Slide 1: Trend Micro FY2021.3Q Results
Trend Micro FY2021.3Q Results Mahendra Negi CFO, Representative Director November 11, 2021
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: FY2021. 3Q Financial Highlight
FY2021. 3Q Financial Highlight （Third quarter ended September 30, 2021） 3 3
Slide 4: Q3 Consolidated Results
Q3 Consolidated Results (in million Yen) Three months YoY ended Sep 30, 3Q2020 3Q2021 growth Net sales 43,217 47,851 + 11% Total Operating expenses 35,728 35,344 - 1% Operating income (Margin) 7,488 （ 17%） 12,507 （26%） + 67% Ordinary income 7,155 12,680 + 77% Net income 3,855 9,166 + 138% attributab
Slide 5: Comparison without One-time correction of miscalculation in booking of Software assets in 20Q3
Comparison without One-time correction of miscalculation in booking of Software assets in 20Q3 ※ Growth rate based on Restated operating income, ordinary income, and Net income without One-time impact of this error in 20Q3 Three months YoY ended Sep 30, 3Q2020 ※ 3Q2021 growth Net sales 43,217 47,851
Slide 6: Progress (9 months)
Progress （9 months） (in million Yen) Revenue (Forecast) Operating Income (Forecast) 200,000 45,000 183,400 40,900 180,000 40,000 (Progress of 174,061 Forecast: 85%) 34,622 39,464 160,000 (Progress of 35,000 Forecast: 76%) 139,180 140,000 30,000 127,029 27,535 120,000 (Progress of 25,000 FY2020Act: 7
Slide 7: Q3 USD based Results (Non-GAAP)
Q3 USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Jun 30, 3Q2020 3Q2021 YoY change Net sales 406,864 434,579 + 7% Cost of sales 121,836 96,322 - 21% Operating expenses 214,524 224,669 + 5% Operating income 70,503 113,587 + 61% Ordinary income 67,364 115,165 + 71% Net I
Slide 8: Net Sales Growth by Region
Net Sales Growth by Region (unaudited) (in million Yen) + 9% 19,402 2020Q3 20,000 2021Q3 18,000 17,852 16,000 14,000 + 9% + 11% + 13% 12,000 9,371 10,000 8,612 8,861 8,603 8,000 7,736 7,817 6,000 + 33% 4,000 1,603 2,000 1,207 0 Japan North America Europe APAC, Middle East and Latin America Africa
Slide 9: Net Sales Growth by Region
Net Sales Growth by Region If currency exchange rates used for 3Q2020 were used for 3Q2021: (unaudited) (in million Yen) 19,402 + 9% 2020Q3 20,000 (0) * ( ) : difference from GAAP base 2021Q3 17,852 18,000 16,000 + 5% + 6% + 7% 14,000 (- 339) (- 380) (- 502) 12,000 10,000 9,031 8,603 8,232 8,358 8,0
Slide 10: Decomposition of Revenue (vs. last year)
Decomposition of Revenue (vs. last year） (in million Yen) Latin America (unaudited) Exchange impact North America Europe 1,369 APAC, MEA 250 428 Japan 496 541 1,549 2021Ｑ3 Net sales 2020Ｑ3 Net 47,851 sales 43,217 (Non-GAAP)
Slide 11: Constant currency Revenue growth
Constant currency Revenue growth (YoY) (unaudited) 12% 10% 8% 6% 4% 2% 0% 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 (Non-GAAP) • Each growth rate shown above is based on applying to each quarter the same currency rate as the previous yea
Slide 12: Sales by Segment
(in million Yen) Sales by Segment (unaudited) 20,000 Growth rate (YoY) 18,000 + 16% 16,000 Consumer + 13% 9,696 Enterprise + 10% 14,000 12,000 10,000 1,531 + 3% - 0% 8,000 + 2% 169 893 + 3% 6,000 + 10% + 12% + 15% 9,705 4,000 7,840 8,443 7,967 - 14% 2,000 2 + 33% 1,601 0 Japan North America Europe A
Slide 13: Definition of terms in new metrics
Definition of terms in new metrics - Perpetual license Traditional license agreement that "Requires" perpetual software license fees in the first year of the contract, and support fees in following years Example: *1 Year New contract＄240 (Perpetual Software license＄120 + 1 Year Support fees＄120) *3
Slide 14: Active Customer Count
Active Customer Count “Notice” As these numbers are just for internal use, they may be subject to some changes hereafter. 14
Slide 15: SaaS Deployed Instance Growth
SaaS Deployed Instance Growth “Notice” As these numbers are just for internal use, they may be subject to some changes hereafter. 15
Slide 16: Enterprise Net Revenue & Subscription ARR
