Trend Micro

4704.THIGH

Core · Weight: 30%· Data as of 2026-05-24

¥5,304-3.14%

6-month daily

Investment Thesis

Global cybersecurity leader with Japan HQ. Q1 FY2026 beat (May 14, 2026): Revenue ¥73,856M (+9.4%), NI ¥11,775M (+32.9%), OP margin 21.1% — beat FY guidance of 17-19%. Vision One ARR +50% YoY, Large-Enterprise Core Platform ARR +74% YoY. FY2026 guidance unchanged: ¥301.5B revenue (+9.2%), OP ¥56.4B. Partners expanded 190→290+ (8x ARR multiplier per partner). Rebranded enterprise business as TrendAI (March 2026) — strategic pivot to AI security platform. Japan Active Cyber Defense Law enforcement Oct 1, 2026 (CONFIRMED) drives critical infrastructure procurement urgency in H2 2026. Div yield ~3.3% rare for cybersecurity.

Risk

1) Total ARR +3% YoY (slow underlying growth vs Vision One +50% subsegment — legacy drag). 2) Microsoft $10B Japan investment (April 2026) escalates Defender/Sentinel competition in enterprise and government — bundles at zero marginal cost. 3) CrowdStrike Japan: Macnica exclusive distribution now targeting SMB, organizational investment expanding. 4) Forward PE expanded meaningfully post-Q1 (stock +9.3%) — valuation no longer as obviously cheap. 5) FX: yen at ¥159 (currently tailwind for USD revenue translation, but if yen strengthens, reverses).

Monitoring Trigger

✓ Q1 FY2026: BEAT (Vision One +50% > 40% threshold — CLEARED). ✓ OP guidance: unchanged (CLEARED). NEW: Watch Q2 FY2026 (Aug 2026) — confirm Vision One accelerates beyond Q1's 50%. Oct 1 ACDA enforcement: watch for named government contracts. If Microsoft wins major Japan critical-infrastructure contract away from Trend Micro, TRIM. If total company ARR growth (USD) accelerates above 8% by Q2, consider UPGRADE.

Key Dates

2026-05earningsQ1 FY2026 earnings

2026-08earningsQ2 FY2026 earnings — confirm Vision One ARR >50% YoY and total ARR accelerating from +3%

2026-10-01catalystActive Cyber Defense Law enforcement begins — 15 critical infrastructure sectors mandated. Expect procurement acceleration in H2.

2027-02earningsFY2026 full-year results — confirm OP ¥56.4B guidance delivery and TrendAI ARR exit rate

Update History

2026-04-15new_narrativeHOLD

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Initial DD — global leader, PE 20.8x, div yield 3.45%, Vision One ARR +58%

2026-05-24evolveHOLD

View report →

Q1 FY2026 beat (May 14): Revenue +9.4%, NI +32.9%, OP margin 21.1% (beat 17-19% guidance). Vision One ARR +50% — monitoring trigger CLEARED. Partners 190→290+. TrendAI rebrand March 2026. NVIDIA/Anthropic/HPE partnerships. ACDA Oct 1 enforcement confirmed. Microsoft $10B Japan risk elevated. Stock +9.3% post-Q1. HOLD.

pe:20.822.5forward_pe:18.821.5op_margin:20.9%21.1% (Q1 actual)div_yield:3.45%3.30%fcf:+¥65.4B+¥42.7B (TTM; prior was FY2025 full-year)market_cap:¥713B¥715Bsupply_chain:2 entries4 entries (added NVIDIA, Anthropic)thesis:FY2025 record dataUpdated with Q1 FY2026 beat, TrendAI rebrand, ACDA confirmedmonitoring_trigger:Q1 FY2026 pendingQ1 CLEARED; updated to Q2 Aug 2026 + ACDA Oct 2026

Key Metrics

22.5

21.5

Fwd PE

5.6

P/B

26.3%

ROE

21.1%

Op Margin

low (near-zero long-term debt, cash ¥231B)

D/E

3.30%

Div Yield

+¥42.7B

FCF

¥715B

Mkt Cap

Business Segments

Segment	Revenue	Share	Description
Enterprise Security	¥220B	80%	Vision One platform, endpoint, cloud, network security
Consumer Security	¥56B	20%	Virus Buster consumer products (Japan dominant)

Supply Chain Evidence

Evidence	Customer	Product	Detail
confirmed	Global enterprises	TrendAI Vision One platform (formerly Vision One)	290+ channel partners (was 190; +53% in one quarter), 500K+ enterprise customers. Vision One ARR +50% YoY, Large-Enterprise Core Platform ARR +74% YoY. Source: Q1 FY2026 earnings press release, May 14, 2026.[source](2026-05)
confirmed	Japan government/critical infrastructure	Endpoint & cloud security under ACDA compliance	Dominant in Japan enterprise market. Active Cyber Defense Law enforcement Oct 1, 2026 mandates critical infrastructure incident reporting and zero-trust architecture for 15 sectors. Trend Micro's Japan brand trust and JPCERT/CC relationships position it as primary beneficiary. Source: The Register March 18, 2026.[source](2026-03)
confirmed	NVIDIA (partnership)	AI factory security / TrendAI for agentic AI	TrendAI expanded partnership to secure NVIDIA OpenShell agentic AI runtime and NVIDIA DSX Air Platform. Announced March 16-23, 2026. Opens new AI infrastructure security market. Source: Trend Micro newsroom.[source](2026-03)
confirmed	Anthropic (partner)	Claude AI models embedded in TrendAI platform	TrendAI embedded Anthropic Claude models for agentic security workflows, automation, and threat research. Announced April 17, 2026. Source: Trend Micro newsroom HK.[source](2026-04)

Sources & References

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Peer Comparison

Company	PE	Fwd PE	ROE	Op Margin	FCF
Trend Micro	22.5	21.5	26.3%	21.1%	+¥42.7B
Digital Arts	21.7	21.7	17.8%	42.7%	N/A
HENNGE	22.9	19.5	46.0%	17.6%	N/A
Cyber Security Cloud	20.4	N/A	18.6%	21.7%	+¥578M
FFRI Security	38.7	67.1	28.4%	31.3%	N/A
Macnica Holdings	14.7	N/A	10.18%	~3.5% (overall distributor; cyber segment >9%)	N/A
Internet Initiative Japan (IIJ)	19.08	N/A	14.96%	10.7%	N/A
Soliton Systems	14.55	N/A	~20%	14.1%	N/A