CELESTICA INC

Previous 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.

Current wording

In this Quarterly Report on Form 10-Q (Q2 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 June 30, 2026 unaudited interim financial statements (Q2 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 July 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. The first half of 2026 is referred to herein as "1H 2026", and the first half of 2025 is referred to herein as "1H 2025."

Previous 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.

Current wording

Certain statements contained in this Q2 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 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.

Current wording

Forward-looking statements contained in this Q2 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, trade restrictions, customs administration, or related refund or recovery processes, including developments relating to duties imposed under the International Emergency Economic Powers Act of 1977 and any replacement, continuing or retaliatory tariff measures compared to what are in effect as of July 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 tariffs, 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; programs a…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We anticipate our 2026 capital expenditures to increase compared to 2025. However, our capital investments may not proceed as anticipated, or we may encounter delays in the timely completion of construction and operationalization of new or expanded assets due to various reasons such as issues with securing required materials, equipment, utilities and labor in a timely manner. We may also experience delays or challenges related to utility, power availability, grid interconnection, supply chain constraints, and other infrastructure or regulatory requirements. Any of these factors could delay the realization of anticipated capacity, increase project costs, or result in assets that are not fully operational when expected. If demand, mix, yield or utilization differ from our expectations, or if customer roadmaps change, ramp milestones are delayed, or expected volumes do not materialize, added capacity may be underutilized and returns on these investments may be lower than expected, and our financial results could be adversely affected. See Item 1A, Risk Factors of our 2025 10-K "Increased capital expenditures to expand capacity to support anticipated growth in customer demand may not proceed as anticipated and may increase our fixed‑cost base, constrain liquidity and adversely affect returns" and Item 7, MD&A — "Liquidity and Capital Resources” of our 2025 10-K and “Liquidity and Capital Resources” below.

Current wording

Our capital investments may not proceed as anticipated, or we may encounter delays in the timely completion of construction and operationalization of new or expanded assets due to various reasons such as issues with securing required materials, equipment, utilities and labor in a timely manner. We may also experience delays or challenges related to utility, power availability, grid interconnection, supply chain constraints, and other infrastructure or regulatory requirements. Any of these factors could delay the realization of anticipated capacity, increase project costs, or result in assets that are not fully operational when expected. If demand, mix, yield or utilization differ from our expectations, or if customer roadmaps change, ramp milestones are delayed, or expected volumes do not materialize, added capacity may be underutilized and returns on these investments may be lower than expected, and our financial results could be adversely affected. See Item 1A, Risk Factors of our 2025 10-K "Increased capital expenditures to expand capacity to support anticipated growth in customer demand may not proceed as anticipated and may increase our fixed‑cost base, constrain liquidity and adversely affect returns" and Item 7, MD&A — "Liquidity and Capital Resources" of our 2025 10-K and "Liquidity and Capital Resources" below.

Previous 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."

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. 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 could negatively affect our operating results. 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."

Previous wording

Materials shortages or other issues affecting timely access to these materials (which often occur in our industry) may impact our ability to successfully complete a program. Factors that may cause or contribute to such materials shortages or supply issues include: supplier or manufacturer delays or failures to provide components, supplies or equipment as required; quality or reliability issues at component providers; financial difficulties affecting suppliers' production and ability to supply components; and industry-wide shortages for certain electronic components. Such materials shortages or supply issues could have a significant impact on our operations and on our customers, including: inability to deliver finished products in a timely manner; losses on fixed price contracts due to increased costs for equipment and supplies; having to source items from third parties on less favorable terms; halted or delayed production of a customer's product; claims against us for failure to meet required customer specifications; and carrying higher levels of inventory and extended lead-times. Shortages may also result in increased component prices, which may require price increases in the products and services that we provide. Any increase in our costs that we are unable to recover would negatively impact our margins and operating results. See Item 1A, Risk Factors of our 2025 10-K "We are dependent on third parties to supply certain materials, and our results were negatively affected by the availability of such materials in the past and may be negatively affected by the quality, availability and cost of such materials in the future."

