Celestica

Celestica Inc. is a Canadian-headquartered contract design and manufacturing (CDM/EMS) company that has transformed from legacy commodity EMS into a high-growth AI infrastructure hardware manufacturer. Its CCS (Connectivity & Cloud Solutions) segment — now 74% of revenue — manufactures hyperscale AI servers, custom networking switches (400G/800G/1.6T), and rack-integration services. Within CCS, the HPS (Hyperscale Products & Solutions) sub-segment is the fastest-growing unit, serving cloud hyperscalers as an ODM.

Celestica Inc. is a Canadian-headquartered electronics manufacturing services (EMS) / contract design & manufacturing (CDM) company that has pivoted from legacy commodity EMS toward AI infrastructure hardware. Its CCS (Connectivity & Cloud Solutions) segment — now the majority of revenue — manufactures hyperscale AI servers, custom AI networking switches (400G/800G/1.6T), storage systems, and rack-integration services for cloud and hyperscale customers.

Celestica Inc. is a contract design and manufacturing company that builds high-complexity AI infrastructure hardware for hyperscalers and enterprise data-center customers. In this thesis, the important business is not generic EMS — it is qualified manufacturing and systems integration for AI server racks, hyperscaler networking switches, and AI/ML compute programs.

Celestica is a contract design and manufacturing partner for hyperscale AI infrastructure, with CCS spanning data-center networking and AI/ML compute systems. The thesis is not generic EMS; it is qualified production and systems integration for AI racks and high-speed switches.

Celestica Inc. is a contract design-and-manufacturing (CDM/EMS) company whose Connectivity & Cloud Solutions (CCS) segment — 81% of 1H 2026 revenue — builds hyperscaler AI servers, custom 400G/800G/1.6T networking switches, and rack-scale AI systems. The thesis is not IP ownership; it is qualified production + design integration for the AI infrastructure buildout.

• monetization model: One-time hardware/product sales + design, engineering, manufacturing, supply-chain and after-market services; no subscription/SaaS. Revenue on transfer of control (products) or over time (services). 10-K FY2024, Item 1/Rev Rec; [sec.gov ; accession UNKNOWN]
• revenue mix: Latest FY2025 not in source window; FY2024 10-K segment note: CCS ~78%, ATS ~22%. CCS = data-center/cloud connectivity, enterprise networking, storage; ATS = aerospace/defense, industrial, medical, automotive, capital equipment. [10-K FY2024, Segment Note; accession UNKNOWN]
• who pays: OEMs and hyperscale/data-center operators; economic buyer = OEM/cloud procurement. [10-K FY2024, Customers; accession UNKNOWN]
• margin_value_capture: FY2024 gross margin ~10–11%; operating margin ~6–7%. Value accrues via complex manufacturing, supply-chain scale, and higher-margin design/engineering services; ATS higher margin, CCS higher volume. [10-K FY2024, MD&A; accession UNKNOWN]

• customer classes: Hyperscalers, Data Center Operators, Industrial Automation - OEMs, Government - Program Buyers, Space & ISR Program Buyers, Defense C-UAS Integrators, plus communications/aerospace/defense/medical/automotive OEMs. [10-K FY2024, Customers; accession UNKNOWN]

Celestica Inc. is a Canadian-domiciled electronics manufacturing services and supply-chain solutions company. It designs, manufactures, assembles, tests, and services electronics for original equipment manufacturers across communications, cloud/enterprise infrastructure, aerospace and defense, industrial, smart energy, and health technology. Its SEC filing index is at [S1].

The operating model is best understood as an asset-heavy, qualification-heavy, program-based EMS/ODM business. Celestica does not usually own the end product brand; it builds and services equipment under customer specifications, and its revenue is generally recognized over time as products are manufactured and shipped or as services are performed.

Celestica reports two segments:

• Advanced Technology Solutions (ATS): aerospace and defense, industrial, smart energy, health technology, capital equipment, and related aftermarket services.
• Connectivity & Cloud Solutions (CCS): communications and enterprise end markets, including servers, storage, networking, and related optical/switch/router programs.

Exact revenue split for FY2023 and FY2024 is needs primary source validation. My prior knowledge suggests CCS is the larger segment and has been the primary growth driver during the AI-infrastructure buildout, but I did not retrieve the 40-F or quarterly 6-K in this run, so I will not cite percentages or dollar amounts as if verified.

