Trend Micro Announces Strong First Quarter Results

Enterprise business achieves nearly 30-percent growth globally, with US and

                      Europe leading revenue growth

    Trend Micro net sales in yen increase by 12 percent year over year



TOKYO, April 26 /Xinhua-PRNewswire-FirstCall/ -- Trend Micro, Incorporated (TSE:4704)(NASDAQ:TMIC), a leader in network antivirus and Internet content security software and services, today announced earnings results for the first quarter 2007, including record net sales for the first quarter 2007.

Trend Micro posted consolidated net sales of 23.25 billion Yen (or US $194.95 million, 119.27JPY = 1USD), and operating income and net income both performed above expectations.  The company posted operating income of 6.63 billion Yen (or US $55.57 million) and net income of 4.35 billion Yen (or US $36.45 million) for the quarter. These figures reflect 12 percent growth in net sales compared to the same period a year ago.

The Company continued to see strong growth, led by a 20-percent year-over- year revenue increase in North America and 14-percent in Europe, this was followed by Asia Pacific and Japan at 10-percent and 6-percent growth respectively. Much of the company's worldwide growth was buoyed by strong sales in Enterprise solutions, which experienced a 29-percent increase year- over-year.

Long-term growth was further supported with the introduction of a number of new solutions and services, and ground-breaking, new Total Web Threat Protection technology.  Trend Micro launched a new messaging security service for enterprise customers, InterScan Messaging Hosted Service.  The Company also launched the beta version of a new consumer web-reputation service called TrendProtect, in March 2007 and announced the acquisition of HijackThis, a popular freeware anti-spyware program now available on TrendSecure that enables technically savvy users to identify and remove unwanted and malicious programs.

'We were very pleased with our achievements in the first quarter of 2007, and particularly note the introduction of our Total Web Threat Protection technology which helps advance the preventative security available to customers against pernicious web threats, today and tomorrow,' said Eva Chen, CEO of Trend Micro. 'We delivered a number of new messaging-protection, small-medium business and mobile device solutions for both businesses and consumers, and the acquisition of HijackThis extends our ability to provide value-add services to end-users everywhere.   Our steadfast focus on content security continues to support our potential for growth now and in the future.'

Based on information currently available to the company, consolidated net sales for the second quarter ending June 30, 2007 is expected to be 22.5 billion Yen (or US $192.31 million, based on an exchange rate of 117JPY = 1USD). Operating income and net income are expected to be 5.3 billion Yen (or US $45.30 million) and 3.0 billion Yen (or US $25.64 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.

  First Quarter Business Highlights
  Corporate
  -- In March 2007, Trend Micro announced state-of-the-art Web threat
     protection technology. New in-the-cloud Trend Micro Web Reputation
     technology is a key new innovation being added to the Trend Micro
     multi-layered approach for dealing with evolving multi-component Web
     threats that take advantage of the interactive nature of the Internet.
     Total Web Threat Protection is a key component within the Trend Micro
     Secure Content & Threat Management security solutions portfolio.
  -- Following closely the certification awarded to Trend Micro consumer
     products in the previous quarter, Trend Micro Client Server Messaging
     Security 3.6 client was awarded Microsoft Vista logo certification in
     March 2007.
  -- New customers in the first quarter included:
     In the United States and Canada - BJC Healthcare. In Europe -- RDC
     DATACENTRUM, ICT Center Justice department, and in China -- TCL Group,
     DongFeng Automobile Co., LTD., China Mobile & Telecom Company FUJIAN
     Co., Ltd, China NETCOM(Group)Company Limited Beijing Branch and China
     Mobile Company HEBEI Branch

  Awards
  -- At the beginning of March 2007, Channel Reseller News in North America
     announced the winners of its CRN 2007 Channel Champions. Trend Micro
     earned a Channel Champs award for Program & Support in the Client
     Security Software category.
  -- At the end of March 2007, TechTarget's Information Security Magazine
     and SearchSecurity.com announced that Trend Micro AntiVirus plus
     AntiSpyware had been awarded the Information Security Readers Choice
     Silver Award in the Antimalware category.

