CELESTICA INC

Previous 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."

Current wording

In this Quarterly Report on Form 10-Q (Q3 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 September 30, 2026 unaudited interim financial statements (Q3 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 October 26, 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 nine months of 2026 is referred to herein as "YTD 2026", and the nine months of 2025 is referred to herein as "YTD 2025."

Previous 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.

Current wording

Certain statements contained in this Q3 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; our strategies and 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 changes in revenue and growth in certain segments, businesses and end markets; 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, and the global economic environment; our anticipated use of the net proceeds of our recent public offering; our intention to launch a new normal course issuer bid (NCIB) and its anticipated terms; 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 issu…

Excerpt shortened here; the source contains the full paragraph.

Previous 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.

Current wording

Forward-looking statements contained in this Q3 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 and demand environment of our businesses; 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; the amount and timing of our working capital investments and 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 (including continuing or retaliatory tariff measures), trade restrictions, or customs administration from those in effect as of October 26, 2026; no unforeseen adverse changes in the regulatory environment or government policies (including export controls, moratoriums and other AI-related measures); that our customers will continue to 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 trade negotiations; 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 inv…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Forward-looking statements are not guarantees of future performance and the Company's actual results may differ significantly from the results discussed in the forward-looking statements. Achievement of anticipated results is subject to substantial risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. You should bear this in mind as you consider forward-looking statements, and you are cautioned not to put undue reliance on forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law or by the rules and regulations of the U.S. Securities and Exchange Commission (SEC). You are advised, however, to consult any further disclosures we make on related subjects. Factors that might cause such differences include, but are not limited to, those discussed in the Risk Factor Summary and in Part I, Item 1A of our 2025 10-K under the heading "Risk Factors," which are incorporated herein by reference, and subsequent Quarterly Reports on Form 10-Q and other documents filed with the SEC, and as applicable, the Canadian Securities Administrators.

Current wording

Forward-looking statements are not guarantees of future performance and the Company's actual results may differ significantly from the results discussed in the forward-looking statements. Achievement of anticipated results is subject to substantial risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. You should bear this in mind as you consider forward-looking statements, and you are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law or by the rules and regulations of the U.S. Securities and Exchange Commission (SEC). You are advised, however, to consult any further disclosures we make on related subjects. Factors that could cause such differences include, but are not limited to, those discussed in the Risk Factor Summary and in Part I, Item 1A of our 2025 10-K under the heading "Risk Factors," which are incorporated herein by reference, and in our subsequent Quarterly Reports on Form 10-Q and other documents filed with the SEC and, as applicable, the Canadian Securities Administrators.

Previous 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 Q2 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.

Current wording

We serve across two operating and reportable segments: Connectivity & Cloud Solutions (CCS) and Advanced Technology Solutions (ATS). Effective Q3 2026, we renamed the two end markets within our CCS segment to better describe the nature of the products delivered in each end market. Specifically, our Communications end market was renamed Networking, and our Enterprise end market was renamed Compute & Storage. This name change does not impact our segment reporting structure, the composition of our reportable segments, or previously reported financial results for our segments and end markets. Our Compute & Storage end market continues to consist of Servers and Storage businesses. 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 Q3 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 frontier AI lab 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

Recent investments in AI infrastructure by hyperscalers and other data center customers have increased demand for certain products in our CCS segment, including our Hardware Platform Solutions (HPS) business. However, the long‑term trajectory of AI adoption and related data center deployment is uncertain and may be affected by a variety of factors outside our control, including rapid changes in technology and customer AI roadmaps; evolving regulatory developments (including export controls and other AI-related measures) that increase our customers’ costs or restrict their AI activities; constraints on specialized components and data center capacity; and the availability, timing, reliability and price of critical utilities. Adverse developments in any of these areas could cause our cloud-based and other service provider customers, including hyperscalers and OEM customers, to delay, reduce or cancel programs, which could adversely impact demand for our products and services, as well as our revenue growth and operating results. See Item 1A, Risk Factors of our 2025 10-K "The future development and adoption of AI and the deployment of data center infrastructure are uncertain and depend on the availability and cost of critical inputs (including power and water), which could materially affect demand for our products and services and our operating results."

