NEC (6701) Q2 2027 earnings summary

Executive summary

• H1 revenue was ¥1,753,857 million, up 11.7% YoY; non-GAAP operating profit rose 47.7% to ¥188,298 million.

• FY2027 revenue and non-GAAP operating profit forecasts were raised to ¥3,740 billion and ¥460 billion, respectively.

• IT Services and Social Infrastructure both delivered revenue and profit growth; CSG consolidation from May 2026 contributed to International IT Services growth.

Financial highlights

• H1 non-GAAP net profit was ¥146.7 billion, up ¥68.1 billion; non-GAAP EPS rose to ¥111 from ¥59.

• Pro forma H1 revenue, assuming CSG consolidation from Apr. 1, 2025, rose 6.6% to ¥1,767.6 billion; non-GAAP operating profit increased ¥46.7 billion to ¥187.6 billion.

• Gross profit was ¥588,741 million versus ¥489,251 million YoY; SG&A expenses increased to ¥424,224 million from ¥375,522 million.

• Operating cash flow was ¥18,600 million; investing cash flow was -¥431,193 million, including ¥413,357 million for newly consolidated subsidiaries.

Outlook and guidance

• FY2027 revenue forecast rose ¥200 billion to ¥3,740 billion; non-GAAP operating profit rose ¥30 billion to ¥460 billion and non-GAAP net profit rose ¥20 billion to ¥310 billion.

• FY2027 non-GAAP operating margin forecast is 12.3%; free cash flow forecast improved from -¥390 billion to -¥90 billion, while dividend guidance remains ¥40/share.

• International IT Services FY2027 forecast increased ¥170 billion to ¥620 billion in revenue and ¥25 billion to ¥77 billion in non-GAAP operating profit.

• Social Infrastructure FY2027 forecast rose to ¥810 billion revenue and ¥104 billion non-GAAP operating profit; estimates increased for Aerospace/National Security and Submarine Systems.

• FY2031 targets remain non-GAAP operating margin of at least 15%, non-GAAP operating profit 2x FY2026, and non-GAAP EPS CAGR of at least 15%; international IT targets were raised.