Trend Micro Incorporated (TMICY) Q2 2025 Earnings Call Transcript

Trend Micro Incorporated (OTCPK:TMICY) Q2 2025 Earnings Conference Call August 7, 2025 3:00 AM ET

Company Participants

Eva Chen – Co-Founder, President, Group CEO & Representative Director
Kevin Simzer – Chief Operating Officer
Mahendra Negi – CFO & Representative Director

Conference Call Participants

Matthew Henderson – JPMorgan Chase & Co, Research Division
Satoru Kikuchi – SMBC Nikko Securities

Mahendra Negi

This is a summary for Q2. Net sales down by 3%, and total OpEx down by 6%, a 9% increase on operating income. To be honest, this is more or less in line with our expectation.

There are two factors. One, Kevin-san will talk about this later, but uncertainty is still continuing in terms of macroeconomics. Sales cycle is getting longer. The expected sales was not achieved and also stronger yen. Without FX impact, growth would have been plus 1%. If the yen gets stronger, denominated sales become smaller, minus 29% in ordinary income.

This is [inaudible] loss of FX. FX assets evaluation based on stronger yen becomes weaker, about a JPY5 billion exchange valuation loss was posted. Pre-GAAP 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. We see a bigger decline in sales. This was actually anticipated, as we explained in Q1.

Overseas [inaudible] company was bankrupt and also, from the difference between three- and one-year contracts, there is a decline in the revenues. For enterprise, this is minus 1%. As I said before, the macroeconomic impact and the sales cycle lengthening is the biggest factor.

Pre-GAAP sales. Net sales in Q4 last year, this was higher. We saw a flat transition. Multiyear contracts existed. In Q4, a lot of those were posted, and this is why Q1 looks weaker.

ARR, pre-GAAP, we believe