Q1 2025 Celestica Inc Earnings Call Transcript
Key Points
- Celestica Inc (CLS) reported strong Q1 2025 performance with revenues of $2.65 billion and adjusted EPS of $1.20, both exceeding guidance.
- The company's adjusted operating margin reached a record high of 7.1%, driven by strong demand in both CCS and ATS segments.
- CCS segment revenue increased by 28%, fueled by high demand for networking switches, particularly from hyperscaler customers.
- ATS segment revenue grew by 5%, surpassing expectations due to significant growth in the capital equipment business.
- Celestica Inc (CLS) raised its annual revenue outlook to $10.85 billion and adjusted EPS to $5 per share, reflecting confidence in continued growth.
- The macro environment remains dynamic with trade policy uncertainties, posing potential risks to future performance.
- Enterprise end market revenue declined by 39% due to a technology transition in an AI, ML compute program with a hyperscaler customer.
- Despite strong demand, the company faces challenges in managing inventory levels, with a sequential increase in inventory balance.
- The ATS segment faces potential risks from macroeconomic slowdowns, which could impact future demand.
- Tariffs and trade restrictions remain a concern, although Celestica Inc (CLS) expects to recover most tariffs from customers.
Hello, and thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to Celestica Q1 2025 financial results and conference call. (Operator Instructions)
I would now like to turn the conference over to Matthew Pallotta. You may begin.
Good morning and thank you for joining us on Celestica's Q1 2025 earnings conference call. On the call today, we have Rob Mionis, President and Chief Executive Officer; and Mandeep Chawla, Chief Financial Officer. Please note that during the course of this call, we will make forward-looking statements relating to the future performance of Celestica, which are based on management's current expectations, forecasts and assumptions.
While these forward-looking statements represent our current judgment, actual results could differ materially from a conclusion, forecast or projection in the forward-looking statements made today. Certain material
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