How CLS (Celestica) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a leading electronics manufacturing services provider like Celestica Inc. (CLS) makes money is essential for investors and anyone interested in the business of global technology manufacturing. In this post, we break down Celestica's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick Celestica Inc. Overview

Celestica Inc. operates as a global provider of electronics manufacturing services (EMS) and supply chain solutions. The company designs, manufactures, and delivers innovative hardware platforms and supply chain services for industries including communications, enterprise, aerospace & defense, industrial, healthtech, and capital equipment.
Revenue comes primarily from contract manufacturing, engineering services, and supply chain management for original equipment manufacturers (OEMs) and emerging technology companies.
Celestica’s business segments include Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS), each serving distinct end markets.

Revenue Breakdown

• Total Revenue (Q3 2025): $2.12B (+8.2% YoY)
  • Advanced Technology Solutions (ATS): $0.89B (42% of total)
  • Connectivity & Cloud Solutions (CCS): $1.23B (58% of total)
  • Growth is powered by robust demand in cloud infrastructure, aerospace & defense, and industrial automation.

Gross Profit and Margins

• Gross Profit: $154M (7.3% gross margin)
  • Cost of Revenue: $1.966B (+7.9% YoY)
  • Celestica maintains moderate margins due to its scalable manufacturing model and operational efficiencies in supply chain management.
• Most costs come from materials procurement, direct labor, and manufacturing overhead.

Operating Income and Expenses

• Operating Income: $70M (+11.1% YoY, 3.3% margin)
• Operating Expenses: $84M (+6.3% YoY)
  • R&D: $18M (+9.1% YoY, 0.8% of revenue) — Focused on advanced engineering, automation, and next-gen hardware platforms.
  • SG&A: $66M (+5.7% YoY, 3.1% of revenue) — Includes sales, marketing, administrative, and logistics costs.
  • Celestica continues to invest in innovation and automation while maintaining cost discipline and expanding its global footprint.

Net Income

• Pre-Tax Income: $65M (+10.2% YoY, 3.1% margin)
• Income Tax: $11M (16.9% effective tax rate)
• Net Income: $54M (+12.5% YoY, 2.5% net margin)
• Celestica converts a moderate portion of sales into profit due to its efficient operations and strategic pricing in high-value segments.

What Drives Celestica Inc.'s Money Machine?

• Connectivity & Cloud Solutions: 58% of revenue, driven by hyperscale data center demand and cloud infrastructure projects.
• Gross Margin: 7.3%, reflecting tight cost controls and value-added engineering.
• Strategic Investment: $18M in R&D, targeting automation, advanced manufacturing, and differentiated hardware platforms.
• Future Growth Areas: Aerospace & defense, healthtech, and industrial automation — segments with expanding margins, though some are not yet profitable.

Visualizing Celestica Inc.'s Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after significant investments in R&D and automation, 2.5% of revenue drops to the bottom line.

Key Takeaways

• Celestica’s money comes overwhelmingly from contract manufacturing and supply chain services for technology and industrial clients.
• High gross and net margins illustrate the power of Celestica’s scalable, global EMS business model.
• Heavy investment in automation and engineering, balanced by efficiency in operating costs.
• Ongoing growth is driven by cloud infrastructure, aerospace & defense, and industrial automation.

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FAQ About Celestica Inc.'s Income Statement

1. What is the main source of Celestica Inc.'s revenue in 2025?

Celestica generates over 58% of its revenue from Connectivity & Cloud Solutions, serving hyperscale data centers and cloud infrastructure clients. The remainder comes from Advanced Technology Solutions, including aerospace, defense, and industrial automation.

2. How profitable is Celestica in Q3 2025?

Celestica reported net income of $54M in Q3 2025, with a net margin of approximately 2.5%, reflecting moderate profitability driven by operational efficiency and strategic pricing.

3. What are the largest expense categories for Celestica?

The biggest expenses on Celestica’s income statement are cost of revenue (materials, labor, overhead) and operating expenses, particularly Research & Development (R&D) at $18M and Sales, General & Administrative (SG&A) at $66M in Q3 2025, as Celestica prioritizes automation, engineering, and global logistics.

4. Why does Advanced Technology Solutions operate at a loss?

ATS, despite generating $0.89B in revenue, posted an operating loss of over $12M in Q3 2025. This is because Celestica aggressively invests in advanced engineering and automation for aerospace and industrial clients, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does Celestica Inc.'s effective tax rate compare to previous years?

Celestica’s effective tax rate in Q3 2025 was 16.9%, consistent with previous years. This moderate rate is primarily due to international structuring and tax benefits from R&D credits and share-based compensation.