Trend Micro Incorporated · TSE:4704
Trend Micro — Q1 2021 Earnings Presentation
35 slides from Trend Micro's earnings presentation, May 13, 2021
Slide 1: Trend Micro FY2021.1Q Results
Trend Micro FY2021.1Q Results Mahendra Negi CFO, Representative Director May 13, 2021
Slide 2: Forward Looking Statements
Forward Looking Statements Certain Statements that we make in this presentation are forward-looking statements. These forward-looking statements are based upon management’s current assumptions and beliefs in light of the information currently available to it, but involve known and unknown risks and
Slide 3: FY2021.1Q Financial Highlight
FY2021. 1Q Financial Highlight （First quarter ended March 31, 2021） 3 3
Slide 4: Q1 Consolidated Results
Q1 Consolidated Results (in million Yen) Three months YoY ended Mar 31, 1Q2020 1Q2021 growth Net sales 42,125 44,594 + 6% Total Operating expenses 32,006 32,367 + 1% Operating income (Margin) 10,119 （ 24%） 12,226 （27%） + 21% Ordinary income 12,034 12,126 + 1% Net income 8,861 8,804 - 1% attributable
Slide 5: Progress (3 months)
Progress （3 months） (in million Yen) Revenue (Forecast) Operating Income 200,000 45,000 (Forecast) 183,400 40,900 180,000 40,000 174,061 39,464 160,000 35,000 140,000 30,000 127,029 27,535 120,000 25,000 100,000 (Progress of Forecast: 24%) (Progress of 20,000 20,046 80,000 83,811 Forecast: 30%) 15,0
Slide 6: Q1 USD based Results (Non-GAAP)
Q1 USD based Results (Non-GAAP) (unaudited) Three months (in thousand USD) ended Mar 31, 1Q2020 1Q2021 YoY change Net sales 386,973 420,904 + 9% Cost of sales 76,192 93,204 + 22% Operating expenses 217,826 212,297 - 3% Operating income 92,954 115,402 + 24% Ordinary income 110,552 114,457 + 4% Net In
Slide 7: Net Sales Growth by Region
(in million Yen) Net Sales Growth by Region (unaudited) + 8% 2020Q1 20,000 18,731 17,392 2021Q1 18,000 16,000 14,000 - 7% + 8% + 13% 12,000 10,000 8,877 8,298 8,034 8,212 8,000 7,427 7,245 6,000 + 11% 4,000 2,000 1,317 1,182 0 Japan North America Europe APAC, Middle East and Latin America Afica 7
Slide 8: Net Sales Growth by Region (constant currency)
Net Sales Growth by Region If currency exchange rates used for 1Q2020 were used for 1Q2021: (unaudited) (in million Yen) + 8% 2020Q1 20,000 18,731 (0) * ( ) : difference from GAAP base 2021Q1 18,000 17,392 16,000 - 4% + 2% + 7% 14,000 (+ 220) (- 479) (- 440) 12,000 10,000 8,877 8,519 + 24% 8,000 7,4
Slide 9: Decomposition of Revenue (vs. last year)
Decomposition of Revenue (vs. last year） (in million Yen) (unaudited) Europe North America Latin America Exchange impact APAC, MEA Japan 282 127 357 550 526 1,339 2021Ｑ1 Net 2020Ｑ1 sales Net sales 44,594 42,125 (Non-GAAP) 9
Slide 10: Constant currency Revenue growth
Constant currency Revenue growth (YoY) (unaudited) 12% 10% 8% 6% 4% 2% 0% 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 (Non-GAAP) • Each growth rate shown above is based on applying to each quarter the same currency rate as the previous year for the same
Slide 11: Sales by Segment
(in million Yen) Sales by Segment (unaudited) 20,000 Growth rate (YoY) 18,000 + 16% 16,000 Consumer + 14% 8,872 Enterprise + 3% 14,000 12,000 10,000 - 3% - 0% 8,000 167 + 22% + 1% 1,422 882 6,000 - 7% + 8% + 12% 9,859 4,000 6,876 7,866 7,329 - 35% 2,000 2 + 11% 0 1,315 Japan North America Europe APA
Slide 12: Hybrid Infrastructure protection & User protection Gross sales
