Company Website:
http://www.checkpoint.com
SAN CARLOS, Calif. -- (Business Wire)
Check
Point® Software Technologies Ltd. (NASDAQ:CHKP), the worldwide
leader in securing the Internet, today announced its financial results
for the second quarter ending June 30, 2014.
- Total Revenue: $363 million, representing a 7 percent increase year
over year
- Non-GAAP Operating Income: $207 million, representing 57 percent of
revenues
- Non-GAAP EPS: $0.89, representing an 8 percent increase year over
year
- Deferred Revenues: $660 million, representing a 14 percent increase
year over year
“We had a fantastic second quarter. Total revenues from products and
software blades subscription delivered 10 percent growth, which was
driven by strong demand across industries and business segments. We saw
a nice up-tick in customer wins across the board with several very large
customer contracts,” said Gil Shwed, founder, chairman, and chief
executive officer of Check Point Software Technologies.
Financial Highlights for the Second Quarter of 2014:
- Total Revenue: $363 million compared to $340 million in the
second quarter of 2013.
- GAAP Operating Income: $190 million compared to $183 million in
the second quarter of 2013.
- Non-GAAP Operating Income: $207 million compared to $198
million in the second quarter of 2013. Non-GAAP operating margin was
57 percent, compared to 58 percent in the second quarter of 2013.
- GAAP Net Income and Earnings per Diluted Share: GAAP net income
was $160 million compared to $151 million in the second quarter of
2013. GAAP earnings per diluted share were $0.83 compared to $0.76 in
the second quarter of 2013.
- Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP
net income was $172 million compared to $165 million in the second
quarter of 2013. Non-GAAP earnings per diluted share were $0.89
compared to $0.83 in the second quarter of 2013.
- Deferred Revenues: As of June 30, 2014, deferred revenues were
$660 million compared to $580 million as of June 30, 2013.
- Cash Flow: Cash flow from operations was $168 million compared
to $205 million in the second quarter of 2013.
- Share Repurchase Program: During the second quarter of 2014,
the company repurchased 3.0 million shares at a total cost of $194
million.
- Cash Balances, Marketable Securities and Short Term Deposits: $3,643
million as of June 30, 2014, an increase of $72 million, compared to
$3,571 million as of June 30, 2013.
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
During the second quarter of 2014, Check Point launched new products and
services, including:
41000 Security System – New datacenter and telco grade high
performance system based on the multi-blade hardware architecture of the
61000. The 41000 has a smaller footprint, enabling more customers to
deploy high performance scalable security. The 41000 delivers
performance of up to 11,000 SecurityPower™ units (SPU), 40 Gbps of
real-life firewall throughput, and 25 Gbps of real-life IPS throughput.
Smart-1 Appliance Family – Upgraded the entire line of the
Smart-1 security management appliance family with five new appliances
that deliver cyber security management for the era of big data. Smart-1
appliances enable organizations to consolidate security policy, log, and
event management. The new Smart-1 Appliances allow for three times more
effective storage capacity and report generation is greatly accelerated.
Next-Generation SmartEvent – Announced the availability of
Next-Generation SmartEvent, a new and powerful event monitoring solution
for real-time processing and storing of threat detection data.
Next-Generation SmartEvent offers one single view for all security
threats and network components, to more easily manage and analyze big
data security, and to make faster and more informed security decisions.
ThreatCloud IntelliStore – The ThreatCloud IntelliStore provides
a threat intelligence marketplace that enables organizations to select
from a wide range of threat intelligence feeds relevant to them and
simultaneously uses this intelligence to proactively stop threats at
their Check Point Security Gateways.
Check Point 2014 Security Report – We published our annual
industry security report which provides insight into the major security
events that occurred in organizations across the world and offers
recommendations on how to protect against them. The report is based on
collaborative research from our Security Checkup assessments, Threat
Emulation sensors, ThreatCloud™ and Endpoint Security reports, and
includes in-depth analysis of 200,000+ hours of monitored network
traffic from over 9,000 security gateways across 996 organizations of
various industries worldwide. The report is available at http://www.checkpoint.com/securityreport.