Current wording

Recent investments in AI infrastructure by hyperscalers and other data center customers have increased demand for certain products in our CCS segment, including our Hardware Platform Solutions (HPS) business. However, the long‑term trajectory of AI adoption and related data center deployment is uncertain and may be affected by a variety of factors outside our control, including rapid changes in technology and customer AI roadmaps; evolving regulatory and government policies (including export controls, moratoriums and other AI-related measures) that increase our customers’ costs or restrict their AI activities; constraints on specialized components and data center capacity; and the availability, timing, reliability and price of critical utilities. Adverse developments in any of these areas could cause our cloud-based and other service provider customers, including hyperscalers and OEM customers, to delay, reduce or cancel programs, which could adversely impact demand for our products and services, as well as our revenue growth and operating results. See Item 1A, Risk Factors of our 2025 10-K "The future development and adoption of AI and the deployment of data center infrastructure are uncertain and depend on the availability and cost of critical inputs (including power and water), which could materially affect demand for our products and services and our operating results."

Previous wording

In 2025, the U.S. Administration imposed a series of tariffs on nearly all U.S. trading partners pursuant to the International Emergency Economic Powers Act of 1977 (IEEPA). In March 2026, the U.S. Court of International Trade issued an order directing U.S. Customs and Border Protection (CBP) to process refunds of certain IEEPA tariffs. In April 2026, the CBP released a new system to process IEEPA tariff refunds, allowing importers to submit refund claims. We recognize tariff refunds when realization is assured. In Q2 2026 and 1H 2026, tariff refunds did not have a material impact on our results of operations. The global tariff landscape continues to evolve rapidly. Changes in policies by U.S. and other governments, including replacement or additional tariffs, trade restrictions, retaliatory measures or changes in refund eligibility by the U.S. or other governments could negatively affect our business, results of operations and financial condition. See Item 1A, Risk Factors of our 2025 10-K "U.S. policies or legislation could have a material adverse effect on our business, results of operations and financial condition."

Current wording

In 2025, the U.S. Administration imposed a series of tariffs on nearly all U.S. trading partners pursuant to the International Emergency Economic Powers Act of 1977 (IEEPA). In March 2026, the U.S. Court of International Trade issued an order directing U.S. Customs and Border Protection to process refunds of certain IEEPA tariffs. In Q2 2026 and Q3 2026, we received refunds for IEEPA tariffs previously paid. On July 23, 2026, the Office of the U.S. Trade Representative took action under Section 301 of the Trade Act of 1974 and imposed new tariff rates ranging from 10% to 12.5% on most imports from certain countries. As of October 26, 2026, both tariff payments and tariff refunds have not had a material impact on our results of operations. The global tariff landscape continues to evolve rapidly. Changes in policies by U.S. and other governments, including replacement or additional tariffs, trade restrictions, retaliatory measures or changes in refund eligibility by the U.S. or other governments could negatively affect our business, results of operations and financial condition. See Item 1A, Risk Factors of our 2025 10-K "U.S. policies or legislation could have a material adverse effect on our business, results of operations and financial condition."

Previous 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.

Current wording

The Q3 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 September 30, 2026 and the operating results and cash flows for the three and nine months ended September 30, 2026. A discussion of our Q3 2026 and YTD 2026 financial results is set forth under "Operating Results" below.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

(2)For YTD 2025, consists entirely of Common Share repurchases under ASPPs for SBC delivery obligations through an independent broker.

Previous wording

We receive cash deposits from certain of our customers primarily to help reduce risks related to excess and/or obsolete inventory. See "Customer cash deposits for inventory" in the table below.

Current wording

We receive cash deposits from certain of our customers primarily to help reduce risks related to excess and/or obsolete inventory. See "Customer cash deposits for inventory at period end" in the table below.