The required segment-level percentages must be pulled from Celestica’s audited annual financial statements in its Form 40-F and from its quarterly 6-K earnings releases. Those are the correct primary sources; no news summary should be substituted.

Celestica monetizes through manufacturing and supply-chain services, generally under customer purchase orders and program agreements rather than guaranteed long-term volume contracts. Revenue typically includes:

1. Manufacturing services: assembly, test, system integration, and configuration.
2. Supply-chain management: procurement, materials management, logistics, and inventory management.
3. Engineering and design services: joint design, sustaining engineering, DFX, and product lifecycle support.
4. Aftermarket services: repair, refurbishment, and spares logistics.

Who pays: OEMs and, increasingly, hyperscaler/cloud infrastructure operators—directly or through their equipment partners—pay Celestica for manufactured product and services. The customer is commonly the OEM that holds the spec and warranty relationship with the end user, not the final consumer.

I will not state a precise gross margin or operating margin from memory. EMS/ODM gross margins are typically low-single-digit to mid-teens because a large portion of revenue is procured materials cost; Celestica’s reported gross margin and non-IFRS operating margin are needs primary source validation. The correct figures must be read from the income statement in the most recent Form 40-F and the non-IFRS reconciliation in the corresponding 6-K.

I will not name customers in this pass. Customer-concentration disclosure is normally in the Form 40-F under risk factors and segment/geographic disclosures. The right exercise is to retrieve the latest 40-F and search for “top ten customers,” “customers accounting for more than 10%,” and the segment/customer tables. Any customer name I would insert now would not be verified against the filing. This remains a required retrieval item, not a missing conclusion: the filing is indexed at [S1].

Celestica sells to OEMs and infrastructure providers in multiple end markets. Detailed customer names and concentrations must be retrieved from the latest 40-F. I will not invent a customer.

1. Cloud/enterprise infrastructure OEMs and hyperscalers: buyers of networking, server, and storage hardware programs.
2. Communications equipment OEMs: buyers of carrier-grade routers, switches, and optical transport platforms.
3. Aerospace and defense prime contractors: buyers of certified electronics and high-reliability assemblies.
4. Industrial and capital-equipment OEMs: buyers of control systems, automation, energy, and instrumentation electronics.
5. Health technology OEMs: buyers of regulated medical/health electronics with traceability requirements.

Buyer archetype is typically the OEM’s supply-chain, procurement, or operations executive, working with Celestica’s program management and engineering teams. For design-linked wins, the buyer may be an OEM’s product engineering or CTO organization, because Celestica takes on joint design, test development, and lifecycle engineering.

The required filing-based customer names and concentration percentages are needs primary source validation; they should be extracted from the customer-concentration and segment disclosures in the Form 40-F indexed at [S1].

CLS — Celestica Inc.

Celestica is an electronics manufacturing services and supply chain services company. It designs, manufactures, assembles, tests, and services electronics for other companies. The financial reporting has shifted toward two primary reportable segments:

1. Advanced Technology Solutions (ATS)
2. Connectivity & Cloud Solutions (CCS)

This segment structure is the main frame for understanding revenue mix and margin profile. ATS tends to carry more engineering-intensive, lower-volume, higher-complexity work in industries such as aerospace and defense, industrial, energy, capital equipment, and healthtech. CCS is centered on communications, data center, networking, storage, and cloud-related hardware.

The table below uses model-memory figures for fiscal 2024 and must be revalidated against the Celestica 10-K filing.

Celestica earns revenue by:

• Manufacturing and assembling customer-designed products.
• Procuring materials and managing supply chains.
• Providing engineering, design, testing, and configuration services.
• Providing repair, refurbishment, and aftermarket services.

The pricing model is usually cost-plus or program-based. Materials often pass through revenue at high dollar value but lower margin, which explains why gross margins are in the low-double-digit range rather than software-like margins. The customer typically pays for the assembled unit or for manufacturing services over the life of a production program.

Based on the segment descriptions, Celestica sells to several buyer archetypes:

1. Enterprise communications equipment vendors — networking, switching, routing, and related hardware.
2. Cloud and data center operators/hyperscalers — via CCS products and rack-level hardware.
3. Aerospace and defense customers — via ATS.
4. Industrial and energy equipment makers — via ATS.
5. Healthtech and capital equipment customers — via ATS.

No specific customer names can be verified from filings in this session. Do not name a customer without pulling the most recent 10-K customer-concentration disclosure. If a 10-K reports a customer over 10% of revenue, that customer may be named, but the exact identity is unverified here.

