NEC Corporation
6701・Prime Market・Electric Appliances
Business
NEC Corporation (NEC) is one of Japan's largest comprehensive IT solutions companies, founded in 1899. In the IT Services Business (revenue of ¥2,508,925 million), it provides System Integration / Consulting, and Outsourcing & Cloud Services to public sector, financial, and manufacturing clients, among others. In the Social Infrastructure Business (revenue of ¥935,302 million), it handles Network Infrastructure, OSS/BSS (Software & Services for Telecom Carriers), and aerospace, defense, and maritime systems. The company has 252 domestic consolidated subsidiaries and is a Global company with business operations in Europe, North America, Asia, and beyond. Its main customers include domestic government agencies, local governments, financial institutions, telecom carriers, and manufacturers, as well as overseas government agencies and financial institutions.
Business Model
NEC has adopted a value-chain-based business model that provides consulting, system construction, and Outsourcing & Cloud Services in an integrated manner to meet customers' DX needs. Centered on its proprietary value creation model "BluStellar", the company is transitioning to a structure that takes responsibility for everything from upstream consulting to downstream operations. In the Social Infrastructure Business, long-term project-based revenue from areas such as defense and submarine cables forms a stable foundation. By investing ¥105,239 million in R&D expenses, NEC is internalizing AI and security technologies, accelerating the portfolio shift toward high-profitability products and services.
Company Strengths
The company deploys its proprietary value creation model "BluStellar" for government agencies, financial institutions, and manufacturers, achieving adjusted operating profit of ¥336,704 million in the IT Services Business for FY2026 (ending March 2026), up ¥84.9 billion year on year (+33.7%). Profit growth exceeded revenue growth, and the structural improvement in profitability is confirmed numerically.
The Social Infrastructure Business has a track record of over 400,000 km of submarine cable laying over the past 60 years. Through strengthening its Aerospace & National Security Systems domain, the segment achieved revenue of ¥935,302 million in FY2026 (ending March 2026), up 12.4% year on year. Years of accumulated technology and track record in the defense, space, and marine fields form a barrier to entry.
The company developed its proprietary generative AI "cotomi" and AI agent technology "cotomi Act," demonstrating a task success rate (80.4%) exceeding that of humans (78.2%) on the WebArena benchmark. It also holds a global intellectual property foundation, including cross-licensing agreements with IBM, Intel, and Microsoft. R&D expenses amounted to ¥105,239 million.
ENVALITH's Perspective
Performance Trend
Revenue reached ¥3,582,733 million (+4.7% YoY), recovering from the slight decline seen in FY2025 (ended March 2025). More importantly, on the profit side, operating profit came to ¥359,913 million (+40.3%) and profit attributable to owners of the parent came to ¥270,228 million (+54.3%), both marking the highest levels in the past five periods. From FY2022 to FY2026, revenue grew +18.9% while operating profit grew +171.6%, with profit growth far outpacing revenue growth. While external factors such as the progression of yen depreciation (foreign currency translation adjustments of foreign operations of +¥99,009 million) contributed to boosting comprehensive income, the structural improvement in profitability of the IT Services Business and the expansion of orders in the Social Infrastructure Business were the main drivers of core business profit. Operating cash flow was also solid at ¥438,463 million (+27.3% YoY), indicating improved cash-generating capacity.
Growth Strategy
Pursuing both profitability and growth through the trinity of BluStellar, overseas IT services, and the defense domain
Centered on the DX support platform "BluStellar", the company is accelerating a portfolio shift toward high-margin products and services such as AI and security. Through the full consolidation of NEC Networks & System Integration Corporation and its incorporation into the IT Services Business, the company is strengthening its business for municipalities and SMEs, expanding its customer base in the domestic DX market. IT Services Business segment income reached ¥336,704 million, up 33.7% year on year.
The company is expanding overseas IT services, centered on digitalization support for governments (Digital Government) in the UK, Australia, and elsewhere, and systems for financial institutions (Digital Finance). External revenue in the Europe, Middle East and Africa region grew from ¥343,111 million in the previous fiscal year to ¥391,949 million, an increase of +14.2%, with growth accelerating.
Against the backdrop of increases in the Japanese government's defense budget, the company is driving order expansion in the Aerospace & National Security Systems domain. External revenue in the Social Infrastructure Business reached ¥935,302 million (up +12.4% year on year), and segment income rose to ¥74,318 million (up +22.9% from ¥60,456 million in the previous fiscal year), improving profitability.
The company is improving asset efficiency through reductions in policy-holding shares, including the sale of Japan Aviation Electronics Industry, Limited shares (gain on sale of ¥20,226 million). The annual dividend for FY2026 (ending March 2026) is ¥38 per share (an increase from the equivalent of ¥28 after adjusting for the stock split from ¥140 in the previous fiscal year), with total dividends of ¥50,592 million. The forecast dividend for FY2027 (ending March 2027) is ¥40 per share, continuing the policy of dividend increases. Share buybacks of ¥27,329 million were also conducted, further strengthening total shareholder returns.
Last updated: July 19, 2026