Check Point® Software Technologies Ltd. (NASDAQ: CHKP), today announced its financial results for the third quarter ended September 30, 2016.
Third Quarter 2016:
- Total Revenue: $428 million, a 6 percent increase year over year
- Software Blades Subscriptions Revenues: $99 million, a 24 percent increase year over year
- GAAP Operating Income: $206 million, representing 48 percent of revenues
- Non-GAAP Operating Income: $231 million, representing 54 percent of revenues
- GAAP EPS: $0.99, a 7 percent increase year over year
- Non-GAAP EPS: $1.13, a 9 percent increase year over year
- Deferred Revenues: $889 million, a 15 percent increase year over year
“Third quarter financial results were very good with revenues coming in toward the upper end of our projections and earnings per share that exceeded our projections. Customers continue to leverage the Check Point security platform and increase their adoption of our advanced security capabilities which is resulting in higher subscription revenues,” said Gil Shwed, founder and chief executive officer, “We continued to see strong sales of our SandBlast, Zero Day Protection solutions, resulting in triple-digit growth as customers focus on prevention.”
Financial Highlights for the Third Quarter of 2016:
- Total Revenue: $428 million compared to $404 million in the third quarter of 2015.
- GAAP Operating Income: $206 million compared to $205 million in the third quarter of 2015.
- Non-GAAP Operating Income: $231 million compared to $228 million in the third quarter of 2015.
- GAAP Net Income and Earnings per Diluted Share: GAAP net income was $170 million compared to $168 million in the third quarter of 2015. GAAP earnings per diluted share were $0.99 compared to $0.92 in the third quarter of 2015.
- Non-GAAP Net Income: Non-GAAP net income was $194 million compared to $188 million in the third quarter of 2015.
- Non-GAAP Earnings per Diluted Share: $1.13 compared to $1.04 in the third quarter of 2015.
- Deferred Revenues: As of September 30, 2016, deferred revenues were $889 million compared to $772 million as of September 30, 2015.
- Cash Flow: Cash flow from operations of $214 million compared to $228 million in the third quarter of 2015.
- Share Repurchase Program: During the third quarter of 2016, the company repurchased 3.2 million shares at a total cost of $247 million.
- Cash Balances, Marketable Securities and Short Term Deposits: $3,708 million as of September 30, 2016, compared to $3,612 million as of September 30, 2015.
For information regarding the non-GAAP financial measures discussed in this release, as well as a reconciliation of such non-GAAP financial measures to the most directly comparable GAAP financial measures, please see “Use of Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Information.”
Business Highlights:
Check Point Defines Security Leadership in New Era of Cloud IT- Check Point’s advanced threat prevention works across cloud platforms, integrating with the most popular SDN/cloud technologies such as VMware NSX, Cisco ACI, OpenStack, Microsoft Azure and Amazon Web Services (AWS). Fueled by the company’s vSEC cloud security with R80 Security Management, Check Point is enabling businesses to secure physical networks and cloud environments with the same industry-leading solutions and policies – all from a single management console.
SandBlast Agent for Browsers – As the newest member of its industry-leading SandBlast family of solutions, SandBlast Agent for Browsers is designed to protect users from evolving threats by seamlessly incorporating key components of the SandBlast security model into the browser. It provides real-time protection, all while reducing the resources required to prevent today’s advanced attacks.
Industry Accolades:
Achieved NSS Labs Recommended Rating Three Times in 2016 – Check Point received a ‘Recommended’ rating three times in the 2016 NSS Labs testing including:
- Next-Generation Intrusion Prevention System (NGIPS) Test with 99.95% exploit catch rate, the highest of all participates and the leading TCO rating
- NSS Labs Breach Detection Systems (BDS) group test
- Next Generation Firewall (NGFW)
Check Point has achieved ‘Recommended’ rating from NSS Labs for all thirteen tests the company has participated in since 2011.
Leader in the 2016 Gartner Magic Quadrant for Unified Threat Management – The new report evaluated the company’s completeness of vision and ability to execute in areas such as security management and threat prevention within the small and medium business market. Check Point has been positioned as a Leader in Unified Threat Management Magic Quadrant for six consecutive years. Check Point is the only vendor to be a leader in both Firewall Gartner Magic Quadrants: Enterprise and Unified Threat Management.
Number One in Worldwide Firewall Equipment Market Share – Check Point is the leader in worldwide market share in 2Q 2016 for Firewall Equipment, according to the Gartner Market Share: Enterprise Network Equipment by Market Segment, Worldwide reports.1
Top Position in Worldwide Combined Firewall and UTM Appliance Market – Check Point continued to be the number one vendor in worldwide combined Firewall and UTM appliance revenue for 2Q 2016, according to the IDC Worldwide Quarterly Security Appliance Tracker. 2
Security Research:
2016 Security Report – In the company’s fourth annual Security Report, Check Point researchers analyzed the activity of more than 31,000 Check Point gateways worldwide, revealing specific details on the challenges enterprises are encountering with unknown malware, attack trends, and the impact of having more mobile devices in the enterprise.
