CLS 10-K & 10-Q changes, risk factors and insider trading

Each of the following risk factors, or any combination of them, could have a material adverse effect on our business, financial condition, and/or operating results. Our shareholders and prospective investors should carefully consider each of the following risks andtogether with all of the other information set forth in this Annual Report.

We are dependent on a limited number of customers and end markets.markets Aand are sensitive to their investment cycles and operating conditions. Revenue decline in revenue from, or the loss of,of any significantmajor customer,customer could have a material adverse effect on our operating results, financial position and cash flows.

We depend (and expect to continue to depend) upon a small number of customers for a substantial portion of our revenue. In the aggregate, our top 10 customers represented 73%79% of total revenue for 2024,2025, 73% for 2024 and 64% for 20232023. andIn 66%2025, forthree 2022.customers We also remain dependent upon revenue fromin our CCS segment,segment whichindividually represented 67%10% or more of total revenue (32%, 14% and 12%). CCS segment revenue represented 74% of our consolidated revenue in 2025 (2024 (— 67%; 2023 — 58%; 2022 — 59%). Notwithstanding the expansion our HPS business and high-value EMS programs (including with hyperscalers), we remain dependent, to a lesser extent compared to prior years, on our traditional CCS business for a portion of our revenue, which continues to experience slower growth rates, increased pricing pressures and a highly competitive marketplace.

A decline in revenue from, or the loss of, any significant customer could have a material adverse effect on our operating results, financial position and cash flows.flows, and may increase the variability of our operating results from period to period. We cannot assure: (i) the replacement of completed, delayed, cancelled or reduced orders with new business; (ii) that our current customers will continue to utilize our services consistent with historical volumes or at all; and/or (iii) that our customers will renew their long-term manufacturing or services contracts with us on acceptable terms or at all. There can also be no assurance that our efforts to secure new customers and programs will succeed in reducing our customer concentration. Failure to secure business from existing or new customers in any of our end markets would adversely impact our operating results. See "Our revenue and operating results may vary significantly from period to period."

Inherent challenges in managing changes in customer demand has and may continue to impact our planning, supply chain execution and manufacturing, and may adversely affect our operating performance and results.

Our customers typically do not commit to long-term production schedules for more than 30 to 90 days in advance, and we oftenmay experience volatility in customer orders and inventory levels. Customers have and may in the future terminate their agreements with us prior to scheduled expiration, fail to renew such agreements upon expiration, or significantly change, reduce or delay the volume of manufacturing or other services they order from us, any of which may adversely affect our operating results when they occur. ForCustomers example,have we experienced demand reductions within our Industrial business during 2024. Customersand may also shift business to our competitors, implement in-source and second-source programs, or adjust the concentration of their supplier base. The global economic environment, adverse market conditions, "buy local" movements, political and geopolitical pressures, negative sentiment from our customers' customers, regulatory changes or changes made by local governments (such as tax benefits, tariffs or export controls) have and may alsocontinue to impact our customers' business decisions. See "Our operations have been and could continue to be adversely affected by events outside our control" and "RegulationAdoption, integration and use of AI/ML technologyin manufacturing and service offerings and in certain of our internal processes may materiallypresent regulatory, ethical, data and adverselycybersecurity impactrisks ourand business.result in reputational harm or liabilities." These and other factors could adversely affect the rate of outsourcing to EMS and/or ODM providers generally or to us in particular. A significant portion of our revenue can occur in the last month of the quarter, and purchase orders may be subject to change or cancellation, all of which affect our operating results when they occur. Because we cannot predict customer behavior, or if or when adverse market conditions will reverse, our forecasts of customer orders may be inaccurate, and may make it difficult to order appropriate levels of materials, schedule production, and maximize utilization of our manufacturing capacity and resources.

Our customers from time to time change their forecasts, production quantities or product type requirements, or accelerate, delay or cancel production quantities. When customers change production volumes or request different products to be manufactured from those in their original forecast, the unavailability of components and materials for such changes could also adversely impact our revenue and working capital performance.capital. See "We are dependent on third parties to supply certain materials, and our results were negatively affected by the availability of such materials in the past and may be negatively affected by the quality, availability and cost of such materials in the future."

Further, to guarantee continuity of supply for many of our customers, we are required to manufacture and warehouse specified quantities of finished goods. The uncertainty of demand in our customers' end markets, intense competition in our customers' industries and general order volume volatility from time to time may result in customers delaying or canceling the delivery of products we manufacture for them or placing purchase orders for lower volumes of products than previously anticipated. This may result in higher than expected levels of inventory, which could in turn have a material adverse impact on our operating results and working capital performance.capital. Although the levels of inventory we carry in any period reflect inventory required to support new program ramps and business growth, inventory levels are also impacted by demand volatility and significant product mix changes, including late changes from customers. In the past, materials constraints from suppliers also negatively impacted our inventory levels. We may not be able to return or re-sell excess inventory resulting from these factors, or we may be required to hold such inventory for a period of time, any of which may result in higher working capital needs (offset in part by customer cash deposits), and/or a requirement to record additional (and higher-than-typical) reserves for excess or obsolete inventory (as occurred in recent years).inventory. Order cancellations and delays could also lower our asset utilization, resulting in higher levels of unproductive assets, lower inventory turns, and lower margins. See "Our products and services involve inventory risk."

Our operating results are highly dependent upon the ability of our customers (both our traditional OEM and hyperscaler customers) to compete and succeed in the marketplace using products we manufacture and services we provide. Factors that may adversely affect our customers include: rapid changes in technology (including evolving AI technologies); evolving industry standards; seasonal demand; their failure to successfully market, and/or a lack of widespread commercial acceptance of, their products and services; supply chain issues; the emergence of substitutes for products and services; dramatic shifts in demand which may cause them to lose market share or exit businesses; recessionary periods in our customers' markets; short product lifecycles resulting from continuous improvements in products and services, commoditization of certain products, changes in preferences by end customers, and the emergence of new entrants or competitors with disruptive products, services, or new business modelsmodels. thatFor de-emphasizeexample, traditionalcompetition OEMfrom solutionslower‑cost and distributionopen‑source channels.AI Inmodels, addition,together certainwith rapid advances in model efficiency, may reduce user switching costs, increase price sensitivity, and limit our customers' ability to maintain or improve pricing for their AI‑related products and services. If technologies or standards supported by our customers' products and services or their business models become obsolete, are delayed due to regulatory certification, fail to gain widespread acceptance or are canceled, our business would be adversely affected. Certain of our customers have experienced, and may in the future experience, severe revenue erosion, pricing, margin and cash flow pressures, and excess inventories that, in turn, have adversely affected (and in the future may adversely affect) our operating results. IfSee technologiesalso or"The standardsfuture supporteddevelopment byand adoption of AI and the deployment of data center infrastructure are uncertain and depend on the availability and cost of critical inputs (including power and water), which could materially affect demand for our customers' products and services or their business models become obsolete, are delayed due to regulatory certification, fail to gain widespread acceptance or are canceled,and our businessoperating would be adversely affected.results."

Our exposure to financially troubled customers or suppliers has and may continue to adversely affect our financial results.

We may provide manufacturing, design engineering, management and other supply chain services to companies and industries that may in the future experience financial difficulty. When our customers experience financial difficulty, we have difficulty recovering amounts owed to us by these customers, or demand for our products and services from these customers sometimes declines. Additionally, if our suppliers experience financial difficulty, we could have difficulty sourcing supplies necessary to fulfill production requirements and meet scheduled shipments. When one or more of our customers becomesbecome insolvent or otherwise isare unable to pay for the services provided by us on a timely basis, or at all, our operating results and financial condition are adversely affected. Such adverse effects have in the past and could in the future include any one or more of the followingfollowing, among others: an increase in our provision for credit losses, a charge for inventory write-offs, a reduction in revenue, and an increase in our working capital requirements due to higher inventory levels and increases in days our accounts receivables are outstanding.

Customer relationships with emerging companies may present special risks because we do not have an extensive product or customer relationship history. There is less demonstration of market acceptance of their products making it harder for us to anticipate requirements than with established customers. Our credit risk on these customers, especially in A/R and inventories, and the risk that these customers will be unable to fulfill indemnification obligations to us, are potentially increased.

If we are unable to recruit or retain highly skilled talent,talent in key jurisdictions and within desired timeframes, our business could be adversely affected.