Previous 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.

Current wording

Our review of the estimates, judgments and assumptions used in the preparation of the Q3 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, 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 YTD 2026. In addition, we determined that no triggering event occurred in YTD 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 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.

Current wording

Due to global economic conditions, including the impact of ongoing trade conflicts, tariffs, rising interest rates, 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 Q32026 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

Revenue of $4.70 billion for Q2 2026 increased 62% compared to Q2 2025. Revenue of $8.75 billion for 1H 2026 increased 58% compared to 1H 2025.

Current wording

Revenue of $5.83 billion for Q3 2026 increased 83% compared to Q3 2025. Revenue of $14.58 billion for YTD 2026 increased 67% compared to YTD 2025.

Previous 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.

Current wording

CCS segment revenue increased $2,459.3 million (102%) in Q3 2026 compared to Q3 2025 and increased $5,594.9 million (88%) in YTD 2026 compared to YTD 2025. Networking end market revenue increased $1,320.3 million (68%) in Q3 2026 compared to Q3 2025 and increased $3,315.2 million (66%) in YTD 2026 compared to YTD 2025, driven by data center networking demand, including the continued growth of our switch programs. HPS revenue for Q3 2026 increased 70% to approximately $2.3 billion compared to Q3 2025, and accounted for 40% of our total Q3 2026 revenue (Q3 2025 — 44% of our total Q3 2025 revenue). Our HPS revenue for YTD 2026 increased 64% to approximately $5.9 billion compared to YTD 2025, and accounted for 41% of our total YTD 2026 revenue (YTD 2025 — 42% of our total YTD 2025 revenue). HPS revenue growth was driven by program ramps across multiple hyperscaler customers. Compute & Storage end market revenue increased $1,139.0 million (242%) in Q3 2026 compared to Q3 2025 and increased $2,279.7 million (173%) in YTD 2026 compared to YTD 2025, driven by the continued growth in hyperscaler AI compute volumes and strength 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 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%).

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 85% of total revenue for Q3 2026 and 84% of total revenue for YTD 2026 (Q3 2025 — 80%; YTD 2025 — 79%). Three customers (all in our CCS segment) individually represented 10% or more of total revenue in Q3 2026 (35%, 17% and 14%) and YTD 2026 (34%, 16% and 15%). 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%).

Previous wording

Gross profit increased by 56% or $206.5 million to $577.5 million in Q2 2026 compared to Q2 2025 and increased by 57% or $369.8 million to $1,014.7 million in 1H 2026 compared to 1H 2025, primarily driven by our strong revenue growth. Gross margin decreased to 12.3% in Q2 2026 from 12.8% in Q2 2025, primarily driven by mix dynamics in our CCS business. Gross margin remained flat at 11.6% in 1H 2026 compared to 1H 2025. Our gross profit and gross margin in Q2 2026 and 1H 2026 also included $7.8 million of higher favorable fair value adjustments (TRS FVAs) related to our total return swap agreement (TRS Agreement) compared to Q2 2025 and 1H 2025, respectively. See "Liquidity —Cash requirements — TRS" below for a description of our TRS Agreement.

Current wording

Gross profit increased by 54% or $224.7 million to $640.8 million in Q3 2026 compared to Q3 2025 and increased by 56% or $594.5 million to $1,655.5 million in YTD 2026 compared to YTD 2025, primarily driven by our strong revenue growth. Gross margin decreased to 11.0% in Q3 2026 from 13.0% in Q3 2025 and decreased to 11.4% in YTD 2026 from 12.1% in YTD 2025. Both gross profit and gross margin were negatively impacted by the unfavorable changes in the fair value adjustments (TRS FVAs) related to our total return swap agreement (TRS Agreement) recorded in cost of sales ($0.9 million loss in Q3 2026 compared to $48.5 million gain in Q3 2025; $40.0 million gain in YTD 2026 compared to $81.6 million gain in YTD 2025), as well as mix dynamics in our CCS business. See "Liquidity —Cash requirements — TRS" below for a description of our TRS Agreement.

