01—Abstract
Summary
Summary of the 10-K filed March 3, 2025. Cited figures are marked; the original filing is the authoritative source.
Celestica Inc. (CLS) reported a strong financial performance for the year ended December 31, 2024, with a significant increase in revenue and net earnings.
The company's revenue grew by 21%a year-over-year, primarily driven by a substantial 40% increase in the Connectivity and Cloud Solutions (CCS) segment, largely attributed to growth in its Hardware Platform Solutions (HPS) business and strong demand in the Communications end market from hyperscaler customers. The Advanced Technology Solutions (ATS) segment experienced a slight revenue decline of 5%, mainly due to anticipated softness in the Industrial business, though Aerospace & Defense and Capital Equipment showed strength. The company highlighted improved segment margins, particularly in CCS, driven by operating leverage and a favorable business mix.
Celestica continues to invest in its HPS business and design capabilities, aiming for long-term growth. The company also repurchased shares under its normal course issuer bid and maintained a healthy free cash flow, demonstrating a commitment to returning capital to shareholders while investing in future growth. The transition to U.S. GAAP accounting standards was completed, with no material impact on overall financial results.
Key risks remain, including dependence on a limited number of large customers and potential impacts from global economic and geopolitical uncertainties. However, the company's strategic focus on high-value markets and expanding service offerings, coupled with operational efficiencies, positions it for continued performance.
02—Key points
Key Highlights
- Revenue increased by 21% to $9.65 billion in 2024, driven by a 40% surge in the CCS segment, particularly the HPS business.
- Net earnings more than doubled, increasing by 75% to $428.0 million in 2024, resulting in diluted EPS of $3.61.
- Gross margin improved significantly to 10.7% in 2024, up from 9.5% in 2023, driven by operating leverage and production efficiencies.
- The CCS segment margin expanded to 7.4% in 2024 from 6.2% in 2023, while the ATS segment margin remained stable at 4.6%.
- Celestica generated $305.9 million in non-GAAP free cash flow in 2024, a substantial increase from $203.8 million in 2023.
- The company repurchased 3.2 million common shares for cancellation during 2024, alongside repurchases for stock-based compensation plans.
- Significant investments are being made in capacity and capabilities, particularly for AI/ML and HPS programs, including new design centers.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Celestica Inc kept $0.04.
- Revenue$9.65B100.0%
- Cost of revenue−$8.61B89.3%
- Gross profit$1.03B10.7%
- Operating costs−$434.4M4.5%
- Operating income$599.3M6.2%
- Interest, other & tax−$171.3M1.8%
- Net income$428.0M4.4%
Where FY2024 revenue went
$9.65B- Cost of revenue: $8.61B, 89% of revenue
- Net income: $428.0M, 4.4% of revenue
- R&D: $78.0M, 0.8% of revenue
- SG&A: $293.5M, 3.0% of revenue
- Other operating costs: $62.9M, 0.7% of revenue
- Interest, other & tax: $171.3M, 1.8% of revenue
Kept 4.4% as net incomeNet income $428.0M · 4.4%R&D $78.0M · 0.8%Other operating costs $62.9M · 0.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed March 3, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $9.65B$7.96B | +21.2% |
| Cost of Revenue | $8.61B$7.21B | +19.5% |
| Gross Profit | $1.03B$754.10M | +37.1% |
| R&D Expenses | $78.00M$60.90M | +28.1% |
| SG&A Expenses | $293.50M$303.20M | −3.2% |
| Operating Income | $599.30M$338.30M | +77.2% |
| Net Income | $428.00M$244.40M | +75.1% |
| EPS (Basic) | $3.62$2.03 | +78.3% |
| EPS (Diluted) | $3.61$2.03 | +77.8% |
| Shares Outstanding (Basic) | 118.10M120.10M | −1.7% |
| Shares Outstanding (Diluted) | 118.70M120.30M | −1.3% |
05—Questions
Frequently Asked Questions
What was Celestica's overall financial performance in 2024?
Celestica reported a strong 2024 with a 21% increase in revenue to $9.65 billion and a 75% increase in net earnings to $428.0 million, or $3.61 per diluted share. This growth was primarily driven by the Connectivity & Cloud Solutions (CCS) segment, which saw a 40% revenue increase, largely due to the robust performance of its Hardware Platform Solutions (HPS) business.
How did the company's segments perform in 2024?
The Connectivity & Cloud Solutions (CCS) segment revenue increased by 40% year-over-year, fueled by strong demand in Communications and Enterprise markets, particularly from hyperscalers. The Advanced Technology Solutions (ATS) segment experienced a 5% revenue decrease, mainly due to anticipated softness in the Industrial business, although Aerospace & Defense and Capital Equipment showed resilience.
What is Celestica's strategy for future growth and capital allocation?
Celestica's strategy focuses on evolving its revenue portfolio by growing in attractive markets like its HPS business, driving profitable growth in the ATS segment (targeting 10% annual growth), and pursuing disciplined acquisitions. Capital allocation priorities include returning capital to shareholders primarily through opportunistic share repurchases, investing 1.5% to 2.0% of revenue in capital expenditures, and pursuing strategic acquisitions.
What are the key risks facing Celestica?
Key risks include a significant dependence on a small number of major customers, which accounted for 73% of total revenue in 2024. Other risks involve managing changes in customer demand, the highly competitive EMS industry with aggressive pricing, rapid technological evolution, global economic and geopolitical uncertainties, and potential disruptions in its global supply chain.
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