Current wording

Component shortages or other issues affecting timely access to materials (which often occur in our industry) may impact our ability to successfully complete a program. Factors that may cause or contribute to such component shortages or supply issues include: supplier or manufacturer delays or failures to provide components, supplies or equipment as required; quality or reliability issues at component providers; financial difficulties affecting suppliers' production and ability to supply components; and industry-wide shortages for certain electronic components. Such component shortages or supply issues could have a significant impact on our operations and on our customers, including: inability to deliver finished products in a timely manner; losses on fixed price contracts due to increased costs for equipment and supplies; having to source items from third parties on less favorable terms; halted or delayed production of a customer's product; claims against us for failure to meet required customer specifications; and carrying higher levels of inventory and extended lead-times. Shortages may also result in increased component prices, which may require price increases in the products and services that we provide. Any increase in our costs that we are unable to recover would negatively impact our margins and operating results. See Item 1A, Risk Factors of our 2025 10-K "We are dependent on third parties to supply certain materials, and our results were negatively affected by the availability of such materials in the past and may be negatively affected by the quality, availability and cost of such materials in the future."

Previous wording

Increases in prices for energy and other commodities may result in further increased raw material, component and transportation costs. Any increase in our costs that we are unable to recover through our pricing to our customers would negatively impact our margins and operating results. See Item 1A, Risk Factors of our 2025 10-K "Volatility in energy and commodity prices may negatively impact our operating results."

Current wording

Increases in prices for energy and other commodities may result in further increased raw materials, component and transportation costs. Any increase in our costs that we are unable to recover through our pricing to our customers would negatively impact our margins and operating results. See Item 1A, Risk Factors of our 2025 10-K "Volatility in energy and commodity prices may negatively impact our operating results."

Previous wording

On April 27, 2026, we amended our existing senior credit agreement (April 2026 Amendment) to: (1) increase the commitments under the revolving credit facility (Revolver) from $750.0 million to $1,750.0 million; (2) refinance our existing term A loan facility (Term A Loan, $228.1 million outstanding borrowings at March 31, 2026) into a new $250.0 million term A loan facility (New Term A Loan); and (3) extend the maturity of the Revolver and the New Term A Loan from June 2029 to

Current wording

We are party to a credit agreement with Bank of America, N.A., as Administrative Agent, and the lenders party thereto. As previously announced in April 2026, we amended our credit agreement (April 2026 Amendment) to: (1) increase the commitments under the revolving credit facility (Revolver) from $750.0 million to $1,750.0 million; (2) refinance our then-existing term A loan facility (Refinanced Term A Loan) into a new $250.0 million term A loan (Term A Loan); and (3) extend the maturity of the Revolver and the Term A Loan from June 2029 to April 2031. See "Liquidity —Cash used in and provided by financing activities — Financing and finance costs" below.

Previous 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.

Current wording

The Q2 2026 Interim Financial Statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present fairly our financial position at June 30, 2026 and the operating results and cash flows for the three and six months ended June 30, 2026. A discussion of our Q2 2026 and 1H 2026 financial results is set forth under "Operating Results" below.

Previous wording

(1)Consists entirely of Common Share repurchases for SBC delivery obligations under automatic share purchase plans for such purpose through an independent broker.

Current wording

(2)Consists entirely of Common Share repurchases under ASPPs for SBC delivery obligations through an independent broker.

Previous 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.

Current wording

Our review of the estimates, judgments and assumptions used in the preparation of the Q2 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 Q2 2026 and 1H 2026. In addition, we determined that no triggering event occurred in Q2 2026 and 1H 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 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.

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 Q22026 Interim Financial Statements taking into consideration certain possible impacts due to the foregoing factors. These estimates may change, as new events occur, or additional information is obtained.

Previous 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.

