CELESTICA INC

Previous 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".

Current wording

In this Quarterly Report on Form 10-Q (Q1 2026 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 March 31, 2026 unaudited interim financial statements (Q1 2026 Interim Financial Statements) and our Annual Report on Form 10-K for the year ended December 31, 2025 (2025 10-K), including our 2025 audited consolidated annual financial statements (2025 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 April 27, 2026 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.

Previous 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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Current wording

Certain statements contained in this Q1 2026 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; our capital investment plans and the funding therefor; developments related to new customer or program wins; timing of production ramps, anticipated economic conditions, industry and market trends and projections, underlying market growth rates, customer demand, prospects and opportunities; strategic initiatives; trends in our segments and/or their constituent businesses; 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 segments, 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 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 adoption, integration and use of artificial intelligence (AI) in manufacturing and service offerings and in certain of our internal processes; 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 sustainability matters; our ability to use certain tax losses; planned investments in our business; the potential impact of the pace of technological changes (including with respect to AI technologies), 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 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 con…

Excerpt shortened here; the source contains the full paragraph.

Previous 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…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Forward-looking statements contained in this Q1 2026 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; technology upgrade cycles; 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 strengthening of customer demand; accelerating growth from our customer base, including our CCS customer base; continued growth in our segments and end markets; our ability to successfully diversify our customer base and develop new capabilities; anticipated demand levels across our businesses, including continued growth in the demand from data center customers; continued advancement and commercialization of AI technologies and cloud computing; supporting sustained high levels of capital expenditure investments by leading hyperscaler, AI and data center customers; scaling of our operations to meet the anticipated growth in customer demand; capital investments proceeding as anticipated, including timely completion of construction and operationalization of assets, securing required materials, utilities, and equipment for our expansion plans; alignment of our capacity with our business demands; the successful recruitment and retention of skilled talent; no significant unforeseen negative impacts to our operations; no unforeseen materials price increases, margin pressures, or other competitive factors affecting the contract design and manufacturing industry 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 April 27, 2026; that our customers will retain liability for and we will continue to 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, trade negotiations, and geopolitical conflicts; our ability to achieve our strategic goals; 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 programs; supplier performance and quality, pricing and terms; the costs and availability of components, materials, services, equipment, labor, energy and transportation; our ability to secure adequate component and material supply; no significant decline in …

Excerpt shortened here; the source contains the full paragraph.

Previous 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.

Current wording

Celestica is a technology leader with deep expertise in design, engineering, manufacturing, supply chain and platform solutions. Celestica enables critical data center infrastructure for AI, cloud and hybrid cloud, and advances technologies in high-growth markets. Our global headquarters is located in Toronto, Ontario, Canada. We operate a network of sites and design centers strategically located in North America, Asia, and Europe.

Previous 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.

Current wording

We serve across two operating and reportable segments: Connectivity & Cloud Solutions (CCS) and Advanced Technology Solutions (ATS). Our CCS segment consists of our Communications and Enterprise end markets. 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. Additional information regarding our segments is included in note 3 to the Q1 2026 Interim Financial Statements and in note 21 to the 2025 AFS. Customers in our CCS segment include cloud based service providers, hyperscalers and other data center customers (including digital native companies), as well as hardware original equipment manufacturer (OEMs) and enterprise customers. Customers in our ATS segment include OEMs in a range of diversified markets that we serve.

Previous wording

See "Overview" in Item 7 of our 2024 10-K for a discussion of additional detail of our business and business environment.

Current wording

See "Overview" in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) of our 2025 10-K for additional detail of our business and business environment.

Previous wording

External factors that could have a material and adverse impact on our industry and/or business include government legislation, regulations, or policies, supplier or customer financial difficulties, fires and related disruptions, political instability, increased political tension between countries (including increased tensions between mainland China and Taiwan and between the U.S. and other countries, as well as threats of retaliatory action from other countries), geopolitical dynamics, terrorism, armed conflict (including the Russia/Ukraine conflict and the conflicts in the Middle East area (Middle East Conflicts)), labor or social unrest, criminal activity, cybersecurity incidents, natural disasters and unusually adverse weather conditions (including those caused by climate change), such as hurricanes, tornados, other extreme storms, wildfires, droughts and floods, disease or illness or other widespread health concerns, pandemics, epidemics or outbreaks of illness that affects local, national or international economies, and other risks present in the jurisdictions in which we, our customers, our suppliers, and/or our logistics partners operate. These types of events could disrupt operations or the economics of one or more of our sites or those of our customers, component suppliers and/or our logistics partners. These events could also lead to higher costs or supply shortages and may disrupt the delivery of components to us, or our ability to provide finished products or services to our customers in a manner that is economical to us and/or them, if at all, any of which could (and in the case of materials constraints, had in the past and may in the future) have a material negative impact on our operating results.