The recruitment of personnel in the EMS and ODM industries is highly competitive. We believe that our future success depends, in part, on our ability to attract and retain highly skilled executive, technical and management talent in the various geographies in which we operate.operate and within desired timeframes. Competitive dynamics, as well as the time required to replace or redistribute responsibilities related to the loss of the services of certain executive, management and technical employees, individually or in the aggregate, could have a material adverse effect on our operations, and there can be no assurance that we will be able to retain their services. Regional competitive dynamics may also impact our ability to retain and acquire talent. Organizational changes may impact our relationships with customers, vendors, and employees, potentially resulting in loss of business, loss of vendor relationships, and the loss of key employees or declines in employee productivity. Uncertainties associated with any senior management transitions could lead to concerns from current and potential third parties with whom we do business, any of which could hurt our business prospects. Turnover in key leadership positions within the Company, or any failure to successfully integrate key new hires or promoted employees, may adversely impact our ability to manage the Company efficiently and effectively, could be disruptive and distracting to management and may lead to additional departures of existing personnel, any of which could have a material adverse effect on our business, operating results, financial results and/or internal control over financial reporting.

•customer disengagements ordisengagements, terminations or non-renewal of customer programs, arrangements or agreements;

•changes in global economic and political conditions and world events, including the impact of Externalevents Events.outside of our control.

We may also encounter difficulties in ramping and executing new programs. Ramping new programs can range from several months to over a year before production starts, and often requires significant up-front investments and increased working capital. These programs may generate lower margins or losses during and/or following the ramp period, or may not achieve the expected financial performance, due to production ramp inefficiencies, lower than expected volume, or delays in ramping to volume. In addition, our customers may significantly change these programs, or even cancel them altogether, due to decreases in their end-market demand or in the actual or anticipated success of their products in the marketplace. We may incur additional ramping costs as we further expand our business and ramp new programs. There can be no assurance that our increased investments will benefit us or result in business growth. As we pursue opportunities in new markets or technologies, we may encounter challenges due to our limited knowledge or experience in these areas. In addition, the success of new business models or programs dependsdepend on a number of factors including: understanding the new business or markets; timely and successful product development; market acceptance; the effective management of purchase commitments and inventory levels in line with anticipated demand; the development or acquisition of appropriate IP and capital investments, to the extent required; the availability of materials in adequate quantities and at appropriate costs to meet anticipated demand; and the risk that new offerings may have quality or other defects in the early stages of introduction. Any of these factors could prevent us from realizing the anticipated benefits of growth in new markets or technologies, which could materially adversely affect our business and operating results.

As part of our strategy to enhance our end-to-end service offerings, we continue to expand our design, engineering and manufacturing capabilities. Providing these services has exposed and may continue to expose us to different or greater potential risks than those we currently face. Our design services require significant investments in R&D, technology licensing, testing and tooling equipment, patent applications and talent recruitment. Our margins may be adversely impacted if we incur higher than expected investment costs, or if our customers are not satisfied with our progress, or do not approve our completed designs. In addition, our design activities often require the purchase of inventory for initial production runs before we have a firm purchase commitment from a customer. Furthermore, we face increased competition with respect to these offerings, as well as the recruitment of talent for our HPS talent,business, from companies providing similar services. As we continue to grow our HPS business globally to increase capacities and capabilities for network resilience, costs required to support our design and engineering capabilities are expected to increase and may adversely impact our profitability. In addition, some of the products we design and develop must satisfy safety and regulatory standards and/or receive government certifications. If we fail to obtain these approvals or certifications on a timely basis, we would be unable to sell these products, which would harm our revenues, profitability and reputation.

There can be no assurance that our expansion into new markets or new business will be successful, or that we will achieve the anticipated benefits. In addition, there is no assurance that we will find suitable new acquisition targets, that we will be able to consummate any such transactions on terms and conditions acceptable to us, or that we will be able to fund any such acquisitions with existing cash resources or through financing provided by external lenders. We may be unable to obtain additional capital required on terms acceptable to us or at all. If we are unable to consummate an acquisition we have deemed desirable, we may not be able to implement our intended business plan, which could adversely affect our business, results of operations and financial condition. In addition, we have incurred and may continue to incur costs to support our pursuit of acquisitions and/or other strategic opportunities, which may adversely impact our operating results, and may not result in the consummation of any such transactions. See "We have incurred substantial third-party debt to fund acquisitions,for which has increased our debt service requirements,requirements may reduce our ability to fund future acquisitions and/or to respond to unexpected capital requirements,expenditures, and may have other adverse impacts on our business."

Our operations and those of our customers, component suppliers and/or our logistics partners may be disrupted by global or local events outside our control, including: fires and related disruptions; political instability; increased political tension between countries (including increased tensions between U.S. and other countries and between mainland China and Taiwan); geopolitical dynamics; terrorism; armed conflict (including the Russia/Ukraine conflict and the conflicts in the Middle East area (Middle East Conflicts)); labor or social unrest; criminal activity; disease or illness or other widespread health concerns, pandemics, epidemics or outbreaks of illness that affects local, regional, national or international economies; natural disasters and unusually adverse weather conditions (including those caused by climate change),conditions, such as hurricanes, tornados, other extreme storms, wildfires, droughts and floods; cybersecurity incidents (see "Our operations and our customer relationships may be adversely and materially affected by disruptions to our IT systems, including disruptions from cybersecurity breaches of our IT infrastructure"); and other risks present in the jurisdictions in which we, our customers, our suppliers and/or our logistics partners operate. Our production operations are also subject to energy, power and water dependencies, including upgrades to manufacturing capabilities and power enhancements at certain facilities, permitting and infrastructure constraints, utility supply interruptions, and severe weather and grid reliability issues. Any of these factors could affect ramp timing at our manufacturing sites, increase our operating costs, or limit capacity utilization, which could adversely affect our business and results of operations. These types of risks and events could disrupt operations at one or more of our sites or those of our customers, component suppliers and/or our logistics partners, with the impact of the event potentially magnified in areas where we or they have multiple facilities in close proximity. These events could also lead to higher costs or supply shortages, and may disrupt the delivery of components to us or our ability to provide finished products or services to our customers, any of which could (and in the case of materials constraints, did in the past and may in the future) adversely affect our operating results materially. We carry insurance to cover damage to our sites and interruptions to our operations, including those that may occur as a result of natural disasters, such as flooding, earthquakes or other events. Our insurance policies, however, are subject to deductibles, coverage limitations and exclusions, and may not provide adequate (or any) coverage should such events occur. Such events could also impact our insurance premiums. In addition, some of our facilities possess certifications or unique equipment necessary to work on specialized products that our other locations lack. If work is disrupted at one of these facilities as a result of the foregoing events or otherwise, it may be impractical or we may be unable to transfer such specialized work to another facility without significant costs and delays. Thus, any disruption in operations at a facility possessing specialized certifications or equipment could adversely affect our ability to provide products and services to our customers, and potentially have a negative affect on our relationships and financial results. Although we carry insurance to cover damage to our sites and interruptions to our operations, including those that may occur as a result of natural disasters such as flooding, earthquakes or other events described above, our insurance policies are subject to deductibles, coverage limitations and exclusions, and may not provide adequate (or any) coverage for the foregoing risks or events, and any claims could adversely affect insurance premiums.

The foregoing events have had and may in the future have an adverse impact on the U.S. and global economy in general, and on consumer confidence and spending, which may adversely affect our revenue and financial results. Such events could increase the volatility of the market price of our securities and may limit the capital resources available to us and/or our customers and suppliers. Also see "We continue to operate in an uncertain global economic and political environment," "U.S. policies or legislation could have a material adverse effect on our business, results of operations and financial condition," "Our ability to successfully manage unexpected changes or risks inherent in our global operations and supply chain may adversely impact our financial performance," and "Geopolitical uncertainty, including as a result of the military conflict between Russiauncertainty and Ukraine and/or the Middle East Conflicts,conflicts may adversely affect our business, financial condition and results of operations,operations." and Item 7, MD&A — "External Factors that May Impact our Business."

We rely on a variety of contracted or common carriers to transport raw materials and components from our suppliers to us, and to transport our products to our customers. The use of contracted or common carriers is subject to a number of risks, including increased costs due to rising energy prices and labor, vehicle and insurance costs; hijacking and theft resulting in lost shipments; delivery delays resulting from port congestion and labor shortages and/or strikes; and other factors beyond our control. Although we attempt to mitigate our liability for any losses resulting from these risks through the use of multiple carriers and modes of transport, as well as insurance, any costs or losses relating to shipping or shipping delays that cannot be mitigated, avoided or passed on to our customers could reduce our profitability, require us to manufacture replacement products or damage our relationships with our customers. Although in the past we have incurred some increased shipping expenses and delays asin aconnection resultwith ofgeopolitical the Middle East Conflicts,conflicts, such increases and delays have not been significant to date. However, wethere cannotcan assurebe no assurance that this will continue to be the case.

