Celestica ($CLS) Projects 2027 Revenue to Nearly Double to $40B on Google ($GOOGL) TPU and OpenAI Custom...
Data-center hardware manufacturer Celestica ($CLS) projected that its full-year 2027 revenue will surge 90% to $40 billion—nearly doubling from its raised 2026 outlook of $21 billion—driven by accelerating demand for 800G/1.6T networking switches and custom AI computing systems from Google ($GOOGL) and OpenAI.
Key financial results, custom silicon ramps, and capital expenditure commitments include:
- Blockbuster Q3 Beat and Multi-Year Growth Trajectory: Following an 83% year-over-year jump in Q3 2026 revenue to $5.83 billion and a more than 100% surge in adjusted EPS to $3.30, Celestica raised its full-year 2026 revenue guidance from $20.5 billion to $21.0 billion. Q3 Connectivity & Cloud Solutions revenue rose 102% to $4.87 billion (with Compute & Storage up 242%), and management noted at its October 27 Investor Day that already-won customer programs point to 2028 demand meaningfully above the $40 billion 2027 target.
- Google TPU and OpenAI-Broadcom ($AVGO) "Jalapeño" Ramps: As a preferred manufacturing partner for Alphabet ($GOOGL), Celestica is expanding U.S. capacity to build systems around Google’s Tensor Processing Units (TPUs). Simultaneously, Celestica is ramping system, server rack, and circuit board production for OpenAI’s custom "Jalapeño" AI accelerator—co-developed with Broadcom ($AVGO)—alongside its new liquid-cooled DS6005 Ethernet switches (800G and 1.6T).
- $1.5B–$2B 2027 CapEx and Working Capital Trade-Offs: To add nearly $19 billion in annual revenue next year across facilities in Texas, Mexico, and Thailand, Celestica plans to increase CapEx from ~$1 billion in 2026 to $1.5 billion–$2.0 billion in 2027. Due to upfront inventory and working capital needs, management trimmed its 2026 non-GAAP free cash flow forecast from $600 million to $460 million and expects a net cash outflow in 2027, cushioned by $4 billion in cash reserves following August’s $3.45 billion equity offering (while noting concentration risk with one customer accounting for 35% of Q3 revenue).