Previous wording

SG&A for Q2 2026 of $58.1 million (1.2% of total revenue) increased $19.2 million compared to $38.9 million (1.3% of total revenue) for Q2 2025. SG&A for 1H 2026 of $175.5 million (2.0% of total revenue) increased $24.1 million compared to $151.4 million (2.7% of total revenue) for 1H 2025. The increase in SG&A in Q2 2026 and 1H 2026 compared to the respective prior respective periods was primarily due to higher variable compensation and variable spend.

Current wording

SG&A for Q3 2026 of $118.2 million (2.0% of total revenue) increased $79.8 million compared to $38.4 million (1.2% of total revenue) for Q3 2025. SG&A for YTD 2026 of $293.7 million (2.0% of total revenue) increased $103.9 million compared to $189.8 million (2.2% of total revenue) for YTD 2025. The increases in SG&A in Q3 2026 and YTD 2026 compared to the respective prior year periods were primarily due to unfavorable changes in TRS FVAs ($3.0 million loss in Q3 2026 compared to $64.8 million gain in Q3 2025; $43.2 million gain in YTD 2026 compared to $110.0 million gain in YTD 2025), as well as higher variable compensation and variable spend.

Previous wording

Segment performance is evaluated based on segment revenue (set forth above), segment income, and segment margin (segment income as a percentage of segment revenue). See "Summary of Q2 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.

Current wording

Segment performance is evaluated based on segment revenue (set forth above), segment income, and segment margin (segment income as a percentage of segment revenue). See "Summary of Q3 2026 and Year-to-Date Period" above for a table showing segment income and segment margin for Q3 2026, YTD 2026 and the respective prior year periods. See the reconciliation of segment income to our earnings before income taxes for Q3 2026, YTD 2026 and the respective prior year periods in note 3 to the Q3 2026 Interim Financial Statements.

Previous 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.

Current wording

CCS segment income increased $233.8 million (117%) in Q3 2026 compared to Q3 2025 and increased $522.6 million (101%) in YTD 2026 compared to YTD 2025, driven by the revenue growth described above. CCS segment margin increased to 8.9% in Q3 2026 from 8.3% in Q3 2025 and increased to 8.7% in YTD 2026 from 8.2% in YTD 2025, driven by improved operating leverage.

Previous wording

ATS segment income increased $12.9 million (30%) in Q2 2026 compared to Q2 2025 and increased $20.2 million (24%) in 1H 2026 compared to 1H 2025, as a result of the ATS revenue increases in Q2 2026 and 1H 2026 described above. ATS segment margin increased to 6.3% in Q2 2026 from 5.3% in Q2 2025 and increased to 6.2% in 1H 2026 from 5.2% in 1H 2025, primarily due to improved product mix and operating leverage.

Current wording

ATS segment income increased $20.1 million (47%) in Q3 2026 compared to Q3 2025 and increased $40.3 million (32%) in YTD 2026 compared to YTD 2025, driven by the revenue growth described above. ATS segment margin increased to 6.6% in Q3 2026 from 5.5% in Q3 2025 and increased to 6.3% in YTD 2026 from 5.3% in YTD 2025, primarily due to improved mix and operating leverage.

Previous 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.

Current 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.

Previous 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.

Current wording

We recorded restructuring charges of $0.9 million in Q3 2026 and $6.0 million in YTD 2026 (Q3 2025 —$3.9 million; YTD 2025 —$18.9 million). In Q3 2026, YTD 2026 and the respective prior year periods, our restructuring charges consisted primarily of cash charges related to employee terminations. Restructuring charges in Q3 2025 and YTD 2025 also included accelerated depreciation of equipment related to disengaging programs. At September 30, 2026, our restructuring provision of $3.2 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. 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.

