Stock Exchange under the ticker CLS, jumped about 17% to $288.07 in after-hours trading, MarketWatch reported. The stock had closed down 5% at $246.65 in the regular session and was down 17% for the year before the report.

Third-quarter results

Adjusted earnings per share, a non-GAAP measure, more than doubled to $3.30 from $1.58, above the company's guidance range of $2.88 to $3.08. GAAP earnings were $3.26 per share, compared with $2.31 a year earlier, on net earnings of $397.2 million. Analysts had expected adjusted earnings of $2.99 per share on revenue of $5.49 billion, according to MarketWatch.

The adjusted operating margin reached 8.5%, a record for the company, compared with 7.6% a year earlier. Celestica had guided to revenue of $5.25 billion to $5.55 billion and said it beat that range because of higher-than-anticipated customer demand and strong operational execution.

Revenue in the Connectivity & Cloud Solutions segment, which serves data center customers, more than doubled, rising 102% to $4.87 billion, with segment margin of 8.9% versus 8.3% a year earlier.
Hardware Platform Solutions revenue rose 70% to about $2.3 billion.
The Advanced Technology Solutions segment, which includes aerospace and defense, industrial, health technology and capital equipment, grew revenue 23% to $0.96 billion, with margin improving to 6.6% from 5.5%.

During the quarter, Celestica completed a public offering with aggregate gross proceeds of $3.45 billion. Cash and cash equivalents stood at $3.96 billion at September 30, compared with $595.6 million at the end of 2025, according to the company's balance sheet.

Outlook for 2026 and 2027

Celestica raised its 2026 revenue outlook to $21.0 billion from $20.5 billion and lifted its adjusted EPS forecast to $11.55 from $11.30, representing growth of 69% and 91%, respectively. It cut its 2026 free cash flow outlook to $460 million from $600 million, citing targeted working-capital investments to support accelerating growth in 2027. Its adjusted operating margin outlook of 8.4% for the year was unchanged.

For the fourth quarter, the company guided to revenue of $6.275 billion to $6.575 billion and adjusted EPS of $3.37 to $3.57. Analysts had forecast fourth-quarter adjusted EPS of $3.51 on revenue of $6.44 billion, MarketWatch said.

For 2027, Celestica forecast:

Revenue of $40.0 billion, up 90%
Adjusted EPS of $21.50
A record adjusted operating margin of 9.0%
Capital expenditures of $1.5 billion to $2.0 billion

Analysts had expected 2027 revenue of $36.07 billion and adjusted EPS of $19.70, according to MarketWatch. The company said customer demand forecasts for 2028 are "meaningfully higher" than its 2027 revenue outlook.

"Celestica is well-positioned to continue to support leading hyperscalers and frontier AI labs through the ongoing AI infrastructure supercycle," Chair and Chief Executive Rob Mionis said. "The demand environment continues to be very robust, supporting our 2027 revenue outlook, with customer demand forecasts meaningfully higher for 2028."

Cash flow and buyback plans

The rapid expansion is absorbing capital. In the first nine months of 2026, Celestica's inventories grew by $2.32 billion and accounts receivable by $1.13 billion, while purchases of property, plant and equipment totaled $767.4 million, up from $106.5 million a year earlier, according to its cash flow statement. Third-quarter free cash flow was $127.5 million.

The company also said it intends to file a notice with the Toronto Stock Exchange to start a new normal course issuer bid in the fourth quarter, after its current program expires on November 2, 2026. If accepted, the bid would allow it to repurchase up to 2.5% of its public float over the following 12 months.

Investor day

Celestica scheduled its third-quarter conference call and 2026 Investor and Analyst Day for Tuesday, October 27, starting at 8:00 a.m. ET. The report was among the notable after-hours movers heading into Tuesday's session, alongside Whirlpool, which fell after reporting third-quarter results, Benzinga reported.