Current wording

External factors that could have a material and adverse impact on our industry and/or business include the long-term sustainability and growth of data center-related investments; technology changes (including AI-related technologies); energy, power, and water constraints in the data center infrastructure; supplier or customer financial difficulties; global economic and political tension (including increased tensions between the U.S. and other countries and between mainland China and Taiwan); geopolitical uncertainty and conflicts (including the Russia/Ukraine conflict and the conflicts in the Middle East area); government legislation, regulations, or policies (including with respect to tariffs and AI technology); fires and related disruptions; labor or social unrest, criminal activity, cybersecurity incidents, natural disasters and unusually adverse weather conditions (including those caused by climate- and weather-related risks). See Item 1A, Risk Factors of our 2025 10-K. These events could disrupt operations or the economics of one or more of our sites or those of our customers, component suppliers and/or our logistics partners and may materially negatively impact our operating results.

Previous wording

The pace of technological changes (including AI-related technologies) and the frequency of customer outsourcing or transferring business among EMS and/or ODM competitors, may impact our business, results of operations and/or financial condition. Data center deployments, which have numerous and specific infrastructure requirements, have influenced our revenue variability and may continue to impact our future demand. In recent periods, we have undertaken investments geared towards capacity and capability expansions at our Thailand, Malaysia and Richardson, U.S. facilities in support of our growth in AI/machine learning (ML) programs.

Current wording

The pace of technological changes (including AI-related technologies) and the frequency of customer outsourcing or transferring business among EMS and/or ODM competitors, may impact our business, results of operations and/or financial condition. Data center deployments, which have numerous, specific infrastructure requirements, have influenced our revenue variability and may continue to impact our future demand.

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/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.

Current wording

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. Changes in policies by the U.S. or other governments could negatively affect our operating results due to changes in duties, tariffs, or 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 other similar actions by other countries or citizens affected by such changes in policies. We will continue to monitor the scope and duration of trade actions by the U.S. and other governments with respect to our business. See Item 1A, Risk Factors of our 2025 10-K "Our ability to successfully manage unexpected changes or risks inherent in our global operations and supply chain may adversely impact our financial performance" and "U.S. policies or legislation could have a material adverse effect on our business, results of operations and financial condition."

Previous wording

See "External Factors that May Impact our Business" in Item 7 of our 2024 10-K for a discussion of additional factors beyond our control that may have an adverse impact on our business.

Current wording

See "External Factors that May Impact our Business" in Item 7, MD&A of our 2025 10-K for a discussion of additional factors beyond our control that may have an adverse impact on our business.

Previous 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.

Current wording

As of March 31, 2026, approximately 5.5 million of our Common Shares remain available for repurchase under our current NCIB, which expires upon the earlier of November 2, 2026 or the completion of purchases thereunder. 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 Q1 2026, we paid $20.0 million (including transaction fees and excluding share buyback taxes) to repurchase 0.1 million Common Shares for cancellation under the NCIB. See "Summary of Q1 2026" and Part II, Item 2, "Unregistered Sales of Equity Securities and Use of Proceeds" below. See note 8 to our Q1 2026 Interim Financial Statements for further details.

Previous 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.

Current wording

The Q1 2026 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 March 31, 2026 and the operating results and cash flows for three months ended March 31, 2026. A discussion of our Q1 2026 financial results is set forth under "Operating Results" below.

