Slide 1: Trend Micro FY2024 Q2 Results
Trend Micro FY2024 Q2 Results Mahendra Negi CFO, Representative Director August 8, 2024
Slide 2: Forward Looking Statements
Forward Looking Statements Certain Statements that we make in this presentation are forward-looking statements. These forward-looking statements are based upon management’s current assumptions and beliefs in light of the information currently available to it, but involve known and unknown risks and
Slide 3: FY2024.Q2 Financial Highlight
FY2024.Q2 Financial Highlight (Second quarter ended Jun 30, 2024)
Slide 4: Q2 Consolidated Results
(unaudited) Q2 Consolidated Results (in million Yen) Three months YoY ended Jun 30, 2Q2023 2Q2024 growth Net sales 60,831 68,603 + 13% Total Operating expenses 52,192 56,294 + 8% Operating income (Margin) 8,639 (14%) 12,308 (18%) + 42% Ordinary income 9,470 12,707 + 34% Net income 5,482 7,141 + 30%
Slide 5: Progress (6 months)
Progress （6 months） (in million Yen) Revenue Operating Income 300,000 60,000 (Forecast) 271,000 (Forecast) 52,900 250,000 50,000 248,691 200,000 40,000 (Progress of Forecast: 50%) 183,725 (Progress of Forecast: 46%) 150,000 134,534 30,000 32,602 24,436 29,613 119,536 100,000 (Progress of 20,000 65,9
Slide 6: Pre-GAAP vs Total Costs
(in million Yen) Pre-GAAPⅴs Total Costs (unaudited) (Non-GAAP) Pre-GAAP Total Costs Pre-GAAP Margin 90,000 30% 80,000 85,220 28% 27% 26% 70,000 69,296 24% 60,000 64,236 65,456 61,733 61,975 22% 50,000 57,970 52,764 53,803 56,294 20% 40,000 52,192 49,155 19% 18% 30,000 18% 18% 16% 20,000 15% 15% 14%
Slide 7: Enterprise ARR
(USD) Enterprise ARR (Non-GAAP) (unaudited) *ARR at constant currency: (1USD= 147.74 yen as the company internal budget exchange rate for FY2024). Non-GAAP and reference for internal management. Therefore, they may be subject to so changes hereafter. 7
Slide 8: Cash flows
Cash flows (unaudited) (in million Yen) 2Q2023 2Q2024 YoY growth Cash flows from operating activities 14,294 11,410 - 20% Cash flows from investing activities - 741 2,679 － Cash flows from financing activities - 13,914 - 29,227 － Effect of exchange rate changes 11,250 5,549 - 51% on cash and cash eq
Slide 9: Headcount
Headcount Mar - 2024 Jun - 2024 7,183 7,053 Admin, Business Admin, Business Process, Process, 749 754 Technical Sales, Marketing, Technical Sales, Marketing, Support, 2,420 Support, 2,384 1,655 1,580 Research, Research, Development, Development, 2,359 - 130 2,335 (- 2%) Japan, Japan, 866 854 Europe,
Slide 10: Cost
(in million Yen) Salary & Benefit Office Overhead Cost (unaudited) Outside Service Cloud (Non-GAAP) 70,000 Administration Selling & Marketing ・ Of +4.1 bn JPY YoY increase, estimated Stock Options / Acquisiton Related Costs Goods/Software Amortization & Capitalization impact of yen depreciation is a
Slide 11: Q2 Highlights
Q2 Highlights • Highest ever net revenues • Highest ever operating income for 1H • Operating margin improvement continues 11
Slide 12: FY2024 Guidance
FY2024 Guidance
Slide 13: Projection for FY2024 Annual (Unchanged)
Projection for FY2024 Annual (Unchanged) (unaudited) For FY2024 Expected (in million Yen) Jan - Dec, 2024 YoY growth Net Sales 271,000 + 9% Operating Income 52,900 + 62% Ordinary Income 50,100 + 38% Net Income 34,600 + 222% attributable to owners of the parent (Estimated annual exchange rate 1USD=14
Slide 14: Appendix for FY2024.Q2
Appendix for FY2024.Q2
Slide 15: Q2 USD based Results (Non-GAAP)
Q2 USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Jun 30, 2Q2023 2Q2024 YoY change Net sales 442,060 440,017 - 0% Cost of sales 109,787 105,780 - 4% Operating expenses 269,489 255,289 - 5% Operating income 62,783 78,947 + 26% Ordinary income 68,818 81,507 + 18% Net Inc
