Press Releases

Tokyo, Japan – October 31, 2006 – Trend Micro, Incorporated (TSE: 4704, NASDAQ: TMIC), a leader in network antivirus and Internet content security software and services, today announced earnings results, including record net sales for the third quarter 2006.

Trend Micro posted consolidated net sales of 21.0 billion Yen (or US $180.54 million, 116.33 JPY = 1USD), operating income of 6.11 billion Yen (or US $52.53 million) and net income of 3.82 billion Yen (or US $32.85 million) for the quarter. These figures reflect 17 percent growth in net sales compared to the same period a year ago.

The Company continued to enjoy steady growth around the world, led by a 19 percent year-over-year revenue increase in North America and 17 percent in Europe, closely followed by Japan at 16 percent growth. Much of the company’s worldwide growth was buoyed by strong sales in SMB and consumer solutions which experienced a 19 percent and 20 percent increase respectively, year-over-year.

Continuing growth was further supported with the introduction of three new solutions.  Trend Micro launched InterScan Gateway Security Appliance, a solution specifically designed to meet the content security needs of medium-sized businesses during August 2006.  In September 2006, the Company introduced its latest consumer security offering - Trend Micro Internet Security an all-in-one solution against identity theft.  Also in September, Trend Micro announced its latest landmark in content security innovation with the release of InterCloud Security Service, a service than enables the identification of botnet activity and offers customers the ability to quarantine and optionally clean bot-infected PCs.

“In the third quarter, we were very pleased with our progress in delivering security solutions designed specifically to meet the needs of our different sized customers,” said Eva Chen, CEO of Trend Micro. “We delivered new solutions against malicious content and attacks and will continue this momentum with our focus on protecting customers from web based threats that can result in data leakage and information theft. This steadfast focus helps strengthen our potential for growth now and in the future.”

Based on information currently available to the company, consolidated net sales for the fourth quarter ending December 31, 2006 is expected to be 22.80 billion Yen (or US $194.87 million, based on an exchange rate of 117JPY = 1USD). Operating income and net income are expected to be 7.10 billion Yen (or US $60.68 million) and 3.80 billion Yen (or US $32.48 million), respectively.

Third Quarter Business Highlights
Corporate
 • Trend Micro was listed on the Dow Jones Sustainability Indexes for the third year running. Inclusion suggests long-term value for shareholders based on corporate governance, environmental and social reporting, customer relationship management, strategic planning, risk and crisis management, and talent retention. 
• In August 2006, Trend Micro was recognised as number 9 on the Cape Horn Strategies “2006 Software Industry Sustained Success Honor Roll” having achieved 9 consecutive years of profitable growth.

• New customers in the third quarter included:
In the United States and Canada – Celestica. In Europe - BT Nederland N.V., Gemeentewerken Rotterdam (local authority of Rotterdam), Smurfit Kappa Group, HSBC and Iberia and in China – ICBC (Industrial & Commercial Bank of China), Xizang Mobile  (Tibet Mobile) and An Hui Electric Power.

Patents
Trend Micro was awarded the following patents in the third quarter 2006:
• 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.

Channel
• In August 2006, U.S. based solution-provider readers of CMP Technology’s VARBusiness magazine recognized Trend Micro in the Annual Report Card (ARC) award program,  for the outstanding satisfaction levels it provides.  Trend Micro received the Product Innovation award, for the third consecutive year, and Loyalty award in the Security Management Software category from the biweekly magazine that provides strategic insight to technology integrators
• In August 2006, Trend Micro announced a distribution agreement with Westcon Group, Inc., in which Comstor and Westcon divisions will have access to the entire Trend Micro product line for customers in the United States. 
• In Europe during August, Trend Micro also announced a pan-European partnership with added-value distributor Westcon Group, focussed exclusively around Westcon Group’s distribution of Cisco’s 5500 series Adaptive Security Appliance (ASA). Trend Micro provides content security for the ASA 5500 series family offering customised and comprehensive protection against a variety of security threats. 

Product
Trend Micro introduced the following products in the third quarter 2006:
• Trend Micro InterScan Gateway Security Appliance - designed for mid-sized organisations that are 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 Internet Security – the 2007 Internet Security release incorporates Trend Micro’s well-known PC-cillin™ engine and anti-malware protection along with a host of new features addressing threats such as rootkits, spyware, phishing and the growing problem of identity-theft. The Trend Micro Internet Security subscription also includes TrendSecure™, new online security services. TrendSecure offers added security for consumers who not only connect at home, but often while they are on the go. TrendSecure is currently available in English and Japanese.
• Trend Micro InterCloud Security Service – is the industry’s most advanced solution for the identification of botnet activity and enables customers to quarantine and optionally clean bot-infected PCs.  It is designed to meet the performance and scalability requirements of Internet Service Providers (ISPs), universities, and other large network providers. The solution incorporates a Service Delivery Platform and a service subscription that leverages Trend Micro’s expertise in threat identification, analysis, mitigation and remediation.

Notice Regarding Forward-looking Statements
Certain 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.