CELESTICA INC

Previous wording

In this Quarterly Report on Form 10-Q (Q2 2025 10-Q), including this Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A), "Celestica," the "Company," "we," "us," and "our" refer to Celestica Inc. and its subsidiaries. This MD&A should be read in conjunction with our June 30, 2025 unaudited interim financial statements (Q2 2025 Interim Financial Statements) and our Annual Report on Form 10-K for the year ended December 31, 2024 (2024 10-K), including our 2024 audited consolidated annual financial statements (2024 AFS) and related notes, which we prepared in accordance with U.S. generally accepted accounting principles (GAAP). Unless otherwise noted, all dollar amounts are expressed in United States (U.S.) dollars. The information in this MD&A is provided as of July 28, 2025 unless we indicate otherwise. As used herein, "Q1," "Q2," "Q3," and "Q4" followed by a year refers to the first quarter, second quarter, third quarter and fourth quarter of such year, respectively. The first half of 2025 is referred to herein as "1H 2025", and the first half of 2024 is referred to herein as "1H 2024".

Current wording

In this Quarterly Report on Form 10-Q (Q3 2025 10-Q), including this Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A), "Celestica," the "Company," "we," "us," and "our" refer to Celestica Inc. and its subsidiaries. This MD&A should be read in conjunction with our September 30, 2025 unaudited interim financial statements (Q3 2025 Interim Financial Statements) and our Annual Report on Form 10-K for the year ended December 31, 2024 (2024 10-K), including our 2024 audited consolidated annual financial statements (2024 AFS) and related notes, which we prepared in accordance with U.S. generally accepted accounting principles (GAAP). Unless otherwise noted, all dollar amounts are expressed in United States (U.S.) dollars. The information in this MD&A is provided as of October 27, 2025 unless we indicate otherwise. As used herein, "Q1," "Q2," "Q3," and "Q4" followed by a year refers to the first quarter, second quarter, third quarter and fourth quarter of such year, respectively. The first nine months of 2025 is referred to herein as "YTD 2025", and the first nine months of 2024 is referred to herein as "YTD 2024".

Previous wording

Certain statements contained in this Q2 2025 10-Q, including this MD&A constitute "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (U.S. Securities Act), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (U.S. Exchange Act), and "forward-looking information" within the meaning of applicable Canadian securities laws (collectively, forward-looking statements), including, without limitation, statements related to: our priorities, intended areas of focus, targets, objectives and goals; trends in the electronics manufacturing services (EMS) industry and our segments (and/or their constituent businesses) and their anticipated impact; the anticipated impact of current market conditions and customer-specific factors on each of our segments (and/or their constituent businesses) and near term expectations; potential restructuring and divestiture actions; our anticipated financial and/or operating results and outlook, including expected revenue increases and decreases (or remaining flat), as well as growth in certain businesses and end markets; our strategies; our credit risk; the potential impact of acquisitions, or program wins, transfers, losses or disengagements; materials, component and supply chain constraints; anticipated expenses, capital expenditures and other working capital requirements and contractual obligations (and intended methods of funding such items); the potential impact of trade policies between countries in which we conduct business (including the tariffs proposed and implemented by the U.S. government, and any reciprocal or retaliatory tariffs); the impact of our price reductions and longer payment terms; our intended repatriation of certain undistributed earnings from non-Canadian subsidiaries (and amounts we do not intend to repatriate in the foreseeable future); the potential impact of tax and litigation outcomes; investor dissatisfaction with inclusion, employee engagement, and other environmental, social and governance matters; our ability to use certain tax losses; intended investments in our business; the potential impact of the pace of technological changes, customer outsourcing, program transfers, and the global economic environment; the intended method of funding common share (Common Share) repurchases; the impact of our outstanding indebtedness; liquidity and the sufficiency of our capital resources; our intention to settle outstanding equity and share unit awards with Common Shares; our financial statement estimates and assumptions; recently issued accounting pronouncements and amendments; the potential adverse impacts of events outside of our control (including those described under "External factors that may impact our business" below); mandatory prepayments under our credit facility; pension plan funding requirements and obligations, and the impact of annuity purchases; our compliance with covenants under our credit facility; refinancing …

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Current wording

Certain statements contained in this Q3 2025 10-Q, including this MD&A constitute "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (U.S. Securities Act), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (U.S. Exchange Act), and "forward-looking information" within the meaning of applicable Canadian securities laws (collectively, forward-looking statements), including, without limitation, statements related to: our priorities, intended areas of focus, targets, objectives and goals; trends in the electronics manufacturing services (EMS) industry and our segments (and/or their constituent businesses) and their anticipated impact; the anticipated impact of current market conditions and customer-specific factors on each of our segments (and/or their constituent businesses) and near term expectations; potential restructuring and divestiture actions; our anticipated financial and/or operating results and outlook, including expected revenue increases and decreases (or remaining flat), as well as growth in certain businesses and end markets; our intention to launch a new normal course issuer bid (NCIB) and anticipated terms; our strategies; our credit risk; the potential impact of acquisitions, or program wins, transfers, losses or disengagements; materials, component and supply chain constraints; anticipated expenses, capital expenditures and other working capital requirements and contractual obligations (and intended methods of funding such items); the potential impact of trade policies between countries in which we conduct business (including the tariffs proposed and implemented by the U.S. government, and any reciprocal or retaliatory tariffs); the impact of our price reductions and longer payment terms; our intended repatriation of certain undistributed earnings from non-Canadian subsidiaries; the potential impact of tax and litigation outcomes; investor dissatisfaction with inclusion, employee engagement, and other environmental, social and governance matters; our ability to use certain tax losses; intended investments in our business; the potential impact of the pace of technological changes, customer outsourcing, program transfers, and the global economic environment; the intended method of funding common share (Common Share) repurchases; the impact of our outstanding indebtedness; liquidity and the sufficiency of our capital resources; our intention to settle outstanding equity and share unit awards with Common Shares; our financial statement estimates and assumptions; recently issued accounting pronouncements and amendments; the potential adverse impacts of events outside of our control (including those described under "External factors that may impact our business" below); mandatory prepayments under our credit facility; pension plan funding requirements and obligations, and the impact of annuity purchases; our compliance with covenants under our credit facility…

