Thank you for joining us today. I would like to explain the full year financial results for the fiscal year ending March 31, 2026, and the financial forecast for fiscal year ending March 2027, which we announced today. The topics we will cover today are listed here. I will now explain the full year results for fiscal year ending March 2026. First, the key takeaways. Domestic IT and A&S, Aerospace and Defense continue to perform strongly. Annual revenue year-on-year, excluding the impact of the transfer enterprise PC sales functions and the withdrawal from low margin hardware businesses grew 9% year-over-year to JPY 3,582.7 billion.
Non-GAAP operating profit increased by JPY 85.9 billion year- on- year to JPY 397.2 billion with the profit margin reaching 11% the first time it has hit double digits. GAAP-based operating profit has set a new record high for the second consecutive fiscal year. Based on these results, we are increasing the year-end dividend by JPY 6 to JPY 22 per share, bringing the annual dividend to JPY 38. First, the key figures. Annual adjusted operating profit increased by JPY 99.7 billion year on year to JPY 386.8 billion and the adjusted operating margin stood at 10.8%. Next, the factors contributing to the increase or decrease in adjusted and non-GAAP operating income.
In FY 2025 March, adjusted operating profit was JPY 287.2 billion, while non-GAAP OP was JPY 311.3 billion. Building on this foundation, we achieved significant growth in IT services and A&S Aerospace and Defense segments, resulting in a total of JPY 85.9 billion in operational improvements. As a result, non-GAAP operating profit for FY 2026 March reached JPY 397.2 billion. Non-GAAP adjusted total to JPY 10.4 billion, consisting of JPY 3.9 billion recorded through the third quarter and JPY 6.5 billion in restructuring related expenses recorded in the fourth quarter. As a result, adjusted operating profit was JPY 386.8 billion. Please refer to page 24 of the appendix for details on the adjustments from GAAP profit to non-GAAP profit.
Next are the results by segment. I will provide further details for each segment later, but both IT services and social infrastructure segments reported increases in both revenue and profit. First, the IT services segment. In Japan, revenue increased by 1.9% year-on-year, driven by strong performance in the public sector. On an actual basis, revenue increased significantly by approximately 9%. For adjusted operating profit, not only an increase in profit in accordance with revenue increase, but also by improved profitability centered around BluStellar and the effects of structural reforms at subsidiaries, profit increased substantially year-on-year by JPY 72.5 billion and profit margin improved by three points. International DGDF saw improved profitability of three European companies and offset unprofitable costs incurred in other regions during the fourth quarter, resulting in a substantial increase in profit.
Is our domestic IT services broken down into the BluStellar and Base businesses. BluStellar's scenario-based business, which resolves customer challenges through end-to-end solutions, has expanded steadily, particularly in the data-driven modernization sector, resulting in a 30% year-on-year increase in revenue and a profit increase of JPY 35.8 billion. Both revenue and profit significantly exceeded the initial targets set at the start of the fiscal year. In the Base business, revenue declined due to the withdrawal of low profit operations. Profitability improved significantly, resulting in a profit increase of JPY 36.8 billion compared to the previous fiscal year. We'll look at the trends in domestic IT service orders.
For domestic IT services overall, orders increased by 2% in Q4 and 1% for the full year on a real basis, with demand centered on digital transformation remaining robust by sector. In the public sector, while orders for municipal government standardization and fire and disaster prevention projects peaked out, we secured large-scale projects for central government agencies, enabling us to maintain the high order volume achieved in FY 2025. In the enterprise segment, we secured projects steadily in Q4, particularly in the finance sector, resulting in performance on par with the previous year. Regarding subsidiaries, et cetera, AB maintained strong performance, growing 11% in Q4 and 12% for the full year, continuing the positive trend from the previous year. The social infrastructure segment.
As explained during the Q3 earnings announcement, profits in the telecom services segment declined as a result of a thorough asset cleanup carried out in conjunction with the restructuring of the base station business. A&S saw a significant increase in both revenue and profit, driven by strong performance in the aerospace and defense sectors. Order intake in aerospace and defense expanded further, reaching just under JPY 600 billion. Submarine systems, although we recorded additional construction costs in FY 2026, the losses narrowed. Business reforms are progressing steadily and going forward. Several large scale projects secured in FY 2026 will contribute to our performance.
