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

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Understanding how a diversified manufacturing and services provider like CLS Income Statement Overview makes money is essential for investors and anyone interested in the business of electronics manufacturing and supply chain solutions. In this post, we break down CLS'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 CLS Overview

CLS Income Statement Overview operates as a global provider of electronics manufacturing services (EMS) and supply chain solutions. The company delivers design, manufacturing, and after-market services to a broad range of industries, including communications, enterprise, healthcare, and industrial markets. Revenue comes primarily from two main segments: Connectivity & Cloud Solutions (CCS) and Advanced Technology Solutions (ATS). The CCS segment focuses on high-volume manufacturing for communications and cloud infrastructure, while ATS targets specialized, high-complexity solutions for healthcare, industrial, and aerospace sectors.

Revenue Breakdown

• Total Revenue (Q3 2025): $3.16B (+26.4% YoY)
  • CCS Revenue: $2.41B (76.4% of total, +43.2% YoY)
  • ATS Revenue: $781M (24.7% of total, -4.1% YoY)
  • Other Revenue by Product: -$35.4M (-1.1% of total)
• Growth is powered by robust expansion in the CCS segment, driven by strong demand for cloud infrastructure and connectivity solutions, partially offset by a decline in ATS.

Gross Profit and Margins

• Gross Profit: $367.2M (11.6% gross margin)
  • Cost of Revenue: $2.79B (+24.6% YoY)
  • CLS maintains moderate margins due to its scalable manufacturing operations and focus on operational efficiencies in high-volume segments.
• Most costs come from raw materials, direct labor, and manufacturing overhead associated with large-scale electronics production.

Operating Income and Expenses

• Operating Income: $212.6M (+55.9% YoY, 6.7% margin)
• Operating Expenses: $154.6M (+26.0% YoY)
  • R&D: $36.4M (+93.1% YoY, 1.2% of revenue) — Focused on advanced manufacturing processes, automation, and next-generation product development.
  • SG&A: $38.4M (-58.2% YoY, 1.2% of revenue) — Reflects disciplined cost control and efficiency improvements in sales, general, and administrative functions.
  • CLS continues to prioritize innovation and automation while maintaining efficiency and expanding its global operations.

Net Income

• Pre-Tax Income: $307.5M (+145.2% YoY, 9.7% margin)
• Income Tax: $42.6M (13.9% effective tax rate)
• Net Income: $264.8M (+188.8% YoY, 8.4% net margin)
• CLS converts a significant portion of sales into profit due to its operational scalability and disciplined cost management.

What Drives CLS's Money Machine?

• CCS Revenue: 76.4% of revenue, driven by surging demand for connectivity and cloud infrastructure manufacturing.
• Gross Margin: 11.6%, reflecting efficient large-scale operations and supply chain management.
• R&D Investment: $36.4M in Q3 2025, nearly doubling YoY, as CLS invests in automation, advanced manufacturing, and new product capabilities.
• Future Growth Areas: Expansion into healthcare and industrial automation, which are not yet major profit contributors but represent strategic long-term bets.

Visualizing CLS'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 R&D and SG&A) taking the largest chunk.
• Even after significant investments in R&D and operational expansion, 8.4% of revenue drops to the bottom line.

Key Takeaways

• CLS's money comes overwhelmingly from its Connectivity & Cloud Solutions (CCS) segment.
• High gross and net margins illustrate the power of CLS's scalable manufacturing and disciplined cost structure.
• Heavy investment in R&D and automation, balanced by efficiency in operating costs.
• Ongoing growth is driven by cloud infrastructure demand and operational excellence.

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FAQ About CLS's Income Statement

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

CLS generates over 76% of its revenue from the Connectivity & Cloud Solutions (CCS) segment, which serves high-growth communications and cloud infrastructure markets. The Advanced Technology Solutions (ATS) segment contributes about 25%, with a small negative adjustment in other product revenue.

2. How profitable is CLS in Q3 2025?

CLS reported net income of $264.8M in Q3 2025, with a net margin of approximately 8.4%, reflecting strong profitability driven by operational scale and cost discipline.

3. What are the largest expense categories for CLS?

The biggest expenses on CLS's income statement are cost of revenue (mainly materials and manufacturing costs), followed by operating expenses—particularly Research & Development (R&D) at $36.4M in Q3 2025 (focused on automation and advanced manufacturing) and SG&A at $38.4M (reflecting efficiency gains).

4. Why does ATS operate at a loss?

ATS, despite generating $781M in revenue, posted a YoY decline due to ongoing investments in specialized manufacturing capabilities and expansion into new markets. CLS believes these investments will drive long-term growth—even if the division is less profitable today.

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

CLS's effective tax rate in Q3 2025 was 13.9%, consistent with previous years. This moderate rate is primarily due to international tax structuring and the impact of share-based compensation.