Financial Analysis

ACQUISITION: In April 2024, we completed the acquisition of 100% of the interests of NCS Global Services LLC (NCS), a U.S.-based IT infrastructure and asset management business, for a purchase price of $39.6. The purchase price was funded with the revolving portion of our credit facility (see note 11). The NCS acquisition agreement also includes a potential earn-out of up to $20 if certain adjusted earnings before interest, taxes, depreciation and amortization targets are achieved during the period from May 2024 to April 2025. At the date of acquisition, we estimated the fair value of such potential earn-out to be $6.6 and recorded purchase consideration of $46.2 for the fair value of the acquired assets (including $3.5 of cash) and liabilities on our consolidated balance sheet. Details of our final purchase price allocation for the NCS acquisition are as follows: Cash and cash equivalents $ 3.5 A/R and other current assets 3.0 ROU assets 5.2 PP&E 0.4 Computer software assets and intellectual property 1.3 Customer and brand intangible assets 28.6 Goodwill 19.4 Accounts payable and accrued liabilities (2.5) Lease liabilities (5.2) Deferred income tax liabilities (7.5) $ 46.2 We engaged third-party consultants to provide valuations of acquired intangible assets and the potential earn-out as of the date of acquisition. The valuation of the intangible assets and the potential earn-out was primarily based on the income approach using a discounted cash flow model and forecasts …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

COMMITMENTS, CONTINGENCIES AND GUARANTEES: At December 31, 2025, we had total capital expenditure commitments (open purchase orders) to third party vendors of $257.7 , primarily to support the growth at certain of our sites driven by customer demands. At December 31, 2025, we had commitments (not recognized as liabilities as of such date) under IT support agreements that require future minimum payments as follows: 2026 $ 31.8 2027 24.7 2028 16.2 2029 8.4 2030 7.1 Thereafter 4.6 Total future minimum payments $ 92.8 We have contingent liabilities in the form of L/Cs , letters of guarantee and surety bonds (collectively, Guarantees) which we have provided to various third parties. The Guarantees cover various payme nts, including customs and excise taxes, utility commitments and certain bank guarantees. At December 31, 2025, we had $48.9 of Guarantees (December 31, 2024 $34.1), including $10.8 (December 31, 2024 $11.1) of L/Cs outstanding under our Revolver. We are required to make scheduled quarterly principal repayments under the Term Loans, certain annual mandatory prepayments under the Credit Facility under specified circumstances, payments of outstanding amounts under the Credit Facility at maturity (see note 11), contractual payments under our lease obligations (described in note 7), and contributions to our pension and non-pension post-employment benefit plans (see note 16). We are also required to pay interest, fees and charges under our Credit Facility, A/R sales progra …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

CREDIT FACILITIES: We are party to a credit agreement (Credit Facility) with Bank of America, N.A., as Administrative Agent, and the other lenders party thereto, which as of a June 2024 amendment (June 2024 Amendment), includes a term loan in the original principal amount of $250.0 (Term A Loan), a term loan in the original principal amount of $500.0 (Term B Loan, and collectively with the Term A Loan, the Term Loans), and a $750.0 revolving credit facility (Revolver). Prior to the June 2024 Amendment, the Credit Facility included a term loan in the original principal amount of $350.0 (Initial Term Loan) and a term loan in the original principal amount of $365.0 (Incremental Term Loan), the outstanding borrowings under each of which were fully repaid with a substantial portion of the proceeds of the Term Loans, and commitments of $600.0 under the Revolver. Borrowings under the Revolver bear interest, depending on the currency of the borrowing and our election for such currency, at: (i) term Secured Overnight Financing Rate (Term SOFR) plus 0.1% (Adjusted Term SOFR), (ii) Base Rate, (iii) Canadian Prime, (iv) an Alternative Currency Daily Rate, or (v) an Alternative Currency Term Rate plus a specified margin (each as defined in the Credit Facility). The margin for borrowings under the Revolver ranges from 1.50% to 2.25% for Adjusted Term SOFR, Alternative Currency Daily Rate or Alternative Currency Term Rate borrowings, and from 0.50% to 1.25% for Base Rate and Canadian Prime …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