Current wording

Finance costs consist of interest expense and fees related to our credit facility (including debt issuance and related amortization costs), interest rate swaps, TRS Agreement, A/R sales program, customer SFPs, and finance lease obligations. We incurred finance costs of $24.1 million in Q3 2026 and $63.3 million in YTD 2026 (Q3 2025 — $13.8 million; YTD 2025 — $43.2 million). This primarily included credit facility interest (including interest rate swap impacts) of $12.6 million and $35.2 million in Q3 2026 and YTD 2026, respectively (Q3 2025 — $10.5 million; YTD 2025 — $34.8 million); TRS interest costs of $5.1 million and $15.1 million in Q3 2026 and YTD 2026, respectively (Q3 2025 — $1.8 million; YTD 2025 — $4.1 million); and A/R sales program and customer SFP discount charges of $4.2 million and $7.7 million in Q3 2026 and YTD 2026, respectively (Q3 2025 —nil; YTD 2025 — $0.1 million). The increase in discount charges was driven by higher volumes of A/R sold in Q3 2026 and YTD 2026. See "Liquidity and Capital Resources" below for further descriptions of these programs.

Previous 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.

Current wording

For Q3 2026, we had a net income tax expense of $58.6 million on earnings before tax of $455.8 million, compared to a net income tax expense of $43.1 million on earnings before tax of $310.9 million for Q3 2025. For YTD 2026, we had a net income tax expense of $175.4 million on earnings before tax of $1,153.7 million, compared to a net income tax expense of $116.9 million on earnings before tax of $681.9 million for YTD 2025.

Previous 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.

Current wording

Our Q3 2026 and YTD 2026 net income tax expenses included $8.4 million of discrete tax benefit related to the acceptance of certain subsidiaries into a bilateral advance pricing arrangement for the 2025 to 2029 fiscal years, offset in part by a $3.8 million tax expense for tax uncertainties relating to another of our subsidiaries. Our YTD 2026 net income tax expense also included $16.2 million of income taxes related to Pillar Two global minimum tax legislation (GMT).

Previous 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.

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 years under examination as well as other subsequent periods.

Previous wording

Net earnings for Q2 2026 of $368.8 million increased $157.8 million compared to Q2 2025, primarily due to $206.5 million in higher gross profit and $11.6 million in lower restructuring and other charges (recoveries), partially offset by $26.5 million in higher income tax expense, $19.2 million in higher SG&A expense and $12.3 million in higher R&D expenses. Net earnings for 1H 2026 of $581.1 million increased $283.9 million compared to 1H 2025, primarily due to $369.8 million in higher gross profit and $19.9 million in lower restructuring and other charges (recoveries), partially offset by $43.0 million in higher income tax expense, $35.9 million in higher R&D and $24.1 million in higher SG&A expense. See "Gross Profit", "SG&A" and "Restructuring and other charges (recoveries)"above for description of changes in gross profit, SG&A and restructuring and other charges (recoveries), respectively, in Q2 2026 and 1H 2026 compared to the respective prior year periods. Higher R&D expenses in Q2 2026 and 1H 2026 were to support the growth of our HPS business. Increases in income tax expenses in Q2 2026 and 1H 2026 compared to respective prior year periods were driven by higher earnings before income taxes in Q2 2026 and 1H 2026.

Current wording

Net earnings for Q3 2026 of $397.2 million increased $129.4 million compared to Q3 2025, primarily due to $224.7 million in higher gross profit and $18.7 million in higher interest income (see "Interest income" above), partially offset by $79.8 million in higher SG&A expense, $15.5 million in higher income tax expense, and $14.8 million in higher R&D expenses. Net earnings for YTD 2026 of $978.3 million increased $413.3 million compared to YTD 2025, primarily due to $594.5 million in higher gross profit, partially offset by $103.9 million in higher SG&A expense, $58.5 million in higher income tax expense, and $50.7 million in higher R&D. See "Gross Profit" and "SG&A" above for description of changes in our gross profit and SG&A, respectively, in Q3 2026 and YTD 2026 compared to the respective prior year periods. Higher R&D expenses in Q3 2026 and YTD 2026 were to support the growth of our HPS business. Increases in income tax expenses in Q3 2026 and YTD 2026 compared to respective prior year periods were driven by higher earnings before income taxes in Q3 2026 and YTD 2026.

