6702.T

Fujitsu Limited

Next est. report 2026-07-30 · BMO

Renewable Energy '26: Long-Duration Energy StorageRenewable Energy '26: Renewable Supermajors

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Overview

Fujitsu Limited (6702.T) is a global IT services company providing digital transformation, consulting, and hardware solutions. Its Service Solutions segment, a

Fujitsu Limited (6702.T) is a global IT services company providing digital transformation, consulting, and hardware solutions. Its Service Solutions segment, a primary growth driver, offers IT modernization and Uvance offerings, generating the majority of revenue. The company serves diverse sectors like finance, manufacturing, and public services, focusing on profitability and investing in growth areas such as AI.

What They Do (Plain English & Analogies): Fujitsu Limited is like a digital architect and problem solver for large organizations and governments worldwide. Instead of building physical structures, they design, implement, and manage complex digital systems and services. Imagine a company that helps a bank upgrade its entire computer network to be faster and more secure, or assists a manufacturing plant in using artificial intelligence to make its production lines more efficient. They offer a wide range of services, from advising on digital strategies and managing cloud computing systems to providing cybersecurity and specialized hardware. They are also developing advanced solutions for big societal challenges, like making supply chains more resilient and helping the energy sector transition to renewables, including through their specialized long-lasting batteries.
Very Brief History: Fujitsu Limited was incorporated in 1935 and is headquartered in Kawasaki, Japan. Initially involved in telecommunications equipment, the company evolved significantly over the decades to become a leading global provider of information technology services, computer hardware, and software solutions, repositioning itself more recently around digital services and its Fujitsu Uvance portfolio.
"Street Stereotype": Fujitsu is generally perceived as a major Japanese IT services provider, undergoing a strategic transformation to focus on higher-value digital services, particularly through its Fujitsu Uvance portfolio, which addresses societal challenges and sustainability. It is also recognized as a significant player in long-duration energy storage, specifically with its Vanadium Redox Flow Battery (VRFB) technology, and contributes to renewable energy expansion through its digital solutions for the energy sector.
Subsidiaries On Linked In*: Fujitsu Technology Solutions GesmbH — Austria
Fujitsu Technology Solutions SA/NV — Belgium
Fujitsu Talent Belgium NV/SA — Belgium
AS Fujitsu Estonia — Estonia
Fsas Technologies Oy — Finland
Fujitsu Finland Oy — Finland
Nice-Business Consulting Oy — Finland
Fujitsu Technology Solutions SAS — France
FDK Electronics GMBH — Germany
Fujitsu Technology Solutions GmbH — Germany
Fujitsu Germany GmbH — Germany
Fujitsu Technology Solutions (Luxembourg) S.A. — Luxembourg
Fsas Technologies BV — Netherlands
Fujitsu Technology Solutions (Holding) B.V. — Netherlands
Fujitsu Services Holding BV — Netherlands
Fujitsu Technology Solutions B.V. — Netherlands
FQS Poland Sp. z.o.o — Poland
Fujitsu Technology Solutions Spzoo — Poland
Fujitsu Technology Solutions Lda — Portugal
Fsas Technologies SL. — Spain
Fujitsu Technology Solutions S.A. — Spain
Fujitsu Sweden AB — Sweden
Fujitsu Technology Solutions AG — Switzerland
Fujitsu Consulting Limited — United Kingdom
Fujitsu EMEA PLC — United Kingdom
Fujitsu Research of Europe Limited — United Kingdom
Fujitsu Services Ltd — United Kingdom
Fujitsu Systems (Europe) Limited — United Kingdom
Fulcrum Biometrics Limited — United Kingdom
InPhysec UK Limited — United Kingdom
Fujitsu Research of America, Inc. — United States
Fujitsu Network Communications, Inc. — United States
TRANSTRON AMERICA, INC. — United States
Fujitsu Frontech North America, Inc. — United States
Fujitsu Caribbean — Caribbean
Customer Sectors & Example Clients: Fujitsu serves a wide array of customer sectors including finance, manufacturing, mobility and transportation, public sectors (including national security), resource and energy, and retail industries. Specific example clients mentioned or credibly inferred include: HSBC, Allianz, Lufthansa, NASA, Tesco, Panasonic, Lowe's Innovation Labs, Leeds City Council, Johoku (Thailand) Co., Ltd., and Bangchak Corporation.
New Customers / Segments They'Re Targeting: Fujitsu is actively targeting new customer segments through its Fujitsu Uvance portfolio, which focuses on addressing global societal challenges and driving sustainability transformation (SX) across industries. This includes expanding into cross-industry areas and technology platforms that support these initiatives. The company is also heavily investing in the modernization business, aiming to help customers upgrade mission-critical systems and embrace digital transformation. Furthermore, the transcript indicates a focus on large-scale deals in the national security field in the second half of the fiscal year.
Supply Chain And Sourcing Geographies: Fujitsu operates a global supply chain, with component procurement costs being sensitive to currency fluctuations, such as the weak yen, implying international sourcing. The company is actively working on enhancing supply chain resilience and visualization through its Uvance solutions, integrating data from production facilities and components to respond quickly to disruptions. They collaborate with both Japanese and overseas suppliers to visualize CO2 emissions by product, indicating a diverse, global supplier base. While specific countries for component sourcing are not detailed, the emphasis on global supply chain risk management suggests a broad international network.
Sales Geographies And Expansion Plans: Fujitsu currently sells its products and services globally, with significant operations in Japan, Europe (including the UK, Germany, France, Spain, Sweden, Finland, Poland, Portugal, Belgium, Estonia, Luxembourg, Netherlands), the Americas (United States, Canada, Brazil, Caribbean, South America), and the Asia Pacific region (including China, Hong Kong, Korea, Taiwan, Thailand, Australia, Singapore, India). The company's strategy involves shifting towards higher-value digital services and its Fujitsu Uvance portfolio across these existing geographies. While the transcript mentions strong order growth in the Asia-Pacific region and Nordic areas, no explicit plans for expanding sales into entirely new geographic regions beyond its current global footprint were disclosed.
How Key Themes May Help/Hurt: The 'Renewable Energy '26: Renewable Supermajors' theme significantly helps Fujitsu by driving demand for its digital services and solutions that support the energy sector's shift towards sustainability. Fujitsu's Uvance offerings, which focus on sustainability transformation, smart grids, and optimizing renewable energy operations, align directly with the needs of large renewable energy players for advanced IT infrastructure, data analytics, and AI to manage complex, decentralized energy models. The 'Renewable Energy '26: Long-Duration Energy Storage' theme also strongly benefits Fujitsu due to its established position as a global veteran in Vanadium Redox Flow Batteries (VRFB). As the buildout of renewable energy supermajors increases the need for stable, long-duration energy storage to integrate intermittent sources, Fujitsu's VRFB technology provides a critical solution for grid support, renewable integration, and microgrids, offering high reliability and a long lifespan.

