Slide 1: Trend Micro FY2015.2Q Results
Trend Micro FY2015.2Q Results Mahendra Negi CFO, Representative Director August 12, 2015 Copyright © 2015 Trend Micro Incorporated. All rights reserved. 1
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: FY2015. 2Q Financial Highlight
FY2015. 2Q Financial Highlight （Second quarter ended June 30, 2015）
Slide 4: Q2 Consolidated Results
Q2 Consolidated Results (in million Yen) Three months YoY ended Jun 30, 2Q2014 2Q2015 growth Net sales 27,807 30,774 + 11% Cost of sales 4,682 5,205 + 11% Operating expenses 16,005 17,745 + 11% Operating income (Margin) 7,119 （ 26%） 7,824 （25%） + 10% Ordinary income 7,748 8,076 + 4% Net income 4,726
Slide 5: Progress (6 months)
Progress （6 months） (in million Yen) Revenue Operating Income 140,000 40,000 (Forecast) (Forecast) 123,100 35,000 34,200 120,000 33,652 115,205 30,000 100,000 83,941 25,000 24,630 80,000 (Progress of Forecast: 45%) (Progress of Forecast: 49%) 20,000 60,000 60,668 55,325 15,494 16,056 15,000 (Progres
Slide 6: Q2 USD based Results (Non-GAAP)
Q2 USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Jun 30, 2Q2014 2Q2015 YoY change Net sales 272,199 253,290 - 7% Cost of sales 45,838 42,841 - 7% Operating expenses 156,675 146,050 - 7% Operating income 69,686 64,397 - 8% Ordinary income 75,850 66,473 - 12% Net Income
Slide 7: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 14,000 13,000 12,931 + 6% 12,232 2Q2014 12,000 2Q2015 11,000 10,000 + 25% 9,000 8,000 7,431 + 5% 7,000 5,939 6,000 5,594 5,848 + 15% 5,000 3,785 4,000 3,302 3,000 + 5% 2,000 1,000 739 779 0 Japan North America Europe Asia Pacific Latin America
Slide 8: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) If currency exchange rates used for 2Q2014 were used for 2Q2015: (unaudited) 14,000 13,000 12,931 + 6% * ( ) : difference from GAAP base 12,232 (0) 12,000 2Q2014 11,000 2Q2015 10,000 + 5% + 9% 9,000 (-1,179) (+250) 8,000 7,000 5,939 6,252 5,594 6,098 + 8%
Slide 9: Decomposition of Revenue (vs. last year)
Decomposition of Revenue (vs. last year） (unaudited) Exchange impact Latin America + 1,077M Asia Pacific North America + 266M + 106M 2015Ｑ2 Europe + 312M + 504M Net Japan sales + 699M 30,774M 2014Ｑ2 Net sales 27,807M (Non-GAAP)
Slide 10: Constant currency Revenue growth
20 -5% 0% 5% 10% 15% 20% (YoY) 07 2 0 Q1 07 2 0 Q2 same period 07 2 0 Q3 07 2 0 Q4 08 2 0 Q1 08 2 0 Q2 08 2 0 Q3 08 2 0 Q4 09 2 0 Q1 09 2 0 Q2 09 2 0 Q3 09 2 0 Q4 10 2 0 Q1 10 2 0 Q2 10 2 0 Q3 10 2 0 Q4 11 2 0 Q1 11 2 0 Q2 11 2 0 Q3 11 2 0 Q4 12 2 0 Q1 12 2 0 Q2 12 2 0 Q3 12 2 0 Q4 13 2 0 Q1 13 2 0
Slide 11: Sales by Segment
(in million Yen) Sales by Segment (unaudited) 14,000 13,000 + 9% Growth rate (YoY) 12,000 Consumer + 8% 11,000 All Enterprise + 12% 10,000 6,662 9,000 8,000 7,000 2,493 + 13% 6,000 336 - 11% 5,000 + 2% 4,000 + 6% 5,511 905 - 2% 3,000 6,268 4,937 + 32% 2,000 2,880 + 21% 16 - 16% 1,000 0 762 + 6% Japa
Slide 12: "Cloud related" Gross sales
“Cloud related” Gross sales JPY'M Gross Revenue 6,000 + 52% YoY 5,000 4,000 3,000 2,000 1,000 - 2011 Q12011 Q22011 Q32011 Q42012 Q12012 Q22012 Q32012 Q42013 Q12013 Q22013 Q32013 Q42014 Q12014 Q22014 Q32014 Q42015 Q12015 Q2 “Notice” As above numbers are just for internal use, they may be subject to s
Slide 13: % share by region
% share by region 2Q2014 2Q2015 27,807 million Yen 30,774 million Yen Latin Latin Asia America Asia America Pacific Pacific 3% 3% 12% 12% Europe Japan Europe Japan 20% 44% 19% 42% North North America America 21% 24%
