Slide 1: Trend Micro FY2024 Q3 Results
Trend Micro FY2024 Q3 Results Mahendra Negi CFO, Representative Director November 12, 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.Q3 Financial Highlight
FY2024.Q3 Financial Highlight (Third quarter ended Sep 30, 2024)
Slide 4: Q3 Consolidated Results
(unaudited) Q3 Consolidated Results (in million Yen) Three months YoY ended Sep 30, 3Q2023 3Q2024 growth Net sales 64,189 68,124 + 6% Total Operating expenses 52,764 53,322 + 1% Operating income (Margin) 11,424 (18%) 14,801 (22%) + 30% Ordinary income 13,486 11,959 - 11% Net income 950 8,523 + 797%
Slide 5: Operating income adjusted for stock option related costs
(Reference) Comparison of Operating income after adjusting for stock option related costs due to higher stock price Due to the significant rise in our stock price from July to September in 2024 (from 6,531 yen at the end of 24Q2 to 8,486 yen at the end of 24Q3, Up 1,955 yen), stock option related co
Slide 6: Progress (9 months)
Progress （9 months） (in million Yen) Revenue Operating Income 300,000 60,000 (Forecast) 271,000 (Forecast) 52,900 250,000 50,000 In case of excluding the stock (Progress of option cost impact of the Q3 Forecast: 75%) 248,691 stock price spike: (Progress of 202,658 (Progress of Forecast: 77%) 40,639
Slide 7: 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 65,108 61,733 61,975 22% 50,000 56,294 53,803 20% 53,322 40,000 52,192 52,764 19% 18% 18% 18% 30,000 18% 16% 20,000 15% 14%
Slide 8: 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. 8
Slide 9: Cash flows
Cash flows (unaudited) (in million Yen) (Main reasons for Operating CF decreasing from last year) Increase in Payment for income tax: -4.1Bn JPY Decrease in accounts payable, other & accrued expenses: -3.0Bn JPY Decrease in Net income before taxes: -1.5Bn JPY 3Q2023 3Q2024 YoY growth Cash flows from
Slide 10: Headcount
Headcount Jun - 2024 Sep - 2024 7,053 6,936 Admin, Business Admin, Business Process, Process, 754 743 Technical Sales, Marketing, Technical Sales, Marketing, Support, 2,384 Support, 2,357 1,580 1,522 Research, Research, Development, Development, 2,335 - 117 2,314 (- 2%) Japan, Japan, 854 817 Europe,
Slide 11: Cost
(in million Yen) Salary & Benefit Office Overhead Cost (unaudited) (Non-GAAP) Outside Service Cloud 70,000 Administration Selling & Marketing ・ Of +0.5 Bn JPY YoY increase, estimated impact of Stock Options / Acquisiton Related Costs Goods/Software Amortization & Capitalization yen depreciation is a
Slide 12: Q3 Highlights
Q3 Highlights • Highest ever quarterly operating profits • Double digit growth of subscription business continues • Operating margin improvement continues 12
Slide 13: FY2024 Guidance
FY2024 Guidance
Slide 14: 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 15: Notice of IR Day 2024
Notice of “IR Day 2024” ・Date: November 20th, 2024 (Tokyo local time) ・Time: 10:00 AM ～ 11:30 AM (90 minutes including Q&A session) ・Event Format： Online webinar by Zoom *Simultaneous Japanese / English interpretation available ・Participation: Pre-registration on the website ・Participated Speakers：
Slide 16: Appendix for FY2024.Q3
Appendix for FY2024.Q3
Slide 17: Q3 USD based Results (Non-GAAP)