3 Main Long-Term Bull Details

Fujitsu Uvance Growth and Strategic Shift: The Uvance portfolio, focused on solving societal challenges and driving sustainability transformation (SX) with strong growth in orders and revenue (31% YoY in H1 FY24), represents a strategic shift towards higher-value digital services and is positioned as the key growth driver for the company, targeting 30% of Service Solutions revenue by FY25.
Strong Service Solutions Profitability Improvement: Fujitsu is demonstrating consistent progress in improving profitability within its core Service Solutions segment, with adjusted operating profit margin improving by 2.3 percentage points to 8.7% in H1 FY24, driven by productivity initiatives, stronger management, and appropriate pricing. This indicates effective execution of its transformation strategy.
Leadership in Long-Duration Energy Storage (VRFB): Fujitsu is recognized as a global veteran in Vanadium Redox Flow Batteries (VRFB), a critical technology for integrating large-scale renewable energy into grids. This expertise positions the company to capitalize on the growing demand for long-duration energy storage solutions from utility partners worldwide.

3 Main Long-Term Bear Details

Declining Traditional Hardware and Ubiquitous Solutions Segments: Revenue in Hardware Solutions and Ubiquitous Solutions continues to decline, with the latter impacted by the exit of low-profit businesses in Europe. This indicates a challenging environment for its legacy hardware and consumer-oriented businesses, requiring successful portfolio transformation to offset.
Slow Recovery in Device Solutions Demand and External Factors: The recovery in demand for electronic components in the Device Solutions segment has been slower than anticipated, and the segment is susceptible to external factors like foreign exchange movements and global demand cycles, which can impact overall performance.
Intense Competition and Investment Pressure: Fujitsu operates in a highly competitive global IT services market against major players like IBM, Accenture, and Microsoft. While investing heavily in growth areas like Uvance and AI, these investments negatively impact short-term operating profit, and sustained differentiation and market share gains require continuous, significant R&D and talent acquisition.

