Fujitsu Limited

Fujitsu reported first-quarter FY2026 revenue of JPY 779.3 billion, up 3.9% year-on-year, and adjusted operating profit of JPY 54.9 billion, up JPY 19.7 billion or 56%. Service Solutions revenue was JPY 548.9 billion, up 6.7%, with adjusted operating profit of JPY 62.8 billion, up JPY 14.9 billion or 31%, and an adjusted operating margin of 11.4%, up 2.1 points. The company said consolidated profit was affected by the absence of a prior-year gain from SHINKO ELECTRIC shares, and it also recorded a gain from the sale of land related to Fujitsu Technology Park. FY2026 full-year guidance was unchanged: revenue JPY 3,510 billion, adjusted operating profit JPY 425 billion, and adjusted net profit JPY 320 billion.

The CEO framed the quarter as a solid start and said results were largely in line with expectations and the internal plan. He emphasized that Service Solutions remains the growth driver, with sustainability of demand across markets confirmed, and noted that the company is taking a realistic view because the broader business environment remains uncertain. Strategically, he highlighted the shift to an industry-centered operating model and said Fujitsu will keep advancing toward the Management Vision 2035.

The CFO focused on the drivers of margin expansion and cash generation. In Service Solutions, profit rose JPY 14.9 billion, including JPY 9.9 billion from higher revenue and JPY 7.8 billion from profitability improvements, while gross margin improved to 37.2% and adjusted operating margin reached 11.4%. Core free cash flow was JPY 217.7 billion, while free cash flow including one-time items was JPY 214.4 billion, down mainly because the prior year included SHINKO ELECTRIC share-sale proceeds; the company also noted higher tax and bonus payouts due to increased profits. Guidance for the full year was unchanged across revenue, operating profit, and net profit.

The transcript is a prepared remarks presentation rather than a live Q&A, so no analyst questions were included. Management did address the main concern areas proactively: Hardware Solutions profit was pressured by product mix and a delay in passing through higher component costs, while Ubiquitous Solutions declined because Windows 10-related demand faded. On the positive side, management said contract changes are now in place to pass through price increases more quickly, and it expects the first-quarter negative impact to be minimal from the second quarter onward.