Current wording

CCS segment revenue increased $1,736.0 million (84%) in Q2 2026 compared to Q2 2025 and increased $3,135.6 million (80%) in 1H 2026 compared to 1H 2025. Communications end market revenue increased $1,012.0 million (62%) in Q2 2026 compared to Q2 2025 and increased $1,994.9 million (65%) in 1H 2026 compared to 1H 2025, driven by data center networking demand, including the continued growth of our switch programs. HPS revenue for Q2 2026 increased 58% to approximately $1.9 billion compared to Q2 2025, and accounted for 41% of our total Q2 2026 revenue (Q2 2025 — 43% of our total Q2 2025 revenue). Our HPS revenue for 1H 2026 increased 60% to approximately $3.6 billion compared to 1H 2025, and accounted for 41% of our total 1H 2026 revenue (1H 2025 — 41% of our total 1H 2025 revenue). Increases in HPS revenue was driven by strong demand for our networking switch programs with hyperscaler customers. Enter prise end market revenue increased $724.0 million (167%) in Q2 2026 compared to Q2 2025 and increased $1,140.7 million (135%) in 1H 2026 compared to 1H 2025, driven by the continued ramp-up of an AI/ML compute program with a hyperscaler customer and increased demand in our storage programs.

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 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%).

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 83% of total revenue for Q2 2026 and 1H 2026 (Q2 2025 and 1H 2025 — 78%). Three customers (all in our CCS segment) individually represented 10% or more of total revenue in Q2 2026 (32%, 17% and 14%) and 1H 2026 (34%, 16% and 15%). 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%).

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 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.

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 Q2 2026 and Year-to-Date Period" above for a table showing segment income and segment margin for Q2 2026, 1H 2026 and the respective prior year periods. See the reconciliation of segment income to our earnings before income taxes for Q2 2026, 1H 2026 and the respective prior year periods in note 3 to the Q2 2026 Interim Financial Statements.

Previous wording

CCS segment income increased $130.1 million (88%) in Q1 2026 compared to Q1 2025, as a result of the CCS segment revenue increase in Q1 2026 compared to Q1 2025. CCS segment margin increased to 8.6% in Q1 2026 from 8.0% in Q1 2025, driven by more favorable mix and operating leverage.

Current wording

CCS segment income increased $158.7 million (93%) in Q2 2026 compared to Q2 2025 and increased $288.8 million (91%) in 1H 2026 compared to 1H 2025, as a result of the CCS segment revenue increases in Q2 2026 and 1H 2026 described above. CCS segment margin increasedto 8.7% in Q2 2026 from 8.3% in Q2 2025 and increased to 8.6% in 1H 2026 from 8.1% in 1H 2025, driven by operating leverage.

Previous 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:

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"), RSUs, Director RSUs (D-RSUs), or cash. The following table shows employee SBC expense, TRS FVAs, and director SBC expense for the periods indicated:

Previous wording

We perform ongoing evaluations of our business, operational efficiency and cost structure, and implement restructuring actions as we deem necessary. Our restructuring activities consisted primarily of actions to adjust our cost base to address reduced levels of demand in certain of our businesses and geographies.

Current wording

We perform ongoing evaluations of our business, operational efficiency and cost structure, and implement restructuring actions as we deem necessary. Our restructuring activities consist primarily of actions to adjust our cost base to address reduced levels of demand in certain of our businesses and geographies.

Previous 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.

Current wording

We recorded restructuring charges of $2.9 million in Q2 2026 and $5.1 million in 1H 2026 (Q2 2025 —$12.8 million;1H 2025 —$15.0 million), consisting primarily of cash charges related to employee terminations. At June 30, 2026, our restructuring provision of $4.0 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

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.

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. During Q2 2026 and 1H 2026, we incurred finance costs of $21.2 million and $39.2 million, respectively (Q2 2025 — $14.4 million; 1H 2025 — $29.4 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 $11.9 million in Q2 2026 and $22.6 million in 1H 2026 (Q2 2025 — $11.2 million;1H 2025 —$24.3 million). See "Liquidity—Cash provided by and used in financing activities— Financing and finance costs" below. Interest costs incurred on our TRS Agreement in Q2 2026 and 1H 2026 were $5.0 million and $10.0 million, respectively (Q2 2025 —$1.8 million;1H 2025 —$2.3 million). See "Liquidity—Cash requirements— TRS" below.

