Trend Micro Reports Highest Annual Net Sales in Company’s History for Fiscal Year 2018

Solid growth in enterprise business fueled by double-digit growth in
hybrid infrastructure protection drives overall results

TOKYO–(BUSINESS WIRE)–Trend
Micro Incorporated
(TYO:
4704
; TSE:
4704
), a global leader in cybersecurity solutions, today announced
earnings results for the fourth quarter and consolidated revenue for
fiscal year 2018, ending December 31, 2018.

In 2018, the company grew net revenue of its enterprise business by 10
percent, evidence of Trend Micro’s continued success securing large and
small & medium organizations around the globe. The company’s hybrid
infrastructure protection gross sales grew by a strong double-digit
growth year-over-year and now represents almost half of its overall
enterprise business, confirming the company’s leading position in
securing cloud and hybrid cloud infrastructures.

“Our strong hybrid infrastructure protection growth reflects our
expertise in securing hybrid cloud environments and addressing our
customer’s increasing challenges,” said Eva Chen, chief executive
officer for Trend Micro. “Today, 75 percent of our business is in the
enterprise environment as a result of our strategy and continuous focus
of providing industry leading solutions and relying on the world’s most
advanced threat intelligence. We are the partner organizations can count
on to secure their connected world.”

For the fourth quarter, Trend Micro posted consolidated net sales of
42,434 million Yen (or US $375 million, 112.90 JPY = 1USD). The company
posted operating income of 8,610 million Yen (or US $76 million) and net
income attributable to owners of the parent of 7,303 million Yen (or US
$64 million) for the quarter. For the fiscal year 2018, Trend Micro
posted consolidated net sales of 160,410 million Yen (or US $ 1,449
million, 110.64 JPY=1USD). The company also reported operating income of
35,836 million Yen (or US $323 million) and net income attributable to
owners of the parent of 28,314 million Yen (or US $255 million).

Based on information currently available to the company, consolidated
net sales for the year ending December 31, 2019 is expected to be
168,600 million Yen (or US $1,532 million, based on an exchange rate of
110 JPY = 1USD). Operating income and net income are expected to be
38,000 million Yen (or US $345 million) and 28,700 million Yen (or US
$260 million), respectively.

Growth rate figures are calculated from Japanese Yen results. Some
discrepancy may therefore be noted in US Dollar comparisons owing to
fluctuations in currency conversion rates.

Relevant business updates in Q4

Product updates

Over half a million organizations around the world rely on Trend Micro’s
solutions and its comprehensive threat intelligence. In Q4 2018, Trend
Micro further strengthened its connected threat defense portfolio with
product updates across endpoint, network and hybrid cloud. Those updates
included:

Launch of Trend Micro Apex One™, an evolution of Trend Micro’s
advanced endpoint security offering. Apex One redefines endpoint
security with the wide set of capabilities delivered as a single agent,
with consistency across SaaS and on-premises deployments. This
simplified offering enhances automated detection and response, and
provides actionable insights that maximize security for customers and
offers growth opportunities for the channel.

Trend Micro’s Cloud Edge™ solution, a unified threat management
solution, was released in North America. The solution was previously
launched in Asia where it established a strong user base over several
years. This offering is exclusively tailored for managed service
providers (MSPs) and allows them to deploy an easy-to-handle,
high-performance solution that extends industry-leading security to
small and medium businesses.

Trend Micro achieved AWS Container Competency status by meeting
criteria that included having two strong customer references and a
strict set of requirements. This collectively reinforces Trend Micro’s
leadership role in container security and demonstrates proven success
with AWS customers.

AWS announced support for software products built on Docker containers.
As an AWS Partner Network Advanced Technology Partner, Trend Micro is
extending its solutions in the AWS Marketplace with its automated
build-time and container image registry scanning. This will detect
vulnerabilities and malware prior to deployment, helping customers
reduce threats and risk early in the CI/CD pipeline with frictionless
security.

Trend Micro can now send key security events to the new AWS Security
Hub. AWS Security Hub is designed to provide users with a comprehensive
view of their high-priority security alerts and compliance status by
aggregating, organizing, and prioritizing alerts or findings from
multiple AWS services, such as Amazon GuardDuty, Amazon Inspector, and
Amazon Macie, as well as from other APN security solutions. The findings
are then visually summarized on integrated dashboards with actionable
graphs and tables. This allows Trend Micro users to gain a stronger
security posture while accomplishing more with less.

Partnerships:

Trend Micro views partnerships as one of the critical means to securing
the world’s digital information. This past quarter, Trend Micro
announced several partnerships to complement its cybersecurity
solutions. Those partnerships include:

The execution of a letter of intent relating to the formation of a
joint-venture corporation—TXOne Network. This new corporation
will focus on the security needs present in Industrial Internet of
Things (IIoT) environments, including smart manufacturing, smart city,
smart energy and more.

Trend Micro is an AWS Partner Network Launch Partner of the new AWS
Marketplace Consulting Partner Private Offers, a new program that will
benefit its channel partners. The program allows an AWS Marketplace
customer and an AWS Marketplace ISV to negotiate custom price and end
user licensing agreement (EULA) terms for a software purchase. The
result will help the channel accelerate cloud migrations and streamline
technology procurement and deployment.

With the 5G era upon us, Trend Micro and NTT DOCOMO agreed to
develop a new solution for the demands of this new era. The technical
verification of a network security solution, specifically for network
function virtualization and the cloud are underway now. This solution is
built upon the recently announced Trend Micro Virtual Network Function
Suite (VNFS) on NTT DOCOMO’s “docomo 5G open cloud.”