We are also subject to increasing expectations and data security requirements from our customers, including those related to the U.S. Federal Acquisition Regulation, U.S. Defense Federal Acquisition Regulation Supplement, and U.S. Cybersecurity Maturity Model Certification. In addition, we must comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in various jurisdictions. For example, the European Union's General Data Protection Regulation, and similar legislation in other jurisdictions in which we operate, impose additional obligations on companies regarding the handling of personal data and provide certain individual privacy rights to persons whose data is stored. Compliance with customer expectations and existing, proposed and recently enacted laws and regulations can be costly; any failure to comply with these expectations and regulatory standards could subject us to legal and reputational risks. Misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against the Company by governmental entities or others, fines and penalties, damage to our reputation and credibility and could have a negative impact on our business and results of operations.

We continuously work to improve our productivity, quality, delivery performance and flexibility through various operational initiatives. Implementation of these initiatives, however, presents a number of risks, including: (i) failure to achieve anticipated margin improvements from such actions; (ii) actual or perceived disruption of service or reduction in service levels to customers; (iii) potential adverse effects on our internal control environment with respect to general and administrative functions during transitions resulting from such initiatives; (iv) actual or perceived disruption to suppliers, distribution networks and other important operational relationships and the inability to resolve potential conflicts in a timely manner; (v) diversion of management attention from ongoing business activities and strategic objectives; and (vi) failure to retain key employees. Because of these and other factors, we cannot predict whether we will fully realize the purpose and anticipated benefits or cost savings of these initiatives and, if we do not, our business and results of operations may be adversely affected. Furthermore, adverse changes to our business may require additional restructuring or reorganization activities in the future. See "We have incurred significant restructuring charges in the past, and expect to incur further restructuring charges in the future; we may not achieve some or all of the expected benefits from our restructuring activities, these activities may adversely affect our business, and additional restructuring actions may be required once currently-contemplated actions are complete."

We have incorporated and may in the future further incorporate various types of AI capabilitiesinto intoour manufacturing and service offerings and certain of our developmentinternal processes, and this technology is an element of our business operations. AI is also an element of the business operations and product and service offerings for certain of our customers.processes. As with many developing technologies, AI presents risks and challenges, and may result in unintended consequences that could affect its further development, adoption and use and, therefore, our business.consequences. Deficiencies or other failures of AI systems could subject us to competitive harm, regulatory action, penalties, legal liability or brand or reputational harm. AI is an emerging technology for which the legal and regulatory landscape is not fully developed, includingincluding, among others, potential liability for breaching IP or privacy laws and regulations. While laws and regulations applicable to AI are emerging and evolving, what these legal frameworks will look like remainsremain uncertain and they may be inconsistent from jurisdiction to jurisdiction.jurisdiction, and compliance may require changes, updates or modifications to systems, processes and controls, and could increase costs. We may not always be able to anticipate how toproperly respond to these legal frameworks, and our obligation to comply with them could entail significant costs, negatively affectaffecting our business and/or materially limitlimiting our ability to incorporate certain AI capabilities into our development processes and solutions.

Additionally, leveragingwhile AI capabilities to potentially improve internal functions and operations presents further risks, costs and challenges. Wewe aim to use AI ethically and attempt to identify and mitigate associated ethical or legal issues presented by its use. However,issues, we may be unsuccessful in identifying or resolving ethical or legal issues presented by the use of AI. The use ofUsing AI to support business operations may carry inherent risks related to IP, data privacy and security, such as intended or unintended transmission of personal or other data or proprietary or sensitive information, as well as challenges related to implementingimplementing, integrating, and maintaining AI tools. GrowingSee usealso "Our operations and our customer relationships may be adversely and materially affected by disruptions to our IT systems, including disruptions from cybersecurity breaches of AIour IT infrastructure." Furthermore, inaccurate, biased or harmful outputs, or misuse by third parties may also increase these risks. Further, reliance on AIparties, could introducelead to reputational harm, operational vulnerabilitiesdisruption, andcustomer impactdisputes, ouror relationshipsregulatory with customers, partners, and suppliers.scrutiny.

Climate changeand weather-related risks could adversely affect our business, results of operations and financial condition.

There is increasing concern that a gradual increase in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases (GHGs) in the atmosphere has, and will continue to, cause significant changes in weather patterns around the globe and an increase in the frequency and severity of natural disasters. Changes in weather patterns and an increased frequency, intensity and duration of extreme weather conditions could, among other things, impair our production capabilities, disrupt the operation of our supply chain, and impact our customers and their demand for our services. There are inherent climate-relatedclimate and weather related risks regardless of where we conduct our business. Climate change-relatedand weatherweather-related events could negatively impact any of our locations or the locations of our customers, and may cause us to experience work stoppages, project delays, financial losses and/or additional costs to resume operations, including increased insurance costs or loss of coverage, legal liability and reputational losses. Further, the risks caused by climate change span across the industry sectors we serve, including A&D, Industrial, HealthTech, Capital Equipment, Communications and Enterprise. The direct physical risks that climate change poses to infrastructure through chronic environmental changes, such as rising sea levels and temperatures, and acute events, such as hurricanes, droughts and wildfires, is common to each of these sectors. Infrastructure owners could face increased costs to maintain their assets, which could result in reduced profitability and fewer resources for strategic investment. These types of physical risks could in turn lead to transitional risks, including market and technology shifts, including decreased demand for our services and solutions, reputational risks, such as how our sustainability practices are viewed by external and internal stakeholders, and policy and legal risks, including the extent to which climate change-related initiatives are driven by the governments in which we operate around the globe. As a result, the effects of climate changeand weather related risks could have a long-term material adverse impact on our business, results of operations and financial condition. See "Our operations have been and could continue to be adversely affected by events outside our control," and "Our business and operations could be adversely impacted by ESGsustainability initiatives."

We operate in a highly competitive industry. Our competitors include large global EMS companies, ODMs that specialize in providing internally-designed products and manufacturing services, smaller EMS companies that often have a regional, product, service or industry-specific focus, as well as component and sub-system suppliers, distributors and/or systems integrators. In addition, our HPS offering may compete with our traditional OEM customers' hardware offerings. Offering products or services that compete with the offerings of our customers may negatively impact our relationship with, or result in a loss of business from, such customers. We face indirect competition from current and prospective customers who decide to manufacture products internally, or insourcein-source previously outsourced business. In addition to the foregoing, we face competition from distribution and logistics providers expanding their services across the supply chain.

Many of the markets for our manufacturing and engineering services are characterized by rapidly changing technology and evolving process development, and we cannot assure that we will maintain or develop the capabilities required by our customers in the future. The emergence of new technologies,technologies (including evolving AI technologies), industry standards or customer requirements may render our equipment, designs, inventory or processes obsolete or noncompetitive. In addition, we may have to invest in new processes, capabilities or equipment to support new technologies used in our customers' current or future products, and to support their supply chain processes. Additionally, as we expand our service offerings or pursue business in new markets where our experience may be limited, we may be less effective in adapting to technological change. Our manufacturing, engineering, supply chain processes, and test development efforts and design capabilities may not be successful due to rapid technological shifts in any of these areas. The acquisition and implementation of new technologies and equipment and the offering of new or additional services to our customers may require significant expense or capital investment, which could reduce our operating margins and adversely affect our operating results. OurIf failurewe fail to anticipate andor adapt to our customers' changing technological needs and requirementsrequirements, or if we are unable to hire and retain a sufficient number of engineerspersonnel and maintain our engineering, technological and manufacturing expertiseexpertise, our business, financial condition and results of operations could havebe amaterially materialand adverseadversely effect on our operations.affected.

Various industry-specific standards, qualifications and certifications are required to produce certain types of products for our customers. Failure to obtain or maintain thosethese certifications may adversely affect our ability to maintain existing levels of business or win new business.

Concerns over global economic conditions, financial markets, geopolitical issues, energy costs, inflation, and the availability and cost of credit, have contributed to increased global economic and political uncertainty. The political environment in the U.S., tensions between the U.S. and other countries, the continuing Russia/Ukraine conflict, Middle East Conflicts, and increased tensions between mainland China and Taiwan, have contributed to such uncertainty. All of the foregoing factors are outside of our control. See "Our operations have been and could continue to be adversely affected by events outside our control," "U.S. policies or legislation could have a material adverse effect on our business, results of operations and financial condition," and "Geopolitical uncertainty, including as a result of the military conflict between Russiauncertainty and Ukraine and/or the Middle East Conflicts,conflicts may adversely affect our business, financial condition and results of operations." Uncertain global economies have adversely impacted, and may continue to unpredictably impact, currency exchange rates. See "We are exposed to translation and transaction risks associated with foreign currency exchange rate fluctuations; hedging instruments may not be effective in mitigating such risks." Financial market instability may result in lower returns on our financial investments, and lower values on some of our assets.

