NEC (6701) Q1 2026 earnings summary

Executive summary

• Q1 revenue rose 3.7% year-over-year to JPY 715.7 billion, with non-GAAP operating profit up 2.5x to JPY 40 billion, driven by domestic IT services, BluStellar, and strong order intake.

• Non-GAAP net profit increased by JPY 11.8 billion year-over-year to JPY 22.3 billion, and EBITDA grew by JPY 23.6 billion to JPY 69.9 billion.

• Net profit attributable to owners of the parent reached JPY 19,310 million, reversing a loss of JPY 5,836 million in the prior year period.

• Total comprehensive income increased to JPY 46,905 million from JPY 44,588 million year-over-year.

• Domestic IT, especially BluStellar, showed significant profitability improvements and strong order intake, supporting the full-year plan.

Financial highlights

• Adjusted operating profit jumped to JPY 41.7 billion, up 228.8% year-over-year, with margin improving from 1.8% to 5.8%.

• Social infrastructure segment revenue grew 9.6% year-over-year, with adjusted operating profit margin rising to 5.7%.

• BluStellar posted a 14.4% year-over-year revenue increase and JPY 4.1 billion profit.

• Free cash flow for Q1 was JPY 253.2 billion, up JPY 171.2 billion year-over-year.

• Basic and diluted EPS were JPY 14.49, compared to a loss of JPY 4.38 per share last year (reflecting a 5-for-1 share split).

Outlook and guidance

• Full-year revenue forecast for FY ending March 2026 is JPY 3,360,000 million, down 1.9% year-over-year, with adjusted operating profit projected at JPY 310,000 million, up 8.0% year-over-year.

• Dividend per share forecast raised to JPY 32, up JPY 4 year-over-year, adjusted for the share split.

• IT Services adjusted operating profit expected to rise to JPY 301.0 billion, with margin improvement to 12.9%.

• International DGDF adjusted OP expected to rise with Avaloq improvements and elimination of one-off expenses.

• ANS revenue and adjusted OP expected to increase, with further investment planned.