Enterprise Net Revenue & Subscription ARR (Non-GAAP) USD Enterprise Net Revenue Subscription ARR (％: YoY Growth) (unaudited) 600M +32% +31% 508M +28% 477M 500M +28% 446M +27% 420M +26% +27% 385M 400M +27% 365M +25% 347M +25% 329M +25% 304M 290M 300M 274M 200M +4% +3% +12% +10% +5% +0% +2% +5% +7% +5
Slide 17: % share by region
% share by region 3Q2020 3Q2021 43,217 million Yen 47,851 million Yen Latin Latin America, America, 3% 3% APAC,MEA, APAC,MEA, 18% 19% Japan, Japan, 41% 41% Europe, Europe, 18% 18% North North America, America, 20% 20%
Slide 18: Pre-GAAP (Revenue before adjusting Deferred revenue)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) + 2% 22,000 20,000 2020Q3 18,311 18,664 2021Q3 18,000 16,000 + 21% + 22% + 27% 14,000 12,000 10,301 10,000 8,716 7,746 8,104 8,000 7,216 6,374 + 45% 6,000 4,000 1,625 2,000 1,121 0 Japan North America E
Slide 19: Pre-GAAP (Revenue before adjusting Deferred revenue)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) If currency exchange rates used for 3Q2020 were used for 3Q2021: (unaudited) 22,000 + 2% 2020Q3 20,000 18,311 18,664 18,000 2021Q3 16,000 + 16% + 16% + 20% 14,000 12,000 10,000 9,742 8,388 8,104 8,000 7,216 7,414 6
Slide 20: Net sales & Pre-GAAP growth trend
Net sales & Pre-GAAP growth trend (unaudited) (on a constant currency basis) 18% Net Sales 16% 16% Pre-GAAP 14% 12% 12% 11% 10% 8% 8% 6% 6% 4% 2% 0% -1% -2% Total Enterprise Consumer (Non-GAAP) 20
Slide 21: Deferred Revenue
(in million Yen) Deferred Revenue 145,000 143,361 143,238 142,241 * Total of current and long term 140,000 139,031 135,000 131,272 131,433 129,246 129,867 130,000 125,808 125,000 122,994 120,000 115,000 110,000 Jun-'19 Sep-'19 Dec-'19 Mar-'20 Jun-'20 Sep-'20 Dec-'20 Mar-'21 Jun-'21 Sep-'21
Slide 22: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) * Total of current and long term 80,000 2021Q2 - 1% 2021Q3 70,000 66,887 66,229 60,000 50,000 - 3% - 4% + 5% 40,000 30,000 27,565 26,534 26,462 27,701 18,301 17,772 - 3% 20,000 10,000 4,003 4,144 0 Japan North America Europe APAC, Middle East L
Slide 23: Deferred Revenue by Region
Deferred Revenue by Region If currency exchange rates used as of the end of 2Q2021 were used as of the end of 3Q2021: (in million Yen) (unaudited) - 1% * ( ) : difference from GAAP base 80,000 2021Q2 (0) * Total of current and long term 2021Q3 70,000 66,887 66,229 60,000 50,000 - 4% - 2% + 6% (- 206
Slide 24: Cost
(in million Yen) Salary & Benefit Cost Office Overhead (unaudited) Outside Service Cloud (Non-GAAP) Administration Selling & Marketing 39,000 Stock Options / Acquisiton Related Costs Goods/Software Amortization & Capitalization Special One-time Software Correction Goods / Software Amortization & Cap
Slide 25: Pre-GAAP vs Total Costs
(in million Yen) Pre-GAAPⅴs Total Costs (unaudited) (Non-GAAP) Pre-GAAP Total Costs Pre-GAAP Margin 60,000 40% 55,125 50,000 35% 36% 47,891 40,000 43,179 44,218 47,054 30% 41,128 26% 27% 25% 30,000 23% 25% 35,728 35,102 36,845 35,344 20,000 31,758 32,367 20% 10,000 15% 13% 0 10% 2020Q2 2020Q3 2020Q4
Slide 26: Cash flows
Cash flows (unaudited) (in million Yen) 3Q2020 3Q2021 YoY growth Cash flows from operating activities 12,058 10,764 - 11% Cash flows from investing activities - 3,477 - 4,634 + 33% Cash flows from financing activities - 4,367 2,133 － Effect of exchange rate changes - 46 - 272 + 486% on cash and cash
Slide 27: Headcount
Headcount Jun - 2021 Sep - 2021 6,972 6,995 Admin, Business Admin, Business Process, Process, 845 797 Sales, Marketing, Technical Sales, Marketing, Technical 2,254 Support, 2,299 Support, 1,550 1,573 Research, Research, Development, Development, 2,323 + 23 2,326 (+ 0%) Latin, Latin, Europe, 136 Euro
Slide 28: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items (in million Yen) (unaudited) Other income Litigation Settlement Operations consignment fee Other expenses Interest income Equity in losses of affiliated companies Exchange gain Loss on retirement of noncurrent assets 94 42 8 92 27 23 4 175 Income before Operating
Slide 29: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Jun-2021 change Sep-2021 Assets Cash & cash equivalents 174,080 + 4,763 178,843 Account receivable (less allowance for doubtful accounts) 37,422 + 1,027 38,449 Marketable securities & Securities investments 86,431 + 3,112 89,543 Goodwill 3,501 - 328 3,173 L