A decline in the U.S. and other government budgets, changes in spending or budgetary priorities, or delays in contract awards may significantly and adversely affect our future revenue and limit our growth prospects.

Because we generate a portion of our revenue from contracts with the U.S. government and governmentits agencies,contractors, our results of operations could be adversely affected by relevant spending caps or changes in budgetary priorities, as well as by delays in the budget process, program starts, or the award of contracts or orders. U.S. government spending levels for defense-related and other programs may decrease or fluctuate in future periods, including as a result of budgetary constraints, spending cuts, and/or uncertain funding of programs. Spending and program authorizations may not increase or may decrease or shift to programs in areas in which we do not provide services or are less likely to be awarded contracts. Such changes in spending authorizations and budgetary priorities may occur as a result of shifts in spending priorities from defense-related and other programs as a result of competing demands for federal funds and the number and intensity of military conflicts or other factors. A significant decline in overall U.S. government spending, a significant shift in spending priorities, the substantial reduction or elimination of particular defense-related programs, or significant budget-related delays in contract or task order awards for large programs could adversely affect our future revenue and limit growth prospects in certain of our growth prospects.business.

Certain statements contained in this MD&A constitute “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (U.S. Securities Act) and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (U.S. Exchange Act), and “forward-looking information” within the meaning of applicable Canadian securities laws (collectively, forward-looking statements), including, without limitation, statements related to: our priorities, intended areas of focus, targets, objectives and goals; trendsour expanded capital investment plans and capacity additions and the funding therefor; market opportunities and investments in thetechnology electronicsplatforms manufacturingand servicesroadmaps; (EMS)expected research and development and other capital expenditures; developments related to new customer or program wins; timing of production ramps, deliveries and availabilities of certain key components; anticipated economic conditions, industry and market trends and projections, underlying market growth rates, customer demand, prospects and opportunities; strategic initiatives; trends in our segments (and/or their constituent businesses) and their anticipated impact; the anticipated impact of current market conditions and customer-specific factors on each of our segments (and/or their constituent businesses) and near term expectations; potential restructuring and divestiture actions; our anticipated financial and/or operating results and outlook, including expected revenue increases and decreases (or remaining flat), as well as growth in certain segments, businesses and end markets; our strategies; our credit risk; the potential impact of acquisitions, or program wins, transfers, losses or disengagements; materials, component and supply chain constraints; anticipated expenses, capital expendituresexpenses and other working capital requirements and contractual obligations (and intended methods of funding such items); the potential impact of trade policies between countries in which we conduct business (including the potentialtariffs tariffsproposed and implemented by the U.S. governmentgovernment, and any reciprocal or retaliatory tariffs); the adoption, integration and use of artificial intelligence (AI) in manufacturing and service offerings and in certain of our internal processes; the impact of our price reductions and longer payment terms; our intended repatriation of certain undistributed earnings from non-Canadian subsidiaries (and amounts we do not intend to repatriate in the foreseeable future); the potential impact of tax and litigation outcomes; investor dissatisfaction with inclusion, employee engagement, and other environmental, social and governance (ESG)sustainability matters; our intention to settle employee share unit awards in common shares (Common Shares); our ability to use certain tax losses; intendedplanned investments in our business; the potential impact of the pace of technological changes,changes (including with respect to AI technologies), customer outsourcing, program transfers, and the global economic environment; the intended method of funding common share (Common Share) repurchases; the impact of our outstanding indebtedness; liquidity and the sufficiency of our capital resources; our intention to settle outstanding equityshare unit awards with Common Shares; our financial statement estimates and assumptions; recently-issued accounting pronouncements and amendments; the potential adverse impacts of events outside of our control (including those described under "External Factors that May Impact our Business" below) (External Events); mandatory prepayments under our credit facility; pension plan funding requirements and obligations, and the impact of annuity purchases; our compliance with covenants under our credit facility; refinancing debt at maturity; interest rates and expense; income tax incentives; accounts payable cash flow levels; accounts receivable sales; expectations with respect to reporting units with goodwill; our future warranty obligations; cybersecurity threats and incidents; our intentions with respect to environmental assessments for newly-leased or acquired properties; our expectations with respect to expiring leases; our intention to retain earnings for general corporate purposes; costs in connection with our pursuit of acquisitions and strategic transactions; and expectations regarding the acceptance of offers to sell accounts receivable (A/R) under our A/R sales programs and supplier financing programs. Such forward-looking statements may, without limitation, be preceded by, followed by, or include words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “continues,” “project,” “target,” "objective," “goal,” “potential,” “possible,” “contemplate,” “seek,” or similar expressions, or may employ such future or conditional verbs as “may,” “might,” “will,” “could,” “should,” or “would,” or may otherwise be indicated as forward-looking statements by grammatical construction, phrasing or context. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995, where applicable, and applicable Canadian securities laws.

Forward-looking statements contained in this Annual Report are based on various assumptions, many of which involve factors that are beyond our control. Our material assumptions include: growth in manufacturing outsourcing from customers in diversified markets; our ability to retain programs and customers, including no unexpected customer or program transfers, losses or disengagements; no unforeseen adverse changes in our mix of businesses; no undue negative impact on our customers' ability to compete and succeed using products we manufacture and services we provide; continued growth in our segments and end markets; our ability to successfully diversify our customer base and develop new capabilities; anticipated demand levels across our businesses;businesses, including continued growth in the demand from data center customers; continued advancement and commercialization of artificial intelligence (AI) technologies and cloud computing; supporting sustained high levels of capital expenditure investments by leading hyperscaler, AI and data center customers; scaling of our operations to meet the anticipated growth in customer demand; capital investments proceeding as anticipated, including timely completion of construction and operationalization of assets, securing required materials, utilities, and equipment for our expansion plans; alignment of our capacity with our business demands; the successful recruitment and retention of skilled talent; no significant unforeseen negative impacts to our operations; no unforeseen materials price increases, margin pressures, or other competitive factors affecting the EMS or originalcontract design manufacturerand (ODM)manufacturing industriesindustry in general or our segments in particular; compliance by third parties with their contractual obligations; no material changes to tariffs or trade restrictions compared to what are in effect as of February 27, 2026; that our customers will retain liability for and we will continue to be able to recover substantially all costs from customers relating to product/component tariffs and countermeasures; no material changes in business activities resulting from current macroeconomic trends and uncertainties, including evolving global tariff and trade negotiations; our ability to achieve our strategic goals; our ability to keep pace with rapidly changing technological developments; the successful resolution of quality issues that arise from time to time; fluctuation of production schedules from our customers in terms of volume and mix of products or services; the timing and execution of, and investments associated with, ramping new businessprograms; supplier performance and quality, pricing and terms; the costs and availability of components, materials, services, equipment, labor, energy and transportation; no significant decline in the global economy or in economic activity in our end markets due to a major recessionrecession, global trade tensions or otherwise; no unforeseen disruptions due to geopolitical factors (including warwar, tariffs and trade restrictions) causing significant negative impacts to economic activity, global or regional supply chains or normal business operations; that global inflation will not have a material impact on our revenues or expenses; the impact of anticipated market conditions on our businesses; the stability of currency exchange rates; the availability of cash generated from operations to fund planned capital investments; the availability of capital resources for, and the permissibility under our credit facility of, repurchases of outstanding Common Shares under our current normal course issuer bid (NCIB), and compliance with applicable laws and regulations pertaining to NCIBs; compliance with applicable credit facility covenants and the components of our leverage ratios (as defined in our credit facility); our maintenance of sufficient financial resources to fund currently anticipated financial actions and obligations and to pursue desirable business opportunities; global tax legislation changes; the timing, execution and effect of restructuring actions; and no unforeseen adverse changes in the regulatory environment.

Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Achievement of anticipated results is subject to substantial risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. You should bear this in mind as you consider forward-looking statements, and you are cautioned not to put undue reliance on forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law or by the rules and regulations of the U.S. Securities and Exchange Commission (SEC). You are advised, however, to consult any further disclosures we make on related subjects. Factors that might cause such differences include, but are not limited to, those discussed in the Risk Factor Summary and in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 20242025 (referred to herein as this "Annual Report") (of which this MD&A forms a part) under the heading “Risk Factors,” which are incorporated herein by reference, and subsequent Quarterly Reports on Form 10-Q and other documents filed with the SEC, and as applicable, the Canadian Securities Administrators.