Competitors And Differentiation: Fujitsu faces competition from major global IT services and technology companies. Its primary competitors include IBM, Hitachi, Dell, Unisys, VMware, Juniper Networks, HP, Accenture, Capgemini, NEC, NTT DATA, Huawei, Oracle, Microsoft, and Siemens. Fujitsu differentiates itself through its comprehensive Fujitsu Uvance portfolio, which focuses on solving business and societal challenges through advanced, data- and AI-driven digital services, with a strong emphasis on sustainability transformation. The company also leverages its expertise in specific technologies like Vanadium Redox Flow Batteries (VRFB) for long-duration energy storage and its strategic collaboration with NVIDIA for full-stack AI infrastructure. Its differentiation also stems from its deep understanding of various industry sectors, offering tailored solutions for digital transformation, modernization, and cybersecurity.
Recent Performance & What The Market'S Focused On: Fujitsu reported a strong first half of fiscal '24, achieving record adjusted operating profit of ¥79.5 billion, a 56.6% increase year-over-year, and a 4.7% operating profit margin. The Service Solutions segment, its growth driver, posted higher revenue and significant profitability improvements. Fujitsu Uvance and modernization businesses showed robust growth, with Uvance revenue up 31% year-on-year. However, Hardware Solutions and Ubiquitous Solutions saw revenue declines, and Device Solutions experienced slower-than-expected demand recovery. The company's full-year forecast for revenue (¥3,760 billion) and adjusted operating profit (¥303 billion) remains unchanged, with operating profit typically skewed towards the second half. The market is focused on the continued acceleration of Fujitsu Uvance, the sustained improvement in Service Solutions' profitability, and the successful transformation of its human resource portfolio, which incurred a one-time loss of ¥20 billion in H1 FY24.

Revenue Segments And Estimated Mix: Service Solutions — Mix: ~60%; Source: H1 FY24 transcript (¥1,017.5 billion out of ¥1,696.6 billion total consolidated revenue); Trend: Increased 3.4% YoY, strong growth driver with improving profitability.
Hardware Solutions — Mix: ~27%; Source: H1 FY24 transcript (¥456.6 billion out of ¥1,696.6 billion total consolidated revenue); Trend: Declined 4.4% YoY, impacted by pullback from large deals and weak yen.
Ubiquitous Solutions — Mix: ~6%; Source: H1 FY24 transcript (¥108.6 billion out of ¥1,696.6 billion total consolidated revenue); Trend: Declined 16.9% YoY, due to exiting European business.
Device Solutions — Mix: ~9%; Source: H1 FY24 transcript (¥147.4 billion out of ¥1,696.6 billion total consolidated revenue); Trend: Increased 3.3% YoY, benefited from weak yen but demand recovery slower than expected.
Inter segment eliminations and corporate — Mix: n/m; Source: H1 FY24 transcript; Trend: Adjusted operating loss, but decrease in expenses YoY.
Product Brands: Fujitsu Uvance
Fujitsu Data Intelligence PaaS (DI PaaS)
Fujitsu Kozuchi AutoML
Fujitsu Cloud IaaS
Fujitsu Interstage
Fujitsu CHORDSHIP
Fujitsu TRIOLE
Fujitsu Distributed Ledger
Digital Annealer
1FINITY
Uvance Wayfinders
Fujitsu Computing as a Service (CaaS)

Bull / Bear Details

Fujitsu (6702.T) is a global IT services leader driving digital transformation and modernization, with its Service Solutions segment, particularly Fujitsu Uvanc

Thesis

Fujitsu (6702.T) is a global IT services leader driving digital transformation and modernization, with its Service Solutions segment, particularly Fujitsu Uvance, demonstrating strong growth and profitability improvements. Strategic investments in AI and human capital, coupled with portfolio optimization through carveouts, position the company for sustained value creation despite headwinds in hardware and slower demand recovery in device solutions. (Updated: 2026-07-10)

