Interim report
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August 7, 2025 Report of Earning Results (Consolidated) for the Second Quarter of the Fiscal Year Ending December 31, 2025 Company : Trend Micro Incorporated Tokyo Stock Exchange, Prime Market Code : 4704 Location : Tokyo URL : http://www.trendmicro.com Representative: Title Representative Director Name Eva Chen Contact: Title Representative Director Name Mahendra Negi TEL +81-3-4330-7600 Expected date of the submission of semi-annual security reports (“Hanki Hokokusho”) : August 8, 2025 1. Financial Highlights for the Six Months Ended June 30, 2025 (1) Consolidated Results of Operations Net Sales Operating Income Ordinary Income Net Income Attributable to Owners of the Parent Million yen % Million yen % Million yen % Million yen % Six Months Ended June 30, 2025 133,909 (0.5) 28,472 16.5 21,475 (18.6) 14,336 (19.9) Six Months Ended June 30, 2024 134,534 12.5 24,436 34.4 26,371 42.9 17,895 50.9 (Note) Comprehensive Income: 11,627million yen （55.4） % as of June 30, 2025 (26,058million yen (3.6)% as of June 30, 2024) Net Income per share (basic) Net Income per share (diluted) Yen Yen Six Months Ended June 30, 2025 109.14 108.25 Six Months Ended June 30, 2024 133.15 132.42 (2) Consolidated Financial Position Total Assets Net Assets Equity Ratio As of Million yen Million yen % June 30, 2025 375,132 112,680 29.2 December 31, 2024 400,316 119,446 29.2 (Note) Net Assets after deduction of Share acquisition rights and Non-controlling interest : 109,544million yen as of June 30, 2025 (116,965million yen as of December 31, 2024)
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2. Dividend of Surplus Cash dividends per share As of The first quarter end The second quarter end The third quarter end Annual end Total Yen Yen Yen Yen Yen December 31, 2024 － 0.0 － 184.0 184.0 December 31, 2025 － 0.0 Projection for FY 2025 － － － (Note) Revision of the projection of dividend for the second quarter of FY 2025 : No (Note) The dividend projection for FY2025 annual end has not been determined yet. 3. Forecasts of consolidated financial results for FY 2025 (January 1, 2025 through December 31, 2025) (Note) For the forecast of FY 2025, please refer to next page. 4. Others (1) Change in the basis of consolidation and application of equity method : No (2) Application of simplified or specified accounting procedures : Yes (3) Changes in accounting principles, accounting estimates and restatement ① Changes under the revision of Accounting Standards : No ② Changes in Accounting Principles other than ① : No ③ Changes in Accounting Estimates : No ④ Restatements : No (4) Number of shares issued (common shares) ① Number of shares issued (including treasury stocks): 140,901,604 shares as of June 30, 2025 140,901,604 shares as of December 31, 2024 ② Number of treasury stocks : 9,051,334 shares as of June 30, 2025 9,604,812 shares as of December 31, 2024 ③ Average number of shares outstanding : 131,350,257 shares six months ended June 30,2025 134,398,028 shares six months ended June 30,2024 * Statement relating to the status of the quarterly review procedures This quarterly report is not subject to the quarterly review procedures, which are based on the Financial Instruments and Exchange Law. The review procedures for quarterly consolidated accounts have not finished at the point of the announcement of the quarterly financial results. * Explanation for the proper use of projection and other notes Any forward-looking statement in this report including forecast results, are based on certain assumptions that were deemed rational as well as information currently available to the Company. However, various factors could cause actual results to differ materially. Please refer to (3) Qualitative Information on the Consolidated Earnings Forecast on page 3 of the attachment for conditions serving as assumptions for forecast results.
