Celestica Inc. Reports 21% Revenue Growth to $9.646 Billion for Fiscal Year 2024

Celestica Inc. reported a significant increase in its financial performance for the fiscal year ended December 31, 2024, with total revenue reaching $9.646 billion, a 21% increase from $7.961 billion in 2023. The company's net earnings also rose sharply to $428 million, up 75% from $244 million in the previous year. This growth was primarily driven by a 40% increase in revenue from its Connectivity and Cloud Solutions (CCS) segment, which accounted for 67% of total revenue, while the Advanced Technology Solutions (ATS) segment saw a 5% decline in revenue to $3.155 billion, reflecting anticipated demand softness in its Industrial business.

The company experienced notable changes in its operational metrics compared to the previous fiscal period. The gross profit increased by 37% to $1.034 billion, resulting in a gross margin improvement to 10.7% from 9.5% in 2023. The CCS segment's margin improved to 7.4%, up from 6.2% in the prior year, attributed to greater operating leverage and an improved product mix. In contrast, the ATS segment's margin decreased slightly to 4.6% from 4.7%, primarily due to reduced operating leverage in the Industrial business.

Strategically, Celestica has focused on expanding its capabilities and customer base. The company completed the acquisition of NCS in April 2024 for $39.6 million, enhancing its service offerings. Additionally, the Hardware Platform Solutions (HPS) business within the CCS segment saw a revenue increase of 63%, driven by strong demand from hyperscaler customers. The company is also investing in capacity expansions at its facilities in Thailand and Malaysia to support growth in AI and machine learning programs.

Operationally, Celestica's workforce increased to 26,865 employees as of December 31, 2024, up from 26,554 in 2023. The company continues to rely heavily on a small number of customers, with its top 10 customers representing 73% of total revenue in 2024, compared to 64% in 2023. This concentration poses risks, as any significant loss of business from these customers could adversely affect financial results. The company has also reported improvements in its cash cycle days, which decreased to 69 days in Q4 2024 from 72 days in Q4 2023, indicating better working capital management.

Looking ahead, Celestica anticipates continued growth in its CCS segment, particularly in the Communications end market, while expecting stabilization in the ATS segment's Industrial business. The company aims to achieve an average annual revenue growth rate of 10% in the ATS segment over the long term. However, it acknowledges potential challenges, including market volatility, customer demand fluctuations, and the impact of geopolitical tensions on its operations. The company remains committed to managing its costs and resources effectively to maximize efficiency and productivity while pursuing strategic acquisitions to enhance its competitive position.