Q1 2025 revenue and adjusted EPS* above the high end of our guidance ranges, Raising 2025 annual outlook
Celestica Inc. (TSX: CLS) (NYSE: CLS), a leader in design, manufacturing, hardware platform and supply chain solutions for the world’s most innovative companies, announced financial results for the quarter ended March 31, 2025 (Q1 2025).
Q1 2025 Highlights
- Revenue: $2.65 billion, increased 20% compared to $2.21 billion for first quarter of 2024 (Q1 2024).
- GAAP earnings from operations as a % of revenue: 4.9%, compared to 5.7% for Q1 2024.
- Adjusted operating margin (non-GAAP)*: 7.1%, compared to 5.9% for Q1 2024.
- GAAP earnings per share2 (EPS): $0.74, compared to $0.77 for Q1 2024.
- Adjusted EPS2 (non-GAAP)*: $1.20, compared to $0.83 for Q1 2024.
- Repurchased 0.6 million common shares for cancellation for $75.0 million in Q1 2025.
“Celestica delivered a strong first quarter in 2025, achieving revenue of $2.65 billion and non-GAAP adjusted EPS* of $1.20, both surpassing the high end of our guidance ranges. This strong performance was further highlighted by our highest ever adjusted operating margin* of 7.1%,” stated Rob Mionis, President and CEO.
“With these results, and a strengthening demand outlook from our CCS customers, we are raising our full-year 2025 outlook. We now expect revenue to reach $10.85 billion, an increase from our prior $10.7 billion, and anticipate non-GAAP adjusted EPS* of $5.00, up from our previous $4.75.”
1 Celestica has two operating and reportable segments: Advanced Technology Solutions (ATS) (comprised of our Aerospace and Defense (A&D), Industrial, HealthTech and Capital Equipment businesses), and Connectivity & Cloud Solutions (CCS) (consists of our Communications and Enterprise (servers and storage) end markets). Segment performance is evaluated based on segment revenue, segment income and segment margin (segment income as a percentage of segment revenue). See note 3 to our March 31, 2025 unaudited interim condensed consolidated financial statements (Q1 2025 Interim Financial Statements) for further detail.
* See Use of Non-GAAP Measures and Schedule 1 for, among other items, non-GAAP financial measures (and ratios) included in this press release, their definitions, uses, and a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures. Non-GAAP measures in this press release are denoted with an asterisk (*).
2 Per share information included in this press release is based on diluted shares outstanding unless otherwise noted.
Second Quarter of 2025 (Q2 2025) Guidance
| Q2 2025 Guidance | |
| Revenue (in billions) | $2.575 to $2.725 |
| Adjusted operating margin (non-GAAP)* | 7.2% at the mid-point of our revenue and non-GAAP adjusted EPS guidance ranges |
| Adjusted EPS (non-GAAP)*(1) | $1.17 to $1.27 |
(1) Q2 2025 guidance excludes a negative $0.23 to $0.29 per share (pre-tax) aggregate impact on net earnings on a GAAP basis for employee stock-based compensation (SBC) expense, amortization of intangible assets (excluding computer software), and restructuring charges. Q2 2025 guidance assumes a non-GAAP adjusted effective tax rate* of approximately 20%.
2025 Annual Outlook Update
- Revenue of $10.85 billion (previous outlook was $10.70 billion)
- Adjusted operating margin (non-GAAP)* of 7.2% (previous non-GAAP outlook was 6.9%)
- Adjusted EPS (non-GAAP)* of $5.00 (previous non-GAAP outlook was $4.75)
Our previous non-GAAP free cash flow* outlook of $350 million remains unchanged.
Our Q2 2025 Guidance and 2025 Annual Outlook Update assume no material changes to tariffs or trade restrictions compared to what are in effect as of April 24, 2025 and no material changes from current macroeconomic trends and uncertainties. Substantially all tariffs paid by Celestica are expected to be recovered from our customers, and are not expected to impact our non-GAAP adjusted EBIAT* or non-GAAP adjusted net earnings* dollars. These amounts are not anticipated to be material at this time.
* See Use of Non-GAAP Measures and Schedule 1. For our Q2 2025 Guidance and 2025 Annual Outlook Update, we present certain forward-looking non-GAAP metrics. A reconciliation of such forward-looking non-GAAP measures to the most directly comparable GAAP measures on a forward-looking basis has not been provided because the items that we exclude from GAAP to calculate the comparable non-GAAP measure are dependent on future events that are not able to be reliably predicted by management and are not part of our routine operating activities. We are unable to provide such a reconciliation without unreasonable effort due to the uncertainty and inherent difficulty in predicting the occurrence, the financial impact and the periods in which the adjustments may be recognized. The occurrence, timing and amount of any of the items excluded from GAAP to calculate non-GAAP could significantly impact our GAAP results.
Summary of Selected Q1 2025 Results
| Q1 2025 Actual | Q1 2025 Guidance(2) | ||
| Revenue (in billions) | $2.65 | $2.475 to $2.625 | |
| GAAP earnings from operations as a % of revenue | 4.9% | N/A | |
| GAAP EPS(1) | $0.74 | N/A | |
| Adjusted operating margin (non-GAAP)* | 7.1% | 6.8% at the mid-point of our revenue and non-GAAP adjusted EPS guidance ranges |
|
| Adjusted EPS (non-GAAP)* | $1.20 | $1.06 to $1.16 | |
CCS segment revenue: $1.84 billion, increased 28% compared to Q1 2024; CCS segment margin: 8.0% compared to 6.8% for Q1 2024. Hardware Platform Solutions revenue of approximately $1 billion increased 99% compared to Q1 2024.
ATS segment revenue: $0.81 billion, increased 5% compared to Q1 2024; ATS segment margin: 5.0% compared to 4.2% for Q1 2024.
(1) GAAP EPS of $0.74 for Q1 2025 included an aggregate charge of $0.33 (pre-tax) per share for employee SBC expense, amortization of intangible assets (excluding computer software), and restructuring charges (Q1 2024 — $0.31 per share (pre-tax)). This aggregate charge was within our Q1 2025 guidance range of between $0.29 to $0.35 per share for these items.
GAAP EPS for Q1 2025 also included a $0.16 per share negative impact attributable to a fair value loss (Q1 2024 — $0.26 per share positive impact attributable to a fair value gain) on our total return swap agreement. See note 9 to our Q1 2025 Interim Financial Statements.
(2) For Q1 2025, our revenue exceeded the high end of our guidance range due to higher than anticipated customer demand. Our non-GAAP adjusted operating margin for Q1 2025 exceeded the mid-point of our revenue and non-GAAP adjusted EPS guidance ranges and our Q1 2025 adjusted EPS exceeded the high end of our guidance range, primarily driven by unanticipated operating leverage in our CCS segment. Our GAAP effective tax rate for Q1 2025 was 24%. As anticipated, our adjusted effective tax rate (non-GAAP) for Q1 2025 was 20%.
Q1 2025 Financial Results
Management will host its Q1 2025 results conference call on April 25, 2025 at 8:00 am. Eastern Daylight Time (EDT). The webcast can be accessed at www.celestica.com.
