Market Overview

Trend Micro Reports Second Quarter 2018 Results

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Overall growth of 15 percent in enterprise business anchored its
success

Trend
Micro Incorporated
(TYO:
4704
; TSE:
4704
), a global leader in cybersecurity solutions, today announced
earnings results for the second quarter 2018, ending June 30, 2018. For
the second quarter, Trend Micro posted consolidated net sales of 39,497
million Yen (or US $361 million, 109.16 JPY = 1USD). The company posted
operating income of 8,547 million Yen (or US $78 million) and net income
of 6,882 million Yen (or US $63 million) for the quarter.

The company will not revise expected consolidated results for the full
fiscal year ending December 31, 2018 (released on February 15, 2018).
Based on information currently available to the company, consolidated
net sales for the year ending December 31, 2018, is expected to be
164,800 million Yen (or US $1,484 million, based on an exchange rate of
111 JPY = 1 USD). Operating income and net income are expected to be
40,700 million Yen (or US $366 million) and 28,400 million Yen (or US
$255 million), respectively.

"Our strategy is built around anticipating and addressing three key
areas: the changing infrastructure, shifting user behaviors and
ever-evolving cyber threats of today and tomorrow," said Eva Chen, chief
executive officer for Trend Micro. "Our business momentum is evidence of
our ability to meet the needs of our customers."

Leadership in securing the cloud and hybrid environments

Enterprise business rose by 15 percent from the same quarter last year
for Trend Micro, reinforcing that businesses of all sizes are entrusting
their critical data to this layered security portfolio. As networking
environments become more complex and cloud adoption increases,
organizations require security that is optimized for highly modern
environments. Trend Micro's offerings for protecting hybrid
infrastructures, specifically the Hybrid Cloud Security and Network
Defense solutions, collectively attracted 900 new customers to the
portfolio and grew an impressive 21 percent in gross sales year over
year.

Optimizing Trend Micro solutions for these new environments requires
close partnerships with leading virtualization and cloud platform
providers. Trend Micro's strength in protecting virtualized environments
was recognized by the VMware Global Partner Innovation Award in the
Technical ISV for the second consecutive year.

Furthering its strength in the cloud security space, Trend Micro
launched Deep
Security™ Smart Check
, a component providing continuous container
image scanning to complement the existing Deep Security runtime
container protection. Organizations are increasingly using containers to
accelerate an application's time to market. This new offering eases and
secures the deployment of containers to cloud environments, including
Amazon Web Services, Microsoft Azure and others.

Preventing risk from proliferation of connected devices

Internet connected devices introduce new vulnerabilities and increase
the enterprise attack surface. Since these devices are generally not
designed with security in mind, Trend Micro continues to add new device
manufacturer partnerships to ensure Internet of Things (IoT) devices
have security embedded.

  • Trend Micro Research issued a report on the reality of IP Camera
    threats, while Vivotek simultaneously announced it chose Trend Micro's
    IoT Security for Surveillance Cameras to embed in its devices.
  • Trend Micro's security solutions for IoT extend to protecting
    consumers, as well. Multiple electronic manufacturers validated the
    strength of Trend Micro's solutions with the updated launch of
    multiple home router products, including TP-Link and Asus over the
    second quarter.

Addressing the skills gap

The global skills shortage is a known problem across cybersecurity,
which Trend Micro works to address from both the technology and people
sides of this global issue. The company continues to enhance products
and service offerings to streamline visibility and prioritize threats,
as well as recruiting and training new security talent to add more
qualified professionals to the industry.

  • Trend Micro announced a new services offering, Trend Micro Managed
    Detection and Response (MDR). Trend Micro has increased product
    capabilities to allow security operations centers (SOC) to more
    quickly triage their most critical threat alerts and strategically
    allocate talent during this global cyber skills shortage.

Patents

Trend Micro was awarded the following patents in Q2 2018:

Patent No.

       

Issue Date

       

Title

1620090 04/01/2018 Login Failure Sequence for Detecting Phishing
10007795 06/26/2018

Detection and Recovery of Documents that Have Been Compromised by
Malware

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 and
  • 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 environments, networks, and
endpoints. All our products work together to seamlessly share threat
intelligence and provide a connected threat defense with centralized
visibility and control, enabling better, faster protection. With more
than 6,000 employees in over 50 countries and the world's most advanced
global threat intelligence, Trend Micro secures your connected world.
For more information, visit www.trendmicro.com.

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

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