Trend Micro Profits Miss Consensus but in Line with Guidance

Trend Micro's 1Q operating profits missed consensus due to rising labor and cloud costs, despite a slight improvement in revenue growth. Performance remains mixed across regions, leading to a maintained Neutral rating.

Key Takeaways

• 1.1Q operating profits of ¥15.56 bn (+4% yoy) missed the Bloomberg consensus of ¥16.35 bn, though they were slightly ahead of internal guidance.
• 2.Underlying profit growth was sluggish, falling 4% yoy when excluding a ¥1.22 bn positive impact from lower stock option costs.
• 3.Operating expenses rose 11% yoy, driven by higher labor costs (+14%), cloud usage fees (+35%), and upfront investments in a new security startup for AI servers.

Table of Contents

• Investment Thesis - Trend Micro Inc.
• Price Target Risks and Methodology - Trend Micro Inc.
• Disclosure Appendix
• Price target and rating history chart(s)
• Target price history table(s)
• Regulatory disclosures

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