Celestica Sprints Ahead: Record Revenue, Margins, and Earnings Fuel Accelerating Growth
Celestica, a leading provider of design, manufacturing, testing, and supply chain solutions for the world's most innovative companies, has delivered yet another outstanding quarter. The company's second-quarter 2026 financial results are nothing short of impressive, with record revenue, margins, and earnings that have further accelerated its growth trajectory.
Rob Mionis, Chair of the Board and Chief Executive Officer, was thrilled to share these achievements on the recent conference call, stating, "As we cross the midyear mark, we continue to see sustained and accelerating momentum across our portfolio." He credited strong operational execution across both segments, alongside record demand from their CCS (Communication & Cloud Services) customers, for delivering revenue of $4.7 billion, exceeding the high end of their guidance ranges.
The adjusted operating margin of 8.2% is a new high for the company, reflecting improved operating leverage and solid profitability improvements in both segments. This achievement was also driven by record demand from CCS customers, with leading hyperscale customers aligned on multi-year capacity roadmaps. The rapid progression and technology upgrade cycles in networking and AI compute are driving broad demand, and Celestica is ramping significant new programs expected to launch in the second half of the year and into 2027.
Mandeep Chawla, Chief Financial Officer, provided further details on the company's Q2 results and Q3 guidance. Revenue was up 62% at $4.70 billion, with non-GAAP operating margin expanding by a robust 80 basis points to 8.2%. Adjusted earnings per share exceeded the high end of their guidance range at an increase of $1.15 or 83%, reaching $2.54.
Adjusted gross margin was 11.5%, down 20 basis points, largely due to mix in the CCS segment. The adjusted effective tax rate was 20%, while adjusted ROIC (Return on Invested Capital) reached approximately 55%, higher by 20 percentage points compared to the prior year.
In the company's CCS segment, revenue of $3.81 billion was up 84% compared to the prior year period, driven by very strong growth in both their communications and enterprise end markets. The communications end market revenue was up 62%, with continued strong demand in their 400G programs. Revenue in the enterprise end market was up by 167%, exceeding expectations due to the accelerated ramp of an AI ML compute program with a hyperscaler customer, supported by stronger than expected demand in storage programs.
Celestica's outstanding performance in Q2 2026 has further solidified its position as a leader in the industry. As the company continues to innovate and expand its portfolio, investors and stakeholders can expect sustained momentum and growth ahead."