Bull case

Fujitsu's Service Solutions segment, its primary growth driver, continues to show robust performance, with revenue up 3.4% and adjusted operating profit margin improving to 8.7%. Fujitsu Uvance, a vital growth area, saw orders increase over 30% and revenue grow 31% year-on-year, nearly doubling in vertical areas, indicating successful strategic execution in high-value digital transformation markets.
The company is making steady progress in enhancing profitability through productivity initiatives like standardization and stronger management. Significant improvements in adjusted operating profit margin (up 2.3 percentage points in Service Solutions) are also driven by strategic carveouts of low-profitability businesses, such as the German private cloud, streamlining the portfolio for better overall financial health.
Fujitsu benefits from strong and continued demand for digital transformation and modernization services, particularly in Japan where revenue rose 7%. The modernization business revenue surged 69% in H1 FY24, with large-scale deals secured in financial and mission-critical systems, and anticipated future deals in national security, ensuring a robust pipeline for sustained revenue growth.

Bear case

The Hardware Solutions segment experienced declines in both revenue and profit due to a pullback from large-scale public sector deals and negative impacts from the weak yen. Furthermore, the Device Solutions segment faces slower-than-anticipated full-scale demand recovery for electric components, which could continue to temper overall consolidated performance despite strength in services.
While strategic, the carveout of low-profitability businesses, such as the German private cloud and the Ubiquitous Solutions business in Europe, has led to a decline in international revenue. This highlights the competitive pressures in certain markets and the ongoing need for portfolio adjustments, which can create short-term revenue volatility and execution risks.
Fujitsu is actively investing in growth areas like Uvance offerings, AI, and quantum computing, which negatively impacted operating profit by ¥16.6 billion in H1 FY24. Additionally, the company recorded a ¥23.1 billion one-time loss related to human resource portfolio transformation, indicating substantial ongoing costs associated with its strategic shift and potential short-term earnings pressure.

Bull / Bear Case

Bear Case: The Hardware Solutions segment experienced declines in both revenue and profit due to a pullback from large-scale public sector deals and negative impacts from the weak yen. Furthermore, the Device Solutions segment faces slower-than-anticipated full-scale demand recovery for electric components, which could continue to temper overall consolidated performance despite strength in services. While strategic, the carveout of low-profitability businesses, such as the German private cloud and the Ubiquitous Solutions business in Europe, has led to a decline in international revenue, highlighting competitive pressures and short-term revenue volatility. Fujitsu is actively investing in growth areas like Uvance offerings, AI, and quantum computing, which negatively impacted operating profit by ¥16.6 billion in H1 FY24. Additionally, the company recorded a ¥23.1 billion one-time loss related to human resource portfolio transformation, indicating substantial ongoing costs associated with its strategic shift and potential short-term earnings pressure.
Bull Case: Fujitsu's Service Solutions segment, its primary growth driver, continues to demonstrate robust performance, with revenue up 3.4% and an adjusted operating profit margin improving to 8.7% in H1 FY24. Fujitsu Uvance, a vital growth area, saw orders increase over 30% and revenue grow 31% year-on-year, nearly doubling in vertical areas, indicating successful strategic execution in high-value digital transformation markets. The company is making steady progress in enhancing profitability through productivity initiatives and strategic carveouts of low-profitability businesses, streamlining the portfolio for better overall financial health. Strong and continued demand for digital transformation and modernization services, particularly in Japan where revenue rose 7%, with large-scale deals secured and anticipated in national security, ensures a robust pipeline for sustained revenue growth. Strategic investments in AI and human capital further position the company for future expansion.
More Compelling & Why: Bear. Despite some P/E metrics suggesting undervaluation relative to historical averages and industry peers (e.g., GuruFocus reports a TTM P/E of 13.18, 22% below its 10-year median and 38% below the Software industry median), the stock has significantly underperformed the Nikkei 225 by over 43% in the past year. The strongest argument for the bear case is the persistent drag from declining Hardware Solutions and slower-than-anticipated recovery in Device Solutions, coupled with substantial one-time human resource transformation costs (¥23.1 billion loss in H1 FY24). These factors, alongside a cautious tech market experiencing a pullback, indicate that the current valuation adequately reflects the near-term execution risks and headwinds. My view would flip to bull if Fujitsu demonstrates sustained, profitable growth across all segments, particularly a clear turnaround in Hardware and Device Solutions, and if the market begins to reward its Uvance growth with positive stock price momentum.

