Trend Micro cuts operating profit guidance by 21% on cloud costs

Trend Micro has lowered its operating profit outlook for the upcoming fiscal year, slashing the forecast by 21%. The revised guidance stands at ¥44.4 billion, a 23% decrease year-over-year and below market projections. The company held steady on its sales guidance but reduced its operating profit margin target to around 15% from the prior 19% goal.

The downward adjustment is primarily due to higher-than-expected cloud expenses, notably AI token usage as Trend Micro bolsters its AI capabilities. Operating profit fell by 54% compared to the previous year, with an operating profit margin of 8%, a 12 percentage point drop from the prior period. Despite a 3% increase in sales on a foreign exchange-neutral basis, attributed to sluggish top-line growth, operating profit fell short of analyst expectations.

The decline was largely attributed to increased cloud-related costs, including AI token expenditures, and heightened marketing spend for a new brand launch.