GOODWILL AND INTANGIBLE ASSETS: The following tables show the carrying amounts of goodwill and intangible assets: December 31, 2025 Cost Accumulated Amortization and Impairment Carrying Amount Goodwill $ 388.5 $ 55.4 $ 333.1 Intellectual property $ 112.0 $ 111.5 $ 0.5 Other intangible assets 693.9 443.3 250.6 Computer software assets 314.0 298.9 15.1 $ 1,119.9 $ 853.7 $ 266.2 December 31, 2024 Cost Accumulated Amortization and Impairment Carrying Amount Goodwill $ 395.9 $ 55.4 $ 340.5 Intellectual property $ 112.0 $ 111.4 $ 0.6 Other intangible assets 693.9 403.6 290.3 Computer software assets 313.3 296.2 17.1 $ 1,119.2 $ 811.2 $ 308.0 The following table details the changes to the carrying amount of goodwill for the years indicated: Year ended December 31 2025 2024 Opening balance $ 340.5 $ 321.7 Acquisitions through business combinations, foreign exchange and other (7.4) 18.8 Ending balance $ 333.1 $ 340.5 At December 31, 2025, our goodwill balance consists of the following: Reportable Segment Amount Capital Equipment reporting unit ATS $ 131.1 Aerospace and Defense (A&D) reporting unit ATS 66.3 PCI Private Limited reporting unit ATS 123.8 NCS reporting unit CCS 11.9 $ 333.1 We evaluate goodwill for impairment at the reporting unit level annually, and in certain circumstances such as a change in reporting units or whenever there are indications that goodwill might be impaired. No triggering events occurred during 2023, 2024 or 2025. In addition to an assessment of trigg …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

"INCOME TAXES The following is a geographical breakdown of earnings before income taxes: Year ended December 31 2025 2024 2023 Domestic (Canada) income $ 120.9 $ 42.7 $ 7.4 Foreign income 862.3 489.5 298.6 Earnings before income taxes $ 983.2 $ 532.2 $ 306.0 The income tax expense (recovery) consisted of the following: Year ended December 31 2025 2024 2023 Current income taxes (recoveries) Domestic (Canada) (i) $ 0.2 $ 1.5 $ 1.4 Foreign 218.9 134.6 63.8 Total current income taxes (ii) (iii) 219.1 136.1 65.2 Deferred income taxes (recoveries) Domestic (Canada) Foreign (68.4) (31.9) (3.6) Total deferred income taxes recoveries (ii) (iii) (68.4) (31.9) (3.6) Income tax expense $ 150.7 $ 104.2 $ 61.6 (i) Domestic (Canada) current income taxes for 2025 consists of a $0.2 federal income tax. Beginning in the 2025 annual reporting, we adopted ASU 2023-09 prospectively. A reconciliation of the income tax rate based on the prospective adoption of ASU 2023-09 for 2025 is below. The Canadian federal statutory rate used is 25%. A 10% federal tax abatement is included in the ""Provincial income taxes, net of federal income tax effect"" line. The ""Provincial income taxes, net of federal income tax effect"" line is solely attributable to the province of Ontario. Year ended December 31, 2025 Amount Percentage (%) Earnings before income taxes $ 983.2 Canadian federal statutory tax rate $ 245.8 25.0 % Provincial income taxes, net of federal income tax effect % Foreign tax effects (ii) (iii) : …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASES: The components of lease expense for the periods indicated are as follows: Year ended December 31 2025 2024 2023 Finance lease expense: Amortization of ROU assets (i) $ 8.3 $ 7.6 $ 7.4 Interest on lease obligations (ii) 3.1 3.4 3.7 Operating lease expense (i) 42.1 40.0 35.4 Short-term lease expense and variable lease expense (i) 2.6 2.1 1.8 Total $ 56.1 $ 53.1 $ 48.3 (i) Recorded within either cost of sales or SG&A on the consolidated statements of operations based on the nature of the leased assets. (ii) Recorded within finance costs on the consolidated statements of operations. Other information related to leases for the periods indicated is as follows: December 31 2025 2024 ROU assets: Operating lease ROU assets $ 124.1 $ 124.4 Finance lease ROU assets (included in PP&E, net) 49.0 56.4 Total ROU assets $ 173.1 $ 180.8 Current portion of lease obligations: Operating lease liability (included in accrued and other current liabilities and provisions) $ 31.6 $ 25.7 Finance lease liability (included in current portion of borrowings under credit facility and finance lease obligations) 9.5 9.9 Long-term portion of lease obligations: Operating lease liability (included in other non-current liabilities and provisions) 107.6 109.4 Finance lease liability (included in long-term portion of borrowings under credit facility and finance lease obligations) 48.5 51.8 Total lease obligations $ 197.2 $ 196.8 Weighted-average remaining lease term (in years): Operating leases 6.2 …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recently adopted accounting pronouncements: In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances income tax disclosures, primarily through changes to the rate reconciliation and disaggregation of income taxes paid. The impact of our adoption of such guidance in 2025 is reflected in note 17. Recently issued accounting pronouncements not yet adopted: In November 2024, the FASB issued ASU 2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public business entities to provide more detailed disclosures of certain costs and expenses in the notes to the financial statements. Specifically, the guidance mandates a tabular disaggregation of relevant expense captions into categories including inventory purchases, employee compensation, depreciation, and intangible asset amortization. The standard is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. In November 2025, the FASB issued ASU 2025-09 Derivatives and Hedging (Topic 815): Hedge Accounting Improvements, which expands the hedged risks permitted to be aggregated in a group of individual forecasted transactions in a cash flow hedge, provides a model to facilitate the application of cash f …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