Key Factors5 rows

Key Factor	Why It Matters	What To Watch	What It Signals	Where/How To Track	Free Alt Data	Paid Alt Data
Device Solutions Demand Recovery	The Device Solutions segment's recovery in demand for electric components was slower than planned in H1. A full-scale recovery in H2 is crucial for this segment to meet its targets and contribute positively to consolidated results.	Commentary on the recovery of demand for electric components in the Device Solutions segment in subsequent earnings calls. Specific metrics on revenue growth for Device Solutions.	Bullish: Device Solutions revenue growth accelerating significantly in H2, indicating a full-scale recovery in demand as anticipated. Bearish: Continued slower-than-planned recovery or further decline in Device Solutions revenue.	Company earnings reports and investor presentations on Fujitsu's Investor Relations website. Next updates for Q3 FY24 results (likely January/February 2025) and full-year FY24 results (likely April/May 2025).	Industry reports on global semiconductor and electronic component demand (e.g., from Deloitte, Gartner, Infosys). News from major electronics manufacturers.	SEMI Market Intelligence: Semiconductor market trends, forecasts, and analysis; TechInsights: Semiconductor Market Intelligence for global market trends & forecasts; IDC: Semiconductor market analysis; Industrial Info Resources: Global Semiconductor Database & Market Intelligence.
Modernization Business Revenue Growth	The modernization business is a rapidly expanding area for Fujitsu, showing significant growth and contributing to the overall Service Solutions segment's strong performance.	Year-on-year revenue growth for the modernization business. Progress towards the full-year FY24 target of ¥200 billion.	Bullish: Modernization business revenue growth exceeding 69% YoY (H1 FY24 rate) or exceeding the FY24 target of ¥200 billion. Bearish: Modernization business revenue growth falling significantly below 69% YoY or missing the FY24 target.	Company earnings reports and investor presentations on Fujitsu's Investor Relations website. Next updates for Q3 FY24 results (likely January/February 2025) and full-year FY24 results (likely April/May 2025).	IDC Japan IT Modernization Market Analysis reports. News articles on large-scale IT modernization projects in Japan.	Forrester Research: Spending trends on IT modernization; TechTarget: Enterprise IT spending surveys; IDC: Japan IT Services Market reports.
Service Solutions Adjusted Operating Profit Margin	Profitability improvement is a key management focus for Fujitsu. An increasing margin in the largest and fastest-growing segment indicates successful cost management, productivity initiatives, and appropriate pricing strategies.	Adjusted operating profit margin for the Service Solutions segment. Specifically, whether it continues to improve beyond the H1 FY24 rate of 8.7% and the 2.3 percentage point improvement YoY.	Bullish: Adjusted operating profit margin for Service Solutions exceeding 8.7% and showing continued year-on-year improvement. Bearish: Adjusted operating profit margin for Service Solutions declining or stagnating below 8.7%.	Company earnings reports and investor presentations on Fujitsu's Investor Relations website. Next updates for Q3 FY24 results (likely January/February 2025) and full-year FY24 results (likely April/May 2025).	Industry benchmarks for IT services operating margins (e.g., from IT services market reports). Analyst reports on Fujitsu's cost-cutting initiatives.	Bloomberg Terminal: Consensus estimates for Fujitsu's segment margins; Refinitiv Eikon: Historical and forecast margin data; AlphaSense: Sentiment analysis of earnings call transcripts.
Large-Scale Deals in Japan (National Security, Financial, Private Enterprise)	Orders in Japan, particularly in high-growth areas like financial, private enterprise, and mission-critical systems (including national security), are crucial for future revenue growth and indicate strong demand for Fujitsu's core services.	Announcements of new large-scale contracts, especially in the national security, financial, and private enterprise segments in Japan. Management's commentary on the pipeline of expected deals for the second half of FY24.	Bullish: Announcement of multiple large-scale deals, particularly in national security, or sustained growth in orders for private enterprise and financial segments (e.g., exceeding 9% YoY for financial). Bearish: Lack of significant new large-scale deal announcements or a decline in order intake for key segments in Japan.	Company press releases and news sections of Fujitsu's website. Earnings call transcripts for management commentary. Tokyo Stock Exchange (TSE) timely disclosure information.	Japan government procurement websites for public sector contracts. Industry news outlets (e.g., Nikkei Asia) covering large IT projects in Japan.	FactSet/S&P Global Market Intelligence: Tracking of contract announcements and news sentiment for Fujitsu; PredictLeads: Tracking of company growth signals and job openings.
Fujitsu Uvance Revenue Growth	Uvance is positioned as Fujitsu's most vital growth area and a key driver for the Service Solutions segment, which is the company's primary growth engine. Strong Uvance performance indicates successful strategic transformation and future revenue expansion.	Year-on-year revenue growth for Fujitsu Uvance. Specifically, progress towards the FY24 target of ¥450 billion and the FY25 target of ¥700 billion.	Bullish: Uvance revenue growth exceeding 31% YoY (H1 FY24 rate) or exceeding the FY24 target of ¥450 billion. Bearish: Uvance revenue growth falling below 22% YoY (FY24 target growth rate) or missing the FY24 target.	Company earnings reports, investor presentations, and press releases on Fujitsu's Investor Relations website. Next updates for Q3 FY24 results (likely January/February 2025) and full-year FY24 results (likely April/May 2025).	Google Trends: 'Fujitsu Uvance' search volume. Industry reports on digital transformation and sustainability solutions market growth in Japan. Fujitsu's corporate website for Uvance case studies and announcements.	Gartner/IDC reports: Market share and growth rates for digital transformation services; S&P Global Market Intelligence: Revenue forecasts for Fujitsu's IT services segment.

