Trend Micro posts steady recurring revenue growth, holds full year guidance

Trend Micro Incorporated delivered a third quarter update that underscores the continuing shift in cybersecurity toward subscription based revenue, reporting annual recurring revenue exceeding US$1.6 billion for the period ending September 30, 2025. The Tokyo headquartered company, the largest global cybersecurity firm based outside the United States, said growth was driven by large enterprise annual recurring revenue, which rose 3 percent year over year.

The earnings announcement, released November 12 in Tokyo, reiterated the company will not revise its consolidated full year forecasts that were set out on August 7. Based on current information Trend Micro expects consolidated net sales for the fiscal year ending December 31, 2025 to be 274,000 million Yen, equivalent to US$1,863 million using the company stated exchange rate of 147 Yen to one US dollar. Operating income for the year is expected to be 53,600 million Yen, or roughly US$364 million. The release also references a figure of 30,200 million Yen, or about US$205 million, among its reported items.

Analysts will read the results through two key lenses. First, the level and trajectory of recurring revenue matters more than one time items in valuing subscription focused cybersecurity firms. ARR north of US$1.6 billion gives Trend Micro a sizable base of predictable revenue that supports its research and development and customer retention investments. Second, the modest three percent year over year enterprise ARR expansion points to a maturing sales cycle within large corporate accounts, where procurement cycles and budget constraints can slow incremental growth even as demand for cloud native and extended detection and response tools rises.

For investors the unchanged full year guidance reduces near term uncertainty. The company is projecting roughly a 15 percent operating margin for the full year if the expected operating income and net sales are realized. That operating margin profile will be monitored against peers in both Japan and the United States as investors weigh trade offs between margin preservation and growth reinvestment.

The financial update also sits amid a broader macroeconomic and policy backdrop that will shape cybersecurity spending. Corporations face heightened regulatory expectations in data protection across regions, creating a durable tailwind for security services. At the same time, macroeconomic pressure on IT budgets and shifting priorities toward generative AI initiatives may reroute some incremental spend away from legacy endpoint protection toward AI native security architectures. Trend Micro’s ability to convert a large installed base into cross sell for cloud workload and AI era security offerings will be central to future ARR acceleration.

Currency exposure is another factor for Tokyo listed technology exporters. The company’s dollar equivalent figures are sensitive to the Yen exchange rate, and management’s use of 147 Yen to the dollar frames results in a specific currency environment. Longer term, Trend Micro’s standing as a major non US headquartered cybersecurity vendor gives it access to diverse markets, but it must sustain innovation and enterprise sales momentum to translate steady recurring revenue into faster top line growth.