PENSION AND NON-PENSION POST-EMPLOYMENT BENEFIT PLANS: (a) Plan summaries: We provide pension and non-pension post-employment benefit plans for our employees. At December 31, 2025, such plans included our pension plan for employees in the United Kingdom (U.K. pension plan), which generally provides participants with stated benefits on retirement based on their pensionable service, either in annuities and/or lump sum payments. The U.K. pension plan is closed to new members and none of such plan members are active employees of the Company. Defined contribution pension plans are offered to certain employees, mainly in Canada and the U.S. We provide non-pension post-employment benefits (under other benefit plans) to retired and terminated employees in Canada, the U.S., Mexico, Thailand, South Korea, Indonesia and the Philippines. These benefits may include one-time retirement and specified termination benefits, medical, surgical, hospitalization coverage, supplemental health, dental and/or group life insurance. To mitigate the actuarial and investment risks of our defined benefit pension plans, we purchase annuities from time to time (using existing plan assets) from third party insurance companies for certain, or all, plan participants. The purchase of annuities by the pension plan substantially hedges the financial risks associated with the related pension obligations. The overall governance of our pension plans is conducted by our Human Resources and Compensation Committee whi …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

SEGMENT AND GEOGRAPHIC INFORMATION: Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenue and incur expenses; for which discrete financial information is available; and whose operating results are regularly reviewed by the chief operating decision maker (CODM) in deciding how to allocate resources and to assess performance. No operating segments have been aggregated to determine our reportable segments. Our CEO, as the CODM, organizes our company, manages resource allocations and measures performance among our two operating and reportable segments: CCS and ATS. Our CCS segment consists of our Communications and Enterprise (servers and storage) end markets. Our ATS segment consists of our ATS end market, and is comprised of our A&D, Industrial, HealthTech, and Capital Equipment businesses. Factors considered in determining the two reportable segments include the nature of applicable business activities, management structure, market strategy and margin profiles. Products in 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 artificial intelligence (AI) service providers), as well as enterprise customers, for a …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

