Worth reading
62In focus
0–100. This measures how worthwhile something is to read, not how good or bad the company is.Direction
Improvement
Direction inferred from the company’s description.Scale
608
¥100 million (year-on-year increase in first-half Non-GAAP operating profit)Wording
Conditional
How definitive the wording is.Contents of this document
Earnings presentation materialsSecond quarter of the fiscal year ending March 202710 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥1,753.9 billion+11.7%
Operating profit¥188.3 billions +60.8%Non-GAAP
Net income¥146.7 billions +68.1%Non-GAAP net income
Operating profit margin
Rate10.7 %
Year-on-year change (points)2.6 %
Results for the three months of the current quarter
Revenue
¥934.1 billion+9.4%
Non-GAAP operating profit
¥113.6 billion+26.1%
Non-GAAP profit for the year
¥85.8 billion+29.5%
Operating profit margin
12.2 %
Year-on-year change (points)1.9
Full-year earnings forecast
Revenue
¥3,740 billion
Non-GAAP operating profit
¥460 billion
Non-GAAP profit for the year
¥310 billion
Free cash flow
¥-90 billion
Dividend per share
40 Yen
What the company explained in this material
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
- Amortization of intangible assets arising from acquisitions¥11.5 billion
- M&A-Related Costs¥7.7 billion
- Restructuring-related expenses and impairment losses¥23.0 billion
- Equity compensation¥2.2 billion
- Other one-off gains/losses (gains/losses on the sale of land and businesses, etc.)-¥2.3 billion
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
- Average exchange rates (first-half actuals)$1 = ¥159.75; €1 = ¥184.90
- Allowance for component risks and the macroeconomic environment¥30 billion
New initiatives
- New consolidation of CSG
- AI collaboration with Anthropic, Google Cloud and Noetra
- NEC AI Platform Service's "cotomi Gateway" is scheduled to launch in November 2026
- Orders for "Petal," the world's first commercial petabit-class optical submarine cable system
- Higher FY2030 targets for overseas IT services and greater capacity for growth investment
Key KPIsA metric the company considers important as a management benchmark.
- BluStellar revenue ratio35 %Year on year against the same period last year+8 percentage points
- Domestic IT services order trends4 %Year on year against the same period last year+4%
- Effective order backlog coverage ratio+3 %Year on year against the same period last year+3%
- Number of internal AI users15,000 People
- International telecommunications demand6 x next 10 years
Segment results
IT Services
Revenue
¥1,330.5 billion+9.5%
Non-GAAP operating profit
¥160.4 billion+37.1%
Social Infrastructure
Revenue
¥356.5 billion+20.3%
Non-GAAP operating profit
¥36.4 billion+22.6%
Other
Revenue
¥66.8 billion+14.4%
Non-GAAP operating profit
¥5.4 billion+4.9%
Medium-term management plan targets
Target fiscal yearFY2030
Company-wide Non-GAAP operating margin15% or higher
Non-GAAP operating profit2x fiscal 2025 level
Non-GAAP EPS growth15% or more on an annual average basis
Overseas IT services revenue growthCAGR 3～5%
Overseas IT services Non-GAAP operating marginHigh teens
Capacity for growth investment¥1.3 trillion of display and video advertising expenditure that may not be viewed by users
Financial targets
Equity ratio attributable to owners of the parent
End-March 202649.2%
End-September 202648.6%
Debt-to-equity ratio
End-March 20260.22 times
End-September 20260.34 times
Net debt-to-equity ratio
End-March 2026-0.08 times
End-September 20260.15 times
Risk amount incorporated into the outlookThe amount representing the range of variation the company expects in its forecast.