Cerber – Check Point researchers investigated one of the largest active ransomware campaigns to have unprecedented insight into its devious scheme. In a detailed report, researchers shine a light on the growing ransomware-as-a-service industry, but revealing a path now being used to help individuals and businesses gain access to their encrypted files – without paying the increasingly inflated ransoms of cyber criminals.
QuadRooter – The Check Point Mobile Research Team uncovered a set of four vulnerabilities in QualComm chipset drivers dubbed the name QuadRooter making at least 900 million Android smartphones and tablets vulnerable. If exploited, hackers could gain complete control of devices and unrestricted access to the sensitive personal and enterprise data on them. Access could also provide an attacker with capabilities such as keylogging, GPS tracking, and recording video and audio.
HummingBad – Cyber criminals utilized HummingBad malware to control over 10 million mobile devices globally, allowing them to manipulate the devices into downloading apps and clicking on advertisements to benefit the coalition of developers behind the malware. Check Point researchers discovered how this illegal network ran alongside a legitimate business of Android and iOS apps and analytics, and provided the details of their network operation.
“Cyberattacks are continuing to increase and the level of their sophistication keeps rising. Every organization should be concerned about achieving the highest level of defense against these attacks. The Check Point platform provides protection against the most advanced attacks and prevents them from entering the organization, while enabling each customer to manage their security on the network, mobile and the cloud through a single pane of glass management console,” Concluded Shwed.
Fourth Quarter 2016 Investor Conference Participation Schedule:
- UBS Global Technology Conference
15, 2016 – San Francisco, CA - Credit Suisse Annual Technology Conference
29, 2016 – Scottsdale, AZ - Raymond James Supply Chain Conference*
6-7, 2016 – New York, NY
* Investor meetings only
Members of Check Point’s management team are expected to present at these conferences and discuss the latest company strategies and initiatives. Check Point’s conference presentations are expected to be available via webcast on the company’s web site. To view these presentations and access the most updated information please visit the company’s web site at www.checkpoint.com/ir. The schedule is subject to change.
Conference Call and Webcast Information
Check Point will host a conference call with the investment community on October 31, 2016, at 8:30 AM ET/5:30 AM PT. To listen to the live webcast, please visit the website at: www.checkpoint.com/ir. A replay of the conference call will be available through November 6, 2016 on the company’s website or by telephone at +1.201.612.7415, replay ID number 13647361.
About Check Point Software Technologies Ltd.
Check Point Software Technologies Ltd. (www.checkpoint.com) is the largest network cyber security vendor globally, providing industry-leading solutions and protecting customers from cyberattacks with an unmatched catch rate of malware and other types of threats. Check Point offers a complete security architecture defending enterprises – from networks to mobile devices – in addition to the most comprehensive and intuitive security management. Check Point protects over 100,000 organizations of all sizes.
© 2016 Check Point Software Technologies Ltd. All rights reserved
Legal Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this press release include, but are not limited to, statements related to our expectations regarding our products and solutions, the success of the new family of cybersecurity solutions that we have developed and our participation in investor conferences during the fourth quarter of 2016. Our expectations and beliefs regarding these matters may not materialize, and actual results or events in the future are subject to risks and uncertainties that could cause actual results or events to differ materially from those projected. These risks include our ability to continue to develop platform capabilities and solutions; customer acceptance and purchase of our existing solutions and new solutions; the market for IT security continuing to develop; competition from other products and services; and general market, political, economic and business conditions. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 28, 2016. The forward-looking statements in this press release are based on information available to Check Point as of the date hereof, and Check Point disclaims any obligation to update any forward-looking statements, except as required by law.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Check Point uses non-GAAP measures of operating income, net income and earnings per diluted share, which are adjustments from results based on GAAP to exclude, as applicable, stock-based compensation charges, amortization of intangible assets and acquisition related expenses and the related tax affects. Check Point’s management believes the non-GAAP financial information provided in this release is useful to investors’ understanding and assessment of Check Point’s ongoing core operations and prospects for the future. Historically, Check Point has also publicly presented these supplemental non-GAAP financial measures in order to assist the investment community to see the Company “through the eyes of management,” and thereby enhance understanding of its operating performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in this press release. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such has determined that it is important to provide this information to investors.
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[1] Gartner, Inc., Market Share: Enterprise Network Equipment by Market Segment, Worldwide, 2Q16, Christian Canales, Petr Gorodetskiy, Naresh Singh, and Joe Skorupa, September 2016. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
[2] IDC Worldwide Quarterly Security Appliance Tracker 2Q2016, September 2016.
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