CONTINGENCIES Litigation: In the normal course of our operations, we may be subject to litigation, investigations and other claims, including legal, regulatory and tax proceedings. Management believes that adequate provisions have been recorded where required. Although it is not always possible to estimate the extent of potential costs, if any, management believes that the ultimate resolution of all such pending matters will not have a material adverse impact on our financial performance, financial position or liquidity. Taxes Matters: In 2021, the Romanian tax authorities issued a final assessment in the aggregate amount of approximately 31 million Romanian leu (approximately $7 at Q2 2026 period-end exchange rates), for additional income and value-added taxes for our Romanian subsidiary for the 2014 to 2018 tax years. In order to advance our case to the appeals phase and reduce or eliminate potential interest and penalties, we paid the Romanian tax authorities the full amount assessed in 2021 (without agreement to all or any portion of such assessment). We believe that our originally-filed tax return positions are in compliance with applicable Romanian tax laws and regulations, and continue to vigorously defend our position through all necessary appeals or other judicial processes. We are under examination by the Thailand tax authorities for tax years 2019 and 2020. The examination may lead to adjustments to our taxes with respect to the year under examination as well as ot …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"CREDIT FACILITIES We are party to a credit agreement (Credit Facility) with Bank of America, N.A., as Administrative Agent, and the lenders party thereto, which, as of an April 2026 amendment (April 2026 Amendment), includes a new term loan in the original principal amount of $250.0 (Term A Loan), a term loan in the original principal amount of $500.0 (Term B Loan), and a $1,750.0 revolving credit facility (Revolver). Prior to the April 2026 Amendment, the Credit Facility included a term loan in the original principal amount of $250.0 (Refinanced Term A Loan), the Term B Loan, and commitments of $750.0 under the Revolver. The Refinanced Term A Loan was fully repaid at closing of the April 2026 Amendment, using a substantial portion of the proceeds of the Term A Loan. Notwithstanding the repayment of the Refinanced Term A Loan in full and its replacement with the Term 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 predecessor term loan, the Refinanced Term A Loan) and the Term B Loan are referred to as the ""Term Loans."" The Term A Loan and the Revolver each mature in April 2031. The Term B Loan matures in June 2031. The Term A Loan requires quarterly principal repayments of $3.125 (commencing in September 2026). The Term B Loan requires quarterly principal repayments of $1.250. Both Term Loans require a lump sum repayment of the remainder outstanding at maturity. Prior to the …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES Interim period income tax expense or recovery is determined by multiplying the year-to-date earnings or losses before tax by managements best estimate of the overall annual effective income tax rate, taking into account the tax effect of certain items recognized in the interim period. As a result, the effective income tax rates used in our interim financial statements may differ from managements estimate of the annual effective tax rate for the annual financial statements. Our estimated annual effective income tax rate varies as the quarters progress, for various reasons, including as a result of the mix and volume of business in various tax jurisdictions within the Americas, Europe and Asia, in jurisdictions with tax holidays and tax incentives, and in jurisdictions for which a valuation allowance has been recognized to reduce net deferred tax assets to nil because management believes that it is more likely than not that the benefit will not be realized (i.e., based on our review of financial projections, no estimated future taxable profit will be available against which tax losses and deductible temporary differences could be utilized). Our annual effective income tax rate can also vary due to the impact of restructuring charges, foreign exchange fluctuations, operating losses, cash repatriations, and changes in our provisions related to tax uncertainties. Our Q2 2026 and 1H 2026 net income tax expense of $72.8 and $116.8, respectively, included tax expense rel …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASES The components of lease expense for the periods indicated are as follows: Three months ended June 30 Six months ended June 30 2026 2025 2026 2025 Finance lease expense: Amortization of ROU assets (i) $ 2.7 $ 2.0 $ 4.8 $ 4.1 Interest on lease obligations (ii) 0.9 0.8 1.6 1.6 Operating lease expense (i) 12.2 10.3 24.5 20.6 Short-term lease expense and variable lease expense (i) 0.3 0.7 1.1 1.1 Total $ 16.1 $ 13.8 $ 32.0 $ 27.4 (i) Recorded within either cost of sales or SG&A on the consolidated statements of operations based on the nature of the leased assets. (ii) Recorded within finance costs on the consolidated statements of operations. Other information related to leases: June 30 2026 December 31 2025 ROU assets: Operating lease ROU assets $ 152.7 $ 124.1 Finance lease ROU assets (included in property, plant & equipment, net) 65.8 49.0 Total ROU assets $ 218.5 $ 173.1 Current portion of lease obligations: Operating lease liability (included in accrued and other current liabilities and provisions) $ 32.5 $ 31.6 Finance lease liability (included in current portion of borrowings under credit facility and finance lease obligations) 9.9 9.5 Long-term portion of lease obligations: Operating lease liability (included in other non-current liabilities and provisions) 138.3 107.6 Finance lease liability (included in long-term portion of borrowings under credit facility and finance lease obligations) 65.6 48.5 Total lease obligations $ 246.3 $ 197.2