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Previous wording

Forward-looking statements contained in this Q2 2025 10-Q are based on various assumptions, many of which involve factors that are beyond our control. Our material assumptions include: growth in manufacturing outsourcing from customers in diversified markets; our ability to retain programs and customers, including no unexpected customer or program transfers, losses or disengagements; no unforeseen adverse changes in our mix of businesses; no undue negative impact on our customers' ability to compete and succeed using products we manufacture and services we provide; continued growth in our end markets; our ability to successfully diversify our customer base and develop new capabilities; anticipated demand levels across our businesses; continued growth in the advancement and commercialization of artificial intelligence (AI) technologies and cloud computing; supporting sustained high levels of capital expenditure investments by leading hyperscaler, AI and data center customers; no significant unforeseen negative impacts to our operations; no unforeseen materials price increases, margin pressures, or other competitive factors affecting the EMS or original design manufacturer (ODM) industries in general or our segments in particular; compliance by third parties with their contractual obligations; no material changes to tariffs or trade restrictions compared to what are in effect as of July 28, 2025; that our customers will retain liability for and we will be able to recover substantially all costs from customers relating to product/component tariffs and countermeasures; no material changes in business activities resulting from current macroeconomic trends and uncertainties, including evolving global tariff and trade negotiations; our ability to keep pace with rapidly changing technological developments; the successful resolution of quality issues that arise from time to time; fluctuation of production schedules from our customers in terms of volume and mix of products or services; the timing and execution of, and investments associated with, ramping new businesses; supplier performance and quality, pricing and terms; the costs and availability of components, materials, services, equipment, labor, energy and transportation; no significant decline in the global economy or in economic activity in our end markets due to a major recession, global trade tensions or otherwise; no unforeseen disruptions due to geopolitical factors (including war) causing significant negative impacts to economic activity, including as a result of tariffs, global or regional supply chains or normal business operations; that global inflation will not have a material impact on our revenues or expenses; the impact of anticipated market conditions on our businesses; the stability of currency exchange rates; the availability of capital resources for, and the permissibility under our credit facility of, repurchases of outstanding Common Shares under our current normal course issuer b…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Forward-looking statements contained in this Q3 2025 10-Q are based on various assumptions, many of which involve factors that are beyond our control. Our material assumptions include: growth in manufacturing outsourcing from customers in diversified markets; our ability to retain programs and customers, including no unexpected customer or program transfers, losses or disengagements; no unforeseen adverse changes in our mix of businesses; no undue negative impact on our customers' ability to compete and succeed using products we manufacture and services we provide; continued growth in our end markets; our ability to successfully diversify our customer base and develop new capabilities; anticipated demand levels across our businesses; continued growth in the advancement and commercialization of artificial intelligence (AI) technologies and cloud computing; supporting sustained high levels of capital expenditure investments by leading hyperscaler, AI and data center customers; no significant unforeseen negative impacts to our operations; no unforeseen materials price increases, margin pressures, or other competitive factors affecting the EMS or original design manufacturer (ODM) industries in general or our segments in particular; compliance by third parties with their contractual obligations; no material changes to tariffs or trade restrictions compared to what are in effect as of October 27, 2025; that our customers will retain liability for and we will be able to recover substantially all costs from customers relating to product/component tariffs and countermeasures; no material changes in business activities resulting from current macroeconomic trends and uncertainties, including evolving global tariff and trade negotiations; our ability to keep pace with rapidly changing technological developments; the successful resolution of quality issues that arise from time to time; fluctuation of production schedules from our customers in terms of volume and mix of products or services; the timing and execution of, and investments associated with, ramping new businesses; supplier performance and quality, pricing and terms; the costs and availability of components, materials, services, equipment, labor, energy and transportation; no significant decline in the global economy or in economic activity in our end markets due to a major recession, global trade tensions or otherwise; no unforeseen disruptions due to geopolitical factors (including war) causing significant negative impacts to economic activity, including as a result of tariffs, global or regional supply chains or normal business operations; that global inflation will not have a material impact on our revenues or expenses; the impact of anticipated market conditions on our businesses; the stability of currency exchange rates; the availability of capital resources for, and the permissibility under our credit facility of, repurchases of outstanding Common Shares under our current NCIB, acceptance of…

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Previous wording

We deliver innovative supply chain solutions globally to customers in two operating and reportable segments: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). Our ATS segment consists of our ATS end market, and is comprised of our Aerospace and Defense (A&D), Industrial, HealthTech, and Capital Equipment businesses. Our CCS segment consists of our Communications and Enterprise (servers and storage) end markets. Additional information regarding our segments is included in note 3 to the Q2 2025 Interim Financial Statements and in note 22 to the 2024 AFS.

Current wording

With deep expertise in design, engineering, manufacturing, supply chain and platform solutions, we serve customers in two operating and reportable segments: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). Our ATS segment consists of our ATS end market, and is comprised of our Aerospace and Defense (A&D), Industrial, HealthTech, and Capital Equipment businesses. Our CCS segment consists of our Communications and Enterprise (servers and storage) end markets. Additional information regarding our segments is included in note 3 to the Q3 2025 Interim Financial Statements and in note 22 to the 2024 AFS.