Q3 USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Sep 30, 3Q2023 3Q2024 YoY change Net sales 443,297 456,076 + 3% Cost of sales 110,026 106,898 - 3% Operating expenses 254,368 250,084 - 2% Operating income 78,901 99,093 + 26% Ordinary income 93,140 80,064 - 14% Net Inc
Slide 18: Net Sales Growth by Region
(in million Yen) Net Sales Growth by Region (unaudited) 2023Q3 25,000 + 4% 2024Q3 21,373 20,551 + 17% 20,000 - 7% + 12% 17,460 15,389 14,340 14,949 14,888 15,000 13,359 10,000 5,000 0 Japan Americas Europe APAC, MEA
Slide 19: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region (unaudited) (in million Yen) If currency exchange rates used for 3Q2023 were used for 3Q2024: 2023Q3 25,000 + 4% 2024Q3 * ( ) : difference from GAAP base 21,373 (0) 20,551 + 13% 20,000 + 7% (- 667) - 8% (- 210) (- 601) 16,793 15,389 14,129 14,347 14,888 15,000 13,359 10,00
Slide 20: Decomposition of Revenue (vs. last year)
Decomposition of Revenue (vs. last year） (in million Yen) (unaudited) Exchange impact Japan Americas Europe 821 1,480 APAC, MEA 1,260 987 1,904 2024Ｑ3 Net sales 2023Ｑ3 Net 68,124 sales 64,189 (Non-GAAP)
Slide 21: 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 2024Q3 (Non-GAAP) • Each growth rate shown above is based on
Slide 22: Net sales by Segment
(in million Yen) Net sales by Segment (unaudited) Growth rate (YoY) 25,000 Consumer + 1% Enterprise + 7% 20,000 1,500 + 9% 10,139 + 0% 15,000 194 + 2% + 1% 1,960 10,000 14,755 + 12% 15,960 + 18% 11,234 + 8% 12,379 - 8% 5,000 0 Japan Americas Europe APAC, MEA “Notice” As Sales by Segment numbers are
Slide 23: % share by region
% share by region 3Q2023 3Q2024 64,189 million Yen 68,124 million Yen APAC,MEA 23% Japan APAC,MEA Japan 32% 26% 31% Europe 21% Europe Americas Americas 22% 21% 24%
Slide 24: Pre-GAAP (Revenue before adjusting Deferred revenue)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) 2023Q3 25,000 - 2% 2024Q3 20,421 + 8% 20,009 - 5% 20,000 + 4% 18,283 16,902 15,000 14,159 13,520 13,295 12,753 10,000 5,000 0 Japan Americas Europe APAC, MEA “Notice” Pre-GAAP means Revenue before adjus
Slide 25: Pre-GAAP (constant currency)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) If currency exchange rates used for 3Q2023 were used for 3Q2024: (in million Yen) (unaudited) 2023Q3 25,000 - 2% 2024Q3 20,421 20,009 + 6% 20,000 - 4% 17,941 + 2% 16,902 15,000 14,159 13,570 12,753 12,971 10,000 5,000 0 Japan Ameri
Slide 26: Net sales & Pre-GAAP growth trend
Net sales & Pre-GAAP growth trend (unaudited) (on a constant currency basis) Net Sales Pre-GAAP 5% 4% 2% 0% 0% Total Enterprise Consumer -7% (Non-GAAP) 26
Slide 27: Deferred Revenue
(in million Yen) Deferred Revenue (unaudited) ・Forex impact from the end of Q2 230,000 -13,417 217,014 218,013 211,532 210,000 203,061 202,356 200,337 195,225 192,914 190,000 185,061 184,807 170,000 150,000 130,000 0 110,000 Jun-'22 Sep-'22 Dec-'22 Mar-'23 Jun-'23 Sep-'23 Dec-'23 Mar-'24 Jun-'24 Sep
Slide 28: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) 2024Q2 2024Q3 - 8% 80,000 - 2% 70,000 68,171 65,805 64,440 62,824 60,000 - 11% 50,250 50,000 - 15% 44,491 40,000 33,785 28,581 30,000 20,000 10,000 0 Japan Americas Europe APAC, MEA (Non-GAAP)
Slide 29: Deferred Revenue by Region (constant currency)
Deferred Revenue by Region (unaudited) If currency exchange rates used as of the end of 2Q2024 were used as of the end of 3Q2024: (in million Yen) 2024Q2 * ( ) : difference from GAAP base 2024Q3 + 1% 80,000 - 2% (+ 6,090) (0) 70,000 68,171 68,915 65,805 64,440 - 4% (+ 3,600) 60,000 - 4% 50,250 50,00
Slide 30: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items (in million Yen) (unaudited) Other incomes Gain on sales of marketable securities Exchange loss Interest income 16 438 666 Equity in losses of 3,811 affiliated companies Other expenses Operating 147 5 Income Income Ordinary before Income income taxes 14,801 11,95
Slide 31: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Jun-2024 change Sep-2024 Assets Cash & cash equivalents 144,282 + 5,051 149,333 Account receivable - 7,023 47,737 (less allowance for doubtful accounts) 54,760 Marketable securities & Securities investments 63,395 - 11,547 51,848 Software 18,432 - 1,198 17,
Slide 32: FY2024 9months Financial Highlight
FY2024 9months Financial Highlight (January ~ Sep, 2024)
Slide 33: Consolidated Results (9 months)
Consolidated Results (9 months) (in million Yen) (Progress vs. last (Progress vs. 9 months year’s annual YoY current year’s ended Sep 30, 2023（1-3Q） result) 2024（1-3Q） growth annual forecast) Net sales 183,725 (74%) 202,658 + 10% (75%) Total Operating expenses 154,112 163,420 + 6% Operating income 2
Slide 34: Net Sales Growth by Region
Net Sales Growth by Region (unaudited) (in million Yen) + 3% 2023Q1-Q3 70,000 62,155 64,030 2024Q1-Q3 + 23% 60,000 + 2% + 18% 51,489 50,000 42,901 43,628 43,510 41,856 40,000 36,812 30,000 20,000 10,000 0 Japan Americas Europe APAC, MEA 34
Slide 35: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region (in million Yen) If currency exchange rates used for 2023（Q1-Q3） were used for 2024（Q1-Q3）: (unaudited) + 3% * ( ) : difference from GAAP base 2023Q1-Q3 70,000 62,155 64,030 (0) 2024Q1-Q3 60,000 + 14% - 7% + 8% (- 3,981) 50,000 (- 3,683) (- 3,868) 47,507 42,901 39,944 39,6
Slide 36: Pre-GAAP (Revenue before adjusting Deferred revenue)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) - 1% 2023Q1-Q3 70,000 64,169 63,731 2024Q1-Q3 + 18% 60,000 53,944 + 13% 50,000 45,772 43,394 + 9% 38,340 38,790 40,000 35,657 30,000 20,000 10,000 0 Japan Americas Europe APAC, MEA “Notice” Pre-GAAP mea
Slide 37: Pre-GAAP (constant currency)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (unaudited) If currency exchange rates used for 2023(Q1-Q3) were used for 2024(Q1-Q3): - 1% 2023Q1-Q3 70,000 64,169 63,731 2024Q1-Q3 60,000 + 10% + 4% 50,147 50,000 45,772 - 0% 40,000 38,340 40,054 35,657 35,630 30,000 20,000 10,00
Slide 38: FY2024 Cost (9 months) YoY Growth
(in million Yen) FY2024 Cost (9 months) YoY Growth (unaudited) 180,000 Goods / Software Salary & Benefit + 8% 170,000 Amortization & Capitalization 160,000 9,862 - 4% Stock options / Office Overhead 150,000 8,373 Acquisition Related 6,958 Costs 140,000 4,564 Selling & Marketing 15,340 Outside Servic
Slide 39: Thank You
Thank You Copyright © 2024 Trend Micro Incorporated. All rights reserved.
Slide 40: 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 68,124 Co s t o f s ale s 14,395 15,107 15,931 18,226 16,015 16,492 15,967 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 3
Slide 41: 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 21,373 A m e r ic as 13,446 14,065 15,389 14,742 14,388 14,899 14,340 Eu r o pe 11,012 12,440 13,359 13,831 13,679 14,882 14,949