We deliverserve innovative supply chain solutions globally to customers inacross two operating and reportable segments: Connectivity and Cloud Solutions (CCS) and Advanced Technology Solutions (ATS). Our CCS segment consists of our Communications and ConnectivityEnterprise &end Cloudmarkets. SolutionsOur (CCS).Enterprise end market is comprised of our servers and storage businesses. Our ATS segment consists of our ATS end market, and is comprised of our Aerospace and Defense (A&D), Industrial, HealthTech, and Capital Equipment businesses. Our CCS segment consists of our Communications and Enterprise (servers and storage) end markets. Additional information regarding our segments is included in note 2221 to the 20242025 AFS. Customers in our CCS segment include cloud-based service providers, hyperscalers and other data center customers (including digital native companies), as well as hardware original equipment manufacturer (OEMs) and enterprise customers. Customers in our ATS segment include OEMs in a range of diversified markets that we serve.

WeProducts offerin our CCS segment consist predominantly of data communications and information processing infrastructure products and systems primarily used in hyperscale data centers. These products include networking switches, optical systems, data center racks, servers and storage products used primarily by cloud-based and other service providers (including AI service providers), as well as enterprise customers, for a comprehensive range of productapplications manufacturingincluding AI workloads and relatedcloud supply chain services to customers in both of our segments, including design and development, new product introduction, engineering services, component sourcing, electronics manufacturing and assembly, testing, complex mechanical assembly, systems integration, precision machining, order fulfillment, logistics, product licensing, and after-market repair, return and information technology (IT) asset management and disposition (ITAM/ITAD)computing services. Our Hardware Platform Solutions (HPS) offering (within our CCS segment) includesenables the development of infrastructurecustomized technology platforms, including hardware and systems-level design, software designsolutions solutions, (including open-source software that complements our hardware offerings, and services that can be used as-is,as-is or customized for specific applications in collaboration with our customers, andcustomers), management of program design and aspects of the supply chain, manufacturing, and after-market support, including ITAM/ITAD.services.

Products and services in our ATS segment are extensiveextensive, serving a broader customer base and are often more regulated than those in our CCS segment, and can include the following: government-certified and highly-specialized manufacturing, electronic and enclosure-related services for A&D customers; high-precision semiconductor and display equipment and integrated subsystems; a wide range of industrial automation, controls, test and measurement devices; engineering-focused engagements, including in the areas of telematics, human machine interface, Internet-of-Things and embedded systems; advanced solutions for surgical instruments, diagnostic imaging and patient monitoring; and efficiency products to help manage and monitor the energy and power industries. Our ATS segment businesses typically have higher margin profiles and margin volatility, higher working capital requirements, and longer product life cycles than the traditional businesses in our CCS segment.

Capacity utilization, customer mix and the types of products and services we provide are important factors affecting our financial performance. The number of sites, the location of qualified personnel, the manufacturing and engineering capacity and network, and the mix of business through that capacity are also vital considerations for EMS and ODM providersus in terms of generating appropriate returns. Because the EMScontract design and manufacturing industry is working capital intensive, we believe that non-GAAP adjusted return on invested capital (ROIC), which is primarily based on adjusted operating earnings and net invested capital (each discussed in "Non-GAAP Financial Measures" below) and investments in working capital and equipment,, is an important metric for measuring an EMS provider'sour financial performance.

ATS segment revenue for 20242025 decreasedincreased 5%1% to $3.2$3.20 billion compared to $3.3$3.16 billion for 2023,2024, drivenas the growth from our Capital Equipment and Industrial businesses was largely offset by the anticipatedrevenue demand softness in our Industrial business, partially offset by strengthdecrease in our A&D and Capital Equipment businesses.business.

ATS segment margin decreasedincreased to 5.3% for 2025 compared to 4.6% for 2024 compared to 4.7% in 2023,2024, primarily due to reduced operating leverage in our Industrial end market, partly offset by improved profitability in our Capital Equipment and A&D businesses.business, aided by the discontinuation of a margin dilutive program.

On October 30,29, 2024, we terminated a prior NCIB which commenced on December 14, 2023 and was scheduled to expire on December 13, 2024 (Prior Bid), and2025, the Toronto Stock Exchange (TSX) accepted our notice to launch a new NCIB (New2025 BidNCIB). UnderThe the2025 PriorNCIB Bid,allows we purchased and cancelled a total of 2.9 million Common Shares, out of the 11.8 million Common Shares we were authorizedus to repurchase. As a result of the early termination and renewal of the Prior Bid, the 2.9 million Common Shares purchased under the Prior Bid were deducted from the New Bid's annual limit as per the requirements of the TSX. Under the New Bid, we may repurchaserepurchase, at our discretion, from November 1,3, 20242025 until the earlier of OctoberNovember 31,2, 20252026 or the completion of purchases thereunder, up to approximately 8.65.7 million Common Shares in the open market (representing approximately 10.0% of the "public float" (within the meaning of the rules of the TSX) at October 18, 2024 less the 2.9 million Common Shares purchased under the Prior Bid),market, or as otherwise permitted, subject to the normal terms and limitations of such bids. The maximum number of Common Shares we are permitted to repurchase for cancellation under the New2025 BidNCIB will be reduced by the number of Common Shares we arrange to be purchased by any non-independent broker in the open market during its term to satisfy delivery obligations under our stock-based compensation (SBC) plans. From the commencement of the New2025 BidNCIB through February 20,19, 2025,2026, we paid a total of: (i) $57.5$55.7 million (including transaction fees and excluding share buyback taxes) to repurchase 0.50.2 million Common Shares, at a weighted average price of $105.18$271.76 per share, for cancellation; and (ii) $239.6 million (including transaction fees) to repurchase 1.9 million Common Shares, at a weighted average price of $126.10 per share, for delivery obligations under our SBC plans.cancellation.

See note 12 to our 20242025 AFS for furtherdetails details.of our Common Share repurchase activities.

Evolving our Revenue Portfolio — To evolve our revenue portfolio, we intend to continue to focus on: (i) pursuing revenue growth in attractive marketsmarkets, which are aligned with our broader portfolio strategy and where we believe we can establish a competitive presence, including in our HPS business,business; (ii) driving sustainable, profitable revenue growth,growth; (iii) growing our aggregate ATS segment revenue organically byat an average rate above that of 10%the perunderlying yearmarkets, over the long term,term; (iv) supplementing our organic growth with disciplinedtargeted and targetedstrategic acquisitionsacquisitions, investments and partnerships intended to expand capabilities,capabilities; and (v) optimizing our portfolio to drive more consistent returns and profitability.

Margins and Non-GAAP adjusted earnings per share (EPS)* — Our goal is to: (i) growcompound non-GAAP adjusted EPS* atconsistently 10%+and CAGR**sustainably over the long-term,long-term; and (ii) continue to focus on improvements to our segment margins† and non-GAAP adjusted operating margin*.

Balanced Approach to Capital Allocation — We are focused on maintaining a strong balance sheet, generating non-GAAP free cash flow* and balancing our debt and capital levels, while maintaining optimal financial flexibility. In terms of capital allocation, our goal is to: (i) invest in capital expenditures and R&D to support our organic growth over the long term; (ii) return capital to shareholders, primarily through share repurchases, on an opportunistic basis, (ii) generally invest 1.5% to 2.0% of annual revenue in capital expenditures to support our organic growth over the long term,basis; and (iii) pursue potential targeted and strategic acquisitionsacquisitions, investments and partnerships as part of a disciplined capital allocation framework.

We remain committed to making the investments we believe are required to support our long-term objectives and to create shareholder value, while simultaneously managing our costs and resources to maximize our efficiency and productivity. Within both of our segments, we are focused on: increasing penetration in our end markets; diversifying our customer mix and product portfolios, including increasing customer engagement on design and development, engineering, and after-market services (higher value-added services, including ITAM/ITAD)services; and diversifyingenhancing our capabilities. However,See customerItem demand1, dynamicsBusiness or— the"Celestica's costsStrategy" of investmentsthis thatAnnual weReport, deem desirable may prevent us from achieving our diversification objectives. In addition, the ramping activities associated with investments that we do make may be significant and could negatively impact our margins in the short and medium term. To counteract these factors, we continue to invest in and deploy automation and digital factory solutions and capabilities throughout our network to improve quality and productivity. Our Celestica Operating System,of which standardizesthis bestMD&A practicesforms anda processespart, across our network, continues to drive operational optimization and improved supply chain resiliency. Our recent productivity initiatives and related restructuring actions were also intended tofor further streamline our business and increase operational efficiencies.detail.

As part of our growth efforts, we have recently undertaken investments geared towards capacity and capability expansions at our Thailand, Malaysia and Richardson, U.S. facilities in support of our growth in AI/ML and HPS programs. WeOur alsointended established2026 capital spending includes investments in our manufacturing capacities and capabilities in the U.S., Thailand, Mexico and Japan, as well as additions of new HPS design centers of excellence in Chennai, India, Penang, Malaysia (in proximity to our expanded Kulim, Malaysia manufacturing site) and Santa Clara,the U.S. and Richardson, U.S. to further increase the breadth of HPS offerings available to our customers.Taiwan.