Slide 16: Net Sales Growth by Region
(in million Yen) Net Sales Growth by Region (unaudited) 2023Q2 25,000 + 3% 2024Q2 20,689 21,295 + 29% 20,000 + 6% + 20% 17,526 14,899 14,882 15,000 14,065 13,637 12,440 10,000 5,000 0 Japan Americas Europe APAC, MEA
Slide 17: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region (unaudited) (in million Yen) If currency exchange rates used for 2Q2023 were used for 2Q2024: 2023Q2 25,000 + 3% * ( ) : difference from GAAP base 2024Q2 20,689 21,295 (0) + 15% 20,000 + 6% (- 1,843) - 7% (- 1,634) (- 1,750) 15,682 15,000 14,065 13,148 13,247 13,637 12,440
Slide 18: Decomposition of Revenue (vs. last year)
Decomposition of Revenue (vs. last year） (in million Yen) (unaudited) Exchange impact Japan Europe Americas 5,229 APAC, MEA 606 916 2024Ｑ2 806 2,045 Net sales 2023Ｑ2 68,603 Net sales 60,831 (Non-GAAP)
Slide 19: Constant currency Revenue growth
Constant currency Revenue growth (YoY) (unaudited) 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4 2023Q1 2023Q2 2023Q3 2023Q4 2024Q1 2024Q2 (Non-GAAP) • Each growth rate shown above is based on applyin
Slide 20: Net sales by Segment
(in million Yen) Net sales by Segment (unaudited) Growth rate (YoY) 25,000 Consumer + 2% Enterprise + 16% 20,000 1,531 + 19% 10,178 - 1% 15,000 196 + 10% 2,042 + 7% 10,000 14,685 + 20% 15,995 + 30% 12,856 + 6% 5,000 11,116 + 6% 0 Japan Americas Europe APAC, MEA “Notice” As Sales by Segment numbers a
Slide 21: % share by region
% share by region 2Q2023 2Q2024 60,831 million Yen 68,603 million Yen APAC,MEA 22% APAC,MEA Japan Japan 26% 31% 34% Europe 20% Europe Americas Americas 22% 22% 23%
Slide 22: Pre-GAAP (Revenue before adjusting Deferred revenue)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) 2023Q2 25,000 + 1% 2024Q2 20,163 20,284 + 22% 20,000 + 21% + 10% 18,619 16,032 14,359 15,236 15,000 13,288 13,044 10,000 5,000 0 Japan Americas Europe APAC, MEA “Notice” Pre-GAAP means Revenue before ad
Slide 23: Pre-GAAP (constant currency)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) If currency exchange rates used for 2Q2023 were used for 2Q2024: (in million Yen) (unaudited) 2023Q2 25,000 + 1% 2024Q2 20,163 20,284 + 10% 20,000 + 8% 16,720 - 1% 14,287 15,236 15,000 13,288 13,044 12,850 10,000 5,000 0 Japan Amer
Slide 24: Net sales & Pre-GAAP growth trend
Net sales & Pre-GAAP growth trend (unaudited) (on a constant currency basis) Net Sales Pre-GAAP 6% 6% 4% 4% Total Enterprise Consumer -1% -4% (Non-GAAP) 24
Slide 25: Active Customer Count
c Active Customer Count *Active customers using both perpetual and subscriptions products will be counted in both customer counts *As these numbers are just for internal use, they may be subject to some changes hereafter. 25
Slide 26: Deferred Revenue
(in million Yen) Deferred Revenue (unaudited) 230,000 217,014 218,013 211,532 210,000 203,061 202,356 192,914 195,225 190,000 185,061 184,807 175,312 170,000 150,000 130,000 0 110,000 Mar-'22 Jun-'22 Sep-'22 Dec-'22 Mar-'23 Jun-'23 Sep-'23 Dec-'23 Mar-'24 Jun-'24
Slide 27: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) 2024Q1 2024Q2 + 1% 80,000 - 2% 70,000 66,813 65,805 67,289 68,171 60,000 - 0% 50,307 50,250 50,000 + 4% 40,000 33,785 32,604 30,000 20,000 10,000 0 Japan Americas Europe APAC, MEA (Non-GAAP)
Slide 28: Deferred Revenue by Region (constant currency)
Deferred Revenue by Region (unaudited) If currency exchange rates used as of the end of 1Q2024 were used as of the end of 2Q2024: (in million Yen) 2024Q1 * ( ) : difference from GAAP base 2024Q2 - 5% 80,000 - 2% (- 4,269) (0) 70,000 66,813 65,805 - 5% 67,289 63,902 (- 2,669) 60,000 - 0% 50,307 50,00