“Hybrid Infrastructure protection” & “User protection” Gross sales (* not including Consumer) (in million Yen) (unaudited) (Non-GAAP) + 7% YoY + 11% YoY Hybrid Infrastructure protection + 5% YoY User Protection + 9% YoY (Last year currency base) (Last year currency base) 26,000 26,000 4 quarters mov
Slide 13: Definition of terms in new metrics
Definition of terms in new metrics - Perpetual license Traditional license agreement that "Requires" perpetual software license fees in the first year of the contract, and support fees in following years Example: *1 Year New contract＄240 (Perpetual Software license＄120 + 1 Year Support fees＄120) *3
Slide 14: Active Customer Count
Active Customer Count “Notice” As these numbers are just for internal use, they may be subject to some changes hereafter. 14
Slide 15: SaaS Deployed Instance Growth
SaaS Deployed Instance Growth “Notice” As these numbers are just for internal use, they may be subject to some changes hereafter. 15
Slide 16: Enterprise Net Revenue & Subscription ARR
Enterprise Net Revenue & Subscription ARR USD (Non-GAAP) 500M (％: YoY Growth) Enterprise Net Revenue Subscription ARR +21% (unaudited) +23% 441M 450M +23% 425M +22% 396M +26% 400M +26% 376M 365M +23% 346M 350M +24% +23% 320M 307M 290M 300M 250M 200M +4% +3% +7% +5% +3% 150M 318M 332M 314M 297M 304M
Slide 17: % share by region
% share by region 1Q2020 1Q2020 42,125 million Yen 44,594 million Yen Latin Latin America America 3% 3% APAC,MEA APAC,MEA 17% 18% Japan Japan 41% 42% Europe Europe 18% 18% North North America America 21% 19% 17
Slide 18: Pre-GAAP (Revenue before adjusting Deferred revenue)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) (in million Yen) + 7% (unaudited) 22,000 20,542 20,000 19,164 2020Q1 2021Q1 18,000 16,000 14,000 - 9% + 16% + 19% 12,000 10,000 8,146 7,803 8,000 7,405 7,025 6,073 6,563 6,000 + 35% 4,000 2,000 1,069 1,440 0 Japan North America Eur
Slide 19: Pre-GAAP (constant currency)
“For reference” Pre-GAAP (Revenue before adjusting Deferred revenue) If currency exchange rates used for 1Q2020 were used for 1Q2021: (in million Yen) + 7% 22,000 (unaudited) 20,542 2020Q1 20,000 19,164 2021Q1 18,000 16,000 14,000 - 7% + 8% + 10% 12,000 10,000 8,146 7,552 8,000 7,248 6,073 6,548 6,5
Slide 20: Net sales & Pre-GAAP growth trend
Net sales & Pre-GAAP growth trend (unaudited) (on a constant currency basis) 14% 13% Net Sales 12% Pre-GAAP 10% 8% 7% 6% 6% 5% 4% 3% 2% 2% 0% Total Enterprise Consumer (Non-GAAP) 20
Slide 21: Deferred Revenue
(in million Yen) Deferred Revenue 145,000 143,238 * Total of current and long term 139,031 140,000 135,000 131,272 131,433 129,246 129,867 130,000 125,173 125,808 125,000 122,994 120,000 115,000 110,000 Mar-'19 Jun-'19 Sep-'19 Dec-'19 Mar-'20 Jun-'20 Sep-'20 Dec-'20 Mar-'21 21
Slide 22: Deferred Revenue by Region
Deferred Revenue by Region (in million Yen) (unaudited) * Total of current and long term 2020Q4 80,000 +3% 2021Q1 70,000 65,398 67,149 60,000 50,000 + 2% + 3% + 5% 40,000 30,000 27,189 27,948 24,362 25,472 18,493 18,921 20,000 + 4% 10,000 3,587 3,747 0 Japan North America Europe APAC, Middle East La
Slide 23: Deferred Revenue by Region (constant currency)
Deferred Revenue by Region If currency exchange rates used as of the end of 4Q2020 were used as of the end of 1Q2021: (in million Yen) (unaudited) + 3% 80,000 (0) * ( ) : difference from GAAP base 2020Q4 70,000 65,398 67,149 * Total of current and long term 2021Q1 60,000 50,000 - 4% + 1% - 2% (- 1,1