Previous wording

Our review of the estimates, judgments and assumptions used in the preparation of the Q3 2025 Interim Financial Statements included those relating to, among others: our determination of the timing of revenue recognition, the determination of whether indicators of impairment existed for our assets and reporting units, our measurement of deferred tax assets and liabilities, our estimated inventory write-downs and expected credit losses, customer creditworthiness, and the determination of the fair value of assets acquired, liabilities assumed and contingent consideration in connection with a business combination. Any revisions to estimates, judgments or assumptions may result in, among other things, write-downs, accelerated depreciation or amortization, or impairments of our assets or reporting units, any of which could have a material impact on our financial performance and financial condition.

Current wording

Our review of the estimates, judgments and assumptions used in the preparation of the Q1 2026 Interim Financial Statements included those relating to, among others: our determination of the timing of revenue recognition, the determination of whether indicators of impairment existed for our assets and reporting units, our measurement of deferred tax assets and liabilities, our estimated inventory write-downs and expected credit losses and customer creditworthiness. Any revisions to estimates, judgments or assumptions may result in, among other things, write-downs, accelerated depreciation or amortization, or impairments of our assets or reporting units, any of which could have a material impact on our financial performance and financial condition. No significant revisions to our critical accounting estimates and/or assumptions were made in Q1 2026. In addition, we determined that no triggering event occurred in Q1 2026 that would require an interim impairment assessment of our reporting units.

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 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.

Current wording

Due to global economic conditions, including the impact of ongoing trade conflicts, tariffs and geopolitical conflicts, there has been and we expect there 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 Q12026 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

Significant accounting policies and methods used in the preparation of our consolidated financial statements are described in note 2 to our 2024 AFS and note 2 to our Q3 2025 Interim Financial Statements. The following paragraph identifies those accounting estimates which management considers to be "critical," defined as accounting estimates made in accordance with GAAP that involve a significant level of estimation uncertainty, and have had, or are reasonably likely to have, a material impact on the Company's financial condition or results of operations. No significant revisions to our critical accounting estimates and/or assumptions were made in Q3 2025.

Current wording

Significant accounting policies and methods used in the preparation of our consolidated financial statements and recently issued accounting pronouncements are described in note 2 to our 2025 AFS and note 2 to our Q1 2026 Interim Financial Statements.

Previous wording

See "Overview" and "Recent Developments" above for a discussion of the impact of recent market conditions on our segments and businesses. See the initial paragraph of "Operating Results" in Item 7 of our 2024 10-K for a general discussion of factors that can cause our financial results to fluctuate from period to period.

Current wording

See "Overview" above for a discussion of the impact of recent market conditions on our segments and businesses. See the initial paragraph of "Operating Results" in Item 7, MD&A of our 2025 10-K for a general discussion of factors that can cause our financial results to fluctuate from period to period.

Previous 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.

Current wording

CCS segment revenue increased $1,399.6 million (76%) in Q1 2026 compared to Q1 2025. Communications end market revenue increased $982.9 million (69%) in Q1 2026 compared to Q1 2025, driven by data center networking demand, including the ongoing ramps of our switch programs. HPS revenue for Q1 2026 increased 63% to approximately $1.7 billion compared to Q1 2025, and accounted for 42% of our total Q1 2026 revenue (Q1 2025 — 39% of our total Q1 2025 revenue). Increases in HPS revenue in Q1 2026 compared to Q1 2025 was driven by strong demand of our networking switch programs with hyperscaler customers. Enterprise end market revenue increased $416.7 million (101%) in Q1 2026 compared to Q1 2025, driven by the ramp-up of 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 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%).

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 84% of total revenue for Q1 2026 (Q1 2025 — 78%). Three customers (all in our CCS segment) individually represented 10% or more of total revenue in Q1 2026 (35%, 15% and 15%). Three customers (all in our CCS segment) individually represented 10% or more of total revenue in Q1 2025 (28%, 13% and 10%).

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 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.

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 Q1 2026" above for a table showing segment income and segment margin for Q1 2026 and Q1 2025. See the reconciliation of segment income to our earnings before income taxes for Q1 2026 and Q1 2025 in note 3 to the Q1 2026 Interim Financial Statements.

Previous wording

ATS segment income increased $2.7 million (7%) in Q3 2025 compared to Q3 2024 and increased $19.9 million (19%) in YTD 2025 compared to YTD 2024. ATS segment margin increased to 5.5% in Q3 2025 from 4.9% in Q3 2024 and increased to 5.3% from 4.6% in YTD 2024. Our ATS segment income and ATS segment margin increased in Q3 2025 and YTD 2025 compared to respective prior year periods, primarily due to improved profitability in our A&D business, aided by the discontinuation of the margin dilutive program.