  Patents
  Trend Micro was awarded the following patents in the first quarter 2007:

  -- U.S. Patent No. 7,188,369, entitled " System and Method Having an
     Antivirus Virtual Scanning Processor with Plug-in Functionalities"
     covers a computer processor emulator that enables virus detection
     instructions to be safely performed in a virtual environment without
     exposing virus infection to the host computer.  According to a specific
     example of the patented technology, the virtual processor allows
     polymorphic viruses and compressed viruses to be safely decrypted and
     uncompressed, respectively, eliminating the need to determine the
     actual encryption or compression algorithm.  This is particularly
     advantageous as viruses use encryption and compression schemes that are
     new and more complex.

  Product
  Trend Micro introduced the following products in the first quarter 2007:

  -- Trend Micro InterScan Messaging Hosted Service, Trend Micro Messaging
     Security Suite and Trend Micro InterScan Messaging Security Appliance,
     designed to provide enterprises a choice of solution form factor and to
     extend the security already available to protect corporate email as
     messaging threats evolve.
  -- Trend Micro ScanMail for Exchange -- the latest version of ScanMail for
     Exchange continues to provide businesses proven protection against a
     multitude of email-borne threats.  The solution now also includes
     technology to protect against zero-day attacks, image spam, and for
     improved web-threat security it includes dedicated anti-spyware as well.


-- Trend Micro Worry-Free Security for small and medium-sized businesses - -

     - updates to Trend Micro Worry-Free security solutions include the
     addition of spyware and rootkit protection, further enhancing the
     comprehensive, single-installation security products already available
     for smaller organizations.
  -- TrendProtect and HijackThis -- The acquisition of popular freeware
     anti-spyware tool HijackThis complemented the launch of the beta
     version of TrendProtect, a new web-reputation service for consumers
     available at http://www.trendsecure.com/ .
  -- Trend Micro Mobile Security 3.0 -- The release of the latest version of
     Trend Micro Mobile Security protects users of the latest Nokia
     Smartphones against mobile malware while protecting against unwanted
     intrusions and data leakage through new firewall and intrusion
     detection technologies.

  Notice Regarding Forward-looking Statements


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

  -- Difficulties in addressing new virus and other computer security
     problems
  -- Timing of new product introductions and lack of market acceptance for
     our new products
  -- The level of continuing demand for, and timing of sales of, our
     existing products
  -- Rapid technological change within the antivirus software industry
  -- Changes in customer needs for antivirus software
  -- Existing products and new product introductions by our competitors and
     the 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 our 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



We assume no obligation to update any forward-looking statements.  For more details regarding risk factors relating to our future performance, please refer to our filings with the U.S. Securities and Exchange Commission.

About Trend Micro Incorporated

Trend Micro Incorporated is a pioneer in secure content and threat management.  Founded in 1988, Trend Micro provides individuals and organizations of all sizes with award-winning security software, hardware and services.  With headquarters in Tokyo and operations in more than 30 countries, Trend Micro solutions are sold through corporate and value-added resellers and service providers worldwide.  For additional information and evaluation copies of Trend Micro products and services, visit our Web site at http://www.trendmicro.com/ .

  Supplementary Information

  1. Consolidated Unaudited Results of Operations for First Quarter Ending
     March 31, 2007 (US GAAP)
     *Figures for the First quarter of 2007 and 2006 are not audited.