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Forecasts of consolidated financial results for FY 2025 Net Sales Operating Income Ordinary Income Net Income Attributable to Owners of the Parent Net Income per share (basic) FY2025 (January 1, 2025 through December 31, 2025) Million yen % Million yen % Million yen % Million yen % Yen 274,000 0.5 53,600 11.4 45,000 (14.8) 30,200 (12.1) 230.01
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1 Appendix contents: 1. Qualitative Information and Financial Statements ------------------------------------------------- 2 (1) Qualitative Information on the Consolidated Business Results --------------------------------- 2 (2) Consolidated Financial Positions ------------------------------------------------------------------- 3 (3) Consolidated Earnings Forecast -------------------------------------------------------------------- 3 2. Others ---------------------------------------------------------------------------------------------------- 5 (1) Movement of Significant Subsidiaries ------------------------------------------------------------- 5 (2) Application of Simplified or Special Accounting Procedures ---------------------------------- 5 3. Consolidated Financial Statements ------------------------------------------------------------------ 6 (1) Consolidated Balance Sheets ------------------------------------------------------------------------ 6 (2) Consolidated Statements of Income ---------------------------------------------------------------- 8 Consolidated Statements of Comprehensive Income --------------------------------------------- 9 (3) Consolidated Statements of Cash Flows ----------------------------------------------------------- 10 (4) Footnotes on Consolidated Financial Statements ------------------------------------------------- 11 (Footnote on Going Concern) ------------------------------------------------------------------------ 11 (Notes on Significant Changes in Shareholders' Equity) ----------------------------------------- 11 (Additional information) ------------------------------------------------------------------------------ 11 (Segment Information) -------------------------------------------------------------------------------- 12
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2 1 Qualitative Information and Financial Statements (1) Qualitative Information on the Consolidated Business Results (Unit: million yen) Net Sales The First Half of FY2025 The First Half of FY2024 Rate of Change Japan Reg. 43,894 42,657 2.9% Americas Reg. 27,026 29,288 -7.7% Europe Reg. 29,032 28,561 1.7% Asia and Pacific Reg. 33,954 34,028 -0.2% Total 133,909 134,534 -0.5% During this term of fiscal year 2025, from January 1 to June 30, the world economy has been progressing with concerns over the impact of monetary policies in various countries on the economy, as well as geopolitical risks while the uncertainty arising from the U.S. trade policies and so on exists. In addition, the increasing uncertainty is caused by fluctuations in financial and capital market s and other related factors exist, the outlook for the world economy is becoming increasingly opaque. In the worldwide Information Technology industry, though cloud computing and generative AI (artificial intelligence) continue to be permeating every aspect of our lives, there is a business pause on net -new spending due to a spike in global uncertainty. A ccording to the report by 3rd party, the forecasts worldwide IT spending to grow 7.9% to $5.43 trillion in 2025. In the cybersecurity industry, ransomware continues to be a prominent figure in the cyber attack. In addition, with the foll owing those risks, the targeting attacks in national institutions, specific companies, and organizations, the cyber attacking along with leaks of sensitive business information, and new security risks associated with the proliferation of GenAI , are remarkably increase, and lead ing to a heightened need for security awareness among both businesses and individuals. Under such an environment, our group business conditions are as follows: With regards to sales in Japan region, the enterprise business has experienced positive growth. Especially AI -Powered Next-Gen SOC security, which means Vision One main composed solutions, showed significantly growth. It contributed to this region's sales with good growth in both Network security solutions and Cloud security solutions. Even though PC security remained weak, the consumer business continued to grow due to sustained sales in mobile phone shops. As the result, net sales for this period in J apan region amounted to 43,894 million yen (2.9% increase from the same period in the previous year) increase to. For Americas region, the enterprise business sales sustained positive growth in local currency terms, however was generally s luggish due to increasing uncertainty surrounding U.S. tariff policy and significantly affected by the U.S. Department of Government Efficiency (DOGE). Meanwhile, the consumer business had a negative impact due to the opportunity loss taking time to build a system wit h a new e-commerce payment company. As the