Celestica (CLS)

The sleeper story isn't the 83% revenue beat, it's that Celestica just cut its 2026 free cash flow guide by $140M while raising revenue and EPS guidance, and openly told investors 2027 will be a net cash consumer. The obvious headline is a blowout quarter with record margins and a $40B 2027 revenue target, but the real story is that this growth is being funded by an exploding inventory balance ($4.5B, up $2.5B YoY) and nearly 4x historical CapEx intensity, with EPS growth now guided to actually trail revenue growth for 2027, breaking last quarter's explicit promise that EPS growth would outpace revenue growth. The binding constraint here isn't AI demand, which remains unambiguously strong, it's working capital and materials, exactly as management themselves have signaled by guiding to a 2027 'net use of cash.' Management's own words say it best: 'Next year, however, the level of net cash usage will be a function of the sheer magnitude and velocity of our revenue ramp'. My view changes if the Q4 print shows FCF stabilizing and inventory growth decelerating relative to revenue; until then, this is a quality-of-earnings story hiding behind a beat-and-raise headline.