Current wording

ATS segment income increased $7.3 million (18%) in Q1 2026 compared to Q1 2025. ATS segment margin increased to 6.0% in Q1 2026 from 5.0% in Q1 2025. Our ATS segment income and ATS segment margin increased in Q1 2026 compared to Q1 2025, primarily due to improved mix and higher profitability as a result of our portfolio optimization activities.

Previous wording

We entered into the TRS Agreement to manage cash flow requirements and exposure to fluctuations in the share price of our Common Shares in connection with the settlement of certain outstanding equity awards under our SBC plans. See "Liquidity —Cash requirements — TRS" below for further detail.

Current wording

We entered into the TRS agreement (TRS Agreement) to manage cash flow requirements and exposure to fluctuations in the share price of our Common Shares in connection with the settlement of certain outstanding equity awards under our SBC plans. See "Liquidity —Cash requirements — TRS" below for further detail.

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 and director share units (collectively, DSUs) and RSUs issued to directors as compensation) for the periods indicated (in millions):

Current wording

We grant restricted share units (RSUs) and performance share units (PSUs), and from time to time grant stock options, to employees. Directors may receive compensation in director share units or deferred share units (collectively, "DSUs"), cash or RSUs. The following table shows employee SBC expense, TRS fair value adjustments (TRS FVAs), and director SBC expense for the periods indicated:

Previous 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.

Current wording

We recorded restructuring charges of $2.2 million in Q1 2026 (Q1 2025 —$2.2 million), consisting primarily of cash charges related to employee terminations. At March 31, 2026, our restructuring provision of $3.6 million (December 31, 2025 — $4.4 million) was recorded in accrued and other current liabilities and provisions on our consolidated balance sheets, which we intend to fund with cash on hand.

Previous wording

See note 11 to the Q3 2025 Interim Financial Statements for details of other costs and recoveries included in the restructuring and other charges, net of recoveries recorded in our consolidated statements of operations.

Current wording

See note 10 to the Q1 2026 Interim Financial Statements for details of other costs and recoveries included in the restructuring and other charges (recoveries) recorded in our consolidated statements of operations.

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 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.

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 supplier financing programs (SFPs), and interest expense on our finance lease obligations, net of interest income earned. During Q1 2026, we incurred Finance Costs of $16.0 million (Q1 2025 — $13.7 million). See "Capital Resources" below for descriptions of our interest rate swap agreements, A/R sales program and customer SFPs. Interest expense under our credit facility recorded in Finance Costs, including the impact of our interest rate swap agreements, was $10.7 million in Q1 2026 (Q1 2025 — $13.1 million). See "Liquidity—Cash provided by and used in financing activities— Financing and Finance Costs" below. Interest costs incurred on our TRS Agreement in Q1 2026 were $5.0 million (Q1 2025 —$0.5 million). See "Liquidity—Cash requirements— TRS" below.

Previous wording

Miscellaneous Expense (Income) consists primarily of: (i) certain net periodic benefit costs (credits) related to our pension and post-employment benefit plans consisting of interest costs and expected returns on pension balances, and amortization of actuarial gains or losses; and (ii) gains or losses related to our foreign currency forward exchange contracts and interest rate swaps that we entered into prior to 2024. Those derivative instruments were accounted for as either cash flow hedges (qualifying for hedge accounting) or economic hedges under IFRS. However, those contracts were not accounted for as such under GAAP until January 1, 2024. Certain gains and losses related to those contracts were recorded in Miscellaneous Expense (Income).

Current wording

Miscellaneous Expense (Income) consists primarily of: (i) certain net periodic benefit costs (gains) related to our pension and post-employment benefit plans consisting of interest costs, expected returns on plan balances, and amortization of actuarial gains or losses; (ii) where applicable, gains on insurance claims settlement; and (iii) where applicable, gains or losses related to interest rate swaps that we entered into prior to 2024. Those interest rate swap contracts were accounted for as cash flow hedges (qualifying for hedge accounting) under International Financial Reporting Standards (IFRS). However, those contracts were not accounted for as such under GAAP until January 1, 2024. Certain gains and losses related to those contracts were recorded in Miscellaneous Expense (Income).

