Celestica (CLS) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $2.5B, up 22% year-over-year, with adjusted EPS of $1.04, both above guidance ranges.

• Non-IFRS operating margin improved to 6.7%, up 100 bps year-over-year; adjusted free cash flow more than doubled to $74.5M.

• CCS segment drove growth with 42% revenue increase, while ATS segment declined 5% due to industrial softness.

• Record quarterly results achieved, with strong demand from hyperscaler customers and margin expansion in CCS.

• Full-year 2024 outlook raised: revenue expected at $9.6B (+21%) and adjusted EPS at $3.85 (+58%).

Financial highlights

• Q3 non-IFRS operating margin was 6.7%, up 100 bps year-over-year.

• Adjusted gross margin reached 10.7%, up 90 bps, and adjusted ROIC improved to 28.6%.

• Adjusted free cash flow for Q3 was $75M; YTD 2024 at $203M, up from $110M in 2023.

• Cash balance at quarter-end was $399M, with $1.1B in total liquidity.

• IFRS net earnings for Q3 2024 were $91.7M, with diluted EPS of $0.77.

Outlook and guidance

• Q4 2024 revenue expected between $2.425B–$2.575B, with adjusted EPS of $0.99–$1.09.

• Full-year 2024 guidance: revenue $9.6B, adjusted EPS $3.85, non-IFRS operating margin 6.5%, adjusted free cash flow $275M.

• 2025 outlook: revenue $10.4B (+8%), adjusted EPS $4.42 (+15%), non-IFRS operating margin 6.7%, adjusted free cash flow $325M.

• Q4 end market outlook: ATS flat, Communications up high-fifties percent, Enterprise down low double-digits year-over-year.