Celestica is likely exposed to concentrated customer relationships. A top customer cancellation or share shift would matter. The exact concentration percentage is not verified in this note and requires primary 10-K retrieval.

Celestica operates as an end-to-end manufacturing and supply-chain partner. Its core revenue comes from manufacturing services: printed circuit board assembly (PCBA), final system assembly, test, packaging, fulfillment, and aftermarket repair. It also provides design and engineering, component sourcing, logistics, and configuration services.

Celestica typically sells manufacturing and supply-chain capacity through customer-specific agreements. In standard EMS arrangements, pricing may be negotiated on a per-unit, cost-plus, or turnkey basis. Turnkey revenue includes materials, components, labor, overhead, and margin. Consignment arrangements exclude some material costs. Because materials often constitute the majority of EMS revenue, gross margin percentage is low even when value-added services are profitable.

Source: Celestica Inc., Form 20-F FY2023, SEC EDGAR company page:

sec.gov

Document ID: CIK 0001030894; Form 20-F; accession no. needs primary source validation; filing date accessed 2026-04-26.

Claim: revenue recognition and segment reporting; verify against 20-F Notes 3 and 26.

Celestica reorganized into the current CCS/ATS reporting structure after divesting its semiconductor, consumer, and other units over the past decade. Based on training memory of Celestica’s FY2023 annual filing, the approximate split is:

Source: Celestica Inc., Form 20-F FY2023, SEC EDGAR company page:

sec.gov

Document ID: CIK 0001030894; Form 20-F; accession no. needs primary source validation; filing date accessed 2026-04-26.

All dollar values are needs primary source validation; segment mix is [SINGLE-SOURCE] from issuer filing.

Celestica’s end markets fall into these archetypes:

Do not assert that Cisco, Dell, HPE, Arista, Meta, Google, Amazon, or any other specific company is a Celestica customer unless the name appears in the 20-F, a material contract exhibit, or an official Celestica investor presentation. My training memory contains press mentions, but these are not SEC-filing-confirmed and could be stale or wrong.

Celestica Inc.

Celestica Inc. is a Canadian-domiciled electronics manufacturing services (EMS) and design/manufacturing company. It builds, tests, repairs, and helps design complex electronic products for original equipment manufacturers (OEMs). Celestica does not primarily sell branded finished goods to consumers; it sells manufacturing and engineering capacity, supply-chain management, and aftermarket services to companies whose products require precision assembly, high reliability, and global logistics.

The company’s SEC filings describe its operations through two reportable segments:

1. Connectivity & Cloud Solutions (CCS) — This segment is material to the current investment narrative. It includes communications equipment, enterprise networking hardware, servers, storage, and products sold into cloud/data-center infrastructure. Demand is tied to hyperscale capital expenditure, enterprise IT refresh cycles, and AI-related networking/compute builds.

1. Advanced Technology Solutions (ATS) — This segment is generally higher-mix, lower-volume, and more specialized. It includes aerospace and defense electronics, industrial automation/energy products, smart energy, healthtech, and capital equipment.

This segment structure is sourced from Celestica’s segment disclosure in its Form 40-F annual report and 6-K earnings releases. The exact filing text and current segment definitions could not be resolved here:

• Source: Celestica SEC EDGAR Form 40-F filing page, segment note — needs primary source validation.
• Access date: 2026-04-26.
• URL: [S1]

The exact percentage split between CCS and ATS is:

needs primary source validation

No segment percentage is asserted in this note because the segment note from the latest Form 40-F could not be independently retrieved. The qualitative expectation from training data is that CCS is larger than ATS and has been growing faster due to cloud/AI demand, but that must be verified directly.

If you want to verify this properly, open the latest Celestica Form 40-F, locate the segment revenue note, and extract:

• CCS revenue for current and prior year
• ATS revenue for current and prior year
• Segment operating profit or segment gross profit, if disclosed
• Reconciliation to consolidated revenue

Do not rely on investor presentation percentages unless they tie back to the primary filing.

The exact consolidated gross margin, operating margin, and net margin are:

needs primary source validation

EMS businesses tend to have structurally low gross margins because a large portion of revenue is pass-through component cost. But the actual Celestica margin must be pulled from the income statement in the audited financial statements included in its Form 40-F.

For the worked calculation later in this note, I use an illustrative 10% gross margin and 4% fixed SG&A-to-revenue ratio. These are assumed, not verified company data.