Industry Accolades:
Leader in the Gartner Magic Quadrant for Enterprise Network Firewall
- Check Point is positioned as a Leader in the Gartner Magic
Quadrant for Enterprise Network Firewall. The company has been in the
Leaders quadrant since 1999.
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 Q1 2014, according to the IDC
Worldwide Quarterly Security Appliance Tracker Q1 2014.
“We’ve continued to innovate and expand our offerings this quarter with
the introduction of our ThreatCloud IntelliStore, which provides
customers access to the industry’s best cyber intelligence sources and
translates it into real-time prevention. This is the latest layer in our
Threat Prevention solution that includes our Intrusion Prevention (IPS),
Network Anti-Virus, Web Security, Anti-bot and Threat Emulation,”
concluded Shwed.
Third Quarter 2014 Investor Conference Participation Schedule:
- Needham 2014 Software and Services Conference
August 5,
2014 – New York, NY
- Pacific Crest 16th Annual Global
Technology Leadership Forum
August 12, 2014 – Vail, CO
- Citi 2014 Technology Conference
September 2, 2014 – New
York, NY
- Deutsche Bank 2014 dbAccess Technology Conference
September
9, 2014 – Las Vegas, NV
Members of Check Point's management team will 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
July 23, 2014 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 August 1, 2014
on the company's website or by telephone at +1.201.612.7415, replay ID
number 13586646.
About Check Point Software Technologies Ltd.
Check Point Software Technologies Ltd. (www.checkpoint.com),
the worldwide leader in securing the Internet, is the only vendor to
deliver Total Security for networks, data and endpoints, unified under a
single management framework. Check Point provides customers with
uncompromised protection against all types of threats, reduces security
complexity and lowers total cost of ownership. Check Point first
pioneered the industry with FireWall-1 and its patented stateful
inspection technology. Today, Check Point continues to innovate with the
development of the Software Blade Architecture™. The dynamic Software
Blade Architecture delivers secure, flexible and simple solutions that
can be fully customized to meet the exact security needs of any
organization or environment. Check Point customers include tens of
thousands of businesses and organizations of all sizes including all
Fortune 100 companies. Check Point's award-winning ZoneAlarm solutions
protect millions of consumers from hackers, spyware and identity theft.
©2014 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
for software-defined protection, Next-Generation SmartEvent and our
other new solutions, and our expectations regarding our collaboration
with VMware to automate and simplify the provisioning and deployment of
network security in private clouds. Our expectations and beliefs
regarding these matters may not materialize, and actual results in
future periods are subject to risks and uncertainties that could cause
actual results 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 March 28, 2014. 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 net income, operating income, operating margin and earnings
per share, which are adjustments from results based on GAAP to exclude
stock-based compensation charges, amortization of intangible assets 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.
|
