NEC (6701) Q2 2025 earnings summary

Executive summary

• Revenue for the first half was ¥1,486.7 billion, with non-GAAP operating profit at ¥64.8 billion, both increasing year-over-year excluding the JAE deconsolidation effect.

• Adjusted operating profit (non-GAAP) grew 33.2% to ¥61,028 million, and non-GAAP profit attributable to owners rose 46.5% to ¥37,439 million.

• IT Services and Social Infrastructure segments saw revenue and profit growth, while the Others segment declined sharply.

• Steady progress was made toward achieving full-year forecasts, with strong domestic IT demand and improved international profitability.

• Total comprehensive income dropped sharply to ¥4,305 million from ¥102,921 million a year earlier, mainly due to negative other comprehensive income.

Financial highlights

• Non-GAAP operating profit for 1H FY25/3 was ¥64.8 billion, up ¥18.7 billion year-over-year; non-GAAP net profit reached ¥37.4 billion, up ¥11.9 billion.

• EBITDA for 1H FY25/3 was ¥125.5 billion, up ¥4.4 billion year-over-year; non-GAAP EPS improved to ¥141.

• Free cash flow for 1H FY25/3 was ¥5.8 billion, up ¥14.0 billion year-over-year.

• Dividend per share increased by ¥10 to ¥70.

• Gross profit was stable at ¥423,424 million, nearly flat year-over-year.

Outlook and guidance

• Full-year revenue forecast is ¥3,370,000 million, a 3.1% decrease year-over-year, with adjusted operating profit projected at ¥255,000 million (7.6% margin).

• Non-GAAP net profit forecast is ¥165,000 million; EBITDA expected at ¥380,000 million.

• Dividend per share forecast is ¥140.

• IT Services revenue forecast at ¥1,950,000 million, adjusted OP at ¥192,000 million; Social Infrastructure revenue at ¥1,170,000 million, adjusted OP at ¥101,000 million.

• International business progress at 89% of annual revenue target, ahead of last year's pace.