Previous wording

Our customers include original equipment manufacturers, cloud-based and other service providers, including hyperscalers, digital native companies, and other companies in a wide range of industries. We are incorporated under the laws of the Province of Ontario, Canada. Our global headquarters are located in Toronto, Ontario, Canada. We operate a network of sites and centers of excellence strategically located in North America, Europe and Asia, with specialized end-to-end supply chain capabilities tailored to meet specific market and customer product lifecycle requirements.

Current wording

We enable critical data center infrastructure for AI, cloud, and hybrid cloud and advances technologies in high-growth markets. Our customers include cloud-based and other service providers, including hyperscalers, digital native companies, original equipment manufacturers, and other companies in a wide range of industries. We are incorporated under the laws of the Province of Ontario, Canada. Our global headquarters are located in Toronto, Ontario, Canada. We operate a network of sites and centers of excellence strategically located in North America, Europe and Asia, with specialized end-to-end supply chain capabilities tailored to meet specific market and customer product lifecycle requirements.

Previous wording

We continue to monitor current macroeconomic trends and uncertainties including the effects of recently proposed and implemented tariffs, and the potential imposition of modified or additional tariffs, changes in policies by the U.S. or other governments, including changes in duties, taxes, or limitations on currency or fund transfers, as well as government imposed restrictions on producing certain products in, or shipping them to, specific countries, or as the result of similar actions by other countries or citizens affected by such changes and policies, which may materially and adversely impact demand for our services, our results of operations or our financial condition. In addition, potential supply chain challenges and economic uncertainty have and may continue to result from rapid changes in global trade policies. Governmental actions related to international trade agreements have increased (and could further increase) the cost to our U.S. customers who use our non-U.S. manufacturing sites and components, and vice versa, which may materially and adversely impact demand for our services, our results of operations or our financial condition. Substantially all tariffs paid by Celestica are expected to be recovered from our customers. Any increase in our costs that we are unable to recover from our customers would negatively impact our results of operations or our financial condition. Our Capital Equipment business and our CCS segment have been in prior periods and may continue to be negatively impacted by U.S. technology export controls with respect to China, and China's policy supporting its private sector businesses. We have increased the resilience of our global network to manage this dynamic. However, given the uncertainty regarding the scope and duration of these or further trade actions and/or restrictions and whether trade tensions will escalate further, their impact on the demand for our services, our operations and results for future periods cannot be currently quantified, but may be material. We will continue to monitor the scope and duration of trade actions by the U.S. and other governments on our business.

Current wording

We continue to monitor current macroeconomic trends and uncertainties including the effects of recently proposed and implemented tariffs, and the potential imposition of modified or additional tariffs, changes in policies by the U.S. or other governments, including changes in duties, taxes, or limitations on currency or fund transfers, as well as government imposed restrictions on producing certain products in, or shipping them to, specific countries, or as the result of similar actions by other countries or citizens affected by such changes and policies, which may materially and adversely impact demand for our services, our results of operations or our financial condition. In addition, potential supply chain challenges and economic uncertainty have and may continue to result from rapid changes in global trade policies. Governmental actions related to international trade agreements have increased (and could further increase) the cost to our U.S. customers who use our non-U.S. manufacturing sites and components, and vice versa, which may materially and adversely impact demand for our services, our results of operations or our financial condition. Substantially all tariffs paid by Celestica are expected to be recovered from our customers. Any increase in our costs that we are unable to recover from our customers would negatively impact our results of operations or our financial condition. Our Capital Equipment business and our CCS segment have been in prior periods and may continue to be negatively impacted by U.S. technology/data export controls, including controls on cross-border technology/data access, with respect to China and other countries, and China's policy supporting its private sector businesses. We have increased and continue to increase the resilience of our global network to manage this dynamic. However, given the uncertainty regarding the scope, timing and duration of these or further trade actions and/or restrictions and whether trade tensions will escalate further, their impact on the demand for our services, our operations and results for future periods cannot be currently quantified, but may be material. We will continue to monitor the scope, timing and duration of trade actions by the U.S. and other governments on our business.

Previous wording

ATS segment margin increased to 5.3% in Q2 2025 compared to 4.6% in Q2 2024, primarily driven by improved profitability in our A&D business, aided by the recent strategic decision not to renew a margin dilutive program.

Current wording

ATS segment margin increased to 5.5% in Q3 2025 compared to 4.9% in Q3 2024, primarily driven by improved profitability in our A&D business, aided by the discontinuation of the margin dilutive program.

Previous wording

CCS segment revenue for Q2 2025 increased 28% compared to Q2 2024. Revenue in our Communications end market increased by 75% in Q2 2025 compared to Q2 2024, driven by strong demand and ramping programs in our Hardware Platform Solutions (HPS) networking business. Revenue in our Enterprise end market decreased by 37% in Q2 2025 compared to Q2 2024, driven by the anticipated technology transition in an AI/ML compute program with one of our hyperscaler customers. HPS revenue of approximately $1.2 billion in Q2 2025 increased 82% compared to Q2 2024 and accounted for 43% of our total revenues.

Current wording

CCS segment revenue for Q3 2025 increased 43% compared to Q3 2024. Revenue in our Communications end market increased by 82% in Q3 2025 compared to Q3 2024, driven by data center networking demand, including the ramp-up of our switch programs. Revenue in our Enterprise end market decreased by 24% in Q3 2025 compared to Q3 2024, driven by a technology transition in an AI/ML compute program with one of our hyperscaler customers. Hardware Platform Solutions (HPS) revenue of approximately $1.4 billion in Q3 2025 accounted for 44% of our total revenues and increased 79% compared to Q3 2024, due to accelerating volumes in our ramping networking switch programs with hyperscaler customers.

Previous wording

CCS segment margin increased to 8.3% in Q2 2025 compared to 7.0% in Q2 2024, driven by a higher mix of HPS revenue and strong productivity.