CHECK POINT SOFTWARE TECHNOLOGIES LTD. |
CONSOLIDATED STATEMENT OF INCOME |
|
(In thousands, except per share amounts)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
| |
June 30,
| |
June 30,
|
| |
2014
|
|
2013
| |
2014
|
|
2013
|
| |
(unaudited)
| |
(unaudited)
| |
(unaudited)
| |
(unaudited)
|
Revenues:
| | | | | | | | |
Products and licenses
| |
$124,342
| |
$119,252
| |
$232,281
| |
$224,445
|
Software Blades subscriptions
| |
63,743
| |
52,350
| |
125,500
| |
101,504
|
Total revenues from products and software blades
| |
188,085
| |
171,602
| |
357,781
| |
325,949
|
Software updates and maintenance
| |
174,513
| |
168,570
| |
347,023
| |
336,953
|
Total revenues
| |
362,598
| |
340,172
| |
704,804
| |
662,902
|
| | | | | | | |
|
Operating expenses:
| | | | | | | | |
Cost of products and licenses
| |
22,353
| |
20,916
| |
42,413
| |
39,765
|
Cost of software blades subscriptions
| |
1,092
| |
1,240
| |
2,602
| |
2,846
|
Total cost of products and software blades
| |
23,445
| |
22,156
| |
45,015
| |
42,611
|
Cost of Software updates and maintenance
| |
17,506
| |
16,959
| |
34,754
| |
33,207
|
Amortization of technology
| |
60
| |
198
| |
120
| |
492
|
Total cost of revenues
| |
41,011
| |
39,313
| |
79,889
| |
76,310
|
| | | | | | | |
|
Research and development
| |
33,451
| |
29,369
| |
66,417
| |
58,683
|
Selling and marketing
| |
79,821
| |
70,481
| |
148,435
| |
132,310
|
General and administrative
| |
18,394
| |
17,719
| |
35,644
| |
35,305
|
Total operating expenses
| |
172,677
| |
156,882
| |
330,385
| |
302,608
|
| | | | | | | |
|
Operating income
| |
189,921
| |
183,290
| |
374,419
| |
360,294
|
Financial income, net
| |
7,298
| |
7,608
| |
14,447
| |
16,450
|
Income before taxes on income
| |
197,219
| |
190,898
| |
388,866
| |
376,744
|
Taxes on income
| |
37,563
| |
39,890
| |
76,125
| |
77,776
|
Net income
| |
$159,656
| |
$151,008
| |
$312,741
| |
$298,968
|
Earnings per share (basic)
| |
$0.84
| |
$0.77
| |
$1.64
| |
$1.51
|
Number of shares used in computing earnings per share (basic)
| |
189,933
| |
196,387
| |
190,972
| |
197,418
|
Earnings per share (diluted)
| |
$0.83
| |
$0.76
| |
$1.61
| |
$1.49
|
Number of shares used in computing earnings per share (diluted)
| |
193,380
| |
199,946
| |
194,566
| |
201,265
|
|
CHECK POINT SOFTWARE TECHNOLOGIES LTD. |
RECONCILIATION OF GAAP TO NON GAAP FINANCIAL INFORMATION |
|
(In thousands, except per share amounts)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
| |
June 30,
| |
June 30,
|
| |
2014
|
|
2013
| |
2014
|
|
2013
|
| |
(unaudited)
| |
(unaudited)
| |
(unaudited)
| |
(unaudited)
|
| | | | | | | |
|
GAAP operating income
| |
$189,921
| | |
$183,290
| | |
$374,419
| | |
$360,294
| |
Stock-based compensation (1)
| |
16,587
| | |
13,752
| | |
29,058
| | |
24,922
| |
Amortization of intangible assets (2)
| |
535
|
| |
826
|
| |
1,070
|
| |
1,748
|
|
Non-GAAP operating income
| |
$207,043
|
| |
$197,868
|
| |
$404,547
|
| |
$386,964
|
|
| | | | | | | |
|
GAAP net income
| |
$159,656
| | |
$151,008
| | |
$312,741
| | |
$298,968
| |
Stock-based compensation (1)
| |
16,587
| | |
13,752
| | |
29,058
| | |
24,922
| |
Amortization of intangible assets (2)
| |
535
| | |
826
| | |
1,070
| | |
1,748
| |
Taxes on the above items (3)
| |
(4,679
|
)
| |
(551
|
)
| |
(6,868
|
)
| |
(1,311
|
)
|
Non-GAAP net income
| |
$172,099
|
| |
$165,035
|
| |
$336,001
|
| |
$324,327
|
|
| | | | | | | |
|