Slide 14: For reference: Pre-GAAP (Revenue before adjusting Deferred revenue)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) 13,832 + 8% 2Q2014 12,866 2Q2015 + 20% 6,936 5,849 + 13% 5,760 + 17% 5,159 4,302 3,687 + 13% 821 928 Japan North America Europe Asia Pacific Latin America “Notice” (Non-GAAP) Pre-GAAP means Revenue befo
Slide 15: For reference: 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 2Q2014 were used for 2Q2015: (unaudited) 13,832 + 8% 2Q2014 12,866 2Q2015 + 1% + 17% 5,760 5,817 6,010 5,159 + 10% 3,687 4,051 + 22% 821 1,003 Japan North America Europe Asia Pac
Slide 16: Net sales & Pre-GAAP growth trend
Net sales & Pre-GAAP growth trend (on a constant currency basis) 12% 11% Net Sales 10% 9% 8% Pre-GAAP 8% 7% 6% 4% 4% 4% 2% 0% Total Enterprise Consumer • Each growth rate shown above is based on applying to each quarter the same currency rate as the previous year for the same period 16
Slide 17: Deferred Revenue
Deferred Revenue (in million Yen) (unaudited) 106,000 102,000 * Total of current and long term 100,071 98,693 98,108 98,000 94,631 94,396 94,973 94,000 92,859 88,904 88,360 90,000 86,000 82,000 78,000 74,000 70,000 66,000 62,000 58,000 54,000 50,000 Jun-'13 Sep-'13 Dec-'13 Mar-'14 Jun-'14 Sep-'14 De
Slide 18: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) 60,000 54,467 + 1% * Total of current and long term 55,000 53,669 50,000 Mar-15 45,000 Jun-15 40,000 35,000 30,000 - 1% 25,000 17,973 17,877 + 2% 20,000 + 7% 15,000 15,327 15,704 10,325 + 12% 10,000 9,628 5,000 1,510 1,696 0 Japan North America
Slide 19: Deferred Revenue by Region
Deferred Revenue by Region If currency exchange rates used as of the end of 1Q2015 were used as of the end of 2Q2015: (in million Yen) (unaudited) 60,000 53,669 54,467 + 1% * ( ) : difference from GAAP base 55,000 (0) Mar-15 50,000 * Total of current and long term Jun-15 45,000 40,000 35,000 - 3% -
Slide 20: Cost
Cost (unaudited) (in million Yen) Stock Options / Acquisition Related Costs Salary & Benefit Office Overhead Outside Service 24,000 Administration Goods / Software Amortization Selling & Marketing & Capitalization 811 486 421 22,000 Goods / Software Amortization & Capitalization 305 2,813 Selling &
Slide 21: Pre-GAAP vs Total Costs
Pre-GAAPⅴs Total Costs (in million Yen) (unaudited) Pre-GAAP Total Costs Pre-GAAP Margin 36,000 40% 34,000 37% 32,000 35% 30,000 32% 30% 28,000 28% 27% 27% 32,656 30% 26,000 29,567 24,000 31,624 31,848 22,000 28,295 27,298 25% 20,000 18,000 20% 16,000 14,000 22,950 22,243 22,223 15% 12,000 20,688 10
Slide 22: Cash flows
Cash flows (unaudited) (in million Yen) 2Q2014 2Q2015 YoY growth Cash flows from operating activities 10,759 10,653 - 1% Cash flows from investing activities - 14,003 - 17,130 － Cash flows from financing activities - 3,259 1,052 － Effect of exchange rate changes - 274 962 － on cash and cash equivale
Slide 23: Headcount
Headcount Mar - 2015 Jun - 2015 5,226 5,227 Admin, Admin, Business Process Business Process Sales, Marketing Sales, Marketing 797 811 Technical Technical Support 1,649 Support 1,679 1,096 1,044 Research, Research, Development +1 Development 1,684 1,693 (+ 0%) Latin 68 Latin 71 EMEA EMEA 602 603 Japa
Slide 24: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items Equity in gains of (unaudited) affiliated companies Exchange loss Other income Gain on sales of Gain on reversal of marketable securities 3M Loss on disposal of fixed assets stock option 24M - 218M Other expense Interest income 164M - 64M - 23M 16M 366M Income Or
Slide 25: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Mar-2015 change Jun-2015 Assets Cash & cash equivalents 51,609 - 4,386 47,223 Account receivable (less allowance for doubtful accounts) 26,647 - 2,311 24,336 Marketable securities & Securities investments 138,226 + 18,312 156,538 Liabilities Deferred revenu
