(Singapore) While the Trump administration’s policies overturn the Japanese cybersecurity company Trend Micro, helping to slow revenues in the first quarter, the company believes artificial intelligence (AI) will provide a long-term promise that more than compensates for current issues.
“No one has stopped the quest for AI despite everyone being regaining their spending,” said Eva Chen, the company’s CEO, in an interview with the Business Times.
The company provides products and services to all cybersecurity layers, including laptops, servers where data is stored, and endpoint devices such as internet networks. With all the security layers in mind, Trend Micro can quickly keep up with innovation and industry changes, including advances in AI, Chen said.
Trend Micro was first listed in 1998 on the Japanese Stock Exchange of Jasdaq startups and venture companies. It was later listed on the Tokyo Stock Exchange in 2000. Since then, the company’s stock price has risen by nearly 20%.
Trend Micro currently has a market capitalization of 1.3 trillion yen (SG$11.4 billion) and annual revenue of around US$2 billion, selling cybersecurity products to both consumers and businesses.
Company Performance
The latest first quarter results for 2025 show that Trend Micro has net sales of ¥67.5 billion, up 2.4% from a year ago. This was a slowdown from the fourth quarter of 2024, with a 7.7% increase in net sales compared to a year ago. Chen attributed the slowdown in sales to several reasons.
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First, one of the suppliers of Trend Micro, which operates the company’s electronic payment system for its consumer business, has gone bankrupt. Therefore, Trend Micro’s payment services were not functioning outside of Japan in the first quarter of 201025.
On a macro level, Trend Micro’s business has slowed down due to policies introduced by the Trump administration in the United States. In the Asian market, Chen observed that companies, particularly manufacturers, were more cautious about spending, given uncertainty about US tariffs.
Within the US market itself, Chen observed a slowdown in business, possibly from the US government sector, due to the impact of the government’s Department of Efficiency, or the initiative to reduce wasted government spending by the Trump administration.
Chen said he hopes Doge will have a slower lingering impact in the second quarter as overall US government spending slows. Overall, first quarter net profit fell 17.6% to 8.9 billion yen. However, Chen attributed this to the Employee Stock Options program, allowing Trend Microstaff to cash out stocks at current market prices at any time.
“And fortunately or unfortunately, our share price rose significantly in the last quarter, which led to a significant increase in (stock options-related) costs,” Chen said. Trend Micro’s stock price hit a 52-week high of 12,160 yen per share on February 19th.
Good sales in 20124
Despite declining revenue and net profit, Trend Micro’s first quarter operating income represents the company’s revenue from core business operations, reaching a record 15 billion yen, an increase of 23.7% from a year ago.
Chen said the performance was due to Trend Micro’s evolving business strategy. In the early days, Trend Micro adopted a perpetual licensing model for sale, where customers could purchase Trend Micro software licenses and pay an additional fee each year to update the software.
Trend Micro moved to a subscription-based software delivery model called Software As A Service (SAAS). This allows customers to subscribe to software run by Trend Micro on cloud-based servers.
However, due to high operating costs for cloud service providers, Trend Micro’s profit margins fell during this period. It was also difficult to expand the range of products sold to customers through the SaaS model.
In 2023, Trend Micro introduced the Vision One Cybersecurity platform. This has integrated all Trend Micro products and services from various cybersecurity layers into one platform.
“When SaaS customers re-register for their services in their second year, they don’t have to re-establish the entire platform again, so the profit margins will be better,” explained Chen. This reduces operational costs and encourages you to purchase more products offered by Trend Micro through the Vision One platform.
The figures for 201024 are encouraging. For the full year ended December 31, 2024, Trend Micro’s net profit reached over 34.4 billion yen. Operating profit increased to 48.1 billion yen, up 47.6%. Full-year net sales increased nearly 10% to 272.6 billion yen, with the Asia-Pacific region growing at its fastest in 2024.
Sales in the region have increased 20% from a year ago compared to other Trend Micro markets in Japan, the US and Europe.
The power of AI
Chen said the long-term business opportunities offered by AI are optimistic that it will override the short-term challenges presented by current US policies.
First, AI will help improve Trend Micro’s products, Chen said. “We use AI to make our products much smarter. For our customers, the whole detection and protection called proactive security is much faster and better,” she explained.
For example, Trend Micro can use AI to create “digital twins” that can replicate systems or programs while still delivering customizable, valuable products at a lower cost.
Second, the incorporation of AI by businesses also presents new cybersecurity risks. For example, companies need to ensure that the data they use to train AI is “uncontaminated.” This means that the data is accurate and unbiased.
For these reasons, AI opportunities will be the focus of trending Micro’s business strategy over the next few years, Chen said.
The company’s net profit for fiscal year 2025 increased by 13.2%, and net sales increased by 5.9% to 288.6 billion yen. In addition, for the current fiscal year, it is estimated that operating profit will increase by 25.3%, to 60.3 billion yen.
The challenges remain, but with AI restructuring both its product and business models, Trend Micro sees more opportunities than it will be in the future.