Key Reported Metrics, Reratings Triggers & Results3 rows

Service Solutions is Fujitsu's primary growth driver, and continued revenue expansion in this segment indicates successful digital transformation and modernizat

Key reported metrics			Rerating thresholds
Metric	Last period	Why it matters	What's needed for rerating	Rerating context	Earnings date
Service Solutions Revenue	3.4%	Service Solutions is Fujitsu's primary growth driver, and continued revenue expansion in this segment indicates successful digital transformation and modernization efforts. Strong performance here is crucial for overall company growth and investor confidence.	Fujitsu Limited's Service Solutions Revenue needs to demonstrate year-over-year growth of 7% to 8% or higher. This would significantly exceed the company's FY2026 guidance of 5.2% and align with or surpass the higher end of its long-term (FY2035) CAGR target of 6% to 8%. Sustained strong growth in key sub-segments like Fujitsu Uvance (which grew 47% in FY2025) and modernization business (up 24% in FY2025), contributing to this overall Service Solutions acceleration, would be critical. This performance would also show progress in closing the gap with the broader IT professional services market, which is projected to grow at a CAGR of 7.01% from 2026 to 2035 (or 7.4% in the US market).	Achieving 7-8%+ Service Solutions Revenue growth is vital as it's Fujitsu's primary growth driver and central to its strategic shift towards high-value digital services and AI. This validates the Uvance strategy, boosts profitability, and signals successful capture of digital transformation and AI market opportunities, justifying a higher valuation.	2026-07-30
Adjusted Operating Profit Margin (Service Solutions)	35.9%	Profitability improvement in Service Solutions is a core management focus, driven by efficiency initiatives and portfolio transformation. An expanding margin demonstrates effective cost management and value creation in the company's most important segment.	For Fujitsu Limited (6702.T) to rerate higher, the Adjusted Operating Profit Margin (Service Solutions) would need to demonstrate sustained expansion significantly above the current stated value of 35.9%, likely achieving a margin in the range of 37-40% or higher. This exceptional performance would need to be coupled with clear evidence of its long-term sustainability and further growth drivers, such as accelerated adoption of high-value Fujitsu Uvance offerings and advanced AI solutions, alongside continued aggressive operational efficiencies.	Achieving a Service Solutions Adjusted Operating Profit Margin significantly above 35.9% would signal unprecedented operational efficiency and pricing power, far exceeding typical IT services industry benchmarks which range from 15% to 30%. This would solidify Fujitsu's competitive position, justify a higher valuation multiple, and indicate a highly profitable, sustainable business model with robust future earnings potential, surpassing current market expectations for even a top-tier IT services provider.	2026-07-30
Fujitsu Uvance Revenue	31%	Fujitsu Uvance is positioned as the most vital area for future growth, with ambitious targets. Its revenue growth rate is a key indicator of the company's strategic shift and ability to capture high-value market opportunities.	Fujitsu Uvance revenue needs to achieve a year-over-year growth rate of 30% or higher for fiscal year 2026, significantly exceeding the company's current target of ¥840.0 billion. This would demonstrate a re-acceleration of growth beyond the implied 18.4% increase from the actual fiscal year 2025 revenue of ¥709.3 billion.	Fujitsu Uvance is the core growth driver for Fujitsu's strategic shift to high-value digital services and AI. Sustained 30%+ growth validates this transformation, signaling strong market capture in digital transformation and AI. This performance would differentiate Fujitsu from peers, justifying a higher valuation and reinforcing the long-term investment thesis.	2026-07-30