Slide 26: Q2 Highlights
Q2 Highlights • Strong growth of cloud security products continues • Enterprise Pre-GAAP growth double digit in constant currency 26
Slide 27: Q2 Lowlights
Q2 Lowlights • Outlook for consumer PC related business uncertain • Pricing pressure on traditional products continues 27
Slide 28: FY2015 6 months Financial Highlight
FY2015 6 months Financial Highlight （January ～ June, 2015）
Slide 29: Consolidated Results (6 months)
Consolidated Results (6 months) (in million Yen) 6 months (Progress vs. (Progress vs. last year’s YoY current year’s ended Jun 30, 2014(Q1-Q2) annual result) 2015(Q1-Q2) growth annual forecast) Net sales 55,325 (48%) 60,668 + 10% (49%) Cost of sales 9,304 10,456 + 12% Operating expenses 29,964 34,71
Slide 30: Net Sales Growth by Region
(in million Yen) Net Sales Growth by Region (unaudited) 30,000 + 7% 28,000 FY2014 Q1-Q2 25,851 26,000 FY2015 Q1-Q2 24,166 24,000 22,000 20,000 + 20% 18,000 + 3% 16,000 14,325 14,000 12,000 11,938 11,227 11,588 + 12% 10,000 8,000 7,407 6,591 + 7% 6,000 4,000 2,000 1,401 1,495 0 Japan North America Eu
Slide 31: Net Sales Growth by Region
(in million Yen) Net Sales Growth by Region If currency exchange rates used for 2014（Q1-Q2） were used for 2015（Q1-Q2）: (unaudited) 30,000 + 7% 28,000 FY2014 Q1-Q2 25,851 (0) 26,000 FY2015 Q1-Q2 24,000 24,166 * ( ) : difference from GAAP base 22,000 20,000 + 2% +8% 18,000 (-2,121) (+536) 16,000 + 6%
Slide 32: For reference: Pre-GAAP (Revenue before adjusting Deferred revenue)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) 28,223 + 2% FY2014 Q1-Q2 27,732 FY2015 Q1-Q2 + 23% 14,272 + 14% 11,637 11,480 + 13% 10,034 7,870 6,961 + 9% 1,497 1,626 Japan North America Europe Asia Pacific Latin America “Notice” (Non-GAAP) Pre-GAAP
Slide 33: For reference: Pre-GAAP (Revenue before adjusting Deferred revenue)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) If currency exchange rates used for 2014(Q1-Q2) were used for 2015(Q1-Q2): + 2% 27,732 28,223 FY2014 Q1-Q2 FY2015 Q1-Q2 + 4% + 19% 12,132 11,988 11,637 + 7% 10,034 7,426 + 15% 6,961 1,728 1,497 Japan North America Europe Asia Pacif
Slide 34: FY2015 Cost (6 months)
FY2015 Cost (6 months) (unaudited) (in million Yen) YoY Growth 50,000 Goods / Software & Capitalization － 45,000 908 Selling & Marketing + 10% 6,254 40,000 35,000 5,678 Administration + 16% 7,137 30,000 6,157 3,940 Outside service + 14% 25,000 3,458 3,025 2,698 Office overhead + 12% 20,000 15,000 Sa
Slide 35: Projection for FY2015 Annual (Unchanged)
Projection for FY2015 Annual (Unchanged) (unaudited) For FY2015 Expected (in million Yen) Jan - Dec, 2015 YoY growth Net Sales 123,100 + 7% Operating Income 34,200 + 2% Ordinary Income 36,600 + 2% Net Income 22,600 + 1% (Estimated annual exchange rate 1USD=118 yen, 1EUR=134 yen) “Reference” actual e
Slide 36: Thank You
Thank You
Slide 37: Appendix: Quarterly Chart (1)
Appendix (unaudited) Quarterly Chart (1) (in million Yen) FY2014 FY2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ｎｅｔ s ale s 27,517 27,807 28,615 31,264 29,893 30,774 Co s t o f s ale s 4,622 4,682 5,272 5,853 5,250 5,205 O pe r at in g e x pe n s e s 13,958 16,005 14,768 16,390 16,972 17,745 O pe r at in g in c o m
Slide 38: Appendix: Quarterly Chart (2)
Appendix (unaudited) Quarterly Chart (2) (in million Yen) FY2014 FY2015 （ S ale s by r e g io n ） Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 J apan 11,934 12,232 13,058 13,511 12,920 12,931 US 5,998 5,939 6,034 6,975 6,894 7,431 Eu r o pe 5,632 5,594 5,474 6,076 5,740 5,848 A s ia P ac ific 3,288 3,302 3,303 3,864 3,6