Celestica (CLS) Q4 2024 earnings summary

Executive summary

• Full-year 2024 revenue reached $9.65 billion, up 21% year-over-year, with Q4 revenue of $2.55 billion, up 19% year-over-year, and adjusted EPS of $3.88, up 58%.

• Q4 2024 adjusted EPS was $1.11, exceeding guidance, and GAAP EPS was $1.29, up from $0.77 in Q4 2023.

• Strong CCS segment growth (up 30% in Q4), driven by hyperscaler demand and robust AI platform execution.

• Major new wins in AI-optimized networking and rack solutions with hyperscaler and digital native customers, with production ramping in 2026.

• Free cash flow for 2024 was $306 million, up 50% year-over-year.

Financial highlights

• Q4 2024 adjusted gross margin was 11.0%, up 50 basis points year-over-year; adjusted operating margin was 6.8%, up 80 basis points.

• Q4 2024 GAAP earnings from operations were $202.6 million (8.0% margin), up from $109.2 million (5.1%) in Q4 2023.

• Adjusted ROIC for Q4 2024 was 29.1%, up 550 basis points year-over-year.

• Inventory reduced to $1.76 billion, down $344 million year-over-year; inventory turns improved to 5.0x.

• Ended Q4 2024 with $423 million in cash and $1.2 billion in total liquidity.

Outlook and guidance

• Q1 2025 revenue projected at $2.475–$2.625 billion; adjusted EPS $1.06–$1.16; adjusted operating margin 6.8%.

• Full-year 2025 revenue outlook raised to $10.7 billion (11% growth), adjusted EPS to $4.75, and free cash flow to $350 million.

• Non-GAAP operating margin outlook for 2025 is 6.9%.

• 2025 adjusted effective tax rate expected at 19%.

• ATS segment revenue expected to be flat in 2025; CCS segment to see mid-double-digit growth, especially in communications.