NEC Corp Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
NEC Corp's Q2 2026 earnings call highlighted strong financial performance driven by domestic IT and ANS, leading to an upward revision of the full-year forecast. Key themes included revenue growth, increased profitability in IT Services and Social Infrastructure, and strategic initiatives like BluStellar. The company also discussed its upcoming IR Day and Innovation Day events.
Key Financial Results
Revenue for the first half of FY2026 was ¥1,569.8 billion, up by 5.6% year-on-year.
Non-GAAP OP for the first half was ¥127.5 billion, a significant increase driven by domestic IT and ANS.
Adjusted OP was ¥131.6 billion, up ¥70.6 billion year-on-year.
Adjusted OP margin was 8.4%.
The company upwardly revised its full-year Non-GAAP OP forecast by ¥20 billion to ¥340 billion.
Adjusted profits of OP are projected to increase by ¥20 billion to ¥330 billion.
Business Segment Results
Both IT Services and Social Infrastructure segments saw increases in revenue and profit.
IT Services revenue increased by 3.4% year-on-year, driven by the domestic public sector.
Excluding special factors, IT Services revenue increased by 9%.
Adjusted OP increased in line with revenue in the IT Services segment.
BluStellar improved profitability due to increasing DX demand.
Domestic IT Services declined by 5% in quarter two.
The Public sector saw continued lifecycle projects, while the enterprise sector recorded an 11% decline.
Abeam maintained strong performance with a 13% increase.
In Social Infrastructure, telecom social service expenses became more efficient.
Aerospace and defense increased revenue and profits significantly.
ANS recorded a one-off expense of ¥10 billion in the submarine cable business.
Growth Opportunities and Strategies
Focus on improving DX demand with BluStellar.
Considering measures to increase profits in the next fiscal year.
Financial Guidance and Outlook
The company increased the projection of earnings.
Revenue and profits have been increased by ¥60 billion to reach ¥3.42 trillion.
Non-GAAP operating profits corrected to be ¥340 billion with an increase of ¥20 billion.
The upside adjustment is in the IT Services segment.
IT Services revenue is projected to increase by ¥60 billion to ¥2.4 trillion.
Adjusted OP for IT Services is projected to increase by ¥20 billion to ¥321 billion.
The projection for Social Infrastructure remains unchanged.
Aerospace and Defense has upside potential, but the projection remains the same due to downside risk in the submarine cable business.
Industry Trends and Dynamics
Solid market environment with upside potential.
Robust DX demand.
Events
IR Day will be held on November 13, focusing on BluStellar and security.
Innovation Day will be held on December 3 at Tamagawa works, featuring lectures and demonstrations of the latest technology, including AI.