Previous 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.

Current wording

We recorded Miscellaneous Income of $0.2 million for Q1 2026 (Q1 2025 — Miscellaneous Expense of $1.4 million). See note 11 to the Q1 2026 Interim Financial Statements for details.

Previous 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.

Current wording

For Q1 2026, we had a net income tax expense of $44.0 million on earnings before tax of $256.3 million, compared to a net income tax expense of $27.5 million on earnings before tax of $113.7 million for Q1 2025.

Previous 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).

Current wording

In Q1 2026, our net income tax expense included $7.2 million tax expense related to Pillar Two global minimum tax legislation (GMT).

Previous wording

We develop our tax filing positions based upon the anticipated nature and structure of our business and the tax laws, administrative practices and judicial decisions currently in effect in the jurisdictions in which we have assets or conduct business, all of which are subject to change or differing interpretations. We are subject to tax audits in various jurisdictions which could result in additional tax expense in future periods relating to prior results. Reviews by tax authorities generally focus on, but are not limited to, the validity of our inter-company transactions, including financing and transfer pricing policies which generally involve subjective areas of taxation and significant judgment. Any such increase in our income tax expense and related interest and/or penalties could have a significant adverse impact on our future earnings and future cash flows.

Current wording

We develop our tax filing positions based upon the anticipated nature and structure of our business and the tax laws, administrative practices and judicial decisions currently in effect in the jurisdictions in which we have assets or conduct business, all of which are subject to change or differing interpretations. We are subject to tax audits in various jurisdictions which could result in additional tax expense in future periods relating to prior results. Reviews by tax authorities generally focus on, but are not limited to, the validity of our inter-company transactions, including financing and transfer pricing policies which generally involve subjective areas of taxation and significant judgment, as well as withholding and indirect taxes. Any such increase in our income tax expense and related interest and/or penalties could have a significant adverse impact on our future earnings and future cash flows.

Previous wording

The successful pursuit of assertions made by any government authority, including tax authorities, could result in our owing significant amounts of tax or other reimbursements, interest and possibly penalties. We believe we adequately accrue for any probable potential adverse ruling. However, there can be no assurance as to the final resolution of any claims and any resulting proceedings. If any claims and any ensuing proceedings are determined adversely to us, the amounts we may be required to pay could be material, and in excess of amounts accrued.

Current wording

The successful pursuit of assertions made by any government authority, including tax authorities, could result in our owing significant amounts of tax or other reimbursements, interest and possibly penalties. We believe that adequate amounts have been accrued in accordance with GAAP (ASC 740 Income Taxes) for any adjustments to the income tax expense or other tax items that may ultimately result from these examinations. However, there can be no assurance as to the final resolution of any claims and any resulting proceedings. If any claims and any ensuing proceedings are determined adversely to us, the amounts we may be required to pay could be material, and in excess of amounts accrued.

Previous 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.

Current wording

Net earnings for Q1 2026 of $212.3 million increased $126.1 million compared to Q1 2025. The increase was primarily due to $163.3 million in higher gross profit (see "Gross profit" above), partially offset by $23.6 million in higher research and development (R&D) expense (to support the growth of our HPS business) and $16.5 million in higher income tax expense (primarily driven by higher earnings before income taxes in Q1 2026 compared to Q1 2025).

Previous 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.

Current wording

In Q1 2026, we generated $356.3 million of net cash from operating activities, primarily due to net earnings of $212.3 million, favorable changes in working capital of $87.0 million, and non-cash expenses added back to net earnings, partially offset by non-cash recoveries. Our favorable working capital changes in Q1 2026 were primarily driven by an increase in A/P balances in Q1 2026, the effects of which were partially offset by the increases in A/R and inventory balances in Q1 2026. A/P balances increased in Q1 2026 primarily due to our business growth, as well as timing of payments and purchases. A/R balances increased in Q1 2026 primarily due to timing and volume of revenue and collections. Increase in inventory balances in Q1 2026, primarily reflected our business growth (mostly in our CCS segment). Net cash provided by operating activities for

Previous wording

Non-GAAP free cash flow is a non-GAAP financial measure without a standardized meaning and may not be comparable to similar measures presented by other companies. We define non-GAAP free cash flow as cash provided by or used in operations less the purchase of property, plant and equipment (net of proceeds from the sale of certain surplus equipment and property, when applicable). Non-GAAP free cash flow does not represent residual cash flow available to Celestica for discretionary expenditures. Management uses non-GAAP free cash flow as a measure, in addition to GAAP cash provided by or used in operations (described above), to assess our operational cash flow performance. We believe non-GAAP free cash flow provides another level of transparency to our ability to generate cash from normal business operations.

