Check Point Software Technologies Ltd. · NASDAQ:CHKP
Check Point Software Technologies — Q1 2023 Earnings Presentation
28 slides from Check Point Software Technologies's earnings presentation, May 1, 2023
Slide 1: 2023 First Quarter Financial Results
2023 First Quarter Financial Results May 1, 2023 Gil Shwed Roei Golan Kip E. Meintzer Founder & CEO Acting CFO Global Head of IR ©2023 Check Point Software Technologies Ltd. 1
Slide 2: Forward Looking Statement
Forward Looking Statement During this presentation, Check Point’s representatives may make certain forward-looking statements. These forward- looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934 include but are
Slide 3: Q1-23: Revenues & EPS
Q1-23: Revenues & EPS Non-GAAP Revenues $566M Actual $1 Million Mid Point Above the Mid-point of our projections $545M $565M $585M EPS $1.80 7 Cents Actual Above the Mid-point Mid Point of our projections $1.68 $1.73 $1.78 *Non-GAAP excludes equity-based compensation charges, amortization of acquire
Slide 4: Q1-23 Financial Results
Q1-23 Financial Results Non-GAAP 1.90 $1.80 15% 2% 1.70 $570M $1.54 $1.57 $566M 1.50 +4% Revenues $543M 1.30 EPS $530M +7% 1.10 $508M $490M 0.90 0.70 $450M 0.50 Q1-21 Q1-22 Q1-23 ©2023 Check Point Software Technologies Ltd. 4
Slide 5: Revenues Growth
Revenues Growth Q1-22 Q1-23 Y/Y % Revenues $543M $566M 4% Deferred Revenues $1,666M $1,797M 8% Calculated Billings* reached $485M Current Calculated Billings $518M up 2% YoY *Calculated Billings is a measure that we defined as total revenues recognized in accordance with GAAP plus the change in
Slide 6: Extended Sales Cycle Resulted in Product Revenues Decline
Extended Sales Cycle Resulted in Product Revenues Decline 6% Q1-21 Q1-22 Q1-23 -1% -7% ©2023 Check Point Software Technologies Ltd. 6
Slide 7: Strong Security Subscription Revenues Growth
Strong Security Subscription Revenues Growth 13% $228M Growth Driven $202M By CloudGuard & Harmony $177M Q1-21 Q1-22 Q1-23 ©2023 Check Point Software Technologies Ltd. 7
Slide 8: Strong Adoption Of Our Infinity Strategy
Strong Adoption Of Our Infinity Strategy Over 140% Triple Digit Growth Q1-22 Q1-23 ©2023 Check Point Software Technologies Ltd. 8
Slide 9: Recurring Revenues Reached 80%!
Recurring Revenues Reached 80%! Driven by Growth in Subscription Recurring Revenues Growth 70% 85% 81% 60% 80% 50% 75% 50% 40% 70% 30% 65% 20% 60% 55% 10% 50% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q1 % Recurring % Subscriptions ©2023 Check Point Software Technologi
Slide 10: Q1-23 Revenues By Geographies
Q1-23 Revenues By Geographies Q1 2023 Q1 2022 12% APAC 13% 45% APAC 44% EMEA 43% EMEA 43% Americas Americas ©2023 Check Point Software Technologies Ltd. 10
Slide 11: P&L Highlights for Q1 – Strong Profitability
P&L Highlights for Q1 – Strong Profitability Non-GAAP Q1-22 Q1-23 YOY YOY Revenues $543M $566M 4% Gross Profit $477M $502M 5% Research and Development $74M $79M 7% Selling and Marketing $146M $165M 13% General and Administrative $18M $20M 11% Operating Expenses $238M $264M 11% Strong Gross Margin @
Slide 12: P&L Highlights for Q1 – Strong Profitability
P&L Highlights for Q1 – Strong Profitability Non-GAAP Q1-22 Q1-23 YOY YOY Operating Income $239M $238M 0% Financial Income, Net $7M $19M 169% Tax Expenses $42M $39M -6% Net Income $204M $218M 7% EPS $1.57 $1.80 15% Operating Margin 42% EPS 2 Cents Above the Top-End, 15% Growth YoY *Non-GAAP excludes
Slide 13: Cash Flow & Cash Position
Cash Flow & Cash Position $3.6 Billion Cash, Marketable Securities & ST Deposits $325 Million Share Repurchase for the Quarter $1.3 Billion $386 Million In the past 12 Months Strong Operating Cash Flow ©2023 Check Point Software Technologies Ltd. 13
Slide 14: Financial Summary
• Double-Digit Growth in Subscription Revenues • Recurring Revenues over 80% of Total Revenues Financial Summary • Extended Sales-Cycles Resulted in Product Revenues Decline • Strong Profitability with 15% Growth in EPS ©2023 Check Point Software Technologies Ltd. 14
Slide 15: Business Update