Current wording

CCS segment margin increased to 8.3% in Q3 2025 compared to 7.6% in Q3 2024, driven by a higher mix of HPS revenue and operating leverage.

Previous wording

As of June 30, 2025, approximately 7.1 million of our Common Shares remain available for repurchase under our current NCIB, which expires in October 2025. The maximum number of Common Shares we are permitted to repurchase for cancellation under the NCIB is reduced by the number of Common Shares we arrange to be purchased by any non-independent broker in the open market during the term of the NCIB to satisfy delivery obligations under our stock-based compensation (SBC) plans. In Q2 2025, we paid a total of $40.0 million (including transaction fees and excluding share buyback taxes) to repurchase 0.6 million Common Shares for cancellation under the NCIB. See "Summary of Q2 2025 and Year-to-Date period" and Part II, Item 2, "Unregistered Sales of Equity Securities and Use of Proceeds" below. See note 9 to our Q2 2025 Interim Financial Statements for further details.

Current wording

As of September 30, 2025, approximately 7.1 million of our Common Shares remain available for repurchase under our current NCIB, which expires on October 31, 2025. The maximum number of Common Shares we are permitted to repurchase for cancellation under the NCIB is reduced by the number of Common Shares we arrange to be purchased by any non-independent broker in the open market during the term of the NCIB to satisfy delivery obligations under our stock-based compensation (SBC) plans. In Q3 2025, we repurchasednil Common Shares. See "Summary of Q3 2025 and Year-to-Date period" and Part II, Item 2, "Unregistered Sales of Equity Securities and Use of Proceeds" below. See note 9 to our Q3 2025 Interim Financial Statements for further details.

Previous wording

Our Q2 2025 Interim Financial Statements have been prepared in accordance with GAAP. The Q2 2025 Interim Financial Statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present fairly our financial position as at June 30, 2025 and the operating results and cash flows for the three and six months ended June 30, 2025. Also see "Recently adopted accounting pronouncements" in note 2 to the Q2 2025 Interim Financial Statements. A discussion of our Q2 2025 and 1H 2025 financial results is set forth under "Operating Results" below.

Current wording

Our Q3 2025 Interim Financial Statements have been prepared in accordance with GAAP. The Q3 2025 Interim Financial Statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present fairly our financial position as at September 30, 2025 and the operating results and cash flows for the three and nine months ended September 30, 2025. Also see "Recently adopted accounting pronouncements" in note 2 to the Q3 2025 Interim Financial Statements. A discussion of our Q3 2025 and YTD 2025 financial results is set forth under "Operating Results" below.

Previous wording

Segment performance is evaluated based on segment revenue, segment income and segment margin (segment income as a percentage of segment revenue), each of which are defined in "Operating Results — Segment income and margin" below.

Current wording

Segment performance is evaluated based on segment revenue, segment income and segment margin. See note 3 to the Q3 2025 Interim Financial Statements and note 22 to the 2024 AFS for definitions of each item.

Previous wording

(1)For Q2 2025 and 1H 2025, includes 0.6 million Common Shares purchased for cancellation under automatic share purchase plans (ASPPs) (Q2 2024— nil;1H 2024— 0.5 million).

Current wording

(1)For Q3 2025 and YTD 2025, includes nil and 0.6 million Common Shares, respectively, purchased for cancellation under automatic share purchase plans (ASPPs) (Q3 2024— nil; YTD 2024— 0.5 million).

Previous wording

Due to global economic conditions, including the impact of ongoing trade conflicts, tariffs and geopolitical conflicts, there has been and will continue to be uncertainty in the global economy. Management has made estimates and assumptions based on information available as of the date of issuance of the Q22025 Interim Financial Statements taking into consideration certain possible impacts due to the foregoing factors. These estimates may change, as new events occur, and additional information is obtained.

Current wording

Due to global economic conditions, including the impact of ongoing trade conflicts, tariffs and geopolitical conflicts, there has been and will continue to be uncertainty in the global economy. Management has made estimates and assumptions based on information available as of the date of issuance of the Q32025 Interim Financial Statements taking into consideration certain possible impacts due to the foregoing factors. These estimates may change, as new events occur, and additional information is obtained.

Previous wording

In addition, we determined that no triggering event occurred in Q2 2025 (or to date) that would require an interim impairment assessment of our reporting units, and no material impairments or adjustments were identified in Q2 2025 (or to date) related to our allowance for credit losses, or the recoverability and valuation of our assets and liabilities.

Current wording

In addition, we determined that no triggering event occurred in Q3 2025 (or year to date) that would require an interim impairment assessment of our reporting units, and no material impairments or adjustments were identified in Q3 2025 (or year to date) related to our allowance for credit losses, or the recoverability and valuation of our assets and liabilities.

Previous wording

Revenue of $2.89 billion for Q2 2025 increased 21% compared to Q2 2024. Aggregate revenue of $5.54 billion for 1H 2025 increased 20% compared to 1H 2024.

Current wording

Revenue of $3.19 billion for Q3 2025 increased 28% compared to Q3 2024. Aggregate revenue of $8.74 billion for YTD 2025 increased 23% compared to YTD 2024.

