Trend Micro (4704) Q4 2024 earnings summary

Executive summary

• Achieved record net sales and operating income for FY2024, with double-digit top-line growth, highest-ever pre-GAAP organic growth, and strong Q4 performance, led by the enterprise segment and platform adoption.

• Growth momentum recovered in Americas and Europe, with Asia Pacific leading regional growth at 21.1%, and all regions contributing to YoY net sales growth.

• Transitioned business model from software distribution to platform-centric, resulting in more multi-year contracts and deeper customer relationships.

• Significant investments in AI and platform innovation, including the launch of a specialized cybersecurity LLM (Cybertron) and expansion of Vision One platform.

• Cost controls maintained despite higher personnel expenses from yen depreciation, supporting strong profit growth.

Financial highlights

• FY2024 net sales grew 10% YoY to ¥272,638 million; operating income up 47.6% YoY to ¥52,840 million (18% margin); net income attributable to owners surged 220% YoY to ¥34,358 million; EPS up 230% YoY.

• Q4 2024 net sales rose 8% YoY to ¥69,979 million; operating income up 197% YoY to ¥8,868 million (13% margin); Q4 net income attributable to owners was ¥7,940 million.

• Pre-GAAP based operating income for Q4 up 77% YoY; after adjusting for collectability risk, Pre-GAAP revenue up 22% YoY.

• Total recurring revenue across all segments reached $1.7 billion, up 5% YoY; enterprise recurring revenue at $1.3 billion, with 7% CAGR.

• Dividend per share for FY2024 was ¥184, with a payout ratio of 71%; share buybacks planned using remaining net income.

Outlook and guidance

• FY2025 guidance projects net sales of ¥288,600 million (+5.9%), operating income of ¥60,300 million (+25–35%), and net income of ¥38,900 million (+13.2%), with minimal FX impact.

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

• Enterprise segment expected to deliver double-digit growth; consumer segment to remain flat or grow modestly, with focus on anti-scam and mobile solutions.

• Strategic focus on expanding Vision One adoption, entering SIEM/SOAR markets, and leveraging AI for proactive cybersecurity.

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