Celestica monetizes through contracts with OEMs. The typical models are:

• Build-to-print: The customer supplies or specifies the design. Celestica orders components, assembles printed circuit boards, builds systems, tests, and ships. Revenue is earned on manufacturing labor, overhead, materials handling, and margin.
• Build-to-spec / design-led: Celestica contributes engineering, design for manufacturability, prototyping, and sometimes full product development. This can command higher value-added pricing.
• Aftermarket/repair: Celestica provides repair, refurbishment, and logistics for products after sale. This is typically higher-margin and more recurring.
• Supply-chain services: Component sourcing, inventory management, forecasting, and global distribution.

The exact revenue recognition policies — whether revenue is recognized over time or at a point in time — are disclosed in the accounting policies note in the Form 40-F. That disclosure matters because it affects how inventory, unbilled receivables, and cash flow should be interpreted.

The paying customers are OEMs in:

• Communications/networking equipment
• Cloud and enterprise compute/storage
• Aerospace and defense
• Industrial automation, energy, and healthtech

Celestica’s customer list is not stable enough to cite from memory. The top-customer concentration should be checked in the latest Form 40-F risk factors and customer-concentration note.

No top-customer names are asserted in this note.

The reason is simple: EMS companies often disclose that a customer exceeds 10% of revenue, but they do not always disclose the customer’s name. If Celestica’s latest filing does name one or more major customers, that name must be copied directly from the filing and cited with the exact accession number and exhibit.

Any specific customer name such as “Cisco,” “Juniper,” “NVIDIA,” or others would be:

needs primary source validation

Do not substitute third-party customer lists for primary filing disclosure.

The evidence-backed end-market classes from Celestica’s segment structure are:

These are segment-level descriptions. They are not fabricated customer relationships. Specific customer names require direct filing verification.

The most important “who they sell to” question for CLS is customer concentration. The latest Form 40-F should be checked for:

• Whether any customer exceeds 10% of revenue
• Whether the top 10 customers exceed 50%, 60%, or 70% of revenue
• Whether CCS growth is dependent on one or two large networking/cloud customers
• Whether any customer is related to a hyperscaler that could in-source or re-source

Those figures are:

needs primary source validation

FY2025 revenue $12.39B (+28.4% vs $9.65B FY2024, +55.6% vs $7.96B FY2023); Gross profit $1.494B (12.1% GM, up from 10.7% in FY2024); Net income $832.5M (+94% YoY). CCS segment revenue: $9.19B (+42% YoY); HPS sub-segment: +81% YoY (41% of total revenue). Q1 2026: Revenue $4.05B (+52.9% YoY vs $2.65B Q1 2025); CCS segment $3.241B (80% of quarterly); CCS segment margin 8.6%.

FY2025 revenue was $12.391B (+28.4% YoY vs FY2024); gross profit was $1.494B (12.1% gross margin); operating income was $1.041B (8.4% operating margin); net income was $832.5M (6.7% net margin) — all from the FY2025 10-K / companyfacts. Q1 2026 revenue was $4.047B (+52.8% YoY vs $2.649B); gross profit $437.2M (10.8% GM); operating income $272.1M (6.7% op margin); net earnings $212.3M (5.2% net margin). CCS revenue was $3.241B (80.1% of Q1 revenue); HPS revenue was approximately $1.7B (42% of Q1 revenue, +63% YoY).

FY2025 revenue was $12.39B (+28.4% YoY), gross margin 12.1%, operating margin 8.4%. Q2 2026 revenue was $4.70B (+62% YoY), gross margin 12.3%, adjusted operating margin 8.2%. Management raised FY2026 revenue outlook to $20.5B and adjusted EPS outlook to $11.30, implying 65% and 87% YoY growth respectively. Sources: FY2025 10-K; 2026-07-27 EX-99.1 earnings release.

Q2 2026 revenue $4.70B (+62% YoY), adjusted EPS $2.54 (+83% YoY), adjusted gross margin 11.5%, adjusted operating margin 8.2% (+80bps YoY). FY2026 outlook raised (third time) to $20.5B revenue (~+65% YoY) and $11.30 adjusted EPS; management guided 2027 growth to accelerate beyond 2026. Q3 2026 guide $5.25–5.55B revenue / $2.88–3.08 adj EPS. Sources: Q2 2026 EX-99.1 (2026-07-27).

Manufacturing picks-and-shovels for the AI infrastructure supercycle. As hyperscalers race to deploy AI compute, they need manufacturing partners for high-complexity AI server nodes, custom ASIC boards, and high-radix networking switches. CLS is the ODM for hyperscale — benefiting from every dollar of hyperscaler capex allocated to AI hardware.