Current wording

Non-GAAP free cash flow is a non-GAAP financial measure without a standardized meaning and may not be comparable to similar measures presented by other companies. We define non-GAAP free cash flow as cash provided by or used in operations less the purchase of property, plant and equipment (net of proceeds from the sale of certain surplus assets, when applicable). Non-GAAP free cash flow does not represent residual cash flow available to Celestica for discretionary expenditures. Management uses non-GAAP free cash flow as a measure, in addition to GAAP cash provided by or used in operations (described above), to assess our operational cash flow performance. We believe non-GAAP free cash flow provides another level of transparency to our ability to generate cash from normal business operations.

Previous 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).

Current wording

Our non-GAAP free cash flow of $137.9 million for Q1 2026 increased $44.3 million compared to Q1 2025, primarily due to $226.0 million in higher cash generated from operations (as described above), partially offset by $181.7 million in higher purchases of property, plant and equipment (see "cash used in investing activities" below), net of sales proceeds.

Previous 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.

Current wording

Our capital expenditures for Q1 2026 were $229.5 million (Q1 2025 — $36.7 million), primarily to enhance our manufacturing capabilities in various geographies (including expansions and enhancements at our Thailand, U.S., Mexico and Japan manufacturing facilities and our design centers), in support of our growth in AI/ML and HPS programs. Most of our capital expenditures in Q1 2026 and Q1 2025 pertained to our CCS segment. We fund our capital expenditures from cash generated from operations.

Previous wording

See "Summary of Q3 2025 and Year-to-Date Period" above for a table detailing Common Share repurchases for the periods indicated.

Current wording

See "Summary of Q1 2026" above for a table detailing Common Share repurchases for the periods indicated.

Previous wording

We are party to a credit agreement (Credit Facility) with Bank of America, N.A., as Administrative Agent, and the other lenders party thereto, which as of a June 2024 amendment, includes a term loan in the original principal amount of $250.0 million (Term A Loan), a term loan in the original principal amount of $500.0 million (Term B Loan, and collectively with the Term A Loan, the Term Loans), and a $750.0 million revolving credit facility (Revolver). See note 8 to the Q3 2025 Interim Financial Statements and note 11 to our 2024 AFS for a description of our Credit Facility terms.

Current wording

We are party to a credit agreement (Credit Facility) with Bank of America, N.A., as Administrative Agent, and the lenders party thereto, which, prior to the April 2026 Amendment, included the Term A Loan in the original principal amount of $250.0 million, a term loan in the original principal amount of $500.0 million (Term B Loan), and a $750.0 million Revolver. On April 27, 2026, we amended our Credit Facility to: (1) increase the commitments under the Revolver from $750.0 million to $1,750.0 million; (2) refinance the Term A Loan into the New Term A Loan; and (3) extend the maturity of the Revolver and the New Term A Loan from June 2029 to April 2031. See "Recent Developments—Celestica Amends and Upsizes Credit Facility" above. The Term A Loan (or its successor term loan, the New Term A Loan) and the Term B Loan are referred to as the "Term Loans."

Previous wording

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

Current wording

Activity under our Credit Facility during Q1 2026 is set forth below (in millions):

Previous 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.

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 $9.9 million in Q1 2026 (Q1 2025 — $12.5 million). Interest rates for outstanding borrowings under the Credit Facility prior to and subsequent to the April 2026 Amendment are described in note 7 to the Q1 2026 Interim Financial Statements. Any increase in prevailing interest rates, margins, or amounts borrowed, would cause our interest expense to increase. Under the Credit Facility, we are required to pay a commitment fee on the unused portion of the Revolver. Commitment fees paid in Q1 2026 were $1.2 million (Q1 2025 — $0.6 million).