Slide 29: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items (in million Yen) (unaudited) Other incomes Equity in losses of affiliated companies Exchange gain Gain on change Interest income 49 Other expenses in equity 378 705 733 55 211 Income Ordinary before Operating Income income taxes Income 12,707 12,919 12,308
Slide 30: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Mar-2024 change Jun-2024 Assets Cash & cash equivalents 154,203 - 9,921 144,282 Account receivable - 4,492 54,760 (less allowance for doubtful accounts) 59,252 Marketable securities & Securities investments 69,127 - 5,732 63,395 Software 18,021 + 411 18,432
Slide 31: FY2024 6months Financial Highlight
FY2024 6months Financial Highlight (January ~ June, 2024)
Slide 32: Consolidated Results (6 months)
Consolidated Results (6 months) (in million Yen) (Progress vs. last (Progress vs. 6 months year’s annual YoY current year’s ended Jun 30, 2023（1-2Q） result) 2024（1-2Q） growth annual forecast) Net sales 119,536 (48%) 134,534 + 13% (50%) Total Operating expenses 101,347 110,098 + 9% Operating income 1
Slide 33: Net Sales Growth by Region
Net Sales Growth by Region (unaudited) (in million Yen) 2023Q1-Q2 50,000 + 3% 2024Q1-Q2 45,000 41,603 42,657 40,000 + 26% + 6% 35,000 + 22% 34,028 29,288 28,561 30,000 27,511 26,968 25,000 23,453 20,000 15,000 10,000 5,000 0 Japan Americas Europe APAC, MEA 33
Slide 34: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region (in million Yen) If currency exchange rates used for 2023（Q1-Q2） were used for 2024（Q1-Q2）: (unaudited) + 3% * ( ) : difference from GAAP base 2023Q1-Q2 50,000 (0) 2024Q1-Q2 45,000 41,603 42,657 40,000 - 6% + 14% + 8% (- 3,473) (- 3,313) 35,000 (- 3,266) 30,714 30,000 27,5
Slide 35: Pre-GAAP (Revenue before adjusting Deferred revenue)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) - 0% 2023Q1-Q2 50,000 43,748 43,722 2024Q1-Q2 45,000 + 24% 40,000 + 24% 35,661 35,000 + 11% 29,873 30,000 28,870 25,494 24,181 25,000 22,903 20,000 15,000 10,000 5,000 0 Japan Americas Europe APAC, MEA
Slide 36: Pre-GAAP (constant currency)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (unaudited) If currency exchange rates used for 2023(Q1-Q2) were used for 2024(Q1-Q2): - 0% 50,000 43,748 43,722 2023Q1-Q2 45,000 2024Q1-Q2 40,000 + 12% + 10% 35,000 32,205 - 1% 30,000 28,870 26,484 24,181 25,000 22,903 22,659 20,0
Slide 37: FY2024 Cost (6 months) YoY Growth
(in million Yen) FY2024 Cost (6 months) YoY Growth (unaudited) 120,000 Goods / Software Salary & Benefit + 13% Amortization & Capitalization 110,000 6,208 Stock options / Office Overhead - 1% 100,000 4,726 Acquisition Related Costs 3,739 3,650 Selling & Marketing 10,090 90,000 Outside Service - 5% 9
Slide 38: Thank You
Thank You Copyright © 2024 Trend Micro Incorporated. All rights reserved.
Slide 39: Quarterly Chart (1)
Appendix (unaudited) Quarterly Chart (1) (in million Yen) FY2023 FY2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 N e t s ale s 58,704 60,831 64,189 64,965 65,931 68,603 Co s t o f s ale s 14,395 15,107 15,931 18,226 16,015 16,492 O pe r at in g e x pe n s e s 34,759 37,084 36,832 43,749 37,788 39,802 O pe r at in g
Slide 40: Quarterly Chart (2)
Appendix (unaudited) Quarterly Chart (2) (in million Yen) FY2023 FY2024 （ S ale s by r e g io n ） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 J apan 20,914 20,689 20,551 20,846 21,361 21,295 A m e r ic as 13,446 14,065 15,389 14,742 14,388 14,899 Eu r o pe 11,012 12,440 13,359 13,831 13,679 14,882 A P A C, Middle Eas t