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Trend Micro Incorporated (ADR) (TMICY)
:TMICY
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Trend Micro
(OTC:TMICY)
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Rating:78Outperform
Price Target:―
Trend Micro is well-positioned in the Software - Infrastructure industry, with strong financial performance driven by robust revenue growth and profitability. The company's efforts in AI and cybersecurity further bolster its market standing. While technical indicators show positive momentum, the high P/E ratio suggests careful consideration of valuation. Challenges in the consumer segment and accounts receivable issues present risks, but the overall outlook remains favorable.
Positive Factors
Zero Debt Position
A zero-debt position enhances Trend Micro's financial stability, providing flexibility to invest in growth opportunities without the burden of interest payments.
AI and Cybersecurity Innovations
Innovations in AI and cybersecurity enhance Trend Micro's competitive edge, aligning with industry trends and potentially driving future growth.
Enterprise Business Growth
Strong growth in the enterprise segment highlights Trend Micro's effective market penetration and product adoption, supporting sustained revenue growth.
Negative Factors
Challenges in Consumer Business
Issues in the consumer segment could hinder revenue diversification and growth, as reliance on enterprise clients increases.
Decline in Free Cash Flow
A decline in free cash flow may limit Trend Micro's ability to reinvest in business expansion and innovation, affecting long-term growth prospects.
Impact of Unrecoverable Accounts Receivable
Issues with accounts receivable management can strain financial resources and impact profitability, posing risks to financial health.
Trend Micro (TMICY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.81B
Dividend Yield2.16%
Average Volume (3M)539.00
Price to Earnings (P/E)25.0
Beta (1Y)0.61
Revenue Growth2.73%
EPS Growth46.30%
CountryUS
Employees6,869
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.62
Shares Outstanding140,901,610
10 Day Avg. Volume0
30 Day Avg. Volume539
Financial Highlights & Ratios
PEG Ratio0.14
Price to Book (P/B)9.44
Price to Sales (P/S)4.13
P/FCF Ratio51.62
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue0.03
Enterprise Value/Gross Profit0.04
Enterprise Value/Ebitda0.10
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.69
Revenue Forecast (FY)$1.77B
Trend Micro Business Overview & Revenue Model
Company DescriptionTrend Micro Inc. (TMICY) is a global leader in cybersecurity solutions, providing advanced security software and services to individuals, businesses, and government organizations. The company operates in the technology sector, focusing on protecting endpoints, networks, servers, and cloud environments. Its core products include antivirus software, internet security, and solutions for cloud security, network defense, and threat intelligence, designed to safeguard against cyber threats and data breaches.
How the Company Makes MoneyTrend Micro makes money primarily through the sale of its cybersecurity software and services. The company generates revenue from licensing its products, which are available for both individual consumers and enterprise clients. Enterprise solutions often involve subscription-based models, where customers pay regular fees for continued access to Trend Micro's security services and updates. Additionally, the company offers managed security services, which provide organizations with outsourced monitoring and management of their security systems. Key revenue streams include endpoint security, hybrid cloud security, and network defense. Trend Micro also engages in strategic partnerships with other technology companies and cloud service providers, which help expand its market reach and enhance its service offerings.
Trend Micro Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 12, 2026
Earnings Call Sentiment Neutral
The earnings call reflects a mixed outlook with strong growth in AI initiatives and Japanese enterprise business, contrasted by challenges in currency impact, consumer revenue decline, and global macroeconomic uncertainties.Q2-2025 Updates
Positive Updates
AI Investments and Vision One Strategy
Trend Micro is heavily investing in AI, with a focus on the Vision One platform and AI security solutions. ARR grew to USD1.6 billion, and the NRR for V1 native and cyber services is over 140%. The company aims to convert all non-Vision One SaaS customers to the Vision One platform.
Japanese Enterprise Growth
The Japanese enterprise business experienced strong double-digit growth of 12% YoY, attributed to multiyear contracts and increased adoption of Trend Vision One.
Productivity and AI Integration
Trend Micro has integrated AI across its operations, improving productivity in product development and customer support. The company reports that AI-powered coding and customer support have increased efficiency significantly.
Vision One Platform Expansion
The Vision One platform saw a 94% YoY growth in large enterprise ARR. The company successfully landed new clients, replacing competitors like Microsoft, and expanded existing accounts with Vision One's capabilities.
Consumer Business Adaptation
Despite challenges, the consumer business showed growth in anti-scam solutions, with a 55% YoY increase in gross sales for beyond device protection.
Negative Updates
Currency Impact and Sales Slowdown
Currency fluctuations negatively impacted earnings, with net sales down 3% YoY and a 29% decrease in ordinary income due to FX losses. The enterprise segment saw elongated sales cycles and project delays.
Consumer Revenue Decline
The consumer revenue declined by 10% YoY, partly due to issues with PayPal transaction processing after switching the merchant of record.
Global Macroeconomic Uncertainty
The geopolitical conflicts and tariff wars have created significant uncertainty, affecting customer investment decisions and delaying new projects, particularly in the government sector.
Weakness in Non-Japanese Markets
While Japan performed well, other regions like Europe and the Americas showed weakness, with less growth in net sales and macroeconomic uncertainties affecting performance.
