Celestica Inc. CLS used its second-quarter 2026 earnings call to sharpen the focus on accelerating AI infrastructure demand, stronger multi-year customer visibility and a growth rate in 2027 that management expects to exceed this year’s already elevated pace.

The key message was not simply that quarterly results topped expectations. Management emphasized that expanding networking, AI compute and custom rack programs are giving the company greater confidence in its capacity plans, margin trajectory and longer-term revenue outlook.

CLS Raises the Bar for 2026

Chief executive officer Robert Mionis said that stronger first-half execution, improving component supply and firmer second-half customer forecasts supported another increase to Celestica’s annual outlook.

The company reported adjusted EPS of $2.54, beating the Zacks Consensus Estimate of $2.29. Revenues were $4.7 billion, surpassing the consensus estimate of $4.35 billion.

The company expects 2026 revenues of $20.5 billion, up from the prior mentioned $19 billion. Adjusted earnings are projected at $11.30 per share compared with the previous $10.15 target, whereas the adjusted operating margin is expected to reach 8.4%.

The free cash flow guidance also increased to $600 million from $500 million. Management maintained its planned capital expenditure of $1 billion, reflecting continued investment in production capacity for awarded and ramping programs.

Celestica, Inc. Price, Consensus and EPS Surprise

Celestica, Inc. Price, Consensus and EPS Surprise

Celestica, Inc. price-consensus-eps-surprise-chart | Celestica, Inc. Quote

Celestica Sees Growth Accelerating in 2027

Mionis said that Celestica expects its 2027 revenue growth rate to exceed the 65% increase anticipated for 2026. Adjusted earnings growth is also expected to outpace revenue growth as the operating margin expands.

Management tied that outlook to higher demand for 800G networking, the rollout of 1.6-terabit switching, and multiple AI and machine-learning compute programs. Celestica has 10 active 1.6T programs, with volume expected to build in the second half of 2026 and accelerate in 2027.

Chief financial officer Mandeep Chawla added that customer capacity discussions now extend into 2028 and, in some cases, 2029. Long component lead times have prompted customers to solidify forecasts and place material orders earlier, increasing management’s visibility.

CLS Expands AI Systems Opportunity

Celestica disclosed that it would begin initial deliveries of custom racks for OpenAI later in 2026. The company will work with OpenAI and Broadcom on a multi-generational accelerator roadmap, with mass production of the Jalapeño platform planned for 2027.

Mionis characterized the OpenAI opportunity as multi-billion-dollar in scope across 2027 and 2028. He also described the AMD Helios scale-up platform as a multi-billion-dollar pipeline for 2027.

Celestica serves as the design and manufacturing partner for the Helios scale-up networking switch. Samples are scheduled for late 2026, with the production ramp beginning in the first half of 2027.

Celestica Leans on HPS & Operating Leverage

Chawla said that Hardware Platform Solutions, or HPS, should remain an important margin driver because Celestica contributes design expertise and proprietary know-how to many switching programs.

HPS revenues rose 58% to $1.9 billion in the quarter and represented 41% of the total revenues. Management expects networking growth and a higher mix of HPS content to support further operating margin expansion.

Celestica also expects productivity gains from high factory utilization and disciplined operating-expense growth. Chawla said that the gross margin should remain near the mid-11% range through 2026, while operating profit expansion remains the clearer priority for 2027.

CLS Addresses Supply & Execution Risks

Analysts repeatedly pressed management on whether component shortages could constrain the raised outlook. Mionis acknowledged that AI infrastructure demand continues to exceed global component supply but said that Celestica has incorporated those limits into its forecasts.

Customers have placed non-cancelable, non-refundable orders for long-lead silicon, while Celestica has secured supply agreements for constrained items such as memory and printed wiring boards.

Management also said that it has sufficient production capacity for its projected 2026 and 2027 demand. The more significant limitation remains material availability, meaning additional supply could create revenue opportunity.

Celestica’s Priorities Remain Expansion & Execution

Management’s tone was confident but centered on execution rather than unrestricted demand. Capacity expansion, component procurement and the transition from product design to scaled manufacturing remain central priorities.

Celestica is investing across Thailand, Japan and the United States, including additional capacity in Texas. Capital allocation will remain focused on business reinvestment, with share repurchases treated opportunistically.

Zacks Signals Remain Favorable but Mixed by Style

CLS currently sports a Zacks Rank #1 (Strong Buy), indicating a favorable near-term earnings-estimate revision profile. Its Growth Score and VGM Score of B also place the shares in the stronger two grades for those measures. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Value Score and Momentum Score of C are more neutral. Zacks research emphasizes that Style Scores work best alongside a top Zacks Rank, particularly when the relevant individual score or VGM Score is A or B. The Zacks Rank can change as analysts revise estimates following the newly reported results.

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Celestica, Inc. (CLS): Free Stock Analysis Report

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