Previous 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.

Current wording

For Q2 2026, we had a net income tax expense of $72.8 million on earnings before tax of $441.6 million, compared to a net income tax expense of $46.3 million on earnings before tax of $257.3 million for Q2 2025. For 1H 2026, we had a net income tax expense of $116.8 million on earnings before tax of $697.9 million, compared to a net income tax expense of $73.8 million on earnings before tax of $371.0 million for 1H 2025.

Previous wording

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

Current wording

Our Q2 2026 and 1H 2026 net income tax expense included tax expense related to Pillar Two global minimum tax legislation (GMT) of $9.0 million and $16.2 million, respectively.

Previous wording

In Q1 2025, our net income tax expense included$6.8 million withholding tax expense incurred to minimize the impact of GMT and $3.0 million tax expense for tax uncertainties relating to one of our subsidiaries, offset in part by$1.9 million of reversals of tax uncertainties relating to another of our subsidiaries.

Current wording

Our Q22025 and 1H 2025 net income tax expense included withholding tax expense incurred to minimize the impact of GMT of $7.1 million and $13.9 million, respectively. Our 1H 2025 net income tax expense also included a $3.0 million of tax expense for tax uncertainties relating to one of our subsidiaries, offset in part by $1.9 million of reversals of tax uncertainties relating to another of our subsidiaries.

Previous wording

We are under examination by the Thailand tax authorities for the tax year 2019. The examination may lead to adjustments to our taxes with respect to the year under examination as well as other subsequent periods.

Current wording

We are under examination by the Thailand tax authorities for tax years 2019 and 2020. The examination may lead to adjustments to our taxes with respect to the year under examination as well as other subsequent periods.

Previous 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

Current wording

In 1H 2026, we generated $767.2 million of net cash from operating activities, primarily due to net earnings of $581.1 million, favorable changes in working capital of $195.6 million and non-cash expenses added back to net earnings, partially offset by non-cash recoveries (including favorable TRS FVAs of $87.1 million). Our favorable working capital changes in 1H 2026 were primarily driven by an increase in A/P balances in 1H 2026, the effects of which were largely offset by the increases in A/R and inventory balances in 1H 2026. A/P balances increased in 1H 2026 primarily due to our business growth, as well as timing of payments and purchases. A/R balances increased in 1H 2026 primarily due to timing and volume of revenue and collections. Increase in inventory balances in 1H 2026, primarily reflected our business growth (mostly in our CCS segment). Net cash provided by operating activities for 1H 2026 increased $484.5 million compared to 1H 2025, primarily driven by an increase in cash earnings and the favorable changes in working capital requirements.

Previous 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.

Current wording

Our non-GAAP free cash flow of $285.0 million for 1H 2026 increased $71.5 million compared to 1H 2025, primarily due to $484.5 million in higher cash generated from operations (as described above), partially offset by $413.0 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 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.

Current wording

Our capital expenditures for 1H 2026 were $493.3 million (1H 2025 — $69.2 million). Our capital expenditures for 1H 2026 were primarily to support revenue growth in our CCS business and enhance our manufacturing capabilities in various geographies (including at our Thailand and U.S. facilities).

Previous wording

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

Current wording

See "Summary of Q2 2026 and Year-to-Date Period" 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 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."

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, as of the April 2026 Amendment, includes 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 the $1,750.0 million Revolver. Prior to the April 2026 Amendment, the Credit Facility included a term loan in the original principal amount of $250.0 million (Refinanced Term A Loan), the Term B Loan, and commitments of $750.0 million under the Revolver. The Refinanced Term A Loan was fully repaid at closing of the April 2026 Amendment, using a substantial portion of the proceeds of the Term A Loan. Notwithstanding the repayment of the Refinanced Term A Loan in full and its replacement with the Term A Loan, for accounting purposes, this transaction was treated as a non-substantial modification of the Refinanced Term A Loan. Term A Loan (or its predecessor term loan, the Refinanced Term A Loan) and the Term B Loan are referred to as the "Term Loans."

