In This Article:
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Revenue: $2.65 billion, up 20% year-over-year.
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Adjusted EPS: $1.20, exceeding guidance and up 45% year-over-year.
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Adjusted Operating Margin: 7.1%, highest in company history.
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Adjusted Gross Margin: 11.0%, up 110 basis points.
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Adjusted ROIC: 31.5%, up 770 basis points.
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ATS Segment Revenue: $807 million, up 5% year-over-year.
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CCS Segment Revenue: $1.84 billion, up 28% year-over-year.
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HPS Revenue: Grew by 99% to over $1 billion, 39% of total revenue.
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Free Cash Flow: $94 million, up $26 million year-over-year.
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Cash Balance: $303 million at quarter-end.
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Gross Debt: $887 million.
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Net Debt: $584 million.
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Capital Expenditures: $37 million, 1.4% of revenue.
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Share Repurchases: $75 million during the quarter, $115 million year-to-date.
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Q2 2025 Revenue Guidance: $2.575 billion to $2.725 billion.
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Q2 2025 Adjusted EPS Guidance: $1.17 to $1.27.
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2025 Revenue Outlook: Raised to $10.85 billion, 12% growth year-over-year.
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2025 Adjusted EPS Outlook: Raised to $5 per share.
Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Celestica Inc (NYSE:CLS) reported strong Q1 2025 performance with revenues of $2.65 billion and adjusted EPS of $1.20, both exceeding guidance.
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The company's adjusted operating margin reached a record high of 7.1%, driven by strong demand in both CCS and ATS segments.
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CCS segment revenue increased by 28%, fueled by high demand for networking switches, particularly from hyperscaler customers.
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ATS segment revenue grew by 5%, surpassing expectations due to significant growth in the capital equipment business.
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Celestica Inc (NYSE:CLS) raised its annual revenue outlook to $10.85 billion and adjusted EPS to $5 per share, reflecting confidence in continued growth.
Negative Points
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The macro environment remains dynamic with trade policy uncertainties, posing potential risks to future performance.
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Enterprise end market revenue declined by 39% due to a technology transition in an AI, ML compute program with a hyperscaler customer.
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Despite strong demand, the company faces challenges in managing inventory levels, with a sequential increase in inventory balance.
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The ATS segment faces potential risks from macroeconomic slowdowns, which could impact future demand.
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Tariffs and trade restrictions remain a concern, although Celestica Inc (NYSE:CLS) expects to recover most tariffs from customers.
Q & A Highlights
Q: Can you share the level of visibility you have with your customers, particularly in the CCS segment, given the current uncertainty? A: Robert Mionis, President and CEO, explained that their hyperscaler customers provide a full-year outlook on CapEx plans, which is firmed up quarterly. This visibility has not changed due to the tariff environment, and they continue to ramp new programs and win share with hyperscaler customers. Mandeep Chawla, CFO, added that there has been no change in design work activity for programs planned for one to two years out, indicating strong resilience among hyperscalers.