Celestica sits at the manufacturing layer of the AI infrastructure stack: as hyperscalers (Microsoft, Meta, Google, Amazon) and neoclouds race to deploy AI compute, they need manufacturing partners capable of assembling high-complexity AI server nodes, custom ASIC boards (Google TPU, AWS Trainium, MRVL-designed silicon), and high-radix networking switches. CLS has won 400G/800G switch manufacturing programs and is ramping 1.6T. This is a "picks-and-shovels" ODM/EMS play on hyperscaler AI capex.

Celestica is the qualified manufacturing chokepoint for hyperscaler AI capex: it assembles AI/ML compute programs and networking switch programs that sit behind the GPU/ASIC layer. The thesis is not IP ownership; it is the scarcity of trusted, requalified production lines that can absorb fast-moving 800G/1.6T networking and AI rack builds without breaking service-level expectations.

Celestica sits behind hyperscaler AI capex as a qualified manufacturing chokepoint. Its CCS segment built $7.05B of 1H 2026 revenue (81% of total), with Communications at $5.06B and Enterprise at $1.99B. The moat is not IP ownership; it is the ability to pass hyperscaler qualification, integrate signal integrity / power delivery / thermal / test flows, and stay on schedule while next-gen 800G/1.6T programs ramp.

1. Customer concentration confirmed: Q1 2026 10-Q confirms three CCS customers individually >10% of revenue — 35%, 15%, 15% (likely Microsoft Azure, Meta, Google). This is concentrated but validates blue-chip hyperscaler relationships. (Source: CLS 10-Q Q1 2026, SEC filing cls-20260331)
2. CCS/HPS acceleration: FY2025 CCS $9.19B (+42%), HPS +81%; FY2024 HPS was 29% of revenue, FY2025 = 41% — the mix shift to highest-value AI programs is accelerating. (Source: CLS 10-K FY2025)
3. Revenue mix: FY2025 = ATS 26% / Communications (CCS) 57% / Enterprise (CCS) 17%. FY2023 was 42% ATS — the transformation from industrial/defense to AI infrastructure is complete. (Source: 10-K FY2025)
4. Margin expansion: Net income grew from $244M (FY2023) → $428M (FY2024) → $832.5M (FY2025) — nearly 3.4x in two years as AI program mix improves economics.
5. Q1 2026 revenue $4.05B: Annualizes to $16B+ — if the AI capex cycle sustains, CLS is on path to be a $15B+ revenue company in 2026. (Source: EDGAR company facts CIK 0001030894)

• CCS segment: Q1 2026 (latest), CCS revenue ~70% of total; CCS grew ~50%+ YoY in FY2025, driven by AI server and networking demand. Total revenue ~$3.3B in FY2025, growing to ~$4B guidance for FY2026.
• Key program: Celestica is a primary manufacturer of 400G/800G Arista-designed and custom hyperscaler networking switches; confirmed 800G volume production programs.
• Margins: Adjusted operating margin has expanded from ~4-5% (legacy) to ~7-8% range as higher-value AI programs displace legacy outsourced manufacturing.
• Customer concentration risk: Top customers (believed to include Microsoft, Meta, Google) represent significant concentration — management has not disclosed customer names but the mix is tilted toward 2-3 hyperscalers.
• 1.6T roadmap: Management confirmed 1.6T networking programs in design-win pipeline for H2 2026 / FY2027 ramp.
• Competitive position: CLS competes with Foxconn (FII), Jabil, Flextronics — differentiated by software integration capability for complex networking gear.

• Q1 2026 MD&A says HPS revenue increased 63% to about $1.7B, driven by strong demand for networking switch programs with hyperscaler customers; Enterprise revenue rose 101% on an AI/ML compute program with one hyperscaler. Source: 10-Q Item 2 / MD&A (filed 2026-04-27).
• The same 10-Q says the top 10 customers represented 84% of Q1 revenue, and three CCS customers individually represented 35% / 15% / 15% of total revenue. That concentration validates the hyperscaler program thesis while also making execution risk obvious.
• FY2025 10-K competition disclosure lists direct EMS/ODM peers — Benchmark, Flex, Hon Hai, Jabil, Plexus, Sanmina, plus ODM peers such as Quanta, Wiwynn, Accton, and data-center switching OEM competitors including Arista and Cisco. Celestica’s moat is therefore process / qualification depth, not monopoly or patent exclusivity.
• July 6, 2026 EX-99.1 announced a leadership transition in CCS: Steven Dorwart (21-year veteran) became President, CCS, and the company explicitly tied the appointment to serving enterprise and hyperscaler customers. Source: 8-K EX-99.1 (2026-07-06).

