Check Point Software Technologies Reports 2018 First Quarter Financial Results

Check Point® Software Technologies Ltd. (NASDAQ: CHKP), today announced its financial results for the first quarter ended March 31, 2018.

First Quarter 2018:

• Total Revenue: $452 million, a 4 percent increase year over year
• Deferred Revenues: $1,166 million, a 10 percent increase year over year
• GAAP Operating Income: $213 million, representing 47 percent of revenues
• Non-GAAP Operating Income: $239 million, representing 53 percent of revenues
• GAAP EPS: $1.16, a 7 percent increase year over year

• Non-GAAP EPS: $1.30, a 9 percent increase year over year
• Cash flow from operations: $419 million, an 18% increase year over year

“First quarter revenues were above the midpoint of our projections while EPS reached the top of our guidance range.” Said Gil Shwed, Founder and CEO of Check Point Software Technologies. “The global cyber threat landscape is becoming increasingly sophisticated.  Attacks are now in their 5^th generation, while 97 percent of enterprises are not prepared for these attacks and remain primarily focused on protections for 2^nd or 3^rd generation attacks. During the first quarter we introduced the Infinity Total Protection Gen V prevention solution, along with its CloudGuard family of security products, and both solutions generated nice wins in the quarter.” Shwed Continued.

Financial Highlights for the First Quarter of 2018:

• Total Revenue: $452 million compared to $435 million in the first quarter of 2017, a 4 percent increase year over year. Revenues were above the midpoint of our guidance.
• GAAP Operating Income: $213 million compared to $211 million in the first quarter of 2017, representing 47 percent and 48 percent of revenues in the first quarter of 2018 and 2017, respectively.
• Non-GAAP Operating Income: $239 million compared to $233 million in the first quarter of 2017, representing 53 percent and 54 percent of revenues in the first quarter of 2018 and 2017, respectively.
• GAAP Taxes on Income: $41 million compared to $39 million in the first quarter of 2017.
• GAAP Net Income and Earnings per Diluted Share: GAAP net income was $187 million compared to $183 million in the first quarter of 2017. GAAP earnings per diluted share were $1.16 compared to $1.08 in the first quarter of 2017, a 7 percent increase year over year.
• Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $210 million compared to $202 million in the first quarter of 2017.  Non-GAAP earnings per diluted share were $1.30 compared to $1.20 in the first quarter of 2017, a 9 percent increase year over year.
• Deferred Revenues: As of March 31, 2018, deferred revenues were $1,166 million compared to $1,063 million as of March 31, 2017, a 10 percent increase year over year.
• Cash Flow: Cash flow from operations of $419 million compared to $355 million in the first quarter of 2017, which included a tax refund of $45 million related to a prior year.
• Share Repurchase Program: During the first quarter of 2018, the company repurchased approximately 2.4 million shares at a total cost of approximately $249 million.
• Cash Balances, Marketable Securities and Short Term Deposits: $4,009 million as of March 31, 2018, compared to $3,848 million as of December 31, 2017.

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.”

First Quarter Key Highlights

New Product of the Year – Check Point Infinity: Check Point Infinity Voted ‘New Product of the Year’ at Network Computing Awards 2018. Check Point Infinity delivers a broad set of security technologies to protect organizations against the most advanced and unknown Gen V threats and can now be deployed using Check Point Infinity Total Protection (ITP).  ITP is a game-changing new consumption model with a simple all-inclusive, per-user, per-year subscription offering.  The solution provides the key elements of a security infrastructure, including the network security hardware and hardware upgrades, network security software, endpoint, mobile and cloud security software, security updates, support and subscriptions all as a single annuity subscription.

CloudGuard™ Product Family: Protecting enterprises from Gen V cyber-attacks on cloud applications and infrastructure. CloudGuard is the industry’s first set of technologies designed to provide advanced security and threat prevention for software-as-a-service (SaaS) applications and infrastructure-as-a-service (IaaS) solutions. CloudGuard SaaS is designed to prevent account hijacking, utilizing patent-pending ID-Guard technology for cloud-based applications such as Microsoft Office365, Google G-Suite, Salesforce, ServiceNow, Slack, Box, Dropbox and more. Formerly vSEC and now a member of the CloudGuard family, CloudGuard IaaS provides advanced Gen V security/threat prevention of attacks on infrastructure and workloads for leading public and private cloud platforms, including: Amazon Web Services, Google Cloud Platform, Microsoft Azure, Cisco ACI, OpenStack, VMware NSX, VMware Cloud on AWS, VMware ESX, Alibaba Cloud, KVM, Hyper-V and more.

‘Gen V’ Security Management: The latest Smart-1 Appliances power Gen V security management by consolidating multiple consoles and enabling collection, correlation and analysis of security events, monitoring the state of security and managing security policies for all sizes of enterprise in a single device. The New Gen V Smart-1 family boosts performance by up to 8x, enabling collection of up to 100,000 logs/sec and provides high capacity storage for security event analysis.

The Israel Prize: Check Point founder & CEO Gil Shwed was awarded the prestigious Israel Prize for his contributions to the Israeli technology industry.  The Israel Prize is an award handed out by the State of Israel and is generally regarded as the state’s highest honor. It’s awarded to those who have displayed excellence in their field(s), or contributed strongly to Israeli culture or the State. It was awarded by the president, prime minister, speaker of the Israeli parliament, minister of education, and the president of the Supreme Court in a ceremony that closed Israel’s 70th Independence Day celebrations.

“I was personally moved when I received the call announcing the decision to award me the Israel Prize. The prize is a testament to the global leadership that Check Point has achieved, the company’s importance to Israel and the role that the innovation generated by our employees plays in the future of cyber-security.” concluded Shwed.

Conference Call and Webcast Information
Check Point will host a conference call with the investment community on April 25, 2018, at 8:30 AM ET/5:30 AM PT. To listen to the live webcast or replay, please visit the website at: www.checkpoint.com/ir.

Second Quarter Investor Conference Participation Schedule:

• Jefferies 2018 Global Technology, Media and Telecom Conference
  May 9, 2018 – Beverly Hills, CA
• P. Morgan 46^th Annual Technology, Media and Telecom Conference
  May 16, 2018 – Boston, MA
• Cowen & Company 46^th Annual Technology Media & Telecom Conference
  May 30, 2018 – New York, NY
• Bank of America Merrill Lynch 2018 Global Technology Conference
  June 5, 2018 – San Francisco, CA (Meetings Only)
• 2018 Baird Global Consumer, Technology & Services Conference
  June 7, 2018 – New York, NY (Meetings Only)
• Nasdaq 38^th Investor Conference
  June 12, 2018 – London, UK (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.