External factors that could have a material and adverse impact on our industry and/or business include governmentthe legislation,long-term regulations,sustainability orand policies,growth of data center-related investments; technology changes (including AI-related technologies); energy, power, and water constraints in the data center infrastructure; supplier or customer financial difficulties,difficulties; firesglobal economic and related disruptions, political instability, increased political tension between countries (including increased tensions between the U.S. and other countries and between mainland China and Taiwan) as well as threats of retaliatory action from other countries,; geopolitical dynamics,uncertainty terrorism,and armed conflictconflicts (including the Russia/Ukraine conflict and the conflicts in the Middle East area); government legislation, regulations, or policies (Middleincluding Eastwith Conflictsrespect to tariffs and AI technology)),; fires and related disruptions; labor or social unrest, criminal activity, cybersecurity incidents, natural disasters and unusually adverse weather conditions (including those caused by climate change), such as hurricanes, tornados, other extreme storms, wildfires, droughts and floods, disease or illness or other widespread health concerns, pandemics, epidemics or outbreaks of illness that affects local, national or international economies, and otherweather-related risks). presentSee inItem the1A, jurisdictionsRisk in which we, our customers, our suppliers, and/or our logistics partners operate.Factors. These types of events could disrupt operations or the economics of one or more of our sites or those of our customers, component suppliers and/or our logistics partners. These events could also lead to higher costs or supply shortagespartners and may disruptmaterially the delivery of components to us, or our ability to provide finished products or services to our customers in a manner that is economical to us and/or them, if at all, any of which could (and in the case of materials constraints, had in the past and may in the future) have a material negativenegatively impact on our operating results.

In this Quarterly Report on Form 10-Q (Q1Q2 2026 10-Q), including this Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A), "Celestica," the "Company," "we," "us," and "our" refer to Celestica Inc. and its subsidiaries. This MD&A should be read in conjunction with our MarchJune 31,30, 2026 unaudited interim financial statements (Q1Q2 2026 Interim Financial Statements) and our Annual Report on Form 10-K for the year ended December 31, 2025 (2025 10-K), including our 2025 audited consolidated annual financial statements (2025 AFS) and related notes, which we prepared in accordance with U.S. generally accepted accounting principles (GAAP). Unless otherwise noted, all dollar amounts are expressed in United States (U.S.) dollars. The information in this MD&A is provided as of AprilJuly 27, 2026 unless we indicate otherwise. As used herein, "Q1," "Q2," "Q3," and "Q4" followed by a year refers to the first quarter, second quarter, third quarter and fourth quarter of such year, respectively. The first half of 2026 is referred to herein as "1H 2026", and the first half of 2025 is referred to herein as "1H 2025."

Certain statements contained in this Q1Q2 2026 10-Q, including this MD&A constitute "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (U.S. Securities Act), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (U.S. Exchange Act), and "forward-looking information" within the meaning of applicable Canadian securities laws (collectively, forward-looking statements), including, without limitation, statements related to: our priorities, intended areas of focus, targets, objectives and goals; our capital investment plans and the funding therefor; developments related to new customer or program wins; timing of production ramps, anticipated economic conditions, industry and market trends and projections, underlying market growth rates, customer demand, prospects and opportunities; strategic initiatives; trends in our segments and/or their constituent businesses; the anticipated impact of current market conditions and customer-specific factors on each of our segments (and/or their constituent businesses) and near term expectations; potential restructuring and divestiture actions; our anticipated financial and/or operating results and outlook, including expected revenue increases and decreases (or remaining flat), as well as growth in certain segments, businesses and end markets; our strategies; our credit risk; the potential impact of acquisitions, or program wins, transfers, losses or disengagements; materials, component and supply chain constraints; anticipated expenses and other working capital requirements and contractual obligations (and intended methods of funding such items); the potential impact of trade policies between countries in which we conduct business (including the tariffs proposed and implemented by the U.S. government, and any reciprocal or retaliatory tariffs); the adoption, integration and use of artificial intelligence (AI) in manufacturing and service offerings and in certain of our internal processes; the impact of our price reductions and longer payment terms; our intended repatriation of certain undistributed earnings from non-Canadian subsidiaries; the potential impact of tax and litigation outcomes; investor dissatisfaction with inclusion, employee engagement, and other sustainability matters; our ability to use certain tax losses; planned investments in our business; the potential impact of the pace of technological changes (including with respect to AI technologies), customer outsourcing, program transfers, and the global economic environment; the intended method of funding common share (Common Share) repurchases; the impact of our outstanding indebtedness; liquidity and the sufficiency of our capital resources; our intention to settle outstanding share unit awards with Common Shares; our financial statement estimates and assumptions; recently issued accounting pronouncements and amendments; the potential adverse impacts of events outside of our control (including those described under "External factors that may impact our business" below); mandatory prepayments under our credit facility; pension plan funding requirements and obligations, and the impact of annuity purchases; our compliance with covenants under our credit facility; refinancing debt at maturity; interest rates and expense; income tax incentives; expectations with respect to reporting units with goodwill; our future warranty obligations; cybersecurity threats and incidents; our intentions with respect to environmental assessments for newly-leased or acquired properties; our expectations with respect to expiring leases; our intention to retain earnings for general corporate purposes; costs in connection with our pursuit of acquisitions and strategic transactions; and expectations regarding the acceptance of offers to sell accounts receivable (A/R) under our A/R sales programs and supplier financing programs. Such forward-looking statements may, without limitation, be preceded by, followed by, or include words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "continues," "project,projects," "target," "objective," "goal," "potential," "possible," "contemplate," "seek," or similar expressions, or may employ such future or conditional verbs as "may," "might," "will," "could," "should," or "would," or may otherwise be indicated as forward-looking statements by grammatical construction, phrasing or context. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995, where applicable, and applicable Canadian securities laws.

Forward-looking statements contained in this Q1Q2 2026 10-Q are based on various assumptions, many of which involve factors that are beyond our control. Our material assumptions include: growth in manufacturing outsourcing from customers in diversified markets; technology upgrade cycles; our ability to retain programs and customers, including no unexpected customer or program transfers, losses or disengagements; no unforeseen adverse changes in our mix of businesses; no undue negative impact on our customers' ability to compete and succeed using products we manufacture and services we provide; continued strengthening of customer demand; accelerating growth from our customer base, including our CCS customer base; continued growth in our segments and end markets; our ability to successfully diversify our customer base and develop new capabilities; anticipated demand levels across our businesses, including continued growth in the demand from data center customers; continued advancement and commercialization of AI technologies and cloud computing; supporting sustained high levels of capital expenditure investments by leading hyperscaler, AI and data center customers; scaling of our operations to meet the anticipated growth in customer demand; capital investments proceeding as anticipated, including timely completion of construction and operationalization of assets, securing required materials, utilities, and equipment for our expansion plans; alignment of our capacity with our business demands; the successful recruitment and retention of skilled talent; no significant unforeseen negative impacts to our operations; no unforeseen materials price increases, margin pressures, or other competitive factors affecting the contract design and manufacturing industry in general or our segments in particular; compliance by third parties with their contractual obligations; no material changes to tariffstariffs, trade restrictions, customs administration, or traderelated restrictionsrefund or recovery processes, including developments relating to duties imposed under the International Emergency Economic Powers Act of 1977 and any replacement, continuing or retaliatory tariff measures compared to what are in effect as of AprilJuly 27, 2026; that our customers will retain liability for and we will continue to be able to recover substantially all costs from customers relating to product/component tariffs and countermeasures; no material changes in business activities resulting from current macroeconomic trends and uncertainties, including evolving global tariff,tariffs, trade negotiations, and geopolitical conflicts; our ability to achieve our strategic goals; our ability to keep pace with rapidly changing technological developments; the successful resolution of quality issues that arise from time to time; fluctuation of production schedules from our customers in terms of volume and mix of products or services; the timing and execution of, and investments associated with, ramping new programs; programs and production ramps occurring and progressing as anticipated in line with expected timelines, specifications, qualification requirements and production schedules, customer decisions, design changes, silicon and component availability, qualification outcomes, deployment timelines and priorities, constraints affecting data center development, construction, equipping or operation, and other technical, commercial, regulatory or supply-chain factors, and our expected role in such programs, including our 800G and 1.6T networking, and AI/machine learning (ML) compute programs with data center customers; supplier performance and quality, pricing and terms; the costs and availability of components, materials, services, equipment, labor, energy and transportation; our ability to secure adequate component and materialmaterials supply; no significant decline in the global economy or in economic activity in our end markets due to a major recession, global trade tensions or otherwise; no unforeseen disruptions due to geopolitical factors (including war, tariffs and trade restrictions) causing significant negative impacts to economic activity, global or regional supply chains or normal business operations; that global inflation will not have a material impact on our revenues or expenses; the impact of anticipated market conditions on our businesses; the stability of currency exchange rates; the availability of cash generated from operations to fund planned capital investments; the availability of capital resources for, and the permissibility under our credit facility of, repurchases of outstanding Common Shares under our current normal course issuer bid (NCIB), and compliance with applicable laws and regulations pertaining to NCIBs; compliance with applicable credit facility covenants and the components of our leverage ratios (as defined in our credit facility); our maintenance of sufficient financial resources to fund currently anticipated financial actions and obligations and to pursue desirable business opportunities; global tax legislation changes; the timing, execution and effect of restructuring actions; and no unforeseen adverse changes in the regulatory environment.