results, net sales in this region were 27,026 million yen (7.7% decrease f rom the same period in the previous year) decrease to. In Europe region sales, Email security solutions, Cloud security solutions, and additionally, Endpoint security were growing besides the demands of Vision One. On the other hand, Network security did not perform well. As the results, even if there is a strong yen impact, net sales in this region were 29,032 million yen (1.7% increase from the same period in the previous year) increase to. In the Asia Pacific region, entire this region sales achieved positive growth in local currency terms. In the enterprise bus iness sales, driven by the demands for Vision One, especially AI -Powered Next-Gen SOC security contributed to this region's sales s ignificantly. On the other hand, the consumer business had a significant negative growth due to the opportunity loss taking time to build a system with a new e-commerce payment company. Locally, Middle East, Taiwan, and Singapore area led this region’s sales. In addition, there was a slight impact of strong yen, as the result, net sales for this period in Asia Pacific region amounted to 33,954 million yen (0.2% decrease from the same period in the previous year) decrease to. As a result, the consolidated net sales for this period (this term of the fiscal year 2025, from January 1 to June 30,) marke d 133,909
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3 million yen (0.5% decrease from the same period in previous year.) For the costs, overall expenses were controlled with significant decrease in both a people cost and a cloud cost, etc. Thus, cost of sales and operating expenses for this period totaled 105,436 million yen (4.2% decrease from the same period in previous ye ar) limited to decrease in. As the result, consolidated operating income for this period was 28,472million yen (16.5% increase from the same period in previous year) increase to. And the consolidated ordinary income for this period was 21,475 million yen (18.6% decrease from the same period in previous year) due to foreign exchange loss, etc. For the first half of the year, the net income attributable to owners of the parent for t his period was 14,336 million yen (19.9% decrease from the same period in previous year) decreased mainly due to the disappearance of gain on change in equity, etc. Operating income based on Pre-GAAP (revenue before adjusting deferred revenue, etc.) serves as the important management indicators for our company. It for this period was 20,165 million yen, a decrease of 4,489 million yen (18.2% decrease from the same pe riod in previous year.) This decrease in Pre-GAAP sales amount due to taking time to build a system with a new e-commerce payment company in consumer business, despite the overall decrease in costs, including the cost of sales and operating expenses. (2) Consolidated Financial Positions Cash and bank deposits at the end of this period amounted to 195,469 million yen and increased to 25,413 million yen from FY2 024 annual closing. Mainly due to a significant decrease in Marketable securities and Notes and Accounts receivable, trade and contract assets, t otal assets at the end of this period were 375,132 million yen, 25,184 million yen decrease from FY2024 annual closing. Total liabilities at the end of this period were 262,452 million yen, 18,417 million yen decrease from FY2024 annual closing due to a decrease in deferred revenue, and a decrease in Allowance for bonuses, etc. Total net assets at the end of this period were 112,680 million yen, 6,766 million yen decrease from FY2024 annual closing. This decline is primarily caused by a substantial decrease in retained earnings, mainly due to dividend payments. (3) Consolidated Earnings Forecast Based on recent performance trends and future outlook, we do following revise from our consolidated results forecast for the full fiscal year ending December 31, 2025 (released on February 18, 2025). As of now, we do revise as taking into consideration of the impact of increasing uncertainty on customer behaviors mainly due to the market competition and the U.S. tariff policy. In addition, for the second half year of FY2025, we have revised our exchan ge rate assumption that reflects an appreciation of the Japanese yen against the U.S. dollar. As the result, forecasts of new net sa les for FY 2025 is assumed Americas region decreases by approximately a middle single-digit growth ratio from the same period in previous year respectively. Japan, Asia and Pacific, and Europe region increase by approximately a low single-digit increase from the same period in previous year respectively. Meanwhile, the overall cost is expected to decrease compared to our consolidated results forecast for the full fiscal year ending December 31, 2025 (released on February 18, 2025), and the operating income association is projected to see a 11.4% increase from the same period in previous year. In addition, we have newly incorporated Foreign exchange loss, etc as Non -operating income and expenses, which occurred during this period (this term of the fiscal year 2025, from January 1 to June 30.)
