Singapore, @mcgallen #microwireinfo, April 18, 2019 – Check Point® Software Technologies Ltd. (NASDAQ: CHKP), today announced its financial results for the first quarter ended March 31, 2019.
First Quarter 2019:
- Total Revenue: US$472 million, a 4 percent increase year over year
- Deferred Revenues: US$1,312 million, a 13 percent increase year over year
- GAAP Operating Income: US$206 million, representing 44 percent of revenues
- Non-GAAP Operating Income: US$235 million, representing 50 percent of revenues
- GAAP EPS: US$15, Non-GAAP EPS: US$1.32
“We had good results in the first quarter with 13 percent growth in our security subscriptions including advanced solutions for Cloud and Mobile as well as SandBlast Zero day threat prevention,” said Gil Shwed, Founder and CEO of Check Point Software Technologies. “During the quarter we launched a series of new products, including Maestro which provides cloud-grade elasticity and resiliency for networks, and the 6000 series security appliances that are optimized for prevention of Gen V threats. Additionally, the Infinity Gen V security platform demonstrated solid traction in the quarter and drove new customer acquisition.”
Financial Highlights for the First Quarter of 2019:
- Total Revenue: US$472 million compared to US$452 million in the first quarter of 2018, a 4 percent increase year over year. Revenues were above the midpoint of our guidance.
- GAAP Operating Income: US$206 million compared to US$213 million in the first quarter of 2018, representing 44 percent and 47 percent of revenues in the first quarter of 2019 and 2018, respectively.
- Non-GAAP Operating Income: US$235 million compared to US$239 million in the first quarter of 2018, representing 50 percent and 53 percent of revenues in the first quarter of 2019 and 2018, respectively.
- GAAP Taxes on Income: US$45 million compared to US$41 million in the first quarter of 2018.
- GAAP Net Income and Earnings per Diluted Share: GAAP net income was US$180 million compared to US$187 million in the first quarter of 2018. GAAP earnings per diluted share were US$1.15 compared to US$1.16 in the first quarter of 2018.
- Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was US$205 million compared to US$210 million in the first quarter of 2018. Non-GAAP earnings per diluted share were US$1.32 compared to US$1.30 in the first quarter of 2018, a 2 percent increase year over year.
- Deferred Revenues: As of March 31, 2019, deferred revenues were US$1,312 million compared to US$1,166 million as of March 31, 2018, a 13 percent increase year over year.
- Cash Balances, Marketable Securities and Short Term Deposits: US$4,175 million as of March 31, 2019, compared to US$4,039 million as of December 31, 2018.
- Cash Flow: Cash flow from operations of US$379 million included an acquisition related payment of US$2 million compared to US$419 million in the first quarter of 2018, which included a tax refund of US$45 million related to a prior year.
- Share Repurchase Program: During the first quarter of 2019, the company repurchased approximately 2.7 million shares at a total cost of approximately US$305 million.
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
Check Point Maestro HyperScale: Check Point Maestro is a revolutionary new architecture that enables businesses of any size to enjoy the power of cloud-grade elasticity and resiliency in a security platform. Maestro enables seamless expansion of existing security gateways to hyperscale capacity by allowing businesses to expand from one gateway up to 52 gateways in minutes and realize the performance of massive Terabits/second firewall throughput.
6000 Series Gateways: The new 6500 and 6800 security appliances set new standards of protection against advanced fifth-generation threats, while offering superior performance and dexterity. The 6500 and 6800 gateways deliver the power to inspect SSL-encrypted network traffic without compromising on performance or uptime. The 6500 provides 20Gbps raw firewall bandwidth and 3.4Gbps of threat prevention output. The 6800 provides 42Gbps raw firewall bandwidth and 9Gbps threat prevention output.
Check Point Launches Partner Program to Accelerate Sales and Reward Partners for Client Engagement: The new Engage partner program directly rewards solution providers with Check PointS for activities that deepen customer relationships.
Check Point CloudGuard Dome9 Named ‘Security Innovation of the Year’ in 2018-19 Cloud Awards: Recognized for its comprehensive software platform for public cloud security and compliance orchestration.