Company Guidance
In the Q2 2025 earnings call, Trend Micro reported a 3% decline in net sales and a 6% reduction in total operating expenses, resulting in a 9% increase in operating income. The company faced challenges from macroeconomic uncertainties, elongated sales cycles, and a stronger yen, which impacted ordinary income by a 29% loss. Despite these headwinds, the annual recurring revenue (ARR) grew to USD 1.6 billion, driven by a 94% year-over-year growth in large enterprise ARR. The Vision One platform saw significant traction, with a 94% YoY increase in ARR and over 11,000 enterprises adopting the platform, contributing to a 143% net revenue retention rate. The company also emphasized its AI initiatives, expecting USD 623 billion in AI spending by 2028, and highlighted its strategic partnerships, notably with NVIDIA and Dell. Trend Micro aims to transition its SaaS customers to the Vision One platform, focusing on increasing the quality of sales through AI-enhanced services. Despite the flat total headcount, the company continued hiring in AI-related technical roles to boost productivity. The forecast for H2 remains cautious but optimistic, with a focus on maintaining operating margins around 20% amidst ongoing macroeconomic challenges and currency fluctuations.Trend Micro Financial Statement Overview
Summary
Trend Micro demonstrates solid financial health with strong revenue growth, robust profitability, and efficient cash flow management. The zero-debt position enhances financial stability, though attention to declining free cash flow and equity levels could further strengthen the company's financial position.Income Statement
Trend Micro exhibits strong profitability with a consistent gross profit margin above 70% and improving net profit margins, reaching 12.6% in the latest year. Revenue has shown steady growth, with a notable increase of around 9.6% from 2023 to 2024. EBIT and EBITDA margins reflect solid operational efficiency. However, the net income growth has been inconsistent, impacting overall profitability scores.85
Very Positive
Balance Sheet
The company maintains a robust balance sheet with zero debt, indicating financial stability and low leverage risk. A strong equity ratio above 25% and healthy ROE highlight efficient use of equity capital. However, a decline in stockholders' equity over the most recent period suggests potential areas for improvement in equity retention or growth.80
Positive
Cash Flow
While operating cash flow remains strong, there has been a decrease in free cash flow, impacting growth rates. The company maintains a favorable operating cash flow to net income ratio, indicating efficient cash conversion. However, the drop in free cash flow from 2023 to 2024 points to increased capital expenditures or other cash outflows that need addressing.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 204.36B | 272.64B | 248.69B | 223.79B | 190.36B | 174.06B |
| Gross Profit | 155.81B | 207.66B | 185.03B | 169.50B | 148.34B | 135.90B |
| EBITDA | 57.79B | 77.03B | 60.92B | 56.53B | 64.54B | 62.14B |
| Net Income | 22.36B | 34.36B | 10.73B | 29.84B | 38.37B | 26.90B |
Balance Sheet | ||||||
| Total Assets | 2.63B | 400.32B | 492.63B | 470.80B | 420.46B | 376.70B |
| Cash, Cash Equivalents and Short-Term Investments | 1.53B | 210.90B | 299.03B | 242.85B | 256.80B | 212.27B |
| Total Debt | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total Liabilities | 1.76B | 280.87B | 278.21B | 242.12B | 199.03B | 187.34B |
| Stockholders Equity | 859.29M | 119.44B | 214.39B | 228.66B | 220.64B | 188.53B |
Cash Flow | ||||||
| Free Cash Flow | 46.74B | 21.84B | 30.87B | 35.92B | 36.48B | 42.47B |
| Operating Cash Flow | 47.47B | 46.78B | 57.23B | 56.90B | 55.27B | 54.31B |
| Investing Cash Flow | -10.44B | 5.04B | 31.00B | -67.72B | 2.58B | -5.78B |
| Financing Cash Flow | -20.08B | -130.90B | -43.43B | -30.44B | -16.45B | -21.14B |
Trend Micro Technical Analysis
Negative
49.68
Price Trends
49.51
Negative
52.65
Negative
61.04
Negative
Market Momentum
-1.93
Positive
33.92
Neutral
24.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TMICY, the sentiment is Negative. The current price of 49.68 is above the 20-day moving average (MA) of 47.39, above the 50-day MA of 49.51, and below the 200-day MA of 61.04, indicating a bearish trend. The MACD of -1.93 indicates Positive momentum. The RSI at 33.92 is Neutral, neither overbought nor oversold. The STOCH value of 24.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TMICY.
Trend Micro Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.81B | 24.96 | 29.20% | 2.16% | 2.73% | 46.30% | |
75 Outperform | $21.59B | 20.80 | 29.35% | ― | 11.27% | 4.47% | |
71 Outperform | $59.03B | 32.84 | 228.04% | ― | 14.78% | 22.52% | |
67 Neutral | $118.49B | ― | -8.88% | ― | 22.05% | -341.24% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $36.11B | -880.68 | -2.41% | ― | 23.24% | -8.83% | |
52 Neutral | $22.37B | -97.36 | -12.73% | ― | 43.26% | -1651.82% |
* Technology Sector Average
TMICY
Trend Micro
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-15.91%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.