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4 Business forecast for the Annual of FY2025 (January 1, 2025 – December 31, 2025) (Million yen) Net Sales Operating Income Ordinary Income Net income attributable to owners of the parent Forecast previously publish （A） 288,600 60,300 57,600 38,900 Revision made （B） 274,000 53,600 45,000 30,200 Difference （B-A） -14,600 -6,700 -12,600 -8,700 Ratio of increase or decrease（%） -5.1 -11.1 -21.9 -22.4 In development of the new business forecasts the main assumed exchange rates for later the Third Quarter of FY2025 as follows. 1 US $ 147 yen (previously 154 yen) 1 Euro 172 yen (previously 161 yen)
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5 2. Others (1) Movement of Significant Subsidiaries N/A (2) Application of Simplified or Special Accounting Procedures (Calculation of income tax expenses) Multiply net income before tax for this period (6 months) by effective tax rate, which is rationally calculated based on proj ected annual profit and its taxes taking into consideration of deferred tax accounting. In addition, deferred tax expense is includ ed in income taxes. However, if the calculation of tax expenses using the effective tax rate results in a markedly unreasonable outcome, tax expe nses are calculated by using the statutory effective tax rate after adding and subtracting important differences that do not fall under temporary differences to and from profit before income taxes.
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6 3. 【CONSOLIDATED FINANCIAL STATEMENTS】 (1) 【Consolidated Balance Sheets】 (Million yen) Account December 31, 2024 June 30, 2025 (Assets) Current assets Cash and bank deposits 170,056 195,469 Notes and Accounts receivable, trade and contract assets 74,795 50,954 Marketable securities 40,839 16,070 Inventories 8,455 9,601 Others 13,950 13,748 Allowance for bad debt (268) (105) Total current assets 307,829 285,739 Non-current assets Property and equipment (1) Buildings and structures, net 3,236 2,745 (2) Office furniture & equipment 2,158 2,231 (3) Others 154 18 Total property and equipment 5,548 4,996 Intangibles (1) Software 17,904 17,724 (2) Goodwill 2,268 1,761 (3) Others 11,220 9,385 Total intangibles 31,393 28,872 Investments and other non-current assets (1) Investment securities 4,520 4,360 (2) Investments in subsidiaries and affiliates 1,236 61 (3) Deferred tax assets 47,638 47,436 (4) Others 2,148 3,665 Total investments and other non-current assets 55,544 55,524 Total non-current assets 92,486 89,392 Total assets 400,316 375,132
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7 (Million yen) Account December 31, 2024 June 30, 2025 (Liabilities) Current liabilities Accounts payable and Notes payable, trade 3,627 1,982 Accounts payable, other 7,952 7,634 Accrued expenses 11,291 9,176 Accrued income and other taxes 5,300 4,368 Allowance for bonuses 7,410 2,531 Deferred revenue(Current and Non-current) 221,386 214,473 Others 10,305 7,747 Total current liabilities 267,274 247,913 Non-current liabilities Net defined benefit liability 7,677 7,575 Others 5,918 6,962 Total non-current liabilities 13,595 14,538 Total liabilities 280,870 262,452 (Net assets) Shareholders' equity Common stock 19,926 19,926 Capital surplus 27,857 29,013 Retained earnings 90,541 80,718 Treasury stock, at cost (66,781) (62,933) Total shareholders' equity 71,543 66,724 Accumulated other comprehensive income Net unrealized gain (loss) on debt and equity securities 336 453 Foreign currency translation adjustments 44,826 42,279 Remeasurements of defined benefit plans 259 86 Total accumulated other comprehensive income 45,422 42,819 Stock acquisition rights 2,480 2,463 Non-controlling interests － 671 Total net assets 119,446 112,680 Total liabilities and net assets 400,316 375,132
