Trend Micro Inc S/Adr (TMICY) Q2 2023 Earnings Call

Investor webinar replay

Replay transcript excerpt

Yes, thank you. I hope you can see the slide. I would like to follow the PowerPoint slide and explain about the performance of Q2. This is a summary of the performance, net sales, 11% increase, and operating income. 15% increase, but ordinary income was only up by 1%. This is mostly due to the equity method affiliates. TX1 for ODA Security, startup company, and they suffered deficit and minus 15% of net income. Well, in overseas business, deferred tax assets have to be taken down and then it has to be built up again. And this is going to be adjusted in the next quarter. And this is why we are seeing a negative number for this particular quarter. Pre-gapped numbers, Forex impact, when this is excluded, the revenue was up by 2%, which was lower than expectation. Our COO, Kevin Simza, will explain about the main factors behind this later on. The purchase cycle for enterprise business is getting longer, and some of the deals did not really materialize in the second quarter. In the macroeconomic level, Fortinet, one of our competitors, also provided a similar explanation of their earnings announcements last week. So security investment environment is maybe getting tougher than before. On the next slide, you can see the gap based sales by region without the foreign impact. And we're seeing growth in all of the regions. EMEA, Europe growing very strongly as expected. And then we have a number by segment after gap. And again, a 13% increase in general for the enterprise business. Now, looking at the pre-gap number, excluding the Forex impact, minus 1% for Japan and minus 3% for Americas. and no longer double digit growth for Europe, only single digit growth this time. Major factors in Japan was a price increase in the previous quarter. There was a lot of front loading of the...