Q2 FY26 Earnings Presentation Quarter End: September 26, 2025 Earnings Announcement: October 29, 2025 Risks and non-GAAP disclosures This presentation contains forward-looking statements within the meaning of U.S. securities laws, including statements related to our future financial results and our guidance for future financial performance (including expected revenues, operating income, margins and earnings per share). These forward-looking statements are based on current expectations, forecasts and assumpt ...

Summary of Key Points from the Conference Call Industry Focus - The conference call primarily discusses the **US-China trade relations** and the implications of **tariff policies** on global trade patterns, particularly focusing on **Asian economies** and their trade dynamics with the US. Core Insights and Arguments 1. **Impact of Government Shutdown on Data**: The lack of data due to the government shutdown complicates the measurement of US effective tariff rates, leading to a focus on trade trends between the US and China instead [7] 2. **Supply Chain Strain Hypothesis**: The hypothesis that product complexity, rather than tariff levels, is the primary driver of trade patterns is supported by recent data [7] 3. **US-China Trade Equilibrium**: A more stable US-China trade equilibrium is expected to be established in 2026, with Chinese market share of US imports stabilizing around **10%** due to China's leadership in key supply chains [12] 4. **Tariff Dynamics**: The US is likely to maintain higher tariffs on China compared to the rest of the world, with rates in the **20-45%** range, as part of a strategy to de-risk from key supply chains [10] 5. **Negotiation Framework**: Progress in US-China negotiations is expected on various topics, including maritime logistics, agricultural trade, and export controls, aligning with the anticipated negotiation framework [11] 6. **Supply Chain Reorientation**: The shift in supply chains has been categorized into three phases, with the current phase (2022-2025) focusing on regional production bases globally due to rising labor costs and supply chain risk mitigation [20] 7. **Tariff Effects on Trade Patterns**: The initial response to tariffs has been a diversion of trade around Asia rather than to the US or Mexico, indicating a significant impact of tariffs on trade dynamics [22] 8. **Product Complexity as a Trade Driver**: Analysis shows that product complexity is a better predictor of trade shifts than tariff levels, with less complex products experiencing a greater contraction in imports [25] Additional Important Insights 1. **Market Share Shifts**: There have been notable shifts in US imports from China to countries like India and Vietnam, particularly in sectors like smartphones and laptops, indicating a potential mean reversion in trade data [14][19] 2. **Long-term Supply Chain Challenges**: The success of onshoring production to the US will take time due to high labor costs and the lack of a comprehensive supply chain ecosystem in the US [21] 3. **Chinese Export Capacity**: China accounts for over **50%** of global capacity for approximately one-third of US imports, making it challenging for the US to diversify away from reliance on Chinese goods [30] 4. **Tariff Convergence**: As Chinese tariffs converge with broader Asian tariffs, the incentives for trade diversion are expected to diminish, emphasizing the need for supply chain efficiencies [27] This summary encapsulates the key points discussed in the conference call, highlighting the ongoing complexities and dynamics of US-China trade relations and their broader implications for global trade.

Group 1 - The ATS segment is significant, contributing approximately 25% to the company's current revenue, and there is potential for growth despite current slower performance [1] - The company operates in four key sectors: aerospace and defense, semiconductor capital equipment, health tech, and industrial, with a focus on improving margins through engineering engagements, expecting a year-over-year margin increase of about 70 basis points by year-end [2] - There is a belief that the current market moment is crucial, with companies that are actively building and innovating likely to achieve substantial profits rather than losses [3] Group 2 - AI has transitioned from being a "nice to have" to a necessity for companies, as it is essential for staying competitive in drug development and supply chain optimization, with the company positioning itself to support this infrastructure [4]

Core Insights - Celestica's CEO Rob Mionis emphasized the company's role in supporting the AI infrastructure, stating that the technology has transitioned from a "nice to have" to a "must have" [1] - The company reported earnings that exceeded estimates and raised its full-year outlook, resulting in a stock increase of over 8% and a year-to-date rise of 253.68% [1] Business Strategy - Celestica has shifted its focus from commodity markets to design and manufacturing, a decision that Mionis claims has significantly benefited the company [2] - The emphasis on design and manufacturing allows Celestica to execute consistently at scale [2] Data Center Operations - The company specializes in high-speed networking and storage systems for hyperscalers and digital native companies [3] - Celestica has a strategic partnership with semiconductor maker Broadcom, utilizing Broadcom's silicon in many of its designs [3] Product Development - When Broadcom launches new silicon products, such as the Tomahawk 6 with 1.6 terabytes, Celestica collaborates to develop products that are supplied to major hyperscalers [4]