GAAP Earnings per share (diluted)
| |
$0.83
| | |
$0.76
| | |
$1.61
| | |
$1.49
| |
Stock-based compensation (1)
| |
0.08
| | |
0.07
| | |
0.15
| | |
0.12
| |
Amortization of intangible assets (2)
| |
-
| | |
0.01
| | |
0.01
| | |
0.01
| |
Taxes on the above items (3)
| |
(0.02
|
)
| |
(0.01
|
)
| |
(0.04
|
)
| |
(0.01
|
)
|
Non-GAAP Earnings per share (diluted)
| |
$0.89
|
| |
$0.83
|
| |
$1.73
|
| |
$1.61
|
|
| | | | | | | |
|
Number of shares used in computing Non-GAAP earnings per share
(diluted)
| |
193,380
|
| |
199,946
|
| |
194,566
|
| |
201,265
|
|
| | | | | | | |
|
(1) Stock-based compensation:
| | | | | | | | |
Cost of products and licenses
| |
$22
| | |
$23
| | |
$38
| | |
$41
| |
Cost of software updates and maintenance
| |
240
| | |
249
| | |
425
| | |
448
| |
Research and development
| |
2,661
| | |
2,802
| | |
4,754
| | |
4,789
| |
Selling and marketing
| |
3,874
| | |
3,312
| | |
6,202
| | |
5,572
| |
General and administrative
| |
9,790
|
| |
7,366
|
| |
17,639
|
| |
14,072
|
|
| |
$16,587
|
| |
$13,752
|
| |
$29,058
|
| |
$24,922
|
|
| | | | | | | |
|
(2) Amortization of intangible assets:
| | | | | | | | |
Amortization of technology-cost of revenues
| |
60
| | |
198
| | |
120
| | |
492
| |
Selling and marketing
| |
475
|
| |
628
|
| |
950
|
| |
1,256
|
|
| |
$535
|
| |
$826
|
| |
$1,070
|
| |
$1,748
|
|
(3) Taxes on the above items
| |
$ (4,679
|
)
| |
$ (551
|
)
| |
$ (6,868
|
)
| |
$ (1,311
|
)
|
Total, net
| |
$12,443
|
| |
$14,027
|
| |
$23,260
|
| |
$25,359
|
|
|
CHECK POINT SOFTWARE TECHNOLOGIES LTD. |
CONDENSED CONSOLIDATED BALANCE SHEET DATA |
|
(In thousands)
|
|
ASSETS |
|
|
|
June 30,
|
|
December 31,
|
| |
2014
| |
2013
|
| |
(unaudited)
| |
(audited)
|
Current assets:
| | | | |
Cash and cash equivalents
| |
$317,544
| | |
$408,432
| |
Marketable securities and short-term deposits
| |
915,977
| | |
758,382
| |
Trade receivables, net
| |
245,432
| | |
379,648
| |
Prepaid expenses and other current assets
| |
59,907
|
| |
53,856
|
|
Total current assets
| |
1,538,860
|
| |
1,600,318
|
|
| | | |
|
Long-term assets:
| | | | |
Marketable securities
| |
2,409,263
| | |
2,463,110
| |
Property and equipment, net
| |
38,083
| | |
37,991
| |
Severance pay fund
| |
6,479
| | |
6,488
| |
Deferred tax asset, net
| |
16,476
| | |
13,557
| |
Other intangible assets, net
| |
15,120
| | |
16,191
| |
Goodwill
| |
727,875
| | |
727,875
| |
Other assets
| |
19,865
|
| |
20,907
|
|
Total long-term assets
| |
3,233,161
|
| |
3,286,119
|
|
| | | |
|
Total assets
| |
4,772,021
|
| |
$4,886,437
|
|
|
LIABILITIES AND |
SHAREHOLDERS’ EQUITY |
Current liabilities:
| | | | |
Deferred revenues
| |
$565,188
| | |
$586,696
| |
Trade payables and other accrued liabilities
| |
251,228
|
| |
396,102
|
|
Total current liabilities
| |
816,416
|
| |
982,798
|
|
| | | |
|
Long-term liabilities:
| | | | |
Long-term deferred revenues
| |
94,958
| | |
84,927
| |
Income tax accrual
| |
227,028
| | |
205,420
| |
Deferred tax liability, net
| |
636
| | |
308
| |
Accrued severance pay
| |
11,071
|
| |
10,887
|
|
| |
333,693
|
| |
301,542
|
|
| | | |
|
Total liabilities
| |
1,150,109
|
| |
1,284,340
|
|
| | | |
|
Shareholders’ equity:
| | | | |
Share capital
| |
774
| | |
774
| |
Additional paid-in capital
| |
811,711
| | |
774,917
| |
Treasury shares at cost
| |
(2,757,415
|
)
| |
(2,421,278
|
)
|
Accumulated other comprehensive income
| |
8,256
| | |
1,839
| |
Retained earnings