Previous wording

See note 7 to the Q1 2026 Interim Financial Statements for a description of our Credit Facility terms prior to and subsequent to the April 2026 Amendment.

Current wording

See note 7 to the Q2 2026 Interim Financial Statements for a description of additional terms of the Credit Facility under the April 2026 Amendment. See note 11 to the 2025 AFS for a description of the Credit Facility terms prior to the April 2026 Amendment.

Previous wording

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

Current wording

Activity under our Credit Facility during 1H 2026 is set forth below (in millions):

Previous wording

(1) Represents scheduled quarterly principal repayments under the Term Loans.

Current wording

(1) Represents scheduled quarterly principal repayments under the Term Loans prior to the April 2026 Amendment.

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 $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).

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 in "Capital Resources" below), was $21.3 million in 1H 2026 (1H 2025 — $23.1 million). Interest rates for outstanding borrowings under the Credit Facility at June 30, 2026 are described under "Capital Resources" below. 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 1H 2026 were $2.0 million (1H 2025 — $1.7 million). During 1H 2026, we paid $4.8 million in debt issuance costs related to the April 2026 Amendment.

Previous wording

See "Operating Results —Finance Costs" above for a description of Finance Costs incurred in Q1 2026 and Q1 2025.

Current wording

See "Operating Results —Finance costs" above for a description of finance costs incurred in Q2 2026, 1H 2026 and the respective prior year periods.

Previous wording

During Q1 2026, we paid $3.0 million (Q1 2025 — $2.6 million) in principal payment of finance leases.

Current wording

In 1H 2026, we paid $5.0 million (1H 2025 — $5.2 million) in principal payment of finance leases.

Previous wording

In Q1 2026, we made a cash payment of $325.5 million for withholding taxes in connection with the SBC awards that vested during such period (Q1 2025 — $156.0 million).

Current wording

In 1H 2026, we made a cash payment of $326.3 million for withholding taxes in connection with the SBC awards that vested during such period (1H 2025 — $156.0 million).

Previous wording

Our working capital requirements can vary significantly from month-to-month due to a range of business factors, including the ramping of new programs, expansion of our services and business operations, timing of purchases, higher levels of inventory for new programs and anticipated customer demand, timing of payments and A/R collections, and customer forecasting variations. The international scope of our operations may also create working capital requirements in certain countries while other countries generate cash in excess of working capital needs. Moving cash between countries on a short-term basis to fund working capital is not always expedient due to local currency regulations, tax considerations, and other factors. As a result, we make intra-quarter borrowings and repayments under the Revolver (Intra-Quarter B/Rs) (see "Financing and Finance Costs —Credit Agreement" above for Intra-Quarter B/Rs we made in Q1 2026), sell A/R through our A/R sales program, and/or participate in available customer SFPs when deemed necessary or desirable to effectively manage our short-term liquidity and working capital requirements. The timing and the amounts we borrow or repay under these facilities can vary significantly from month-to-month depending upon our cash requirements.

Current wording

Our working capital requirements can vary significantly from month-to-month due to a range of business factors, including the ramping of new programs, expansion of our services and business operations, timing of purchases, higher levels of inventory for new programs and anticipated customer demand, timing of payments and A/R collections, and customer forecasting variations. The international scope of our operations may also create working capital requirements in certain countries while other countries generate cash in excess of working capital needs. Moving cash between countries on a short-term basis to fund working capital is not always expedient due to local currency regulations, tax considerations, and other factors. As a result, we make intra-quarter borrowings and repayments under the Revolver (Intra-Quarter B/Rs) (see "Financing and finance costs —Credit Agreement" above for Intra-Quarter B/Rs we made in 1H 2026), sell A/R through our A/R sales program, and/or participate in available customer SFPs when deemed necessary or desirable to effectively manage our short-term liquidity and working capital requirements. The timing and the amounts we borrow or repay under these facilities can vary significantly from month-to-month depending upon our cash requirements.