We anticipate our 2026 capital expenditures to increase compared to 2025. However, ourOur capital investments may not proceed as anticipated, or we may encounter delays in the timely completion of construction and operationalization of new or expanded assets due to various reasons such as issues with securing required materials, equipment, utilities and labor in a timely manner. We may also experience delays or challenges related to utility, power availability, grid interconnection, supply chain constraints, and other infrastructure or regulatory requirements. Any of these factors could delay the realization of anticipated capacity, increase project costs, or result in assets that are not fully operational when expected. If demand, mix, yield or utilization differ from our expectations, or if customer roadmaps change, ramp milestones are delayed, or expected volumes do not materialize, added capacity may be underutilized and returns on these investments may be lower than expected, and our financial results could be adversely affected. See Item 1A, Risk Factors of our 2025 10-K "Increased capital expenditures to expand capacity to support anticipated growth in customer demand may not proceed as anticipated and may increase our fixed‑cost base, constrain liquidity and adversely affect returns" and Item 7, MD&A — "Liquidity and Capital Resources”" of our 2025 10-K and “"Liquidity and Capital Resources”" below.

Governmental actions related to international trade agreements have increased (and could further increase) the cost to our U.S. customers who use our non-U.S. manufacturing sites and components, and vice versa, which may materially and adversely impact demand for our services, our results of operations or our financial condition. Changes in policies by the U.S. or other governments could negatively affect our operating results due to changes in duties, tariffs, or taxes, or limitations on currency or fund transfers, as well as government-imposedGovernment-imposed restrictions on producing certain products in, or shipping them to, specific countries, or as the result of other similar actions by other countries or citizens affected by such changes in policies.policies could negatively affect our operating results. We will continue to monitor the scope and duration of trade actions by the U.S. and other governments with respect to our business. See Item 1A, Risk Factors of our 2025 10-K "Our ability to successfully manage unexpected changes or risks inherent in our global operations and supply chain may adversely impact our financial performanceperformance." and "U.S. policies or legislation could have a material adverse effect on our business, results of operations and financial condition."

MaterialsComponent shortages or other issues affecting timely access to these materials (which often occur in our industry) may impact our ability to successfully complete a program. Factors that may cause or contribute to such materialscomponent shortages or supply issues include: supplier or manufacturer delays or failures to provide components, supplies or equipment as required; quality or reliability issues at component providers; financial difficulties affecting suppliers' production and ability to supply components; and industry-wide shortages for certain electronic components. Such materialscomponent shortages or supply issues could have a significant impact on our operations and on our customers, including: inability to deliver finished products in a timely manner; losses on fixed price contracts due to increased costs for equipment and supplies; having to source items from third parties on less favorable terms; halted or delayed production of a customer's product; claims against us for failure to meet required customer specifications; and carrying higher levels of inventory and extended lead-times. Shortages may also result in increased component prices, which may require price increases in the products and services that we provide. Any increase in our costs that we are unable to recover would negatively impact our margins and operating results. See Item 1A, Risk Factors of our 2025 10-K "We are dependent on third parties to supply certain materials, and our results were negatively affected by the availability of such materials in the past and may be negatively affected by the quality, availability and cost of such materials in the future."

Increases in prices for energy and other commodities may result in further increased raw material,materials, component and transportation costs. Any increase in our costs that we are unable to recover through our pricing to our customers would negatively impact our margins and operating results. See Item 1A, Risk Factors of our 2025 10-K "Volatility in energy and commodity prices may negatively impact our operating results."

Recent Developments:

OnWe are party to a credit agreement with Bank of America, N.A., as Administrative Agent, and the lenders party thereto. As previously announced in April 27, 2026, we amended our existing senior credit agreement (April 2026 Amendment) to: (1) increase the commitments under the revolving credit facility (Revolver) from $750.0 million to $1,750.0 million; (2) refinance our existingthen-existing term A loan facility (Refinanced Term A Loan, $228.1 million outstanding borrowings at March 31, 2026Loan) into a new $250.0 million term A loan facility (New Term A Loan); and (3) extend the maturity of the Revolver and the New Term A Loan from June 2029 to April 2031. The New Term A Loan was fully drawn at closing of the April 2026 Amendment. The proceeds of the New Term A Loan were used to repay all amounts outstanding under the refinanced Term A Loan and certain fees and expenses related to the April 2026 Amendment, with any remaining proceeds to be used for general corporate purposes. Amounts drawn under the Revolver are permitted to be used for general corporate purposes. See "Liquidity — Cash used in and provided by financing activities — Financing and Financefinance Costscosts" below.

Summary of Q1Q2 2026 and Year-to-Date Period

The Q1Q2 2026 Interim Financial Statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present fairly our financial position as at MarchJune 31,30, 2026 and the operating results and cash flows for the three and six months ended MarchJune 31,30, 2026. A discussion of our Q1Q2 2026 and 1H 2026 financial results is set forth under "Operating Results" below.

(1) ConsistsFor entirelyQ2 of2025 and 1H 2025, includes 0.6 million Common ShareShares repurchasespurchased for SBC delivery obligationscancellation under automatic share purchase plans for such purpose through an independent broker.(ASPPs).

Our review of the estimates, judgments and assumptions used in the preparation of the Q1Q2 2026 Interim Financial Statements included those relating to, among others: our determination of the timing of revenue recognition, the determination of whether indicators of impairment existed for our assets and reporting units, our measurement of deferred tax assets and liabilities, our estimated inventory write-downs and expected credit losses and customer creditworthiness. Any revisions to estimates, judgments or assumptions may result in, among other things, write-downs, accelerated depreciation or amortization, or impairments of our assets or reporting units, any of which could have a material impact on our financial performance and financial condition. No significant revisions to our critical accounting estimates and/or assumptions were made in Q1Q2 2026 and 1H 2026. In addition, we determined that no triggering event occurred in Q1Q2 2026 and 1H 2026 that would require an interim impairment assessment of our reporting units.

Due to global economic conditions, including the impact of ongoing trade conflicts, tariffs and geopolitical conflicts, there has been and we expect there will continue to be uncertainty in the global economy. Management has made estimates and assumptions based on information available as of the date of issuance of the Q1Q2 2026 Interim Financial Statements taking into consideration certain possible impacts due to the foregoing factors. These estimates may change, as new events occur, andor additional information is obtained.

Revenue of $4.05$4.70 billion for Q1Q2 2026 increased 53%62% compared to Q1Q2 2025. Revenue of $8.75 billion for 1H 2026 increased 58% compared to 1H 2025.

CCS segment revenue increased $1,399.6$1,736.0 million (76%84%) in Q1Q2 2026 compared to Q1Q2 2025 and increased $3,135.6 million (80%) in 1H 2026 compared to 1H 2025. Communications end market revenue increased $982.9$1,012.0 million (69%62%) in Q1Q2 2026 compared to Q1Q2 2025 and increased $1,994.9 million (65%) in 1H 2026 compared to 1H 2025, driven by data center networking demand, including the ongoingcontinued rampsgrowth of our switch programs. HPS revenue for Q1Q2 2026 increased 63%58% to approximately $1.7$1.9 billion compared to Q1Q2 2025, and accounted for 42%41% of our total Q1Q2 2026 revenue (Q1Q2 2025 — 39%43% of our total Q1Q2 2025 revenue). Our HPS revenue for 1H 2026 increased 60% to approximately $3.6 billion compared to 1H 2025, and accounted for 41% of our total 1H 2026 revenue (1H 2025 — 41% of our total 1H 2025 revenue). Increases in HPS revenue in Q1 2026 compared to Q1 2025 was driven by strong demand offor our networking switch programs with hyperscaler customers. Enterprise end market revenue increased $416.7$724.0 million (101%167%) in Q1Q2 2026 compared to Q1Q2 2025 and increased $1,140.7 million (135%) in 1H 2026 compared to 1H 2025, driven by the continued ramp-up of an AI/ML compute program with onea ofhyperscaler customer and increased demand in our hyperscalerstorage customers.programs.