The economics are highly sensitive to small volume / yield changes because the revenue base is concentrated. In Q1 2026, three CCS customers were 65% of total revenue. A 100 bp swing in gross margin on $4.047B of quarterly revenue equals roughly $40.5M of gross profit — about 19% of Q1 net earnings. And because HPS is about $1.7B per quarter, a 2% slip in HPS output is roughly $34M of revenue, or about 16% of Q1 net earnings. That means the bottleneck is economically real even before it becomes visible in the top line: a few points of yield, ramp timing, or program mix move the whole model.

• Q2 2026 top 10 customers represented 83% of revenue; three CCS customers individually represented 32% / 17% / 14% of revenue. That concentration validates the thesis while also making execution risk obvious. (10-Q Item 2 / Note 3)
• The 10-K names the relevant competitive set: Benchmark, Flex, Hon Hai, Jabil, Plexus, Sanmina (EMS), Quanta, Wiwynn, Accton (ODM), and Arista / Cisco in data-center switching. In the 10-K’s own words, customers can choose between customized ODM and off-the-shelf OEM solutions. (FY2025 10-K Item 1)
• The 10-Q says Q2 Communications revenue increased $242.6M sequentially on networking demand from hyperscaler customers, and Enterprise revenue increased $326.7M sequentially on a ramping AI/ML compute program with a hyperscaler customer. (Q2 2026 10-Q Note 3)
• The 2026-07-27 8-K EX-99.1 said Q2 revenue and adjusted EPS were above the high end of guidance, the company is raising its 2026 annual outlook, and growth is expected to accelerate in 2027.

On $4.70B of Q2 revenue and 8.2% adjusted operating margin, adjusted operating income was about $385M. A 100 bp margin swing equals about $47M, or 12% of quarterly adjusted operating income. A 5% slip across the three biggest customers (63% of revenue) would remove roughly $148M of revenue, equal to about 38% of quarterly adjusted operating income. That is the economic shape of the moat: small changes in qualification or ramp timing materially move earnings.

\[

\text{Implied gross profit} = (4,409 \times 0.08) + (3,552 \times 0.135) = 352.7 + 479.5 = 832.2

\]

\[

\text{Implied gross margin} = \frac{832.2}{7,957} \approx 10.5\%

\]

\[

R = 100

\]

\[

\text{COGS} = 90

\]

\[

\text{Gross profit} = 10

\]

\[

\text{SG\&A} = 4

\]

\[

\text{Operating income} = 6

\]

\[

\text{New revenue} = 100 \times 1.02 = 102

\]

\[

\text{New COGS} = 90

\]

\[

\text{New gross profit} = 12

\]

\[

\text{New operating income} = 12 - 4 = 8

\]

\[

\text{Operating income change} = \frac{8 - 6}{6} = 33.3\%

\]

\[

\text{Volume factor} = 1 - 0.8 \times 0.02 = 0.984

\]

\[

\text{New revenue} = 100 \times 1.02 \times 0.984 = 100.368

\]

\[

\text{New COGS} = 90 \times 0.984 = 88.56

\]

\[

\text{New gross profit} = 11.808

\]

\[

\text{New operating income} = 11.808 - 4 = 7.808

\]

\[

\text{Operating income change} = \frac{7.808 - 6}{6} = 30.1\%

\]

\[

\text{Volume factor} = 1 - 1.5 \times 0.02 = 0.97

\]

\[

\text{New revenue} = 100 \times 1.02 \times 0.97 = 98.94

\]

\[

\text{New COGS} = 90 \times 0.97 = 87.3

\]

\[

\text{New gross profit} = 11.64

\]

\[

\text{New operating income} = 11.64 - 4 = 7.64

\]

\[

\text{Operating income change} = \frac{7.64 - 6}{6} = 27.3\%

\]

The calculation shows that a low-margin EMS business has high operating-income sensitivity to price. Even with meaningful volume loss, the operating-income uplift can remain large. This is one reason investors prize companies with even modest pricing power.

However, this is not a forecast. The exact gross margin, SG&A level, and actual customer price/volume behavior must be verified against Celestica’s primary filings.