Trend Micro Inc S/Adr (TMICY) Q2 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

This is a summary for Q2. Net sales down by 3%. And total OPEX down by 6%. And 9% increase on operating income. To be honest, this is more or less in line with our expectation. There are two factors. One, Kevin Simpson will talk about this later. But uncertainty is still continuing in terms of macroeconomics. So the sales cycle is getting longer. So the expected sales was not achieved. And also stronger yen. Without FX impact, growth would have been plus 1%. But if the yen gets stronger, the denominated sales become smaller. And the minus 29% in ordinary income. Well, this is evaluation loss of FX. So FX assets evaluation based on stronger yen becomes weaker. So about 5 billion yen exchange evaluation loss was posted. And pre-gap was minus 6%. This is a little bit lower than our expectation. Now, for enterprise and consumer, on the right-hand side, you can see consumer, and we see a bigger decline in sales, but this was actually anticipated, as we explained in the first quarter. Overseas, online settlement company was bankrupt, and also, from three year between the difference between three year and one year contract there is a decline in the revenues and for enterprise this is minus one percent as I said before macroeconomic impact and the sales cycle lengthening is the biggest factor. Pre-gap sales, net sales. In the fourth quarter last year, this was higher. We saw flat transition. Multi-contracts existed, and in the fourth quarter, a lot of those were posted, and this is why the first quarter looks weaker. ARR, both on pre-gap, post-gap, we believe that ARR is more accurate in terms of what is happening with the enterprise market. In Q1 and Q2, you can see the numbers are flat. And number-wise, it looks flat. But if you look at the breakdown, one positive factor f...