NEC Corporation

FY March 2025 revenue was JPY3,423.4 billion and non-GAAP operating profit was JPY311.3 billion. Adjusted operating profit was JPY287.2 billion, up JPY63.6 billion year over year from JPY223.6 billion, while non-GAAP OP increased from JPY227.6 billion, a JPY98.9 billion improvement excluding the impact of JAE deconsolidation. The company said it also achieved its mid-term targets for non-GAAP net profit and EBITDA one year ahead of schedule. Free cash flow was JPY213.2 billion, an increase of JPY18 billion year over year. For FY March 2026, management guided to revenue of JPY3.36 trillion, adjusted OP of JPY310 billion, and non-GAAP OP of JPY320 billion, with the gap between adjusted OP and non-GAAP OP assumed at JPY10 billion from ongoing structural reforms.

Management’s tone was confident but cautious. The CEO/lead presenter emphasized that NEC exceeded its mid-term management plan targets early and intends to keep lifting profits even in an uncertain macro environment. Strategically, the call highlighted continued investment in growth areas, stronger discipline around M&A using cash ROIC evaluation, and reshaping the business mix through reorganizations such as reclassifying NEC Networks and renaming the submarine cable business as ANS.

The financial update emphasized broad profit improvement and better cash generation. Adjusted OP was JPY287.2 billion, up JPY63.6 billion, and non-GAAP OP was JPY311.3 billion, up JPY98.9 billion excluding JAE deconsolidation. Free cash flow reached JPY213.2 billion, helped by a JPY73.2 billion increase in operating cash flow and a JPY48.5 billion improvement from the cash conversion cycle; investing cash flow was a JPY55.1 billion outflow, mainly for real estate portfolio optimization. The company also said it would keep reducing cross-shareholdings, noting JPY7.4 billion of sales in FY March 2025 and cumulative sales of JPY159 billion since March 2020.

No live Q&A was included in the transcript, so there were no analyst questions or management answers to summarize. The most notable issues raised by management themselves were the submarine cable force-majeure losses, project delays, and the need for countermeasures and contract-term adjustments. They said profitability in that business is expected to return to normal once the work is completed.