Previous wording

CCS segment revenue increased $450.1 million (28%) in Q2 2025 compared to Q2 2024 and increased $850.5 million (28%) in 1H 2025 compared to 1H 2024. Communications end market revenue increased $706.0 million (75%) in Q2 2025 compared to Q2 2024, and increased $1,369.5 million (81%) in 1H 2025 compared to 1H 2024, driven by strong demand and ramping programs in our HPS networking business. HPS revenue for Q2 2025 increased 82% to approximately $1.2 billion compared to Q2 2024, and accounted for 43% of our total Q2 2025 revenue (Q2 2024 — 29% of our total Q2 2024 revenue), driven by increased hyperscaler customer demand and program ramps. Our HPS revenue for 1H 2025 increased 89% to approximately $2.2 billion compared to 1H 2024, and accounted for 41% of our total 1H 2025 revenue (1H 2024 — 26% of our total 1H 2024 revenue). Enterprise end market revenue decreased $255.9 million (37%) in Q2 2025 compared to Q2 2024 and decreased $519.0 million (38%) in 1H 2025 compared to 1H 2024, driven by the anticipated technology transition in an AI/ML compute program with one of our hyperscaler customers.

Current wording

CCS segment revenue increased $727.6 million (43%) in Q3 2025 compared to Q3 2024 and increased $1,578.1 million (33%) in YTD 2025 compared to YTD 2024. Communications end market revenue increased $875.6 million (82%) in Q3 2025 compared to Q3 2024, and increased $2,245.1 million (81%) in YTD 2025 compared to YTD 2024, driven by data center networking demand, including the ramp-up of our switch programs. HPS revenue for Q3 2025 increased 79% to approximately $1.4 billion compared to Q3 2024, and accounted for 44% of our total Q3 2025 revenue (Q3 2024 — 30% of our total Q3 2024 revenue). HPS revenue for YTD 2025 increased 85% to approximately $3.6 billion compared to YTD 2024, and accounted for 42% of our total YTD 2025 revenue (YTD 2024 — 28% of our total YTD 2024 revenue). Increases in HPS revenue in Q3 2025 and YTD 2025 compared to respective prior year periods were driven by accelerating volumes in our ramping networking switch programs with hyperscaler customers. Enterprise end market revenue decreased $148.0 million (24%) in Q3 2025 compared to Q3 2024 and decreased $667.0 million (34%) in YTD 2025 compared to YTD 2024, driven by a technology transition in an AI/ML compute program with one of our hyperscaler customers.

Previous wording

We depend on a small number of customers for a substantial portion of our revenue. In the aggregate, our top 10 customers represented 78% of total revenue for Q2 2025 and 1H 2025 (Q2 2024 — 74%; 1H 2024 — 72%). Two customers (both in our CCS segment) individually represented 10% or more of total revenue in Q2 2025 (31% and 13%). Three customers (all in our CCS segment) individually represented 10% or more of total revenue in 1H 2025 (30%, 13% and 10%). Two customers (both in our CCS segment) individually represented 10% or more of total revenue in Q2 2024 (32% and 12%) and 1H 2024 (33% and 10%).

Current wording

We depend on a small number of customers for a substantial portion of our revenue. In the aggregate, our top 10 customers represented 80% of total revenue for Q3 2025 and 79% for YTD 2025 (Q3 2024 — 74%; YTD 2024 — 73%). Three customers (all in our CCS segment) individually represented 10% or more of total revenue in Q3 2025 (30%, 15% and 14%) and in YTD 2025 (30%, 14% and 12%). Two customers (both in our CCS segment) individually represented 10% or more of total revenue in Q3 2024 (25% and 12%) and YTD 2024 (30% and 11%).

Previous wording

2024, primarily driven by higher volumes and more favorable mix. Our gross profit and gross margin in Q2 2025 and 1H 2025 also included $33.5 million and $13.2 million, respectively, of higher favorable fair value adjustments (TRS FVAs) related to our total return swap agreement (TRS Agreement) compared to Q2 2024 and 1H 2024, respectively. See "Liquidity —Cash requirements — TRS" below for a description of our TRS Agreement.

Current wording

Gross profit increased by 60% or $155.5 million to $416.1 million in Q3 2025 compared to Q3 2024, and increased by 44% or $324.5 million to $1,061.0 million in YTD 2025 compared to YTD 2024, primarily driven by our strong revenue growth. Gross margin increased to 13.0% in Q3 2025 from 10.4% in Q3 2024 and increased to 12.1% in YTD 2025 from 10.4% in YTD 2024, primarily driven by operating leverage and more favorable mix. Our gross profit and gross margin in Q3 2025 and YTD 2025 were also favorably impacted by the fair value adjustments (TRS FVAs) related to our total return swap agreement (TRS Agreement) ($48.5 million gain in Q3 2025 compared to $2.7 million loss in Q3 2024; $81.6 million gain in YTD 2025 compared to $17.2 million gain in YTD 2024). See "Liquidity — Cash requirements — TRS" below for a description of our TRS Agreement.

Previous wording

SG&A for Q2 2025 of $38.9 million (1.3% of total revenue) decreased $40.4 million compared to $79.3 million (3.3% of total revenue) for Q2 2024. The decrease in SG&A in Q2 2025 compared to Q2 2024 was primarily due to $48.2 million favorable TRS FVA changes ($56.8 million gain in Q2 2025 compared to $8.6 million gain in Q2 2024), partially offset by higher foreign exchange losses.

Current wording

SG&A for Q3 2025 of $38.4 million (1.2% of total revenue) decreased $53.4 million compared to $91.8 million (3.7% of total revenue) for Q3 2024. The decrease in SG&A in Q3 2025 compared to Q3 2024 was primarily due to $69.8 million favorable TRS FVA changes ($64.8 million gain in Q3 2025 compared to $5.0 million loss in Q3 2024), partially offset by higher expected credit losses and compensation expenses.

Previous wording

Segment performance is evaluated based on segment revenue (set forth above), segment income and segment margin (segment income as a percentage of segment revenue). See "Summary of Q2 2025 and Year-to-Date Period" above for a table showing segment income and segment margin for Q2 2025, 1H 2025 and the respective prior year periods. See the reconciliation of segment income to our earnings before income taxes for Q2 2025, 1H 2025 and the respective prior year periods in note 3 to the Q2 2025 Interim Financial Statements.

