Trend Micro (4704) Q4 2024 earnings summary

Executive summary

• Achieved record net sales and operating income for FY2024, with highest-ever pre-GAAP organic growth in Q4 and strong enterprise performance across all regions.

• Net income attributable to owners surged 220% year-over-year to ¥34,358 million, with EPS of ¥259.05 and a dividend of ¥184 per share, reflecting a 70–71% payout ratio.

• Growth momentum was led by the enterprise segment, while the consumer segment saw a slight decline in Q4 but focused on profitability and anti-scam offerings.

• Strategic focus on platform transformation, AI investment, and proactive cybersecurity, with alliances to drive AI-enabled solutions.

• Maintained cost controls despite higher personnel expenses from yen depreciation, supporting strong profit growth.

Financial highlights

• FY2024 net sales grew 9.6–10% year-over-year to ¥272,638 million, with operating income up 46–47.6% to ¥52,840 million and operating margin at 18%.

• Q4 pre-GAAP net sales exceeded JPY 100 billion, up 20% year-over-year; pre-GAAP operating income was JPY 41.1 billion.

• Total recurring revenue across all segments reached $1.7 billion, with enterprise recurring revenue at $1.3 billion and 7% CAGR.

• Gross margin improved as cost of sales and operating expenses rose only 3.9% year-over-year, below revenue growth.

• Cash and cash equivalents at year-end decreased to ¥187,392 million due to significant dividend payments and share buybacks.

Outlook and guidance

• FY2025 guidance projects net sales of ¥288,600 million (+5.9–6%), operating income of ¥60,300 million (+14–25.3%), and net income of ¥38,900 million (+13–13.2%).

• Revenue growth expected across all regions, with Asia Pacific forecasted to increase by ~10% and other regions by ~5%.

• Expects double-digit growth in enterprise, while consumer business faces headwinds due to payment platform changes and weak PC market.

• Plans to invest in AI, increase headcount, and expand anti-scam offerings in the consumer segment.

• Cost structure is expected to remain stable, supporting improved profit margins.