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8 (2) 【Consolidated Statements of Income and Consolidated Statements of Comprehensive Income】 Consolidated Statements of Income (Million yen) Six months ended June 30, 2024 Six months ended June 30, 2025 Net sales 134,534 133,909 Cost of sales 32,507 31,937 Gross profit 102,026 101,971 Operating expenses 77,590 73,498 Operating income 24,436 28,472 Non-operating income Outsourcing service income 21 4 Interest income 1,255 1,606 Foreign exchange gain 2,310 － Other income 91 67 Total non-operating income 3,678 1,678 Non-operating expenses Foreign exchange loss － 8,063 Equity in losses of affiliated companies 1,519 563 Loss on disposal of fixed assets 161 5 Other expenses 62 43 Total non-operating expenses 1,743 8,676 Ordinary income 26,371 21,475 Extraordinary gain Gain on business transfer 587 － Gain on change in equity 2,145 － Total extraordinary gain 2,732 － Extraordinary loss Loss on valuation of investment securities － 160 Total extraordinary loss － 160 Net income before taxes 29,104 21,314 Income taxes 10,214 7,081 Income taxes for prior periods 994 － Net income 17,895 14,232 Net income(loss) attributable to non-controlling interests (0) (103) Net income attributable to owners of the parent 17,895 14,336
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9 Consolidated Statements of Comprehensive Income (Million yen) Six months ended June 30, 2024 Six months ended June 30, 2025 Net income 17,895 14,232 Other comprehensive income Valuation difference on available-for-sale securities 581 117 Foreign currency translation adjustment 6,746 (1,939) Remeasurement of defined benefit plans 9 (172) Share of other comprehensive income of associates accounted for using equity method 826 (610) Total other comprehensive income 8,163 (2,605) Comprehensive income 26,058 11,627 Comprehensive income attributable to owners of the parent 26,054 11,733 Comprehensive income attributable to non-controlling interests 4 (106)
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10 (3) 【Consolidated Statements of Cash Flows】 (Million yen) Account Six months ended June 30, 2024 Six months ended June 30, 2025 Cash flows from operating activities: Net income before taxes 29,104 21,314 Depreciation and amortization 13,999 13,082 Stock compensations 675 597 Amortization of goodwill 987 331 Increase (decrease) in allowance for bad debts (212) (148) Increase (decrease) in net defined benefit liability 3 (84) Interest income (1,255) (1,606) Equity in (earnings)/loss of affiliated companies 1,519 563 (Gain) loss on sale of businesses (587) － (Gain) loss on change in equity (2,145) － (Gain) loss on disposal of Fixed assets 161 5 (Gain) loss on valuation of investment securities － 160 (Increase) decrease in notes and accounts receivable and contract assets 18,090 19,078 (Increase) decrease in inventories (2,433) (1,768) Increase (decrease) in notes and accounts payable (43) (1,571) Increase (decrease) in accounts payable, other & accrued expenses (5,366) (1,868) Increase (decrease) in deferred revenue (9,660) (3,302) Increase (decrease) in virtual share bonus plan (1,506) (45) Others (3,861) (1,481) Subtotal 37,469 43,257 Proceeds from interest and dividend received 1,242 1,709 Payment for income tax (10,997) (9,906) Net cash provided by operating activities 27,714 35,060 Cash flows from investing activities: (Payments for)/Proceeds from time deposits (6,283) (18,925) Payments for purchases of marketable securities and securities investments (10) (1) Proceeds from sale or redemptions of marketable securities and securities investments 16,902 18,640 Payments for purchases of property and equipment (675) (607) Payments for purchases of other intangibles (12,919) (11,640) Proceeds from sales of businesses 291 － Net cash provided by investing activities (2,694) (12,535) Cash flows from financing activities: Proceeds from issuance of common shares 119 － Payment for purchase of treasury stock (39,999) (0) Receipt from disposal of treasury stock 42 3,067 Dividends paid (96,282) (23,481) Repayments to non-controlling shareholders － (176) Proceeds from paid-up by non-controlling shareholders 0 2,277 Net cash used in financing activities (136,119) (18,313) Effect of exchange rate changes on cash and cash equivalents 9,368 (3,616) Net increase (decrease) in cash and cash equivalents (101,731) 595 Cash and cash equivalents at beginning of period 261,265 187,392 Cash and cash equivalents at end of period 159,534 187,987