Core Insights - Celestica Inc. reported strong third-quarter 2025 results with adjusted earnings and revenues exceeding Zacks Consensus Estimates, driven by growth in the Connectivity & Cloud Solutions segment and management's focus on innovation and AI advancements [1][8] Financial Performance - Quarterly net income reached $267.8 million or $2.31 per share, a significant increase from $89.5 million or 75 cents per share in the same quarter last year, reflecting nearly threefold growth in GAAP earnings due to top-line improvement [2] - Non-GAAP net earnings rose to $183.1 million or $1.58 per share, up from $123.8 million or $1.04 per share year-over-year, beating the Zacks Consensus Estimate by 11 cents [2] Revenue Analysis - Total revenues for the quarter were $3.19 billion, marking a 27.8% year-over-year increase, driven by strong demand in the CCS segment, surpassing management's guidance and Zacks Consensus Estimate by $170 million [3][8] - CCS segment revenues improved by 43.2% year-over-year to $2.41 billion, accounting for 76% of total revenues, primarily due to robust demand in the Communications end market [4] - Revenues from the Enterprise end market declined by 23.9% year-over-year to $470.1 million, while Communications end market revenues surged by 82% to $1.94 billion, supported by hyperscale customer demand for networking products [5] Segment Performance - Advanced Technology Solutions segment revenues were $781 million, down 4.1%, contributing 24% to total revenues, with operating income increasing by 6.7% year-over-year to $42.8 million [6] Cash Flow & Liquidity - Operating cash flow for the quarter was $126.2 million, slightly up from $122.8 million in the previous year, with free cash flow at $88.9 million compared to $76.8 million year-over-year [7] - As of September 30, 2025, the company held $305.9 million in cash and cash equivalents against long-term debt of $756.7 million [7] Future Guidance - For Q4 2025, Celestica anticipates revenues between $3.325 billion and $3.575 billion, with non-GAAP earnings per share expected in the range of $1.65 to $1.81 [9] - Full-year revenue projection has been raised to approximately $12.2 billion, up from the previous estimate of $11.55 billion, with non-GAAP adjusted earnings expected to be $5.90 per share [10]

Summary of Celestica Q3 2025 Financial Results Conference Call Company Overview - **Company**: Celestica - **Industry**: Technology platform solutions, focusing on data center infrastructure and advanced technology solutions Key Financial Metrics - **Q3 2025 Revenue**: $3.19 billion, up 28% year-over-year, exceeding guidance [6][12] - **Non-GAAP Operating Margin**: 7.6%, up 80 basis points, highest in company history [6][12] - **Adjusted Earnings Per Share (EPS)**: $1.58, an increase of 52% year-over-year [6][12] - **Adjusted Gross Margin**: 11.7%, up 100 basis points [6][12] - **Adjusted Return on Invested Capital (ROIC)**: 37.5%, up 850 basis points year-over-year [7][12] - **Cash Flow**: Generated $89 million in free cash flow for Q3, totaling $302 million year-to-date [10][12] Segment Performance - **Advanced Technology Solutions (ATS)**: - Revenue: $781 million, down 4% year-over-year [8][12] - Segment margin: 5.5%, up 60 basis points [9][12] - **Connectivity and Cloud Solutions (CCS)**: - Revenue: $2.41 billion, up 43% year-over-year [8][12] - Segment margin: 8.3%, up 70 basis points [10][12] - Communications end market revenue increased by 82% [9][12] Market Dynamics - **Demand Drivers**: Strong demand in data center networking, particularly for 800G switch programs [9][12] - **Enterprise Market**: Revenue decreased by 24% due to a technology transition in AI/ML compute [9][12] - **Customer Concentration**: Three customers accounted for 30%, 15%, and 14% of total revenue [10][12] Guidance and Outlook - **Q4 2025 Revenue Guidance**: Projected between $3.325 billion and $3.575 billion, representing 36% growth at midpoint [12][13] - **Adjusted EPS Guidance**: Expected between $1.65 and $1.81, implying a 56% increase at midpoint [13][15] - **2025 Financial Outlook**: Revenue expected to reach $12.2 billion, up from $11.55 billion, reflecting 26% year-over-year growth [15][16] Strategic Initiatives - **Investment in Technology**: Focus on next-generation technology roadmaps and advanced capabilities [17][18] - **Operational Excellence**: Emphasis on quality, reliability, and on-time delivery across global sites [24][28] - **Customer Engagement**: Deepening relationships with customers through engineering services and tailored solutions [55][56] Market Opportunities - **AI Infrastructure**: Significant investments in AI infrastructure expected to drive demand for data center technologies [39][40] - **Networking Solutions**: Anticipated revenue of $7 billion in 2025 from networking solutions, with strong growth in 800G and 1.6T programs [40][41] - **Custom ASIC Platforms**: Focus on custom ASIC platforms expected to grow significantly, with a projected TAM of nearly $500 billion by 2029 [50][51] Capital Allocation and Financial Management - **Capital Expenditures**: Expected to rise to 2.0% - 2.5% of revenue, funded by operational cash flow [67][68] - **Free Cash Flow Target**: Projected at $500 million for 2026 [64][68] - **Return on Invested Capital**: Adjusted ROIC expected to remain strong, currently at 35% year-to-date [68][68] Conclusion - **Overall Performance**: Celestica is experiencing strong financial performance, driven by robust demand in key segments, particularly in AI and data center solutions, with a clear strategy for sustainable growth and operational excellence [20][28]