LesseeOperatingLeasesTextBlock

Recently issued accounting pronouncements not yet adopted: In November 2024, the FASB issued ASU 2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public business entities to provide more detailed disclosures of certain costs and expenses in the notes to the financial statements. Specifically, the guidance mandates a tabular disaggregation of relevant expense captions into categories including inventory purchases, employee compensation, depreciation, and intangible asset amortization. The accounting standard update is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. In November 2025, the FASB issued ASU 2025-09 Derivatives and Hedging (Topic 815): Hedge Accounting Improvements, which expands the hedged risks permitted to be aggregated in a group of individual forecasted transactions in a cash flow hedge, provides a model to facilitate the application of cash flow hedge accounting to forecasted interest payments on variable-rate debt instruments and expands hedge accounting for forecasted purchases and sales of non-financial assets. ASU 2025-09 is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted. In December 2025, the FASB issued ASU 2025-12 Codification Improvements, which provides nar …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

PENSION AND NON-PENSION POST-EMPLOYMENT BENEFIT PLANS The components of net periodic benefit cost for the periods indicated are as follows: Pension Plans Other Benefits Plans Pension Plans Other Benefits Plans Three months ended June 30 Three months ended June 30 Six months ended June 30 Six months ended June 30 2026 2025 2026 2025 2026 2025 2026 2025 Service cost $ 0.6 $ 0.5 $ 1.0 $ 0.8 $ 1.2 $ 1.0 $ 2.1 $ 1.6 Interest cost 2.6 2.6 0.8 0.8 5.3 5.1 1.5 1.5 Expected return on plan assets (2.5) (2.5) (5.1) (5.0) Amortization of net gain (0.1) (0.9) (0.5) (0.2) (0.1) (1.8) (1.0) Net periodic benefit cost $ 0.6 $ 0.6 $ 0.9 $ 1.1 $ 1.2 $ 1.0 $ 1.8 $ 2.1 The components of net periodic benefit cost, other than the service cost component, are included in miscellaneous expense in our consolidated statements of operations. See note 11. We generally record the service cost component in cost of sales and SG&A, depending on the nature of the expenses. …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

SEGMENT AND CUSTOMER REPORTING Segments: Celestica serves customers in two operating and reportable segments. Our CCS segment consists of our Communications and Enterprise (servers and storage) end markets. Our ATS segment consists of our ATS end market, and is comprised of our Aerospace and Defense, Industrial, HealthTech, and Capital Equipment businesses. Segment performance is evaluated based on segment revenue, segment income and segment margin (segment income as a percentage of segment revenue). Segment income is defined as a segment's revenue less its cost of sales and its allocatable portion of selling, general and administrative expenses (SG&A) and research and development expenses (collectively, Segment Costs). See note 21 to our 2025 AFS for a description of the businesses that comprise our segments, how segment revenue is attributed, how costs are allocated to our segments, and how segment income and segment margin are determined. Information regarding each reportable segment for the periods indicated is set forth below: Revenue by segment: Three months ended June 30 Six months ended June 30 2026 2025 2026 2025 % of total % of total % of total % of total CCS Communications $ 2,653.2 56 % $ 1,641.2 57 % $ 5,063.8 58 % $ 3,068.9 56 % Enterprise 1,157.1 25 % 433.1 15 % 1,987.5 23 % 846.8 15 % $ 3,810.3 81 % $ 2,074.3 72 % $ 7,051.3 81 % $ 3,915.7 71 % ATS 888.3 19 % 819.1 28 % 1,694.3 19 % 1,626.3 29 % Total revenue $ 4,698.6 $ 2,893.4 $ 8,745.6 $ 5,542.0 Segment …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing