Slide 1: Trend Micro FY2015.1Q Results
Trend Micro FY2015.1Q Results Mahendra Negi CFO, Representative Director May 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. 1Q Financial Highlight
FY2015. 1Q Financial Highlight （First quarter ended March 31, 2015） Copyright © 2015 Trend Micro Incorporated. All rights reserved.
Slide 4: Q1 Consolidated Results
Q1 Consolidated Results (in million Yen) Three months YoY ended Mar 31, 1Q2014 1Q2015 growth Net sales 27,517 29,893 + 9% Cost of sales 4,622 5,250 + 14% Operating expenses 13,958 16,972 + 22% Operating income (Margin) 8,937 （ 32%） 7,670 （26%） - 14% Ordinary income 9,686 8,494 - 12% Net income 6,038
Slide 5: Progress (3 months)
Progress （3 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 25,000 24,630 83,941 80,000 (Progress of Forecast: 22%) (Progress of Forecast: 24%) 20,000 60,000 16,056 55,325 15,000 29,893 40,000 10,000 8
Slide 6: Q1 USD based Results (Non-GAAP)
Q1 USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Mar 31, 1Q2014 1Q2015 YoY change Net sales 267,755 250,849 - 6% Cost of sales 44,975 44,062 - 2% Operating expenses 135,818 142,423 + 5% Operating income 86,961 64,363 - 26% Ordinary income 94,250 71,284 - 24% Net Incom
Slide 7: Net Sales Growth by Region
Net Sales Growth by Region (in million Yen) (unaudited) 14,000 13,000 12,920 + 8% 11,934 1Q2014 12,000 1Q2015 11,000 10,000 9,000 + 15% 8,000 6,894 + 2% 7,000 5,998 5,632 5,740 6,000 + 10% 5,000 3,621 4,000 3,288 3,000 + 8% 2,000 1,000 662 716 0 Japan North America Europe Asia Pacific Latin America
Slide 8: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region (in million Yen) If currency exchange rates used for 1Q2014 were used for 1Q2015: (unaudited) 14,000 13,000 12,920 + 8% * ( ) : difference from GAAP base 12,000 11,934 (0) 1Q2014 11,000 1Q2015 10,000 - 1% +7% 9,000 (-943) (+284) 8,000 7,000 6,025 5,998 5,951 5,632 + 4% 6,0
Slide 9: Decomposition of Revenue (vs. last year)
Decomposition of Revenue (vs. last year） (unaudited) Exchange impact Latin America North America Asia Pacific + 854M Europe + 124M + 66M - 47M 2015Ｑ1 Japan + 392M Net sales + 985M 29,893M 2014Ｑ1 Net sales 27,517M (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 Growth rate (YoY) 12,000 + 14% Consumer + 7% 11,000 All Enterprise + 10% 10,000 6,459 9,000 8,000 7,000 - 3% 6,000 2,291 323 - 16% 5,000 + 3% 4,000 3,000 6,461 5,417 + 3% 901 - 2% 4,602 + 27% 2,000 1,000 2,719 + 15% 30 + 30% 0 685 + 7% Japa
Slide 12: “Cloud related” Gross sales
“Cloud related” Gross sales Gross Revenue JPY'M 6,000 + 71% YoY 5,000 4,000 3,000 2,000 1,000 - 2011 Q1 2011 Q2 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 “Notice” As above numbers are just for internal use, they may be sub
Slide 13: % share by region
% share by region 1Q2014 1Q2015 27,517 million Yen 29,893 million Yen Latin Latin Asia America Asia America Pacific Pacific 2% 2% 12% 12% Europe Japan Europe Japan 20% 43% 19% 43% North North America America 22% 23%
Slide 14: Pre-GAAP (Revenue before adjusting Deferred revenue)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) (unaudited) 14,865 14,391 - 3% 1Q2014 1Q2015 + 25% 7,335 5,631 + 16% 5,877 + 9% 4,875 3,568 3,273 + 3% 675 698 Japan North America Europe Asia Pacific Latin America “Notice” (Non-GAAP) Pre-GAAP means Revenue before
Slide 15: Pre-GAAP at constant currency
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) If currency exchange rates used for 1Q2014 were used for 1Q2015: (unaudited) 14,865 - 3% 14,391 1Q2014 1Q2015 + 7% 6,315 + 23% 5,877 5,977 4,875 + 3% 3,374 3,273 + 7% 675 725 Japan North America Europe Asia Pacific
Slide 16: Net sales & Pre-GAAP growth trend
Net sales & Pre-GAAP growth trend (on a constant currency basis) 15% 12% Net Sales Pre-GAAP 10% 7% 6% 5% 4% 3% 0% Total Enterprise Consumer -5% -10% -9% -15% • 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) 102,000 98,693 98,108 * Total of current and long term 98,000 94,973 94,631 94,396 94,000 92,859 90,000 88,904 88,360 87,381 86,000 82,000 78,000 74,000 70,000 66,000 62,000 58,000 54,000 50,000 Mar-'13 Jun-'13 Sep-'13 Dec-'13 Mar-'14 Jun-'14 Sep-'14 Dec
Slide 18: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) 60,000 * Total of current and long term 55,000 53,669 + 3% 52,303 50,000 Dec-14 45,000 Mar-15 40,000 35,000 30,000 + 3% 25,000 - 11% 20,000 17,519 17,973 17,151 15,327 - 4% 15,000 9,995 9,628 - 12% 10,000 5,000 1,724 1,510 0 Japan North America
Slide 19: Deferred Revenue by Region (constant currency)
Deferred Revenue by Region If currency exchange rates used as of the end of 4Q2014 were used as of the end of 1Q2015: (in million Yen) (unaudited) 60,000 55,000 52,303 53,669 + 3% (0) * ( ) : difference from GAAP base Dec-14 50,000 * Total of current and long term Mar-15 45,000 40,000 35,000 + 3% +
Slide 20: Cost
Cost (unaudited) Stock options / Acquisition related co sts Sala ry & Bene fit (in million Yen) Offi ce overhe ad Outside se rvice Admini stration Sell ing & Mar keting Goo ds / S oftware Amortiza tion & Capitalization 24,000 22,000 811 486 20,000 370 305 456 2,813 2,858 3,684 18,000 3,174 2,790 2,8
Slide 21: Pre-GAAP vs Total Costs
Pre-GAAPⅴs Total Costs (in million Yen) (unaudited) Pre-GAAP Total Costs Pre-GAAP Margin 36,000 37% 40% 34,000 32% 32,000 30% 32% 35% 30,000 27% 27% 28,000 30,348 29,567 32,656 30% 26,000 24,000 31,624 28,295 27,298 25% 22,000 20,000 18,000 20% 16,000 14,000 22,223 15% 12,000 22,243 20,764 20,688 20
Slide 22: Cash flows
Cash flows (unaudited) (in million Yen) 1Q2014 1Q2015 YoY growth Cash flows from operating activities 6,411 5,399 - 16% Cash flows from investing activities - 12,304 - 2,388 － Cash flows from financing activities - 15,336 - 11,982 － Effect of exchange rate changes - 900 - 2,443 － on cash and cash eq
Slide 23: Headcount
Headcount Dec - 2014 Mar - 2015 5,258 5,226 Admin, Admin, Business Process Business Process Sales, Marketing Sales, Marketing 808 797 Technical Technical 1,576 Support Support 1,649 1,174 1,096 Research, Research, Development - 32 Development 1,700 1,684 (- 1%) Latin 65 Latin 68 EMEA EMEA 588 602 Ja
Slide 24: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items (unaudited) Exchange gain Equity in losses of affiliated companies Other income Other expense Gain on reversal of stock option Interest income 19M - 55M 62M - 21M 3M Gain on sales of 394M marketable securities 425M Income before income taxes Ordinary Income 8,498
Slide 25: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Dec-2014 change Mar-2015 Assets Cash & cash equivalents 63,109 - 11,500 51,609 Account receivable (less allowance for doubtful accounts) 26,071 + 576 26,647 Marketable securities & Securities investments 142,143 - 3,917 138,226 Liabilities Deferred revenue
Slide 26: Q1 Highlights
Q1 Highlights • Strong growth of cloud security products continues • Enterprise Pre-GAAP growth double digit in constant currency 26
Slide 27: Q1 Lowlights
Q1 Lowlights • Decline in Consumer business continues • Higher share price affects OP margin negatively 27
Slide 28: 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 29: Thank You
Thank You | i ,
Slide 30: 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 Co s t o f s ale s 4,622 4,682 5,272 5,853 5,250 O pe r at in g e x pe n s e s 13,958 16,005 14,768 16,390 16,972 O pe r at in g in c o m e 8,937 7,119 8,574
Slide 31: 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 US 5,998 5,939 6,034 6,975 6,894 Eu r o pe 5,632 5,594 5,474 6,076 5,740 A s ia P ac ific 3,288 3,302 3,303 3,864 3,621 L at in A m e r