Trend Micro Reports Results for 2006

Trend Micro Reports Results for 2006

Revenues Up 17 Percent Annually, Driven by Strong Sales in the Small and Mid-Sized Business Market and Overall US Growth

Trend Micro Incorporated (TSE: 4704) , a leader in network antivirus and Internet content security software and services, today announced earnings results for the fourth quarter and consolidated revenue for fiscal year 2006 ended December 31, 2006.

For the fourth quarter, Trend Micro posted a record 23.386 billion Yen ($198.524 million, 117.80JPY=1USD) in net sales, representing 14 percent growth in Yen year-over-year and 11 percent growth over the third quarter in Yen. Operating income for the quarter was 6.705 billion Yen ($56.921 million) and net income was 5.030 billion Yen ($42.697 million).

For 2006, Trend Micro posted record consolidated net sales of 85.614 billion Yen (or U.S. $726.771 million), representing an annual growth rate of 17 percent. The company also reported operating income of 27.076 billion Yen (or U.S. $229.845 million) and net income of 17.236 billion Yen (or US $146.317 million). Revenues from products and services sold to enterprise, mid-sized, and small business customers worldwide comprised 76 percent of 2006 revenues; revenue from consumer products comprised the remaining 24 percent.

Trend Micro continued to experience double digit growth worldwide, most notably in North America where sales grew 25 percent annually while Europe saw a growth of 15 percent year on year. In the Japan and Asia-Pacific regions, annual sales increased 13 and 16 percent, respectively.

”2006 was a healthy year for our company, annual growth remained in double digits and our steadfast focus on delivering new products and services designed specifically to meet the needs of our different-sized customers helped fuel development,” said Eva Chen, CEO of Trend Micro. ”In the past year, we delivered a number of new security solutions which prevent malicious content and attacks. During 2007, we will continue this momentum by focusing on protection against web-based threats that can result in data leakage and information theft. This approach is helping us to build a strong foundation to position us for the next stage of growth and our continued leadership.”

Based on information currently available to the company, consolidated net sales for the first quarter ending March 31, 2007, is expected to be 23.000 billion Yen (or U.S. $194.915 million, based on an exchange rate of 118JPY = 1USD). Operating income and net income are expected to be 5.500 billion Yen (or U.S. $46.610 million) and 2.850 billion Yen (or U.S. $24.153 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.

Trend Micro Internet Security, incorporates Trend Micro’s well-known PC- cillin(TM) engine and anti-malware protection along with a host of new features addressing rootkits, spyware, phishing, spam, hackers, viruses, WiFi attacks, smartphone threats and the growing number of identity-theft threats. In addition, the Trend Micro Internet Security subscription includes TrendSecure(TM), Trend Micro’s new online security services.

– Small and Mid-sized Businesses.

InterScan Gateway Security Appliance is designed for mid-sized organizations looking for an easy to install, easy to maintain content security solution. While protecting corporate and personal data, the appliance supports employee productivity and it includes an anti-bot functionality to help prevent internal PC’s from becoming zombies.

Trend Micro(TM) Email Security Services were developed specifically with the small and medium businesses (SMB) in mind. This service protects their network and infrastructure by stopping threats before they reach the customer’s gateway.

– Enterprise:

InterScan Web Security Appliance is a new gateway-based hardware solution with unique capabilities designed to provide enterprise organizations with comprehensive front-line protection against malware and content security threats including spyware.

Network VirusWall(TM) Enforcer, is a second-generation enterprise-class Network Access Control (NAC) appliance that ensures that all devices — managed or unmanaged, local or remote — comply with security policies before they’re granted access to corporate networks.

InterScan(TM) Messaging Security Appliance is a comprehensive solution for enterprises to address email-based threats including spam, phishing, bots, spyware, and viruses, as well as content compliance.
Patents
In 2006, Trend Micro was awarded the following patents:
— U.S. Patent No. 7,099,853, entitled “Configurable Hierarchical Content
Filtering System” covers a content filtering scanning method that
distributes the scanning of incoming data against a knowledge base to
more than one computer. This technology advantageously allows a
complete pattern file to be segmented, with different computers
scanning incoming data using different segments of the pattern file.
— U.S. Patent No. 7,062,553, entitled “Virus Epidemic Damage Control
System and Method for Network Environment” covers a method of early
virus detection by analyzing whether identical sections of files have
been modified over a certain time interval. According to a specific
example of the patented technology, a network system finds all files
having been modified within a predetermined time interval and analyzes
the modifications. If the modified sections of the modified files are
identical or similar, the network is alerted of a possible virus
outbreak, allowing early containment and quarantine.

Business Highlights
— New customers in the fourth quarter included: Nova Information Systems
in the United States and Eastern Norway Regional Health Authority,
Statoil ASA and ISC Central (Dutch Police Force) in EMEA

Notice Regarding Forward-looking StatementsCertain 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, Inc.

Trend Micro, Inc. is a leader in network antivirus and Internet content security software and services. The Tokyo-based corporation has business units worldwide. Trend Micro products are sold through corporate and value- added resellers and managed service providers. For additional information and evaluation copies of all Trend Micro products, visit our Web site, http://www.trendmicro.com/ .

Trend Micro and the t-ball logo are trademarks or registered trademarks of Trend Micro Incorporated. TrendLabs is a service mark of Trend Micro Incorporated. All other company or product names may be trademarks or registered trademarks of their owners.