  Consolidated Results of Operations

                             FY2007             FY2006
                             Current first      Previous first
                             quarter            quarter
                             From January 1,    From January 1,
                             2007               2006
                             To March 31,       To March 31,      Growth
                             2007               2006              Rate
                             Millions of yen    Millions of yen    %

  Net sales                     23,252            20,778          11.9
  Cost of sales                  4,429             3,679          20.4
  Operating expenses            12,195             8,570          42.3
  Operating income               6,628             8,529         (22.3)
  Other income (expenses)          883               348         153.4
  Net income before taxes        7,511             8,877         (15.4)
  Income taxes                   3,185             3,710         (14.1)
  Minority interest in
   income of
   consolidated
   subsidiaries                      0                 0         (69.5)
  Equity in earnings of
   affiliated
   companies                        21               (22)       (196.1)
  Net income                     4,347             5,145         (15.5)



  (2) Segment  information

  Net sales to third parties

                         FY2007                  FY2006
                   Current first quarter    Previous first quarter
                   From January 1, 2007     From January 1, 2006
                   To March 31,2007         To March 31,2006

                    Millions of yen          Millions of yen

  Japan                  8,538                    8,028
  North America          5,788                    4,819
  Europe                 5,825                    5,124
  Asia Pacific           2,379                    2,166
  Latin America            722                      641
       Total            23,252                   20,778


  Deferred  Revenue

                        FY2007                   FY2006
                    As of March 31,2007     As of March 31,2006
                      Millions of yen        Millions of yen
  Japan                 22,904                   18,350
  North America         15,960                    9,878
  Europe                12,849                    9,507
  Asia Pacific           3,966                    2,819
  Latin America          1,507                    1,324
        Total           57,186                   41,878


  Note: Classification of countries and regions into each segment.
        North America: U.S.A.
        Europe: Italy, Germany, France, UK, Ireland
        Asia Pacific: Taiwan, Korea, Australia, Hong Kong, Malaysia,
                      New Zealand, China, Singapore, Thailand, India
        Latin America: Brazil, Mexico

  (3) Basis of consolidation
      The number of consolidated subsidiaries     19 (19 in overseas)
      The number of unconsolidated subsidiaries   --

  (4) Increase (Decrease) of major assets, liabilities and shareholders'
      equity


                          As of March 31,    Increase    As of December 31,
                                2007        (Decrease)          2006

                          Millions of yen  Millions of yen  Millions of yen
  (Assets)
  Cash and cash
   equivalents               67,219          (8,978)           76,197
  Notes and accounts
   receivable, trade
   -less allowance for
   doubtful accounts and
   sales returns             20,405             481            19,924
  Marketable securities
   and securities
   investments               42,273             633            41,640
  Goodwill                    2,957             (26)            2,983

  (Liabilities)
  Deferred revenue
   (Total of current and
    long term)               57,186           4,411            52,775

  (Minority interest)
  Minority interest in
   consolidated
   subsidiaries                   9               2                 7

  (Shareholders' equity)
  Treasury stock             (15,651)        (1,484)           (14,167)

  2. Projected consolidated earnings (US GAAP)
     Projected earnings for the next quarter (April 1, 2007 through
     June 30, 2007)


                     Net sales       Operating income       Net income
                  Millions of yen    Millions of yen     Millions of yen
      2nd Qtr        22,500             5,300               3,000


  Note: Since the business environment surrounding Trend Micro Group tends
        to fluctuate in the short run, it is difficult to make the highly
        reliable projection figures on a yearly basis. We, therefore,
        decided to announce the earnings on a quarterly basis in the fiscal
        year ending in December 2007 as well as earnings projection of the
        succeeding quarter.

        If we found through our calculation conducted from time to time that
        the net sales fluctuate from the most recent quarterly projection by
        more than 10%, or operating income or net income fluctuates by more
        than 30%, we will announce the revision of the earnings projection.


  For additional Information
   Mr. Mahendra Negi
   Chief Operating Officer / Chief Financial Officer / IR Officer
   Phone: [phone]
   Fax:   [phone]
   Email: 

DATASOURCE: Trend Micro, Incorporated



CONTACT: Mahendra Negi of Trend Micro, [phone], or fax,

[phone], or  



Web site: http://www.trendmicro.com/ 

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