Key Questions

Can Fujitsu's core growth drivers, Fujitsu Uvance and the modernization business within Service Solutions, sustain their strong revenue growth and achieve their

Can Fujitsu's core growth drivers, Fujitsu Uvance and the modernization business within Service Solutions, sustain their strong revenue growth and achieve their ambitious full-year FY2024 targets?

Question 2: Will Fujitsu continue to improve the adjusted operating profit margin in its Service Solutions segment and demonstrate a return to profitable growth in its international regions following the carve-out of low-profitability businesses?
Question 3: Will the anticipated full-scale recovery in demand for electric components in the Device Solutions segment materialize in the second half of FY2024, and how effectively will Fujitsu's strategic investments in growth areas like AI and quantum computing translate into future business expansion?

Earnings Transcript SummaryTable

2024-10-31 · 2024H1 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
1. Accelerating growth in Service Solutions, particularly Fujitsu Uvance and modernization business: Management highlighted Service Solutions as the 'growth driver,' emphasizing strong progress and profitability improvement. Fujitsu Uvance revenue grew 31% year-on-year, with vertical areas nearly doubling, and the modernization business increased by 69%. Active investments are being made in Uvance offerings and knowledge aggregation for modernization. 2. Improving profitability across the business: The CFO detailed significant progress in profitability improvement, especially in Service Solutions, where the adjusted operating profit margin improved by 2.3 percentage points to 8.7%. This was attributed to initiatives like standardization of development work processes, stronger profitability management, and the positive impact of carving out low-profitability businesses in international regions. 3. Transforming the human resource portfolio and making strategic growth investments: Management is focused on optimizing human resources through re-skilling, a job posting system, and a time-limited expansion of a self-produced support system for managers. Concurrently, proactive, systematic investments are being made in business growth, including developing Uvance offerings, strengthening security, and enhancing the overall management foundation, such as ERP deployment.	The overall takeaway of the call was that Fujitsu is making steady progress in its strategic transformation, with the Service Solutions segment, particularly Fujitsu Uvance and the modernization business, performing well and driving profitability improvements. While some segments (Hardware, Ubiquitous Solutions) faced headwinds and Device Solutions experienced slower-than-anticipated demand recovery, overall consolidated results were in line with plans. Management expressed confidence in achieving full-year targets through continued focus on revenue expansion, profitability improvement, and strategic investments, including human resource transformation. The tone was generally cautious yet confident, acknowledging challenges while emphasizing positive momentum and strategic progress.	Specific segment-level year-over-year revenue growth for the prior quarter (Q4 FY23, ending March 2024) is not available in the provided search results. However, the total consolidated revenue for Q4 FY23 (March 2024 quarter) showed a -0.28% year-over-year change.	The provided transcript contains only the CFO's presentation and explicitly states 'End of Q&A'. Therefore, there is no Q&A section to identify analyst questions or management's responses.	Total consolidated revenue increased by 0.9%. Service Solutions revenue increased by 3.4% year-over-year. Within Service Solutions, business in Japan rose by 7%, while outside Japan, revenue declined by 4% (essentially unchanged excluding carveout). Fujitsu Uvance's overall revenue grew by 31% year-on-year, with its vertical areas growing by 93%. The modernization business saw a 69% increase in revenue. Subsegments of Service Solutions included Global Solutions, which grew by 13.3%; Japan regions, which increased by 2.1%; and International regions, which decreased by 4.4% (essentially unchanged excluding carveout). Hardware Solutions revenue decreased by 4.4%. Ubiquitous Solutions revenue declined by 16.9%. Device Solutions revenue increased by 3.3%.

