Trend Micro faces profit squeeze despite AI-driven revenue growth

The Tokyo-based cybersecurity firm is banking on its transition toward an AI-native operational model to sustain long-term growth. CEO Eva Chen characterized the current period as an inflection point, with the company’s TrendAI Vision One platform seeing a 49% rise in annual recurring revenue. This shift toward AI-integrated security has attracted over 2,900 new customers in the last year, with existing clients expanding their footprint to an average of 4.2 solutions per account.

Despite these gains, the company is grappling with rising costs that threaten its bottom line. Executives attributed the downward revision of the annual operating income forecast to higher-than-expected cloud expenses and the costs associated with AI token consumption. While consolidated net sales remain aligned with initial projections, the company now expects operating income for the year to reach 44,400 million Yen. To offset these pressures, management is focusing on monetization within its enterprise pipeline, aiming to turn its heavy investments in AI functionality into measurable operating leverage.