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Celestica (NYSE:CLS) just dropped a monster Q1blowing past estimates and turning heads across the Street. Adjusted EPS came in at $1.20, up a massive 45% year over year, while revenue surged 20% to hit $2.649 billion. The real standout? Its Connectivity & Cloud Solutions business, where Communications revenue spiked 87% on the back of booming 400G and 800G hyperscaler programs. Adjusted operating margin reached a record 7.1%, showing this isn't just top-line growthit's high-quality, margin-rich execution.
Under the hood, the company's Advanced Technology Solutions segment held steady, with 5% growth and a 28% jump in segment income. Free cash flow clocked in at $93.6 million despite $75 million in buybacksproof the balance sheet is working just as hard as the income statement. Celestica ended the quarter with $900 million in liquidity and a slim adjusted debt leverage ratio of 1.1x. Management also dialed up full-year EPS guidance to $5.00, while reaffirming a 7.2% adjusted operating margin target. Translation: they're confident and they're not being shy about it.
Looking ahead, Q2 is set to keep the momentum alive. Celestica sees revenue landing between $2.575B and $2.725B, with adjusted EPS in the $1.17 to $1.27 range. Communications is expected to soar againup high-fifties year over yearwhile Enterprise should rebound in the back half thanks to next-gen AI/ML compute ramps and new customer wins. With AI, cloud, and hyperscaler tailwinds fully in play, Celestica is positioning itself not just as a supplier, but as a critical builder of the AI infrastructure economy.
This article first appeared on GuruFocus.