Check Point Software Technologies Reports Record Second Quarter 2010 Financial Results
Redwood City, CA
* Revenue: $261.1 million, representing a 17 percent increase year over year
* Product Revenues: $103.9 million, representing a 25 percent increase year over year
* Non-GAAP Operating Income: $144.7 million, representing a 24 percent increase year over year or 55 percent of revenues versus 52 percent a year ago
* Non-GAAP EPS: $0.58, representing a 21 percent increase year over year
* Cash Flow from Operations: $148.9 million, representing a 32 percent increase year over year
Check Point® Software Technologies Ltd. (NASDAQ: CHKP), the worldwide leader in securing the Internet, today announced record financial results for the second quarter ended June 30, 2010.
“We experienced strong sales growth driven by 25% growth in product revenues. This enabled us to exceed our revenue projections and achieve the top-end of our earning per share projections,” said Gil Shwed, chairman and chief executive officer of Check Point Software Technologies. “The growth in revenues came from all main product lines and geographies.”
Financial Highlights for the Second Quarter of 2010
* Total Revenues: $261.1 million, an increase of 17 percent, compared to $223.6 million in the second quarter of 2009.
* GAAP Operating Income: $122.1 million, an increase of 41 percent, compared to $86.7 million in the second quarter of 2009.
* Non-GAAP Operating Income: $144.7 million, an increase of 24 percent, compared to $116.4 million in the second quarter of 2009. Non-GAAP operating margin was 55 percent, compared to 52 percent in the second quarter of 2009.
* GAAP Net Income and Earnings per Diluted Share: GAAP net income was $102.9 million, an increase of 36 percent, compared to $75.6 million in the second quarter of 2009. GAAP earnings per diluted share was $0.48, an increase of 33 percent, compared to $0.36 in the second quarter of 2009.
* Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $122.4 million, an increase of 21 percent, compared to $100.9 million in the second quarter of 2009. Non-GAAP EPS was $0.58, an increase of 21 percent compared to $0.48 in the second quarter of 2009.
* Deferred Revenues: As of June 30, 2010, we had deferred revenues of $414.8 million, an increase of 15 percent, compared to $362.1 million as of June 30, 2009.
* Cash Flow: Cash flow from operations was $148.9 million, an increase of 32 percent compared to $112.7 million in the second quarter of 2009.
* Share Repurchase Program: During the second quarter of 2010, we repurchased 1.5 million shares at a total cost of $50 million.
* Cash Balances and Marketable Securities: $2,141 million as of June 30, 2010, an increase of $511 million compared to $1,630 million as of June 30, 2009
Recent Business Highlights Include:
* Introduction of Check Point Data Loss Prevention (DLP) solution – A new product category of network-based solutions that prevents leaks of sensitive data to unintended recipients outside the organization.
* Acquisition of Liquid Machines – Acquired the Boston based company, a leader in data security with award-winning products for document encryption, secure sharing and protection of corporate data. The acquisition broadens Check Point’s extensive data security portfolio.
* The New SmartEvent Software Blade – A unified security management solution for real-time event visibility across multiple security systems, including Firewall, Intrusion Prevention (IPS), Data Loss Prevention (DLP) and endpoints.
* Significant Antivirus and URL Filtering Performance Improvements – Innovative streaming technology that dramatically increases software blade performance by up to 80 times for these operations.
* Higher Performance for Entry Level & Mid-Range Appliances – Introduced new entry level appliances with Gigabit performance for under $800. Also, expanded performance for our existing entry level and mid-range appliances (UTM-1 130, 270, 570, 1070 and 2070 series) with up to four times firewall performance and four times connections per second performance improvement.
* New Free Firewall for Consumers – The new edition of ZoneAlarm Free Firewall includes DefenseNet services that analyze malware automatically through our cloud service. The new ZoneAlarm edition already won key industry awards this quarter (see below).
Check Point Accolades:
* PC Magazine Editors’ Choice Award – Check Point ZoneAlarm Free Firewall
* Five out of five stars from CNET – Check Point ZoneAlarm Free Firewall
* Ten Best Web Support Sites of 2010 – Recognized by The Association of Support Professionals (ASP), an organization that focused on excellence in online service and customer support.
* Network Security Vendor of the Year – Awarded by consulting firm, Frost & Sullivan in Malaysia
* The Customer Care Award – Computerworld Singapore in the Firewall/VPN Solutions category
* Best Product Awards – Check Point UTM-1 appliances, Check Point Firewall/VPN Blades and IPS Software Blades from Computerworld magazine in Hong Kong
* Editor’s Choice Award – Check Point UTM-1 Edge appliances selected by SMBWorld in the “SMB Security Solution” category
* IT Product of 2010 Award – Check Point Abra, the innovative secure virtual workspace announced in the first quarter, selected by Computerworld magazine in the Czech Republic
Mr. Shwed concluded, “Our record second quarter results were a nice conclusion to the first half of the year. We continued to execute and deliver top and bottom line growth while further expanding our product portfolio.”
Third Quarter Investor Conference Participation Schedule:
* 12th Annual Pacific Crest Technology Leadership Forum
August 9, 2010 – Vail, CO
* Oppenheimer Annual Technology, Media & Telecommunications Conference
August 11, 2010 – Boston, MA
* Morgan Keegan’s 2nd Annual Technology Conference
August 12, 2010 – New York, NY
* Citi’s 2010 Global Technology Conference
September 7, 2010 – New York, NY
* Deutsche Bank’s 2010 Technology Conference
September 14, 2010 – San Francisco, CA
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 at the company’s web site. To view these presentations and access the most updated information on presenters and the schedule, please visit the Investor Relations section of the company’s web site at http://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 21, 2010 at 8:30 AM ET/5:30 AM PT. To listen to the live webcast, please visit Check Point’s website at http://www.checkpoint.com/ir. A replay of the conference call will be available through August 5, 2010 at the company’s website http://www.checkpoint.com/ir or by telephone at +1 201.612.7415, passcode # 353499, account # 215.
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.
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, operating margin, net income and earnings per share, which are adjusted from results based on GAAP to exclude non-cash equity-based compensation charges, amortization of acquired intangible assets, restructuring and other acquisition related charges and the related tax affects. 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. Check Point’s management also believes the non-GAAP financial information provided in this release is useful to investors’ understanding and assessment of Check Point’s on-going core operations and prospects for the future. 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.
Read the Full Press Release (includes financial tables): http://www.checkpoint.com/press/2010-Q2-Financial-Results.pdf
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