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11 (4) Footnotes on Consolidated Financial Statements (Footnote on Going Concern) N/A (Notes on Significant Changes in Stockholders' Equity) (Dividends from Surplus) We resolved to pay a dividend of 24,158 million yen based on the resolution of the Ordinary General Meeting of Shareholders on March 27, 2025. As a result, retained earnings decreased by 9,822 million yen for the current fiscal year consolidated cumula tive period. (Additional information) (Matters concerning consolidated subsidiaries) We invest in Trend Forward Capital I, L.P. (hereinafter TFI), which operates a venture capital business in the United States as a limited partnership. Business execution powers of TFI were held by Wael Mohamed who was our board until March 2020, while we are only limited partners and have no authority or intention to participate in the management of TFI. However, we have contributed more than half of the total amount invested in TFI and have not been able to prove that Wael is not a close member in accordan ce with “the Practical Handling of the Application of Control and Influence Standards to Investment Partnerships” (Practical Handling Report No. 20). Therefore, we have included TFI in our consolidation scope in accordance wi th “the Practical Handling Repo rt No.20” and” the Accounting Standards for Consolidated Financial Statements “(ASBJ Statement No. 22).
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12 (Segment Information) Information on sales, profit/loss by reporting segments For the previous fiscal year (from January 1, 2024 to June 30, 2024) 1. Information on net sales and profits by reporting segment (Million Yen) Japan Americas Europe Asia Pacific Total Adj (*)3 Amt in Con P&L (*)4 Sales (1) Net sales to external customers 42,657 29,288 28,561 34,028 134,534 － 134,534 (2) Intercompany sales 8 5,541 4,975 31,470 41,996 (41,996) － Total 42,665 34,829 33,536 65,498 176,530 (41,996) 134,534 Segment income 7,957 4,220 5,977 7,013 25,168 (732) 24,436 (Note) 1 The classification of the geographical segment is based on geographic proximity. 2 Major countries other than Japan: Americas U.S.A., Brazil Europe Ireland, Germany, Italy, France, UK Asia Pacific Taiwan, Australia, Singapore, UAE 3 Consolidation Adjustment in segment income (732) million yen comes from the elimination between segments transaction. 4 Total amount of segment income is adjusted to operating income in consolidated statement of income.
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13 For the current fiscal year (from January 1, 2025 to June 30, 2025) 1. Information on net sales and profits by reporting segment (Million Yen) Japan Americas Europe Asia Pacific Total Adj (*)3 Amt in Con P&L (*)4 Sales (1) Net sales to external customers 43,894 27,026 29,032 33,954 133,909 － 133,909 (2) Intercompany sales 27 6,224 4,567 16,942 27,761 (27,761) － Total 43,922 33,250 33,600 50,896 161,670 (27,761) 133,909 Segment income 10,344 4,950 6,250 6,680 28,225 247 28,472 (Note) 1 The classification of the geographical segment is based on geographic proximity. 2 Major countries other than Japan: Americas U.S.A., Brazil Europe Ireland, Germany, Italy, France, UK Asia Pacific Taiwan, Australia, Singapore, UAE 3 Consolidation Adjustment in segment income 247 million yen comes from the elimination between segments transaction. 4 Total amount of segment income is adjusted to operating income in consolidated statement of income.