Transcript TidbitsTable

2024-10-31

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
Fujitsu's Service Solutions segment saw continued strong demand in Japan for digital transformation and modernization services, with revenue in Japan rising by 7%. The company experienced growth in projects related to digital transformation, sustainable transformation, and modernization for mission-critical systems across various customer segments including manufacturing, mobility, retail, distribution, and finance. Orders in the financial business segment were up 9% due to multiple large-scale deals to upgrade mission-critical systems. The Fujitsu Uvance business, positioned as a vital growth area, saw orders increase by over 30% and revenue grow by 31% year-on-year, with vertical areas nearly doubling revenue. The modernization business also showed significant expansion, with revenue increasing by 69% in the first half, progressing according to plan. The company foresees multiple large-scale deals in the second half, particularly in national security, and anticipates continued growth in sales revenues.	Fujitsu's revenue outside of Japan declined by 4% due to the carveout of low-profitability businesses, specifically mentioning the negative impact of exiting the low-profit German private cloud business in international regions. The company also exited its Ubiquitous Solutions business in Europe in April, citing a very competitive environment where it was difficult to ensure profitability.	There is a continued strong demand for digital transformation and modernization services in Japan. However, the full-scale recovery in demand for electric components in the Device Solutions segment has been slower than initially planned, with expectations for recovery in the second half of the year. Market demand for service solutions was generally in line with the company's plan.	Fujitsu anticipates receiving multiple large-scale deals in the second half of the fiscal year, particularly in national security, and expects to continue growth in sales revenues. The company is targeting Fujitsu Uvance revenue of ¥450 billion for fiscal 2024 (a 22% increase) and ¥700 billion in fiscal 2025, aiming for Uvance to represent 30% of total Service Solutions revenue. The modernization business is on track to achieve its full-year revenue target of ¥200 billion. Fujitsu plans to improve profitability through knowledge aggregation and automation while expanding its digital transformation and sustainable transformation businesses. Investments in product development for network products are ongoing to prepare for the next growth cycle, and planned investments in cutting-edge research like AI and quantum computing, along with enhancements to the management foundation, will continue. The company plans to launch an ERP system in Service Solutions in Japan in fiscal 2024 to accelerate digital transformation and optimize operations. Overall, consolidated results are in line with the plan, and the company is committed to expanding revenue and improving profitability to achieve its midterm management plan and enhance corporate value.	The	Key broader themes emerging from the transcript include the pervasive demand for digital transformation (DX) and modernization services across various industries, the strategic importance of sustainable transformation, and ongoing investments in advanced technologies such as AI and quantum computing. The company is also focused on internal digital transformation through ERP system deployment to enhance speed and optimization.	Service Solutions, which continue to post steady improvements and higher revenue and operating profit. In terms of the first half, results adjusted operating profit was a record for Fujitsu showing an increase of 56.6% over the last year's first half. Our growth driver had a higher revenue and strong pace of progress and profitability improvement. Orders received in fiscal '24 amounted to ¥223.1 billion. Major increase over 30% from the last year. For Uvance orders and revenue are in good shape and progressing at the strong pace towards our target. profitability is continuing to improve at a steady pace year after year. Overall, consolidated results were in line with our plan. We believe we are progressing mostly according to plan, particularly in our growth drivers service solutions.	because of the carveout of low profitability business, revenue declined by 4%. Hardware Solutions, both revenue and profit fell as there was a pullback from last year's large-scale deals and the negative impact of the weak yen. public and healthcare segment orders fell 10%. The business in Europe was a very competitive environment in which it was difficult to ensure profitability. The full-scale recovery in demand has been lower than initially planned, and it is expected to occur in the second half of the year. we recorded a loss of ¥23.1 billion as adjusted item. As an additional measure to top of the efforts, we have already been making on the job posting system and reskilling.	Fujitsu is actively investing in employee training and development, as well as in developing and hiring employees with special skills to support business growth. The company is undertaking initiatives to transform its human resource portfolio, which includes re-skilling and implementing a job posting system. A time-limited expansion of a self-produced support system for manager-level employees without direct customer responsibilities was implemented to accelerate productivity improvement and optimize human resource positioning. This transformation of the human resource portfolio incurred a one-time loss of approximately ¥20 billion. The company emphasizes the need for an optimal human resource portfolio and decisive actions to accelerate both human resource and business portfolio transformations.