Trend Micro : 2022 Q2 Financial Report Data

August 9, 2022

			Report of Earning Results (Consolidated)
			for the Second Quarter of the Fiscal Year
			Ending December 31, 2022
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	[phone]

Expected date of the submission of quarterly security reports ("Shihanki Hokokusho") : August 10, 2022

1. Financial Highlights for the Six Months Ended June 30, 2022

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	105,302	15.3		18,657	(15.6)			20,609	(9.4)	14,962	(9.3)
June 30, 2022
Six Months Ended	91,329	9.0		22,115	10.3			22,742	11.8	16,503	9.1
June 30, 2021
(Note) Comprehensive Income:		37,453million yen 55.2 % as of June 30, 2022
(24,126million yen 94.4% as of June 30, 2021)
			Net Income per share		Net Income per share
			(basic)						(diluted)
			Yen						Yen
Six Months Ended		107.11						107.03
June 30, 2022
Six Months Ended		118.48						118.39
June 30, 2021
(2) Consolidated Financial Position
			Total Assets				Net Assets				Equity Ratio
As of			Million yen				Million yen				%
June 30, 2022		459,377			222,683					48.0
December 31, 2021		420,457			221,434					52.1

(Note) Net Assets after deduction of Share acquisition rights and Non-controlling interest

: 220,478million yen as of June 30, 2022 (219,084million yen as of December 31, 2021)

(4) Number of shares issued (common shares)

① Number of shares issued (including treasury stocks):

140,789,104 shares as of June 30, 2022

140,744,104 shares as of December 31, 2021

②Number of treasury stocks :

966,590 shares as of June 30, 2022

1,068,790 shares as of December 31, 2021

③Average number of shares outstanding :

139,687,113 shares six months ended June,2022

139,293,674 shares six months ended June,2021

* 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-lookingstatement 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.

2. Dividend of Surplus

			Cash dividends per share
	As of	The first	The second	The third		Annual end		Total
	quarter end	quarter end	quarter end
		Yen	Yen	Yen		Yen		Yen
December 31, 2021	－	0.0	－		195.0		195.0
December 31, 2022	－	0.0
Projection for FY 2022			－		－		－
(Note)	Revision of the projection of dividend for the first quarter of FY 2022	:	No
(Note)	The dividend projection for FY2022 annual end has not been determined yet.

3. Forecasts of consolidated financial results for FY 2022

(January 1, 2022 through December 31, 2022)

(Note) For the forecast of FY 2022, 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	:	Yes
②Changes in Accounting Principles other than ①	:	No
③Changes in Accounting Estimates	:	No
④Restatements	:	No

Forecasts of consolidated financial results for FY 2022

								Net Income
	Net Sales		Operating Income	Ordinary Income	Attributable to	Net Income
								Owners of the Parent	per share (basic)
FY2022	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
(January 1, 2022
through December	225,900		18.7	42,000	(3.8)	42,100	(5.4)	30,300	(21.0)	216.93
31, 2022)

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
	(Changes in Accounting Policies) -------------------------------------------------------------------	11
	(Additional information) ------------------------------------------------------------------------------	12
	(Segment Information) --------------------------------------------------------------------------------	13

1

1 Qualitative Information and Financial Statements

(1) Qualitative Information on the Consolidated Business Results

			(Unit: million yen)
		Net Sales
	The First Half	The First Half
	of	of	Rate of Change
	FY2022	FY2021
Japan Reg.	40,559	37,534	8.1%
Americas Reg.	24,396	20,269	20.4%
Europe Reg.	18,941	16,560	14.4%
Asia and Pacific Reg.	21,403	16,964	26.2%
Total	105,302	91,329	15.3%

During this term of fiscal year 2022, from January 1 to June 30, despite the world economy expects movements of picking up undergoing through recovery gradually from a severe situation due to COVID-19 pandemic, there are unpredictable situations by the possibility of fresh outbreaks as the COVID-19 variant spreads in some regions, the progress of global inflation, and steep rise in fuel import price due to prolong the Russian-Ukrainian crisis, etc. The worldwide economic outlook has been concerned.

The worldwide Information Technology industry has growth due to accelerated demands of remote working, education, DX (digital transformation) under the global affected by the Covid-19 pandemic. Refer to the report by 3rd party, it forecasts worldwide IT spending to grow 5.1% into $4.5 trillion in 2022. According to accommodating increasingly complex hybrid work for employees, then enterprise software is expected to have growth in 11.0% mainly due to increasing in cloud usage and SaaS migration.

In the cyber security industry, continuously multitude of cyber terrorism that targets specific national institutions, etc., a spate of identity theft in business client information, and targeted attacks including crypto assets drain in specific companies, organizations have been still coming across occasionally. In addition, the global epidemic of Covid-19 infection was used by phishing scams, the malware files which abuse remote meeting system have infested. Especially in ransomware, threat in targeted attacks which implemented the 'double extortion' technique by reveal stolen and sensitive information stood out. In Japan, there was a stoppage incident attracted people's attention by ransomware attacking supply chain vulnerabilities of the large enterprise for its stoppage all factory operations. Against this background, the conventional security measure, with defense of each single terminal and device, and the network segmented into smaller zones, has been changing to no longer desired. The demand is expanding for the solutions including visibility and deep analytics on the premise of intrusion risks. Going through the trend of such threat changes, it has been required showing more rigorous approach to information management to regardless business or individual into new daily life.

Under such environment, our group business conditions are as follows:

With regards to sales in Japan region, consumer business has led this region sales with going well continuously under the sustained good sales in mobile channel shop, etc. In Enterprise business, despite endpoint security performed not well, cloud security and service business are going well. As a result, net sales for this period in Japan region amounted to 40,559 million yen (8.1% increase from the same period in the previous year) increase to.

For Americas region, which integrates the former North American region and Latin American region, SaaS related business has been still kept well and also cloud security besides on demands for Trend Micro Vision One ("Vision One" which is a security operation at the center of the Trend Micro cybersecurity platform) performed well in enterprise business sales. In addition, there was a weak yen impact, net sales in this region were 24,396 million yen (20.4% increases from the same period in previous year) increase in double- digit growth rate.

In Europe region sales, cloud security was growing with Vision One, and additionally support business showed growth in enterprise business. As a results, net sales in this region were 18,941 million yen (14.4% increase from the same period in the previous year) in double-digit growth rate.

In the Asia Pacific region, the entire region sales performed well. Especially in enterprise business sales, network security performed

2