Celestica 2027 outlook calls for $40 billion revenue as AI orders surge

The AI hardware boom found a fresh data point on Monday evening. The Celestica 2027 outlook projects revenue nearly doubling next year, and the stock jumped about 10% in extended trading as investors looked for proof that data center spending is still accelerating.

What happened

Third-quarter revenue rose 83% to $5.83 billion, above the company's own guidance range of $5.25 billion to $5.55 billion, according to Celestica's release. Adjusted earnings per share more than doubled to $3.30, beating a $2.88 to $3.08 guidance range, and the adjusted operating margin hit a record 8.5%.

The Connectivity & Cloud Solutions segment, which sells networking and compute hardware to hyperscalers, grew revenue 102% to $4.87 billion. The smaller Advanced Technology Solutions arm rose 23% to $0.96 billion.

Celestica raised its 2026 outlook to $21.0 billion in revenue and $11.55 in adjusted EPS, up from $20.5 billion and $11.30. CNBC said the new EPS figure beats the FactSet consensus of $11.16. For the fourth quarter it guided to revenue of $6.275 billion to $6.575 billion.

Why it matters

The headline is the year ahead. The Celestica 2027 outlook calls for $40.0 billion in revenue, up 90%, adjusted EPS of $21.50 and a record 9.0% adjusted operating margin, with capital spending of $1.5 billion to $2.0 billion. "The demand environment continues to be very robust," CEO Rob Mionis said, adding that customer forecasts for 2028 are meaningfully higher.

That matters for a sector that has been under pressure. Worries about whether hyperscalers and AI labs can keep financing data centers have weighed on chip and server names, as seen in Super Micro's preliminary results and in the debate over Nvidia's backstops for neoclouds. A supplier projecting 90% growth suggests its biggest customers are still placing orders.

There is a cost. Celestica trimmed its 2026 free cash flow outlook to $460 million from $600 million, citing working capital investments to support growth next year. Inventories roughly doubled from the end of 2025, according to its balance sheet, and accounts payable rose sharply as well, a sign of how much hardware is moving through the business. Cash, by contrast, jumped to about $3.96 billion after a $3.45 billion share offering completed during the quarter, giving Celestica a cushion for its expansion.

Celestica also plans a new normal course issuer bid on the Toronto Stock Exchange once its current buyback program expires on Nov. 2, which would let it repurchase up to 2.5% of its public float over the following 12 months, subject to exchange approval.

What's next

Management hosts its earnings call and investor day on Tuesday at 8 a.m. Eastern, where analysts will press for detail on customer concentration and capacity. Whether the stock holds its after-hours gain will show how much faith investors place in the Celestica 2027 outlook. Figures are in Celestica's results release.