Previous 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.

Current wording

In YTD 2026, we generated $1,156.9 million of net cash from operating activities, primarily due to net earnings of $978.3 million, favorable changes in working capital of $133.6 million and non-cash expenses added back to net earnings, partially offset by non-cash recoveries (including favorable TRS FVAs of $83.2 million). Our favorable working capital changes in YTD 2026 were primarily driven by an increase in A/P balances in YTD 2026, largely offset by the increases in A/R and inventory balances in YTD 2026. A/P balances increased in YTD 2026 primarily due to our business growth, as well as timing of payments and purchases. A/R balances increased in YTD 2026 primarily due to timing and volume of revenue and collections. Inventory balances increased in YTD 2026, to support the increase in our customer demand and our anticipated revenue growth. Net cash provided by operating activities for YTD 2026 increased $748.0 million compared to YTD 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 $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.

Current wording

Our non-GAAP free cash flow of $412.5 million for YTD 2026 increased $110.1 million compared to YTD 2025, primarily due to $748.0 million in higher cash generated from operations (as described above), partially offset by $637.9 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 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).

Current wording

Our capital expenditures for YTD 2026 were $767.4 million (YTD 2025 — $106.5 million). Our capital expenditures for YTD 2026 were primarily to support revenue growth in our CCS business and expand our manufacturing facilities in various geographies (including our Thailand and U.S. facilities).

Previous wording

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

Current wording

In YTD 2026, we paid $7.3 million (YTD 2025 — $7.6 million) in principal payment of finance leases.

Previous wording

The value of the TRS Agreement is determined by comparing the market price of our Common Shares to the fixed price paid by the counterparty for such shares (Strike Price). In each of December 2025 and March 2025, we re-struck our TRS Agreement at a Strike Price of $288.87 per share and $91.58 per share, respectively, and received $246.6 million and $98.6 million from the counterparty, respectively, each of which was recorded in cash provided by financing activities in our consolidated statements of cash flows.

Current wording

Agreement at a Strike Price of $288.87 per share and $91.58 per share, respectively, and received $246.6 million and $98.6 million from the counterparty, respectively, each of which was recorded in cash provided by financing activities in our consolidated statements of cash flows.

Previous 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).

Current wording

In YTD 2026, we made a cash payment of $373.6 million for withholding taxes in connection with the SBC awards that vested during such period (YTD 2025 — $156.0 million).

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, 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."

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 amended in April 2026 (April 2026 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 a $1,750.0 million revolving credit facility (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

The Term A Loan and the Revolver each mature in April 2031. The Term B Loan matures in June 2031. The Term A Loan requires quarterly principal repayments of $3.125 million (commencing in September 2026). The Term B Loan requires quarterly principal repayments of $1.250 million. Both Term Loans require a lump sum repayment of the remainder outstanding at maturity.

Current wording

The Term A Loan and the Revolver each mature in April 2031. The Term B Loan matures in June 2031. The Term A Loan requires quarterly principal repayments of $3.125 million. The Term B Loan requires quarterly principal repayments of $1.250 million. Both Term Loans require a lump sum repayment of the remainder outstanding at maturity.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

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 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.

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 $32.8 million in YTD 2026 (YTD 2025 — $33.4 million). Interest rates for outstanding borrowings under the Credit Facility at September 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 YTD 2026 were $3.0 million (YTD 2025 — $2.3 million). During YTD 2026, we paid $6.4 million in debt issuance costs related to the April 2026 Amendment.

Previous wording

In 1H 2026, we paid $10.8 million (1H 2025 —$0.5 million) in interest costs under our TRS Agreement (included in "net cash provided by operating activities").

Current wording

In YTD 2026, we paid $10.8 million (YTD 2025 —$2.6 million) in interest costs under our TRS Agreement (included in "net cash provided by operating activities").