CLS

Celestica has transformed from a sleepy contract manufacturer into a primary beneficiary of the AI data-center buildout, and the numbers are striking. Revenue compounded from $7.25B (FY2022) to $12.4B (FY2025), with growth re-accelerating to +28.5% last year, while net income nearly doubled to $833M and diluted EPS jumped +98.3% to $7.16. Critically, this is profitable, operating-leveraged growth: operating income rose +73.7% and gross profit +44.5%, both far outpacing revenue, lifting net margin to 6.7% and ROE to a very strong 37.6%. The balance sheet is adequate — liabilities/equity 2.25x is typical for EMS, cash grew 40.7% to $596M, and $660M operating cash flow comfortably funds $201M capex plus $153M of buybacks. By quality of trend, this is a genuinely improving business.

The catch is concentration and cyclicality, stated bluntly in the 10-K. Top-10 customers are 79% of revenue (up from 64% in 2023), the CCS segment is now 74% of the company (up from 58%), and three single CCS customers individually account for 32%, 14% and 12% of total revenue. The filing ties demand directly to hyperscaler 'AI investment strategy,' access to accelerators, and even 'data center capacity, grid interconnections, and access to power and water' — and warns customers 'do not commit to long-term production schedules' and have terminated agreements early. This is a low-margin business whose revenue is hostage to a handful of customers' capex cycles, exactly the kind of demand that can reverse fast.