Current wording

Segment performance is evaluated based on segment revenue (set forth above), segment income and segment margin (segment income as a percentage of segment revenue). See "Summary of Q3 2025 and Year-to-Date Period" above for a table showing segment income and segment margin for Q3 2025, YTD 2025 and the respective prior year periods. See the reconciliation of segment income to our earnings before income taxes for Q3 2025, YTD 2025 and the respective prior year periods in note 3 to the Q3 2025 Interim Financial Statements.

Previous wording

CCS segment income increased $56.7 million (50%) in Q2 2025 compared to Q2 2024 and increased $105.1 million (49%) in 1H 2025 compared to 1H 2024, as a result of the CCS segment revenue increases in Q2 2025 and 1H 2025 described above. CCS segment margin increased to 8.3% in Q2 2025 from 7.0% in Q2 2024 and increased to 8.1% in 1H 2025 from 7.0% in 1H 2024, driven by a higher mix of HPS revenue and strong productivity.

Current wording

CCS segment income increased $70.7 million (55%) in Q3 2025 compared to Q3 2024 and increased $175.8 million (51%) in YTD 2025 compared to YTD 2024, as a result of the CCS segment revenue increases in Q3 2025 and YTD 2025 described above, as well as the factors described below that favorably impacted our CCS segment margin. CCS segment margin increased to 8.3% in Q3 2025 from 7.6% in Q3 2024 and increased to 8.2% in YTD 2025 from 7.2% in YTD 2024, driven by a higher mix of HPS revenue and operating leverage.

Previous wording

The following table shows employee SBC expense (with respect to stock options, restricted share units (RSUs) and performance share units (PSUs) granted to employees), TRS FVAs, and director SBC expense (with respect to deferred share units (DSUs) and RSUs issued to directors as compensation) for the periods indicated (in millions):

Current wording

The following table shows employee SBC expense (with respect to stock options, restricted share units (RSUs) and performance share units (PSUs) granted to employees), TRS FVAs, and director SBC expense (with respect to deferred share units and director share units (collectively, DSUs) and RSUs issued to directors as compensation) for the periods indicated (in millions):

Previous wording

The changes in TRS FVAs in Q2 2025 compared to Q2 2024 and in 1H 2025 compared to 1H 2024 were due to fluctuations in our Common Share price.

Current wording

The changes in TRS FVAs in Q3 2025 compared to Q3 2024 and in YTD 2025 compared to YTD 2024 were due to fluctuations in our Common Share price.

Previous wording

In Q2 2025, 1H 2025 andrespective prior year periods, our restructuring charges consisted primarily of cash charges related to employee terminations. At June 30, 2025, our restructuring provision of$11.5 million (December 31, 2024 —$2.9 million) was recorded in accrued and other current liabilities and provisions on our consolidated balance sheet, which we intend to fund with cash on hand.

Current wording

We recorded restructuring charges of $3.9 million in Q3 2025 and $18.9 million in YTD 2025 (Q3 2024 —$0.6 million; YTD 2024 —$11.3 million). In Q3 2025, YTD 2025 andrespective prior year periods, our restructuring charges consisted primarily of cash charges related to employee terminations and accelerated depreciation of equipment related to disengaging programs. At September 30, 2025, our restructuring provision of $4.4 million (December 31, 2024 — $2.9 million) was recorded in accrued and other current liabilities and provisions on our consolidated balance sheet, which we intend to fund with cash on hand.

Previous wording

Finance Costs consist of interest expense and fees related to our credit facility (including debt issuance and related amortization costs), our interest rate swap agreements, our TRS Agreement, our A/R sales program, customer SFPs, and interest expense on our finance lease obligations, net of interest income earned. During Q2 2025 and 1H 2025, we incurred Finance Costs of $13.5 million and $27.2 million, respectively (Q2 2024 — $15.0 million;1H 2024 —$29.0 million). Interest expense under our credit facility recorded in Finance Costs, including the impact of our interest rate swap agreements (described under "Capital Resources" below), was $11.2 million in Q2 2025 and$24.3 million in 1H 2025 (Q2 2024 — $12.1 million; 1H 2024 — $24.0 million). In Q2 2024 and 1H 2024, we also recorded as Finance Costs $2.0 million in fees and costs incurred in connection with the amendment of our credit facility in June 2024. See "Liquidity—Cash provided by and used in financing activities— Financing and Finance Costs" below.

Current wording

Finance Costs consist of interest expense and fees related to our credit facility (including debt issuance and related amortization costs), our interest rate swap agreements, our TRS Agreement, our A/R sales program, customer SFPs, and interest expense on our finance lease obligations, net of interest income earned. During Q3 2025 and YTD 2025, we incurred Finance Costs of $12.8 million and $40.0 million, respectively (Q3 2024 — $11.2 million; YTD 2024 —$40.2 million). Interest expense under our credit facility recorded in Finance Costs, including the impact of our interest rate swap agreements (described under "Capital Resources" below), was $10.5 million in Q3 2025 and$34.8 million in YTD 2025 (Q3 2024 — $11.4 million; YTD 2024 — $35.4 million). In YTD 2024, we also recorded as Finance Costs $2.0 million in fees and costs incurred in connection with the amendment of our credit facility in June 2024. See "Liquidity—Cash provided by and used in financing activities— Financing and Finance Costs" below.

Previous wording

We recorded Miscellaneous Expense of $1.7 million for Q2 2025 and $3.1 million for 1H 2025 (Q2 2024 — $4.4 million;1H 2024— $11.0 million). See note 12 to the Q2 2025 Interim Financial Statements for details.