BUSINESS UPDATE ©2023 Check Point Software Technologies Ltd. 15
Slide 16: Quarter Highlights
Quarter Highlights The Good, the Bad and the Pretty Good Financial Results Challenging Economy Strong Subscription Revenues Revenues Above Mid-Point Extended sales cycles a Double-Digit Growth in CloudGuard 15% EPS Growth result of projects being and Harmony Email Healthy Renewals postponed 140% Gro
Slide 17: Q1 Best Security Innovation
Q1 Best Security Innovation New Infinity Global Services Introducing Horizon XDR/XPR CloudGuard CNAPP • Address the skills shortage in $75B • New Market of Security Operations • Cloud Native Application Protection Market Expected to Growth from sub-$1B to ~$3B in 5 Years • Consolidate 6 technologies
Slide 18: Introducing: Infinity Global Services
NEW Introducing: Infinity Global Services • Address the Skills Shortage in $75B Market • Complement our Customers/Partners Capabilities with 30+ Services ©2023 Check Point Software Technologies Ltd. 18
Slide 19: Introducing: Horizon XPR/XDR
Introducing: Horizon XPR/XDR NEW • New Market of Security Operations Expected to Growth from sub-$1B to ~$3B in 5 Years • The First AI Driven Prevention Focused Solution • Includes Network, Endpoint, Email “Check Point’s XPR Introduces a More Integrated Approach to Threat Prevention. This Advancemen
Slide 20: CloudGuard Cloud Native Application Protection Platform (CNAPP)
CloudGuard Cloud Native Application Protection Platform (CNAPP) • Consolidates 6 Technologies into One Solution NEW • Posture Management, Cloud Network, Workload Protection, Pipeline/Source Security, Web Application Protection, Entitlement Management • Effective Risk Management with AI and Immediate
Slide 21: The Best Cyber Security is Based on Core 3 'C' Principles
The Best Cyber Security is Based on Core 3 ‘C’ Principles COMPREHENSIVE CONSOLIDATED COLLABORATIVE Prevention across all Unified management Best security engines easily attack vectors applied to any attack vector Unified security operations From code to cloud, networks, for your entire security stac
Slide 22: Across Industries - Organizations Trust Check Point for Best Security
Across Industries - Organizations Trust Check Point for Best Security Airline Major Media Leading Telco • Received Low Score on • Complex Environment - • Suffered Two Major Email Security Assessment – Thousands of Cloud Accounts Attacks Despite Using 12 Vendors • New Cloud Projects Drove • Existing
Slide 23: Summary
• Financial Results • Good Results Despite Economic Slowdown • Double-Digit Growth in Subscription Revenues SUMMARY • 15% EPS Growth • Best Security with our 3Cs Strategy • Infinity Global Services • Prevention-First Security Operations (XPR) • Smarter Cloud Prevention ©2023 Check Point Software Tec
Slide 24: Projections
. ‘GS @ cHeEck POINT 6 PROJECTIONS YOU DESERVE THE BEST SECU
Slide 25: Full Year 2023 Projections (Unchanged)
Full Year 2023 Projections (Unchanged) Revenues $2,340M - $2,510M Non-GAAP EPS $7.70 - $8.30 GAAP EPS is expected to be $1.22 less Projecting future results is very challenging, there is a high level of uncertainty Results can be better or worse than our projections *Non-GAAP excludes equity-based c
Slide 26: Q2-2023 Projections
Q2-2023 Projections Non-GAAP Revenues $570M - $605M Non-GAAP EPS $1.85 - $1.95 GAAP EPS is expected to be 31 cents less Projecting future results is very challenging, there is a high level of uncertainty Results can be better or worse than our projections *Non-GAAP excludes equity-based compensation
Slide 27: Thank you!
Thank you! ©2023 Check Point Software Technologies Ltd. 27
Slide 28: GAAP to Non-GAAP Consolidated Statement of Income Reconciliation
GAAP to Non-GAAP Consolidated Statement of Income Reconciliation Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Amortization of Amortization of intangible assets Taxes on intangible assets Taxes on Stock-based Stock-based (In millions, except per share amounts) GAAP and acquisit
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