Slide 30: Q3 Highlights
Q3 Highlights • Highest ever revenues and operating income • Subscription ARR cross 500M USD mark with growth accelerating • All regions outside Japan show strong double digit Pre-GAAP growth 30
Slide 31: Q3 Lowlights
Q3 Lowlights • Impact of state of emergency on Japan Pre-GAAP growth • Decline in Consumer Pre-GAAP revenues 31
Slide 32: FY2021 9 months Financial Highlight
FY2021 9 months Financial Highlight （January ～ September, 2021）
Slide 33: Consolidated Results (9 months)
Consolidated Results (9 months) (in million Yen) Progress vs. 9 months Progress vs. last year’s annual YoY Current year’s ended Sep 30, 2020（1-3Q） result 2021（1-3Q） growth annual forecast as of Feb. in 2021 Net sales 127,029 (73%) 139,180 + 10% (76%) Total Operating expenses 99,493 104,558 + 5% Oper
Slide 34: Net Sales Growth by Region
Net Sales Growth by Region (unaudited) (in million Yen) + 8% 2020Q1-Q3 60,000 56,936 2021Q1-Q3 52,622 50,000 40,000 + 2% + 14% + 15% 30,000 26,302 26,816 25,173 25,825 22,157 22,413 20,000 + 25% 10,000 4,428 3,532 0 Japan North America Europe APAC, Middle East and Latin America Africa 34
Slide 35: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) If currency exchange rates used for 2020（Q1-Q3） were used for 2021（Q1-Q3）: (unaudited) 56,936 + 8% * ( ) : difference from GAAP base 2020Q1-Q3 60,000 (0) 2021Q1-Q3 52,622 50,000 + 1% + 6% + 7% 40,000 (- 295) (- 1,729) (- 1,792) 30,000 26,302 26,521 23,443
Slide 36: Pre-GAAP (Revenue before adjusting Deferred revenue)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) + 2% 70,000 2020Q1-Q3 60,000 56,644 58,059 2021Q1-Q3 50,000 + 8% + 22% + 23% 40,000 30,000 28,008 23,170 24,943 23,462 22,679 + 33% 20,000 19,295 10,000 4,690 3,535 0 Japan North America Europe APAC, Mi
Slide 37: Pre-GAAP (Revenue before adjusting Deferred revenue)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) If currency exchange rates used for 2020(Q1-Q3) were used for 2021(Q1-Q3): 70,000 + 2% 2020Q1-Q3 60,000 56,644 58,059 2021Q1-Q3 50,000 + 6% + 13% + 15% 40,000 30,000 24,581 25,981 23,170 21,804 22,679 1
Slide 38: FY2021 Cost (9 months) YoY Growth
(in million Yen) FY2021 Cost (9 months) YoY Growth (unaudited) Goods / Software 110,000 Amortization & Capitalization Salary & Benefit Special One-time Software Correction + 12% (※Only for prior FY until FY19) Stock options / 1,832 Acquisition Related 100,000 4,649 + 5% 3,388 Costs Office Overhead 3
Slide 39: Extraordinary income planned to book in 2021Q4
Extraordinary income planned to book in 2021Q4 ・As announced on Oct. 25, 2021, transferring the shares of AsiaInfo Security Limited, which have been disclosed in a quarterly report since 2019Q3, were completed in Oct. 2021 due to the completion of the receipt of the final payment. Approximately 7.9
Slide 40: Projection for FY2021 Annual (Changed as of Oct. 25)
Projection for FY2021 Annual (Changed as of Oct. 25) (in million Yen) For FY2021 Expected Jan - Dec, 2021 YoY growth Net Sales 183,400 + 5% Operating Income 40,900 + 4% Ordinary Income 41,200 + 3% Net Income 34,100 + 27% attributable to owners of the parent (before 28,800) (before + 7%) (Estimated a
Slide 41: Thank You
Thank You 41
Slide 42: Appendix: Quarterly Chart (1)
Appendix (unaudited) Quarterly Chart (1) (in million Yen) FY2020 FY2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 N et s al es 42,125 41,686 43,217 47,031 44,594 46,734 47,851 Cos t of s a l es 8,294 7,695 12,941 9,235 9,875 10,209 10,606 Op e ra ti n g e x p e n s e s 23,712 24,063 22,786 25,867 22,492 26,635 24,738
Slide 43: Appendix: Quarterly Chart (2)
Appendix (unaudited) Quarterly Chart (2) (in million Yen) FY2020 FY2021 （ Sa l e s b y re g i on ） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 J apan 17,392 17,377 17,852 19,322 18,731 18,803 19,402 N orth A m e ri c a 8,877 8,821 8,603 9,004 8,298 9,145 9,371 E u rop e 7,427 6,994 7,736 8,686 8,034 8,525 8,612 A PA C