Next, free cash flows. Operating cash flow increased by JPY 94.1 billion year-on-year to JPY 438.5 billion. As for breakdown, we had an increase in adjusted operating profit plus JPY 99.7 billion. Return of retirement benefit trust assets plus JPY 140 billion. Increase in working capital due to higher sales -JPY 120 billion. Investing cash flow improved JPY 164.9 billion year-on-year to JPY 33.7 billion. Main factors were sales of shares, including JAE acquisition and disposal of real estate. As a result, free cash flow increased JPY 258.9 billion year-on-year to JPY 472.1 billion. Regarding CCC, due to higher Q4 sales, the end of period results worsened.
Improvement activities continue and average days improved by five days to 49 days. Progress on low profit businesses. During the midterm management plan period, we aimed to decide the direction of all target businesses. We monitored them under the leadership of CFO. As planned, by the end of March 2026, we decided the direction of all businesses. Over the past five years, a total of 14 businesses graduated from the monitoring post. For the remaining six businesses, we also determined whether to improve them independently or carve them out. Going forward, our business portfolio management will move to the next stage. In addition to monitoring based on hurdle rates, we will introduce a new evaluation system based on relative assessment. Through this, we aim to further strengthen profitability. We will explain the FY 2027 financial forecast. The overall company forecast.
Until now, we disclosed both adjusted operating profit and non-GAAP operating profit. From FY March 2027, profit indicators will be unified to non-GAAP basis. Revenue for FY March 2027 is JPY 3,500 billion. Non-GAAP operating profit is JPY 420 billion. We have incorporated an allowance. The allowance reflects component risks and a macroeconomic uncertainty. Allowance is JPY 100 billion for revenue and JPY 30 billion for non-GAAP operating profit. We will revise the forecast as needed based on business progress. The forecast does not include the performance of CSG, although the acquisition is planned within this fiscal year. Next, segment forecasts. Details for IT services and social infrastructure will be explained on the following pages.
Of the allowance mentioned earlier, JPY 100 billion in revenue is included in domestic IT services, while JPY 30 billion in non-GAAP operating profit is included in adjustments. First, IT services. In Japan, revenue is expected to decline. This reflects the peak out of public sector projects such as municipal standardization and fire and disaster prevention. It also reflects the component risks and macroeconomic risks of JPY 100 billion. However, we will continue to accumulate orders, while we aim to minimize the impact of lower revenue, so profitability is expected to improve. Driven by further expansion of BluStellar, non-GAAP operating profit is planned to increase JPY 9.8 billion to JPY 312 billion. The margin is planned at 15.3%. Overseas, DGDF is also expected to improve. We will continue profitability improvement and curb unprofitable projects we had last year.
As a result, profit will increase JPY 4.3 billion to JPY 38 billion. Next, we will explain March 2027 forecast for domestic IT services. We show it divided into BluStellar and base business. For BluStellar, towards the FY March 2031 targets announced on April 24, JPY 1,300 billion in revenue and 25% in operating margin. We will expand scenarios using AI and improve productivity. Revenue in March 2027 is planned to increase by JPY 135 billion to JPY 840 billion. Non-GAAP operating profit is planned to increase JPY 41 billion to JPY 143 billion. Next, social infrastructure. For telecom services, revenue is expected to decline due to risks in the network infrastructure business. Revenue is planned at JPY 355 billion, down JPY 35.5 billion.
Non-GAAP operating profit is expected to increase. This is due to the effects of structure reforms implemented in the previous year. Profit is planned to increase JPY 18.9 billion to JPY 48 billion. For ANS, profit is also expected increase. This is driven by further expansion of aerospace and defense. It will reflect the return to profitability in submarine system business. Non-GAAP is expected increase by JPY 24.6 billion to JPY 79 billion. Next, changes to result segments. From FY March 2026, businesses in the telecom services domain will be reorganized. We will reallocate it to IT services and social infrastructure. IT services for telecom carriers in Japan will be moved to domestic IT services. Netcracker will move to international IT services and network infrastructure business will be moved to social infrastructure. Finally, information on upcoming events.
First, a briefing on the new midterm management plan will be held on May the 12th. In addition, NEC IR Day will be held on June the 1st. This event is for capital market participants. We will have a Q&A session. We hope this will deepen your understanding of initiatives in each segment. These initiatives are aimed at achieving the midterm management plan. We look forward to your participation. This concludes my presentation. Thank you for your attention.