We depend on a small number of customers for a substantial portion of our revenue. In the aggregate, our top 10 customers represented 84%83% of total revenue for Q1Q2 2026 and 1H 2026 (Q1Q2 2025 and 1H 2025 — 78%). Three customers (all in our CCS segment) individually represented 10% or more of total revenue in Q1Q2 2026 (35%,32%, 15%17% and 14%) and 1H 2026 (34%, 16% and 15%). Two customers (both in our CCS segment) individually represented 10% or more of total revenue in Q2 2025 (31% and 13%). Three customers (all in our CCS segment) individually represented 10% or more of total revenue in Q11H 2025 (28%,30%, 13% and 10%).

Segment performance is evaluated based on segment revenue (set forth above), segment income, and segment margin (segment income as a percentage of segment revenue). See "Summary of Q1Q2 2026 and Year-to-Date Period" above for a table showing segment income and segment margin for Q1Q2 2026, 1H 2026 and Q1the 2025.respective prior year periods. See the reconciliation of segment income to our earnings before income taxes for Q1Q2 2026, 1H 2026 and Q1the 2025respective prior year periods in note 3 to the Q1Q2 2026 Interim Financial Statements.

CCS segment income increased $130.1$158.7 million (88%93%) in Q1Q2 2026 compared to Q1Q2 2025 and increased $288.8 million (91%) in 1H 2026 compared to 1H 2025, as a result of the CCS segment revenue increaseincreases in Q1Q2 2026 comparedand to1H Q12026 2025.described above. CCS segment margin increased to 8.6%8.7% in Q1Q2 2026 from 8.0%8.3% in Q1Q2 2025 and increased to 8.6% in 1H 2026 from 8.1% in 1H 2025, driven by more favorable mix and operating leverage.

We grant restricted share units (RSUs) and performance share units (PSUs), and from time to time grant stock options, to employees. Directors may receive compensation in director share units or deferred share units (collectively, "DSUs"), cashRSUs, Director RSUs (D-RSUs), or RSUs.cash. The following table shows employee SBC expense, TRS fair value adjustments (TRS FVAs),FVAs, and director SBC expense for the periods indicated:

We perform ongoing evaluations of our business, operational efficiency and cost structure, and implement restructuring actions as we deem necessary. Our restructuring activities consistedconsist primarily of actions to adjust our cost base to address reduced levels of demand in certain of our businesses and geographies.

We recorded restructuring charges of $2.2$2.9 million in Q1Q2 2026 and $5.1 million in 1H 2026 (Q1Q2 2025 — $2.2$12.8 million; 1H 2025 — $15.0 million), consisting primarily of cash charges related to employee terminations. At MarchJune 31,30, 2026, our restructuring provision of $3.6$4.0 million (December 31, 2025 — $4.4 million) was recorded in accrued and other current liabilities and provisions on our consolidated balance sheets, which we intend to fund with cash on hand.

Finance Costscosts consist of interest expense and fees related to our credit facility (including debt issuance and related amortization costs), our interest rate swap agreements, our TRS Agreement, our A/R sales program, customer supplier financing programs (SFPs), and interest expense on our finance lease obligations, net of interest income earned.obligations. During Q1Q2 2026 and 1H 2026, we incurred Financefinance Costscosts of $16.0$21.2 million and $39.2 million, respectively (Q1Q2 2025 — $13.7$14.4 million; 1H 2025 — $29.4 million). See "Capital Resources" below for descriptions of our interest rate swap agreements, A/R sales program and customer SFPs. Interest expense under our credit facility recorded in Financefinance Costs,costs, including the impact of our interest rate swap agreements, was $10.7$11.9 million in Q1Q2 2026 and $22.6 million in 1H 2026 (Q1Q2 2025 — $13.1$11.2 million; 1H 2025 — $24.3 million). See "Liquidity — Cash provided by and used in financing activities — Financing and Financefinance Costscosts" below. Interest costs incurred on our TRS Agreement in Q1Q2 2026 and 1H 2026 were $5.0 million and $10.0 million, respectively (Q1Q2 2025 — $0.5$1.8 million; 1H 2025 — $2.3 million). See "Liquidity — Cash requirements — TRS" below.

For Q1Q2 2026, we had a net income tax expense of $44.0$72.8 million on earnings before tax of $256.3$441.6 million, compared to a net income tax expense of $27.5$46.3 million on earnings before tax of $113.7$257.3 million for Q1Q2 2025. For 1H 2026, we had a net income tax expense of $116.8 million on earnings before tax of $697.9 million, compared to a net income tax expense of $73.8 million on earnings before tax of $371.0 million for 1H 2025.

InOur Q1Q2 2026,2026 ourand 1H 2026 net income tax expense included $7.2 million tax expense related to Pillar Two global minimum tax legislation (GMT). of $9.0 million and $16.2 million, respectively.

InOur Q1Q2 2025,2025 ourand 1H 2025 net income tax expense included $6.8 million withholding tax expense incurred to minimize the impact of GMT of $7.1 million and $13.9 million, respectively. Our 1H 2025 net income tax expense also included a $3.0 million of tax expense for tax uncertainties relating to one of our subsidiaries, offset in part by $1.9 million of reversals of tax uncertainties relating to another of our subsidiaries.

We are under examination by the Thailand tax authorities for the tax yearyears 2019.2019 and 2020. The examination may lead to adjustments to our taxes with respect to the year under examination as well as other subsequent periods.

In Q11H 2026, we generated $356.3$767.2 million of net cash from operating activities, primarily due to net earnings of $212.3$581.1 million, favorable changes in working capital of $87.0$195.6 million,million and non-cash expenses added back to net earnings, partially offset by non-cash recoveries.recoveries (including favorable TRS FVAs of $87.1 million). Our favorable working capital changes in Q11H 2026 were primarily driven by an increase in A/P balances in Q11H 2026, the effects of which were partiallylargely offset by the increases in A/R and inventory balances in Q11H 2026. A/P balances increased in Q11H 2026 primarily due to our business growth, as well as timing of payments and purchases. A/R balances increased in Q11H 2026 primarily due to timing and volume of revenue and collections. Increase in inventory balances in Q11H 2026, primarily reflected our business growth (mostly in our CCS segment). Net cash provided by operating activities for Q11H 2026 increased $226.0$484.5 million compared to Q11H 2025, primarily driven by an increase in cash earnings and the favorable changes in working capital requirements.

Our non-GAAP free cash flow of $137.9$285.0 million for Q11H 2026 increased $44.3$71.5 million compared to Q11H 2025, primarily due to $226.0$484.5 million in higher cash generated from operations (as described above), partially offset by $181.7$413.0 million in higher purchases of property, plant and equipment (see "cash used in investing activities" below), net of sales proceeds.

See "Summary of Q1Q2 2026 and Year-to-Date Period" above for a table detailing Common Share repurchases for the periods indicated.

We are party to a credit agreement (Credit Facility) with Bank of America, N.A., as Administrative Agent, and the lenders party thereto, which, prioras toof the April 2026 Amendment, includedincludes the Term A Loan in the original principal amount of $250.0 million, a term loan in the original principal amount of $500.0 million (Term B Loan), and the $1,750.0 million Revolver. Prior to the April 2026 Amendment, the Credit Facility included a term loan in the original principal amount of $250.0 million (Refinanced Term A Loan), the Term B Loan, and commitments of $750.0 million Revolver. On April 27, 2026, we amended our Credit Facility to: (1) increase the commitments under the RevolverRevolver. fromThe $750.0Refinanced millionTerm toA $1,750.0Loan million;was (2)fully refinancerepaid at closing of the April 2026 Amendment, using a substantial portion of the proceeds of the Term A LoanLoan. intoNotwithstanding the New Term A Loan; and (3) extend the maturityrepayment of the Revolver and the NewRefinanced Term A Loan fromin June 2029 to April 2031. See "Recent Developments — Celestica Amendsfull and Upsizesits Creditreplacement Facility"with above.the TheTerm A Loan, for accounting purposes, this transaction was treated as a non-substantial modification of the Refinanced Term A Loan. Term A Loan (or its successorpredecessor term loan, the NewRefinanced Term A Loan) and the Term B Loan are referred to as the "Term Loans."

See note 7 to the Q1Q2 2026 Interim Financial Statements for a description of ouradditional terms of the Credit Facility under the April 2026 Amendment. See note 11 to the 2025 AFS for a description of the Credit Facility terms prior to and subsequent to the April 2026 Amendment.

Activity under our Credit Facility during Q11H 2026 is set forth below (in millions):

(1) Represents scheduled quarterly principal repayments under the Term Loans.Loans prior to the April 2026 Amendment.