Core Insights - Foxconn plans to invest up to NT$42 billion ($1.4 billion) in AI data center equipment from December 2025 to December 2026 to enhance its cloud computing services and develop smart platforms [1][2] Group 1: Investment and Expansion - The investment will be funded through Foxconn's own resources and aims to expand its cloud compute service platform [2] - This announcement follows Foxconn's earlier plan to build a 100-megawatt AI data center in collaboration with Nvidia in Taiwan [3] Group 2: Revenue Diversification - Foxconn has successfully diversified its revenue streams, with AI server production surpassing smart consumer electronics for the first time in Q2 [4] - The AI server segment contributed 41% to Foxconn's NT$1.8 trillion revenue in the three months ended June, while smart consumer electronics accounted for 35% [4] - The company claims to hold over 40% of the global AI server market [4] Group 3: Strategic Partnerships - In August, Foxconn sold an EV factory in Ohio to SoftBank to focus on AI server manufacturing, while continuing operations at the plant [5] - The Ohio facility will produce equipment for the $500 billion AI data center venture supported by SoftBank, OpenAI, Oracle, and Abu Dhabi's MGX [5]

Investment Announcement - Foxconn Technology Group has announced a significant investment of up to NT$42 billion (approximately $1.37 billion) to build an AI compute cluster and a supercomputing center [2] - The investment will be entirely self-funded and is scheduled to take place between December 2025 and December 2026 [2] Strategic Focus - The investment aims to enhance Foxconn's cloud computing platform and accelerate the development of its three smart platforms [3] - Earlier in the year, Foxconn introduced its in-house large language model, FoxBrain, which utilizes Nvidia technology and was trained in just four weeks [3] Financial Performance - Foxconn's profit surged by 27% to $1.47 billion in the second quarter of 2025, driven by high demand for AI servers and ongoing iPhone production for Apple Inc. [4] - The company's second-quarter revenue increased by 16% year-over-year, reaching TWD 1.79 trillion (approximately $59.6 billion) [4]

Core Insights - Celestica Inc. is a key player in the electronics manufacturing services sector, known for its advanced technology solutions and data center infrastructure, demonstrating strong financial performance and reliability for investors [1] Financial Performance - On October 27, 2025, Celestica reported earnings per share (EPS) of $1.59, exceeding the estimated $1.47, and showing a significant increase from $1.04 per share in the same quarter last year [2][6] - The company achieved revenue of approximately $3.21 billion, surpassing the estimated $3.10 billion, and reflecting a 28% increase from $2.5 billion reported in the same period last year [3][6] Operational Efficiency - Celestica's GAAP earnings from operations as a percentage of revenue rose to 10.2%, up from 5.5% in the previous year, while the adjusted operating margin improved to 7.6% compared to 6.8% in Q3 2024, indicating enhanced operational efficiency [4][6] Valuation Metrics - The company's price-to-earnings (P/E) ratio is approximately 66.31, and the price-to-sales ratio stands at about 3.28, reflecting strong investor confidence and the value placed on sales [5]

Group 1: Market Performance - Tokyo's Nikkei 225 Index (N225) has surpassed the 50,000 level for the first time, reaching 50,367.38, marking a 25.8% rise for the year [2][7] - The surge in the Nikkei is attributed to optimism surrounding U.S.-China trade negotiations and momentum from Wall Street [2][7] - South Korea's Kospi Index (KOSPI) increased by 2.1% to cross 4,000, while Hong Kong's Hang Seng Index (HSI) rose by 1.15%, and China's CSI 300 Index gained 0.83% [2] Group 2: Government Policies - Japanese Prime Minister Sanae Takaichi is set to meet U.S. President Donald Trump to discuss a stimulus package exceeding 13.9 trillion yen aimed at boosting domestic demand and combating deflation [2][7] - The proposed "high-pressure economy" strategy may also address the U.S. trade deficit [2] Group 3: Company Developments - Hon Hai Precision Industry Co. Ltd. (Foxconn) announced an investment of up to NT$42 billion (approximately US$1.3 billion) in AI compute cloud infrastructure, indicating a strategic focus on the growing AI market [4][7] Group 4: Precious Metals Market - Gold prices are experiencing a technical recovery, trading around $4,312 per ounce after a volatile period, with key support levels identified between $4,200 and $4,300 [5][7] - Analysts are forecasting potential targets of $5,000 per ounce for gold, driven by central bank demand and geopolitical risks [5][7]