| |
5,558,586
|
| |
5,245,845
|
|
Total shareholders’ equity
| |
3,621,912
|
| |
3,602,097
|
|
Total liabilities and shareholders’ equity
| |
$4,772,021
|
| |
$4,886,437
|
|
Total cash and cash equivalents, marketable securities and
short-term deposits
| |
$3,642,784
|
| |
$3,629,924
|
|
|
CHECK POINT SOFTWARE TECHNOLOGIES LTD. |
SELECTED CONSOLIDATED CASH FLOW DATA |
|
(In thousands)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
| |
June 30,
| |
June 30,
|
| |
2014
|
|
2013
|
|
2014
|
|
2013
|
| |
(unaudited)
| |
(unaudited)
| |
(unaudited)
| |
(unaudited)
|
Cash flow from operating activities: | | | | | | | | |
Net income
| |
$159,656
| | |
$151,008
| | |
$312,741
| | |
$298,968
| |
Adjustments to reconcile net income to net cash provided by
operating activities:
| | | | | | | | |
Depreciation of property and equipment
| |
2,248
| | |
2,081
| | |
4,439
| | |
4,097
| |
Amortization of intangible assets
| |
535
| | |
826
| | |
1,070
| | |
1,748
| |
Stock-based compensation
| |
16,587
| | |
13,752
| | |
29,058
| | |
24,922
| |
Realized gain on marketable securities
| |
(143
|
)
| |
40
| | |
(154
|
)
| |
(1,074
|
)
|
Decrease (increase) in trade and other receivables, net
| |
(15,128
|
)
| |
10,875
| | |
130,015
| | |
105,251
| |
Increase (decrease) in deferred revenues, trade payables and other
accrued liabilities
| |
11,594
| | |
29,065
| | |
(129,500
|
)
| |
112,561
| |
Excess tax benefit from stock-based compensation
| |
(2,674
|
)
| |
(1,934
|
)
| |
(1,952
|
)
| |
(6,105
|
)
|
Deferred income taxes, net
| |
(4,703
|
)
| |
(1,054
|
)
| |
(5,687
|
)
| |
(4,267
|
)
|
Net cash provided by operating activities | |
167,972
|
| |
204,659
|
| |
340,030
|
| |
536,101
|
|
| | | | | | | |
|
Cash flow from investing activities: | | | | | | | | |
| | | | | | | |
|
Investment in property and equipment
| |
(2,328
|
)
| |
(2,044
|
)
| |
(4,531
|
)
| |
(4,626
|
)
|
Net cash used in investing activities | |
(2,328
|
)
| |
(2,044
|
)
| |
(4,531
|
)
| |
(4,626
|
)
|
| | | | | | | |
|
Cash flow from financing activities: | | | | | | | | |
Proceeds from issuance of shares upon exercise of options
| |
-
| | |
6,785
| | |
47,418
| | |
33,430
| |
Purchase of treasury shares
| |
(194,000
|
)
| |
(142,797
|
)
| |
(380,869
|
)
| |
(274,434
|
)
|
Excess tax benefit from stock-based compensation
| |
2,674
|
| |
1,934
|
| |
1,952
|
| |
6,105
|
|
Net cash used in financing activities | |
(191,326
|
)
| |
(134,078
|
)
| |
(331,499
|
)
| |
(234,899
|
)
|
| | | | | | | |
|
Unrealized gain (loss) on marketable securities, net
| |
6,272
|
| |
(21,276
|
)
| |
8,860
|
| |
(21,288
|
)
|
| | | | | | | |
|
Increase in cash and cash equivalents, marketable securities and
short term deposits
| |
(19,410
|
)
| |
47,261
| | |
12,860
| | |
275,288
| |
| | | | | | | |
|
Cash and cash equivalents, marketable securities and short term
deposits at the beginning of the period
| |
3,662,194
|
| |
3,523,391
|
| |
3,629,924
|
| |
3,295,364
|
|
| | | | | | | |
|
Cash and cash equivalents, marketable securities and short term
deposits at the end of the period | |
$3,642,784
|
| |
$3,570,652
|
| |
$3,642,784
|
|
|
$3,570,652
|
|
Contacts:
Check Point Software Technologies
INVESTOR CONTACT:
Kip
E. Meintzer, +1-650-628-2040
ir@checkpoint.com
MEDIA
CONTACT:
James Rivas, +1-650-628-2215
press@checkpoint.com
Source: Check Point Software Technologies Ltd.
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