Current wording

We recorded Miscellaneous Expense of $1.3 million for Q3 2025 and $4.4 million for YTD 2025 (Q3 2024 — $2.8 million; YTD 2024— $13.8 million). See note 12 to the Q3 2025 Interim Financial Statements for details.

Previous wording

For Q2 2025, we had a net income tax expense of $46.3 million on earnings before tax of $257.3 million, compared to a net income tax expense of $18.5 million on earnings before tax of $113.5 million for Q2 2024. For 1H 2025, we had a net income tax expense of $73.8 million on earnings before tax of $371.0 million, compared to a net income tax expense of $31.9 million on earnings before tax of $218.7 million for 1H 2024.

Current wording

For Q3 2025, we had a net income tax expense of $43.1 million on earnings before tax of $310.9 million, compared to a net income tax expense of $34.5 million on earnings before tax of $124.0 million for Q3 2024. For YTD 2025, we had a net income tax expense of $116.9 million on earnings before tax of $681.9 million, compared to a net income tax expense of $66.4 million on earnings before tax of $342.7 million for YTD 2024.

Previous wording

Our Q2 2025 net income tax expense included $7.1 million of income taxes related to Pillar Two global minimum tax legislation in jurisdictions where we operate (GMT). Our 1H 2025 net income tax expense included $13.9 millionof income taxes related to GMT and a $3.0 million tax expense for tax uncertainties relating to one of our Asian subsidiaries, offset in part by $1.9 million of reversals of tax uncertainties relating to another of our Asian subsidiaries. Taxable foreign exchange impacts were not significant in Q2 2025 or 1H 2025.

Current wording

In Q3 2025 and YTD 2025, our net income tax expense included $13.3 million and$27.2 million of income taxes, respectively, related to Pillar Two global minimum tax legislation in jurisdictions where we operate (GMT).

Previous wording

Our Q2 2024 net income tax expense included$12.2 million income taxes related to GMT, offset in part by the recognition of$7.5 million of previously unrecognized deferred tax assets in our U.S. group of subsidiaries (DTA Recognition) as a result ofthe acquisition of NCS Global Services LLC (NCS). Our 1H 2024 net income tax expense included$16.2 millionof income taxes related to GMT, offset in part by the$7.5 million DTA Recognition and$5.6 million of reversals of tax uncertainties relating to one of our Asian subsidiaries. Taxable foreign exchange impacts were not significant in Q2 2024 or 1H 2024.

Current wording

Our Q3 2024 net income tax expense included$2.6 million ofincome taxes related to GMT. Our YTD 2024 net income tax expense included$18.8 million of income taxes related to GMT, offset in part by the recognition of$7.5 million of previously unrecognized deferred tax assets in our U.S. group of subsidiaries as a result of the acquisition of NCS Global Services LLC (NCS) and$5.6 million of reversals of tax uncertainties relating to one of our Asian subsidiaries.

Previous wording

Our tax incentives currently consist of tax exemptions for the profits of our Thailand and Laos subsidiaries. We have the following four income tax incentives in Thailand: (i) a 5-year 50% income tax exemption that expires in 2027; (ii) an 8-year 100% income tax and distribution tax exemption that expires in 2028; (iii) a 6-year 100% income tax and distribution tax exemption that expires in 2028 (6-year 2028 Thailand tax incentive) and (iv) a 6-year 100% income tax and distribution tax exemption that expires in 2029. Our Thailand tax incentives are capped at our investments in Thailand. We reached the limit in 2024 for the 6-year 2028 Thailand tax incentive. Our tax incentive in Laos allows for a 100% income tax exemption until 2025, and a reduced income tax rate of 8% thereafter. Upon full expiry of each of the incentives, taxable profits associated with such incentives become fully taxable. Our tax expense could increase significantly if certain of the foregoing tax incentives are retracted or expire.

Current wording

Our tax incentives currently consist of tax exemptions for the profits of our Thailand and Laos subsidiaries. We have the following four income tax incentives in Thailand: (i) a 5-year 50% income tax exemption that expires in 2027; (ii) an 8-year 100% income tax and distribution tax exemption that expires in 2028; (iii) a 6-year 100% income tax and distribution tax exemption that expires in 2028 (6-year 2028 Thailand tax incentive) and (iv) a 6-year 100% income tax and distribution tax exemption that expires in 2029. Our Thailand tax incentives are capped at our investments in Thailand. We reached the limit in

Previous wording

Net earnings for Q2 2025 of $211.0 million increased $116.0 million compared to Q2 2024. The increase was primarily due to $117.2 million in higher gross profit and $40.4 million in lower SG&A, partially offset by $27.8 million in higher income tax expense and $14.6 million in higher research and development (R&D) expense. Net earnings for 1H 2025 of $297.2 million increased $110.4 million compared to 1H 2024. The increase was primarily due to $169.0 million in higher gross profit, partially offset by $41.9 million in higher income tax expense and $15.7 million in higher R&D expense. Our income tax expense in Q2 2025 and 1H 2025 increased compared to the respective prior year periods primarily due to higher earnings before income taxes in Q2 2025 and 1H 2025. R&D expenses in Q2 2025 and 1H 2025 increased compared to the respective prior year periods to support the growth of our HPS business.

Current wording

Net earnings for Q3 2025 of $267.8 million increased $178.3 million compared to Q3 2024. The increase was primarily due to $155.5 million in higher gross profit and $53.4 million in lower SG&A, partially offset by $17.7 million in higher research and development (R&D) expense and $8.6 million in higher income tax expense. Net earnings for YTD 2025 of $565.0 million increased $288.7 million compared to YTD 2024. The increase was primarily due to $324.5 million in higher gross profit and $46.1 million in lower SG&A, partially offset by $50.5 million in higher income tax expense and $33.4 million in higher R&D expense. Our income tax expense in Q3 2025 and YTD 2025 increased compared to the respective prior year periods primarily due to higher earnings before income taxes in Q3 2025 and YTD 2025. R&D expenses in Q3 2025 and YTD 2025 increased compared to the respective prior year periods to support the growth of our HPS business. Increases in gross profit and decreases in SG&A in Q3 2025 and YTD 2025 compared to the respective prior year periods are described in "Gross profit" and "SG&A" above, respectively.

