Check Point® Software Technologies Ltd. (NASDAQ: CHKP), the worldwide leader in securing the Internet, today announced financial results for the second quarter ended June 30, 2013.
- Total Revenue: $340.2 million, representing a 4 percent increase year over year
- Non-GAAP Operating Income: $ 197.9 million, representing 58 percent of revenues
- Non-GAAP EPS: $0.83, representing an 8 percent increase year over year
- Cash Flow from Operations: $204.7 million, representing a 30 percent increase year over year
“We are pleased with our second quarter results, which were highlighted by excellent sequential growth in our product sales. Top performers were the North American region and our new data center appliances,” said Gil Shwed, founder, chairman, and chief executive officer of Check Point Software Technologies. “Our software blades continued to deliver double-digit growth year over year, with threat prevention and application control technologies driving share gains.”
Financial Highlights:
- Total Revenue: $340.2 million, an increase of 4 percent, compared to $328.6 million in the second quarter of 2012.
- GAAP Operating Income: $183.3 million, an increase of 2 percent, compared to $180.5 million the second quarter of 2012. GAAP operating margin was 54 percent, compared to 55 percent in the second quarter of 2012.
- Non-GAAP Operating Income: $197.9 million, an increase of 2 percent, compared to $193.6 million in the second quarter of 2012. Non-GAAP operating margin was 58 percent, compared to 59 percent in the second quarter of 2012.
- GAAP Net Income and Earnings per Diluted Share: GAAP net income was $151.0 million, an increase of 1 percent, compared to $150.0 million in the second quarter of 2012. GAAP earnings per diluted share were $0.76, an increase of 7 percent, compared to $0.71 in the second quarter of 2012.
- Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $165.0 million, an increase of 2 percent, compared to $161.8 million in the second quarter of 2012. Non-GAAP earnings per diluted share were $0.83, an increase of 8 percent, compared to $0.77, in the second quarter of 2012.
- Deferred Revenues: As of June 30, 2013, we had deferred revenues of $580.4 million, an increase of 8 percent, compared to $536.6 million as of June 30, 2012.
- Cash Flow: Cash flow from operations was $204.7 million, an increase of 30 percent, compared to $157.5 million in the second quarter of 2012.
- Share Repurchase Program: During the second quarter of 2013, we repurchased 2.9 million shares for a total amount of $142.8 million.
- Cash Balances, Marketable Securities and Short Term Deposits: $3,570.7 million as of June 30, 2013, an increase of $368.9 million, compared to $3,201.8 million as of June 30, 2012.
For information regarding the Non-GAAP financial measures discussed in this release, please see “Use of Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Information.”
Business Highlights:
The transformation of our appliance family that began in 2012 is complete with the introduction of our new low-end appliances designed to meet the security needs of small businesses and branch offices, the 600 and 1100 series:
600 Series Appliances – Designed to address the security needs of small businesses with less than 100 employees. The 600 Series delivers the full Check Point Software Blade architecture (Next Generation Firewall, IPS, Threat Prevention, etc.) with an extremely easy to use Web user interface and features performance up to 1.5Gbps, at prices ranging from $399-$1,200. The 600 appliance just won the Network World Clear Choice Award. See below.
1100 Series Appliances – Targeted at enterprise remote offices and optimized for large-scale deployments of hundreds of branch offices. The 1100 Series offers customers the ability to utilize the Check Point Software Blade architecture with centralized enterprise management capabilities and offers performance up to 1.5Gbps, at prices ranging from $599-$2,000.
In addition, we introduced a new data center appliance series, augmenting the 12000 and 21000 lines:
13000 Series Appliances – The 13500 Appliance, the first in a new line of 13000 Appliances, delivers blazing-fast security performance, leveraging a wide spectrum of software optimizations and accelerations that in turn maximize hardware utilization, with performance of up to 77Gbps and a starting price of $79,000.
Industry Accolades:
Network World Clear Choice Award – The Network World Clear Choice Test Shootout recognized the Check Point 640 appliance as the number one Unified Threat Management (UTM) product for small businesses, having outperformed seven other comparable products tested in both capabilities and price.
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 FY 2012 and Q1 2013, according to the IDC Worldwide Quarterly Security Appliance Tracker Q1 2013.
2013 Frost & Sullivan Malaysia Excellence Awards – 2013 Frost & Sullivan Malaysia Network Security Vendor of the Year.
ComputerWorld Hong Kong Awards – Firewall/VPN Check Point 2012 Appliances & Check Point IPS Software Blade.
Network World Asia 2013 Information Management Awards – Firewall & Network Security and Identity & Access Management.
U.S. Government & International Certifications – Check Point earned several notable U.S. Government and International certifications for its security appliances and software.
New Mobile Security Report – Check Point published its second mobile security report which revealed that the majority of businesses (79%) had a mobile security incident in the past year. The report quantifies the dramatic growth of BYOD, exposes the frequency and cost of mobile security incidents, and identifies the main mobile security challenges faced by businesses of all sizes.
“We continue to provide the highest level of defense against cyber security risks to our customers. With our unique Software Blade architecture, a single Check Point gateway can provide customers with integrated security protections that could otherwise require up to 15 disparate security products from multiple vendors. We continue to elevate our customers’ security today, to address the challenges of tomorrow,” Shwed concluded.
Third Quarter 2013 Investor Conference Participation Schedule:
- Needham 2013 Software and Services Conference
August 6, 2013 – New York, NY - Pacific Crest 15th Annual Global Technology Leadership Forum
August 12, 2013 – Vail, CO - Oppenheimer 16th Annual Technology, Internet and Communications Conference
August 14, 2013 – Boston, MA - Citi 2013 Technology Conference
September 4, 2013 – New York, NY - Deutsche Bank 2013 dbAccess Technology Conference
September 10, 2013 – Las Vegas, NV
Members of Check Point’s management team will present at these conferences and will 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 July 18, 2013 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 July 25, 2013 on the company’s website or by telephone at +1.201.612.7415, replay ID number 417690.
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 net income, operating income, operating margin and earnings per share, which are adjustments from results based on GAAP to exclude non-cash equity-based compensation charges, amortization of acquired intangible assets, and the related tax effects. 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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