As a part of its diversity initiative, Trend Micro launched the Close
the Gap initiative
with key support from Amazon Web Services. This
campaign is focused on reducing the gender gap within the IT and
cybersecurity workforce. At the most recent re:Invent, Trend Micro and
AWS co-hosted 30 young women of Girls in Tech to attend the conference,
helping them advance their knowledge and build new connections in the
industry.

Research highlights:

Trend Micro prides itself on having the world’s most advanced global
threat intelligence. The company’s research is focused on helping
customers and the industry anticipate and analyze potential threats
across global enterprises. Trend Micro approaches research with a clear
view of the changing infrastructure and threat landscape and, as
importantly, changing user behaviors. This past quarter we shared the
following research insights:

Trend Micro warned organizations to revisit their operational technology
(OT) security after finding major design flaws and vulnerable
implementations related to two popular machine-to-machine (M2M)
communication protocols, Message Queuing Telemetry Transport (MQTT) and
Constrained Application Protocol (CoAP). Trend Micro’s new report,
co-branded with Politecnico di Milano, The Fragility of Industrial
IoT’s Data Backbone
,
highlights the growing threat of industrial
espionage, denial-of-service and targeted attacks by abusing these
protocols.

A Trend Micro study revealed that 86 percent of surveyed IT and
security decision makers across the globe believe their organization needs
to improve its awareness of IoT threats
. This significant lack of
knowledge accompanies rising threat levels and security challenges
related to connected devices, which leaves organizations at great risk.

Trend Micro published research revealing how exposed human machine
interface
(HMI) systems could be exploited in thousands of critical
water and energy organizations around the world, causing significant
real-world impacts, such as contaminating the water supply.

Trend Micro revealed that 43 percent of surveyed organizations
have been impacted by a Business Process Compromise (BPC).
Despite a high incidence of these types of attacks, 50 percent of
management teams still don’t know what these attacks are or how their
business would be impacted if they were victimized.

Trend Micro released its 2019 predictions report, warning that
attackers will increase the effectiveness of proven attack methods by
adding more sophisticated elements to take advantage of the changing
technology landscape. The report, Mapping the Future: Dealing with
Pervasive and Persistent Threats,
highlights the growing threats
faced by consumers and organizations that are exacerbated by the
increasingly connected world.

Trend Micro announced the winners of its global Capture The Flag
(CTF), an annual competition designed to help fill the cybersecurity
skills gaps in the most critical areas of need. Now in its fourth year,
the Trend Micro CTF 2018 – Raimund Genes Cup invites teams from around
the world to compete, strengthening the talent of young industry
professionals.

Awards

Trend Micro was awarded the following awards in Q4 2018:

Endpoint product has been named a 2018 Gartner Peer Insights
Customers’ Choice
Endpoint Protection Platforms (EPP). This
recognition from endpoint security customers follows multiple
assessments from analysts and third-party testers. Gartner Peer Insights
Customers’ Choice for EPP focused specifically on Trend Micro’s
OfficeScan and Worry-Free Standard solutions.

Trend Micro’s sales leader for the Americas, Hernan Armbruster, won a
SANS Difference Makers Award for leading the company’s efforts, together
with the Organization of American States (OAS), to create the OAS
Cyberwomen Challenge, a capture the flag (CTF) dedicated to women.

Patents

Trend Micro was awarded the following patents in Q4 2018:

Patent No.       Issue Date       Title
 
10116614 10/30/2018 Detection of Abusive User Accounts in Social Networks
10154065 12/11/2018 Policy Management In Software Container Computing Environments
10162966 12/25/2018 Anti-Malware System with Evasion Code Detection and Rectification
10162967 12/25/2018 Method and Systems for Identifying of Legitimate Computer Files
 

Notice Regarding Forward-Looking Statements

Certain statements that are made in this release are forward-looking
statements. These forward-looking statements are based on management’s
current assumptions and beliefs in light of the information currently
available, but involve known and unknown risks and uncertainties. Many
important factors could cause actual results to differ materially from
those expressed in forward-looking statements. These factors include:

  • Difficulties in addressing new threats and other computer security
    problems
  • Timing of new product introductions and lack of market acceptance for
    new products
  • The level of continuing demand for, and timing of sales of, existing
    products
  • Rapid technological change within the security software industry
  • Changes in customer needs for security software
  • Existing products and new product introductions by competitors and
    pricing of those products
  • Declining prices for products and services
  • The effect of future acquisitions on our financial condition and
    results of operations
  • The effect of adverse economic trends on principal markets
  • The effect of foreign exchange fluctuations on our results of
    operations
  • An increase in the incidence of product returns
  • The potential lack of attractive investment targets
  • Difficulties in successfully executing our investment strategy
  • New and potentially unforeseen risks and liabilities associated with
    the internet of things, the use of artificial intelligence in our
    products and services, and other emerging technologies

About Trend Micro

Trend Micro Incorporated, a global leader in cybersecurity solutions,
helps to make the world safe for exchanging digital information. Our
innovative solutions for consumers, businesses, and governments provide
layered security for data centers, cloud workloads, networks, and
endpoints. With more than 6,000 employees in 50 countries and the
world’s most advanced global threat research and intelligence, Trend
Micro enables organizations to secure their connected world. For more
information, visit www.trendmicro.com.

All product and company names herein may be trademarks of their
registered owners.

Contacts

Investor Relations Contact:
[email protected]
+81-3-5334-3600

Media Contact:
Kateri Daniels
[email protected]
+1
817-522-7911

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