Previous wording

Notwithstanding the foregoing and the April 2026 Amendment, although we anticipate that we will be able to repay or refinance outstanding obligations under our Credit Facility when they mature (our primary current long-term cash liquidity requirement), there can be no assurance we will be able to do so, or that the terms of any refinancing will be favorable. In addition, we may require additional capital in the future to fund capital expenditures, acquisitions, strategic transactions or other investments. We will continue to assess our liquidity position and potential sources of supplemental liquidity in view of our objectives, operating performance, economic and capital market conditions and other relevant circumstances. Our operating performance may also be affected by matters discussed under Item 1A, Risk Factors of our 2025 10-K. These risks and uncertainties may adversely affect our long-term liquidity.

Current wording

Based on our current cash flow budgets and forecasts of our short-term and long-term liquidity needs, we continue to believe that our current and projected sources of liquidity will be sufficient to fund our anticipated liquidity needs for the next twelve months and beyond. Specifically, we believe that cash flow from operating activities, together with cash on hand, availability under the Revolver ($1,739.6 million at June 30, 2026), potential availability under uncommitted intraday and overnight bank overdraft facilities, and cash from accepted sales of A/R, will be sufficient to fund our anticipated working capital needs, planned capital spending, contractual obligations and other cash requirements (including any required SBC share repurchases and SBC cash settlements, debt repayments and finance costs). See "Capital Resources" below. Notwithstanding the foregoing, although we anticipate that we will be able to repay or refinance outstanding obligations under our Credit Facility when they mature (our primary current long-term cash liquidity requirement), there can be no assurance we will be able to do so, or that the terms of any refinancing will be favorable. In addition, we may require additional capital in the future to fund capital expenditures, acquisitions, strategic transactions or other investments. We will continue to assess our liquidity position and potential sources of supplemental liquidity in view of our objectives, operating performance, economic and capital market conditions and other relevant circumstances. Our operating performance may also be affected by matters discussed under Item 1A, Risk Factors of our 2025 10-K. These risks and uncertainties may adversely affect our long-term liquidity.

Previous wording

See "Liquidity —Cash provided by and used in financing activities— Financing and Finance Costs" above for interest and commitment fees paid under our Credit Facility in Q1 2026. Annual interest expense and fees under the Credit Facility, including the impact of our interest rate swap agreements and the April 2026 Amendment, based on amounts and swap agreements outstanding at March 31, 2026 are approximately$46 million. We expect to fund our Finance Costs with cash on hand.

Current wording

See "Liquidity —Cash provided by and used in financing activities— Financing and finance costs" above for interest and commitment fees paid under our Credit Facility in 1H 2026. Annual interest expense and fees under the Credit Facility, including the impact of our interest rate swap agreements, based on amounts and swap agreements outstanding at June 30, 2026 are approximately $46 million. We expect to fund our finance costs with cash on hand.

Previous wording

We do not believe that the aggregate amounts outstanding under our Credit Facility at March 31, 2026 ($719.3 million under the Term Loans and $10.4 million in ordinary course L/Cs), had or will have a material adverse impact on our liquidity, our results of operations or financial condition. In addition, we do not believe that Intra-Quarter B/Rs have had (or future Intra-Quarter B/Rs will have) a material adverse impact on our liquidity, results of operations or financial condition. See "Capital Resources" below for a description of our available sources of liquidity. See the Credit Facility activity table under "Financing and Finance Costs —Credit Agreement" above for Intra-Quarter B/Rs during Q1 2026.

Current wording

We do not believe that the aggregate amounts outstanding under our Credit Facility at June 30, 2026 ($740.0 million under the Term Loans and $10.4 million in ordinary course L/Cs), had or will have a material adverse impact on our liquidity, our results of operations or financial condition. In addition, we do not believe that Intra-Quarter B/Rs have had (or future Intra-Quarter B/Rs will have) a material adverse impact on our liquidity, results of operations or financial condition. See "Capital Resources" below for a description of our available sources of liquidity. See the Credit Facility activity table under "Financing and finance costs —Credit Agreement" above for Intra-Quarter B/Rs during 1H 2026.