¥30 billion
DetailsAllowance for component risks and uncertainty in the macroeconomic environment
Market Size / Share
International telecommunications demandSixfold over the next 10 years
Annual Dividend
Annual dividend per share40 Yen
| Item | Details |
|---|---|
| Document type | Earnings presentation materials |
| Fiscal Period Covered | Second quarter of the fiscal year ending March 2027 |
| Net Sales | ¥1,753.9 billion (YoY +11.7%) |
| Operating profit | ¥188.3 billions (Non-GAAP) (YoY +60.8%) |
| Net income | ¥146.7 billions (Non-GAAP net income) (YoY +68.1%) |
| Operating profit margin | Rate 10.7 % / Year-on-year change (points) 2.6 % |
| Results for the three months of the current quarter | Revenue ¥934.1 billion (YoY +9.4%) / Non-GAAP operating profit ¥113.6 billion (YoY +26.1%) / Non-GAAP profit for the year ¥85.8 billion (YoY +29.5%) / Operating profit margin 12.2 % |
| Full-year earnings forecast | Revenue ¥3,740 billion / Non-GAAP operating profit ¥460 billion / Non-GAAP profit for the year ¥310 billion / Free cash flow ¥-90 billion / Dividend per share 40 Yen |
| Segment results | IT Services Revenue ¥1,330.5 billion (YoY +9.5%) / Non-GAAP operating profit ¥160.4 billion (YoY +37.1%) / Social Infrastructure Revenue ¥356.5 billion (YoY +20.3%) / Non-GAAP operating profit ¥36.4 billion (YoY +22.6%) / Other Revenue ¥66.8 billion (YoY +14.4%) / Non-GAAP operating profit ¥5.4 billion (YoY +4.9%) |
| Breakdown of Factors Affecting the Change | Factors Amortization of intangible assets arising from acquisitions / Amount ¥11.5 billion, Factors M&A-Related Costs / Amount ¥7.7 billion, Factors Restructuring-related expenses and impairment losses / Amount ¥23.0 billion, Factors Equity compensation / Amount ¥2.2 billion, Factors Other one-off gains/losses (gains/losses on the sale of land and businesses, etc.) / Amount -¥2.3 billion |
| Key KPIs | Indicator name BluStellar revenue ratio / Value 35 % / Year on year against the same period last year +8 percentage points, Indicator name Domestic IT services order trends / Value 4 % / Year on year against the same period last year +4%, Indicator name Effective order backlog coverage ratio / Value +3 % / Year on year against the same period last year +3%, Indicator name Number of internal AI users / Value 15,000 People / Year on year against the same period last year Not disclosed, Indicator name International telecommunications demand / Value 6 x (next 10 years) / Year on year against the same period last year Not disclosed |
| Assumptions Underlying the Business Outlook | Item Average exchange rates (first-half actuals) / Value $1 = ¥159.75; €1 = ¥184.90, Item Allowance for component risks and the macroeconomic environment / Value ¥30 billion |
| Risk amount incorporated into the outlook | Amount ¥30 billion / Details Allowance for component risks and uncertainty in the macroeconomic environment |
| Medium-term management plan targets | Target fiscal year FY2030 / Company-wide Non-GAAP operating margin 15% or higher / Non-GAAP operating profit 2x fiscal 2025 level / Non-GAAP EPS growth 15% or more on an annual average basis / Overseas IT services revenue growth CAGR 3～5% / Overseas IT services Non-GAAP operating margin High teens / Capacity for growth investment ¥1.3 trillion of display and video advertising expenditure that may not be viewed by users |
| Financial targets | Equity ratio attributable to owners of the parent End-March 2026 49.2% / End-September 2026 48.6% / Debt-to-equity ratio End-March 2026 0.22 times / End-September 2026 0.34 times / Net debt-to-equity ratio End-March 2026 -0.08 times / End-September 2026 0.15 times |
| Annual Dividend | Annual dividend per share 40 Yen / Interim and Year-End Breakdown Not disclosed |
| Market Size / Share | International telecommunications demand Sixfold over the next 10 years / Market share Not disclosed |
| New initiatives | New consolidation of CSG, AI collaboration with Anthropic, Google Cloud and Noetra, NEC AI Platform Service's "cotomi Gateway" is scheduled to launch in November 2026, Orders for "Petal," the world's first commercial petabit-class optical submarine cable system, Higher FY2030 targets for overseas IT services and greater capacity for growth investment |
Items this document does not state (13)
Ordinary incomeGross Profit MarginSelling, general and administrative expensesProgress against full-year forecastSelf-assessment against the planUnit price and quantity metricsNumber of stores and locationsNumber of employeesPayout ratioAcquisition of treasury sharesCapital expendituresOrders received and order backlogKey points of the Q&A
These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.In domestic IT services, the expansion of BluStellar and improved profitability contributed, while in social infrastructure, strong performance in aerospace and defense and marine systems, along with the effects of structural reforms in network infrastructure, contributed. CSG, which has been consolidated since May 2026, also contributed to higher revenue and profit.
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