Nec Corp Unsp/Adr New (NECPY) Q2 2026 Earnings Call

Investor webinar replay

Replay transcript excerpt

Thank you very much for participating today. Today, we have already presented the results of Q2 for F1 ending March 2026. So let me walk you through the material. This is a table of the content that I'm explaining to you today. Page 3. Second quarter financial results. In the first half of FY2026, revenue was 569.8 billion yen. Non-GAAP up B was 127.5 billion yen. Year-on-year, the revenue went up by 5.6%. And regarding non-GAAP OB, year-on-year, it was up by 62.6 billion yen. And this is a dramatic growth being driven by domestic IT as well as ANS. With that as a backdrop, we decided to upward revise our full-year forecast. Non-GAAP OB, we will be increasing it by 20 billion yen, amounting to 340 billion yen. Now, let's look at the details of the financial results of Q2 FY ending March 2026. Firstly, the major indicators for the first half. Adjusted OB was 131.6 billion yen, up 70.6 billion yen year-on-year. Also, regarding adjusted OB margin, it was 8.4%. As compared to our internal forecast, adjusted OP was up by 20 billion yen. This is due to the unexpected growth of domestic IT services. Now, let's look at the year-on-year changes in adjusted and non-GAAP OP. In the first half of FY24, adjusted OP was 61 billion yen, and non-GAAP OP was 64.8 billion yen. So this is a starting point. IT service and social infrastructure increased dramatically in terms of profit. And also, we invested in AI. Therefore, the margin and profit improved by 62.6 billion yen. Having said that, the first half of FY26, non-GAAP OP ended at 127.5 billion yen. Non-GAAP adjusted items includes 4.1 billion yen of gain from sales of business amounting to 131.6 billion yen. Regarding the details of translation from GAAP profit to non-GAAP profit, please take a look at pages 19 and 20. Next, let...