Fujitsu Limited

For Q1 FY2026, Fujitsu reported consolidated 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, and an 11.4% margin, up 2.1 percentage points. Hardware Solutions revenue was JPY 211.2 billion, up 4.5%, with an adjusted operating loss of JPY 3.7 billion; Ubiquitous Solutions revenue fell 28.1% and adjusted operating profit was JPY 4.4 billion. Core free cash flow was JPY 217.7 billion, and free cash flow including one-time items was JPY 214.4 billion. For FY2026, Fujitsu left its full-year outlook unchanged at revenue of JPY 3,510 billion, adjusted operating profit of JPY 425 billion, and adjusted net profit of JPY 320 billion.

Takeshi Isobe said the quarter was in line with internal plans and confirmed the sustainability of demand in Service Solutions, especially across Uvance and modernization. He emphasized that Fujitsu is shifting to an industry-centered operating model and is investing in AI-driven delivery, with AI Top Gun and Agentic AI seen as important tools to improve productivity and shorten delivery times. His tone was confident but measured, repeatedly noting that the broader business environment remains uncertain.

He highlighted that profitability improved through higher revenue and better execution, including a JPY 9.9 billion benefit from higher revenue and JPY 7.8 billion from profitability improvement in Service Solutions. Gross margin in Service Solutions improved by 1.5 percentage points to 37.2%, while adjusted operating margin reached 11.4%; consolidated adjusted operating margin was 7.0%, up 2.3 percentage points. On cash flow, core free cash flow was JPY 217.7 billion, while free cash flow including one-time items was JPY 214.4 billion, which fell versus last year because of the prior-year SHINKO ELECTRIC share sale. He also said Hardware Solutions profitability was pressured by revenue mix and a delay in passing through higher component costs, but expects the impact to be minimal from the second quarter onward.

There was no separate analyst Q&A in the transcript. Management did, however, address likely investor concerns by explaining the decline in Ubiquitous Solutions as a Windows 10 update-related demand pullback, and by noting that Hardware Solutions margin pressure came from mix changes and delayed pass-through of memory and component cost increases. They also pointed to strong order trends in enterprise, public, defense, Uvance, and modernization as evidence that demand remains solid.