Slide 24: Cost
(in million Yen) Salary & Benefit Cost Office Overhead (unaudited) Outside Service Cloud (Non-GAAP) Administration Selling & Marketing 39,000 Stock Options / Acquisiton Related Costs Goods/Software Amortization & Capitalization Special Ont-time Software Correction 35,000 1,918 Special One-time 787 S
Slide 25: Pre-GAAP vs Total Costs
(in million Yen) Pre-GAAPⅴs Total Costs (unaudited) (Non-GAAP) Pre-GAAP Total Costs Pre-GAAP Margin 60,000 40% 55,125 50,000 53,262 35% 33% 36% 44,218 40,000 41,017 43,179 30% 41,128 26% 27% 30,000 35,728 35,102 25% 22% 35,733 32,006 31,758 32,367 20,000 20% 10,000 15% 13% 0 10% 2019Q4 2020Q1 2020Q2
Slide 26: Cash flows
Cash flows (unaudited) (in million Yen) 1Q2020 1Q2021 YoY growth Cash flows from operating activities 12,452 17,144 + 38% Cash flows from investing activities 299 - 6,479 － Cash flows from financing activities - 19,163 - 19,929 － Effect of exchange rate changes - 3,333 6,704 － on cash and cash equiv
Slide 27: Headcount
Headcount Dec - 2020 Mar - 2021 6,975 6,922 Admin, Business Admin, Business Process, Process, 872 786 Sales, Marketing, Technical Sales, Marketing, Technical 2,231 2,250 Support, Support, 1,555 1,553 Reserch, Reserch, Development, Development, 2,319 - 53 2,331 (- 1%) Latin, Latin, Europe, 125 Europe
Slide 28: Non-operating & Extra-ordinary Items
Non-operating & Extra-ordinary Items (in million Yen) (unaudited) Exchange loss Other income Litigation Settlement Operations consignment fee Loss on retirement of noncurrent assets Interest income Equity in losses of affiliated companies 29 17 184 Other expenses 113 26 Loss on liquidation of subsid
Slide 29: Balance Sheet
Balance Sheet (unaudited) (in million Yen) Dec-2020 change Mar-2021 Assets Cash & cash equivalents 155,740 - 5,839 149,901 Account receivable (less allowance for doubtful accounts) 47,019 - 7,656 39,363 Marketable securities & Securities investments 92,450 + 6,494 98,944 Goodwill 4,778 - 981 3,797 L
Slide 30: Q1 Highlights
Q1 Highlights • Enterprise business growth improves • SaaS deployed instances continue healthy growth • Highest ever Operating Income and Cash flow 30
Slide 31: Q1 Lowlights
Q1 Lowlights • North America revenues declined • Cloud costs continue to grow 31
Slide 32: Projection for FY2021 Annual (Unchanged)
Projection for FY2021 Annual (Unchanged) (unaudited) For FY2021 Expected (in million Yen) Jan - Dec, 2021 YoY growth Net Sales 183,400 + 5% Operating Income 40,900 + 4% Ordinary Income 41,200 + 3% Net Income 28,800 + 7% attributable to owners of the parent (Estimated annual exchange rate 1USD=105 ye
Slide 33: Thank You
Thank You 33
Slide 34: Appendix: Quarterly Chart (1)
Appendix (unaudited) Quarterly Chart (1) (in million Yen) FY2020 FY2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net s ales 42,125 41,686 43,217 47,031 44,594 Cos t of s a l es 8,294 7,695 12,941 9,235 9,875 Op er a t i n g e x p e n s e s 23,712 24,063 22,786 25,867 22,492 Op er a t i n g i nc o m e 10,119 9,927 7,
Slide 35: Appendix: Quarterly Chart (2)
Appendix (unaudited) Quarterly Chart (2) (in million Yen) “Notice” Pre-GAAP means Revenue before adjusting deferred revenue and sales return allowance. As these numbers are just for internal use, they may be subject to some changes hereafter. 35