Previous wording

In 1H 2025, we generated $282.7 million net cash from operating activities, primarily due to net earnings of $297.2 million and non-cash expenses added back to net earnings, partially offset by working capital requirements of $66.5 million and non-cash recoveries (including favorable TRS FVAs of $78.3 million). See "Operating Results —SBC expense and TRS FVAs" above for detail of TRS FVAs. Our working capital requirements in 1H 2025 were primarily driven by increases in A/R and inventory balances in 1H 2025, the effects of which were partially offset by the effect of the increase in A/P balances in 1H 2025. A/R balances increased in 1H 2025 primarily due to timing and volume of revenue and collections. Increase in inventory balances in 1H 2025 reflected our business growth (primarily in our CCS segment). A/P balances increased in 1H 2025 primarily due to timing and volume of payments and purchases. Net cash from operating activities for 1H 2025 increased $75.0 million compared to 1H 2024, primarily driven by an increase in net earnings.

Current wording

In YTD 2025, we generated $408.9 million net cash from operating activities, primarily due to net earnings of $565.0 million and non-cash expenses added back to net earnings, partially offset by working capital requirements of $158.9 million and non-cash recoveries (including favorable TRS FVAs of $191.6 million). See "Operating Results —SBC expense and TRS FVAs" above for detail of TRS FVAs. Our working capital requirements in YTD 2025 were primarily driven by increases in A/R and inventory balances in YTD 2025, the effects of which were partially offset by the increase in A/P balances in YTD 2025. A/R balances increased in YTD 2025 primarily due to timing and volume of revenue and collections. Increase in inventory balances in YTD 2025 reflected our business growth (primarily in our CCS segment). A/P balances increased in YTD 2025 primarily due to timing and volume of payments and purchases. Net cash from operating activities for YTD 2025 increased $78.4 million compared to YTD 2024, primarily driven by an increase in cash earnings, partially offset by higher working capital requirements.

Previous wording

A reconciliation of non-GAAP free cash flow to cash provided by operating activities measured under GAAP is set forth below:

Current wording

A reconciliation of non-GAAP free cash flow to cash provided by operating activities measured under GAAP is set forth below (in millions):

Previous wording

Our non-GAAP free cash flow of $213.5 million for 1H 2025 increased $80.2 million compared to 1H 2024, primarily due to $75.0 million in higher cash generated from operations (as described above).

Current wording

Our non-GAAP free cash flow of $302.4 million for YTD 2025 increased $92.3 million compared to YTD 2024, primarily due to $78.4 million in higher cash generated from operations (as described above).

Previous wording

Our capital expenditures for 1H 2025 were $69.2 million (1H 2024 — $77.3 million), primarily to enhance our manufacturing capabilities in various geographies (including the expansion of our Thailand facility) and to support new customer programs. Most of our capital expenditures in 1H 2025 and 1H 2024 pertained to our CCS segment. We fund our capital expenditures from cash on hand and through the financing arrangements described below.

Current wording

Our capital expenditures for YTD 2025 were $106.5 million (YTD 2024 — $123.3 million), primarily to enhance our manufacturing capabilities in various geographies (including the expansion of our Thailand facility) and to support new customer programs. Most of our capital expenditures in YTD 2025 and YTD 2024 pertained to our CCS segment. We fund our capital expenditures from cash on hand and through the financing arrangements described below.

Previous wording

Activity under our Credit Facility during 1H 2025 is set forth below (in millions):

Current wording

Activity under our Credit Facility during YTD 2025 is set forth below (in millions):

Previous wording

Interest we paid under the Credit Facility (included in "net cash provided by or used in operating activities"), including the impact of our interest rate swap agreements (described below), was $23.1 million in 1H 2025 (1H 2024 — $23.1 million). Interest rates for outstanding borrowings under the Credit Facility as at June 30, 2025 are described under "Capital Resources" below. Any increase in prevailing interest rates, margins, or amounts borrowed, would cause our interest expense to increase. Commitment fees paid in 1H 2025 were $1.7 million (1H 2024 — $1.2 million). During 1H 2024, we paid $9.0 million in debt issuance costs related to the June 2024 amendment to our Credit Facility.

Current wording

Interest we paid under the Credit Facility (included in "net cash provided by operating activities"), including the impact of our interest rate swap agreements (described below), was $33.4 million in YTD 2025 (YTD 2024 — $34.0 million). Interest rates for outstanding borrowings under the Credit Facility as at September 30, 2025 are described under "Capital Resources" below. Any increase in prevailing interest rates, margins, or amounts borrowed, would cause our interest expense to increase. Commitment fees paid in YTD 2025 were $2.3 million (YTD 2024 — $1.2 million). During YTD 2024, we paid $9.6 million in debt issuance costs related to the June 2024 amendment to our Credit Facility.

Previous wording

See "Operating Results —Finance Costs" above for a description of Finance Costs incurred in Q2 2025, 1H 2025 and the respective prior year periods.

Current wording

See "Operating Results —Finance Costs" above for a description of Finance Costs incurred in Q3 2025, YTD 2025 and the respective prior year periods.

Previous wording

During 1H 2025, we paid $5.2 million (1H 2024 — $4.8 million) in principal payment of finance leases.

Current wording

During YTD 2025, we paid $7.6 million (YTD 2024 — $7.1 million) in principal payment of finance leases.