Check Point SandBlast Agent Earns ‘NSS Labs Recommended’ Rating in 2019 Advanced Endpoint Protection Test: NSS Labs gave a ‘recommended’ rating to Check Point’s SandBlast Agent solution for detecting 100% of HTTP and email threats and 100% of malware using sophisticated evasion techniques, while providing zero false positives.
Completed ForceNock Acquisition: A web application and API protection startup acquisition that will strengthen Check Point offerings and capabilities with advanced machine learning protection.
Check Point Research (https://research.checkpoint.com) uncovered numerous findings that included vulnerabilities in widely deployed applications and services such as WinRar, Windows Deployment Services and RDP protocols. Exposed campaigns targeting Public Cloud Linux servers, mobile devices and nation-state targets, and created the world’s first repository for MacOS malware.
Vulnerabilities in Applications & Infrastructure:
Vulnerabilities in WinRAR: Check Point Research discovered a 19-year-old vulnerability in WinRAR, the world’s most popular compression tool potentially exposing 500 million users to a remote code execution.
Windows – Vulnerabilities in RDP Protocols: Check Point Research recently discovered multiple critical vulnerabilities in the commonly used Remote Desktop Protocol (RDP) that would allow a malicious actor to reverse the usual direction of communication and infect the IT professional or security researcher’s computer. Such an infection could then allow for an intrusion into the IT network as a whole.
Windows – Vulnerabilities in WDS: Check Point Research discovered vulnerabilities in Windows Deployment Services (WDS). Through the vulnerability, an attacker could potentially have modified it to control the content of every new computer and equip it with his own proprietary malware.
Malware and Campaigns Research:
Cloud Security: SpeakUp – A New Trojan Hits Linux Servers: Check Point Research discovered a new campaign exploiting Public Cloud Linux servers to implant a new Backdoor, which evades all security vendors. The new Trojan, named “SpeakUp” after one of its command and control names, exploits known vulnerabilities in six different Linux distributions.
N.Korea Attacks Russian Targets: Check Point Research discovered what appears to be a coordinated attack against Russian entities by the North Korean APT group, Lazarus. The attack flow includes the distribution of ZIP files, containing a benign PDF decoy document and a malicious Word doc with macros that install the Lazarus backdoor that collects information about the victim’s machine.
Joomla Spam Campaign: Check Point Research identified a new campaign from a known threat actor who is now exploiting a new backdoor with an old vulnerability in Joomla! Using it to monetize his attack via a profitable spam campaign.
Windows – Cuckoo Black: Check Point Research identified an attack targeting Windows servers in APAC and revealed the attackers infrastructure. The uploading of sensitive data, such as Windows login credentials, OS version and IP addresses was occurring at between 3-10 different victims each second.
Mobile – Chinese SDK Infection: Check Point Research discovered a group of Android apps massively harvesting contact information on mobile phones without the user’s consent. The data stealing logic hides inside a Software Development Kit (SDK) seen in up to 12 different mobile applications and downloaded over 111 million times.
Mobile – SimBad Adware: Check Point Research discovered a new adware campaign on the Google Play Store. The ‘SimBad’ Adware was resident in 206 applications and downloaded by almost 150 million users.
MacoPedia, A Catalogue of Mac Malware: Check Point Research launched a complete Mac Malware portal that collects and summarizes all information about MacOS malware.
About Check Point Software Technologies Ltd.
Check Point Software Technologies Ltd. (www.checkpoint.com) is a leading provider of cyber security solutions to governments and corporate enterprises globally. Its solutions protect customers from cyber-attacks with an industry leading catch rate of malware, ransomware and other types of attacks. Check Point offers a multilevel security architecture that defends enterprises’ cloud, network and mobile device held information, plus the most comprehensive and intuitive one point of control security management system. Check Point protects over 100,000 organizations of all sizes.
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, customer and market acceptance of our products and solutions, and our participation in investor conferences during the first quarter of 2019. 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 27, 2018. 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 or include certain items. 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 the business internally and as such has determined that it is important to provide this information to investors.