39 slides from Check Point Software Technologies's earnings presentation, Oct 28, 2021
Slide 1: Third Quarter 2021 Financial Results
THIRD QUARTER 2021 FINANCIAL RESULTS Oct 28, 2021 Gil Shwed – Founder & CEO | Tal Payne – CFO & COO | Kip E. Meintzer – Global Head of IR ©2021 Check Point Software Technologies Ltd. 1
Slide 2: Forward Looking Statement
Forward Looking Statement During the course of 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 inc
Slide 3: Tal Payne – CFO & COO
TAL PAYNE – CFO & COO ©2021 Check Point Software Technologies Ltd. 3
Slide 4: Revenues & EPS Above Our Guidance
Revenues & EPS Above Our Guidance Non-GAAP Revenues $534M $7 Million Actual Above the mid-point of our guidance $515M $527M $540M Mid Point $1.65 EPS Actual Surpassing the top end of our guidance $1.54 $1.64 *Non-GAAP excludes equity-based compensation charges, amortization of acquired intangibles a
Slide 5: Strong Billings and Revenues
Strong Billings and Revenues Q3-20 Q3-21 Y/Y % Revenues $509M $534M 5% Billings* $473M $517M 9% Deferred Revenues $1,302M $1,456M 12% *Billings is a non-GAAP measure that we define as revenues recognized in accordance with GAAP plus the change in deferred revenues from the beginning to the end of th
Slide 6: Security Subscriptions Accelerated growth
Security Subscriptions Accelerated growth 13% 10% $190M $169M Double Digit Growth in Harmony $154M Double Digit Growth in CloudGuard Q3-19 Q3-20 Q3-21 ©2021 Check Point Software Technologies Ltd. 6
Slide 7: Strong Adoption Of Our Infinity Strategy
Strong Adoption Of Our Infinity Strategy 172% 81% Q3-19 Q3-20 Q3-21 ©2021 Check Point Software Technologies Ltd. 7
Slide 8: Revenues By Geographies
Revenues By Geographies Q3 2021 Q3 2020 12% APAC 12% APAC 44% 42% EMEA 44% EMEA 46% Americas Americas EMEA and APAC with Double Digit Growth Year Over Year ©2021 Check Point Software Technologies Ltd. 8
Slide 9: P&L Highlights
P&L Highlights Non-GAAP Q3-20 Q3-21 Revenues $509M $534M Gross profit $458M $474M Gross profit strong $474M @ 89% Investment in cloud infrastructure as we grow the cloud business and services Delivery on time to our customers with higher cost relating to supply chain constraints *Non-GAAP excl
Slide 10: Operating Expenses
Operating Expenses Non-GAAP Q3-20 Q3-21 Y/Y % Research and Development $53M $62M 17% Selling and Marketing $124M $134M 8% General and Administrative $16M $17M 8% Operating Expenses $193M $213M 10% Added over 250 employees Dollar weakness increased cost by ~$5M *Non-GAAP excludes equity-based com
Slide 11: Strong Profitability
Strong Profitability Non-GAAP Q3-20 Q3-21 Operating Income $265M $261M Financial Income, Net $15M $9M Income Taxes ($49M) ($50M) Net Income $231M $220M EPS $1.64 $1.65 49% Operating margin 41% Net income margin *Non-GAAP excludes equity-based compensation charges, amortization of acquired intangible
Slide 12: Cash Flow and Cash Position
Cash Flow and Cash Position $3.8 Billion $234 Million Cash, Marketable Securities & ST Deposits Net cash paid for Avanan Acquisition $251 Million Operating Cash Flow* $325 Million Share Repurchase *Include $14M relating to Avanan Acquisition ©2021 Check Point Software Technologies Ltd. 12
Slide 13: Share Repurchase Program
Share Repurchase Program Expansion of $2 Billion Up to $325 Million a quarter ©2021 Check Point Software Technologies Ltd. 13
Slide 14: Business Update
Business Update ©2021 Check Point Software Technologies Ltd. 14
Slide 15: The State of Cyber Security
THE STATE OF CYBER SECURITY The threat landscape has never been greater Surge in Large Scale Gen 5 attacks SOLAR WINDS CODECOV COLONIAL PIPELINE KASEYA ©2021 Check Point Software Technologies Ltd. 15
Slide 16: Everywhere Employee, Hybrid Datacenter, Cloud Transformation
“Everywhere Employee” Hybrid Datacenter Cloud Transformation ©2021 Check Point Software Technologies Ltd. 16
Slide 17: Don't Focus on Prevention, Fragmented Security Stack
DON’T FOCUS ON PREVENTION FRAGMENTED SECURITY STACK LACK OF INTEGRATION AND MANAGEABILITY ©2021 Check Point Software Technologies Ltd. 17
Slide 18: Secure the Cloud, Network, Users & Access
SECURE THE CLOUD SECURE THE NETWORK SECURE USERS & ACCESS CONSOLIDATED MANAGEMENT & SECURITY OPERATIONS ©2021 Check Point Software Technologies Ltd. 18
Slide 19: Customer Wins
CUSTOMER WINS ©2021 Check Point Software Technologies Ltd. 19
Slide 20: Infinity Gaining Market Traction
INFINITY 172% GAINING MARKET TRACTION Q3-20 Q3-21 ©2021 Check Point Software Technologies Ltd. 20
Slide 21: Infinity Momentum
INFINITY MOMENTUM Across geographies and industries US EMEA APAC GERMANY, OIL & GAS AUSTRALIA, OIL REFINEMENT CORPORATION UTILITIES COMPANY Fortune 500 company 12% of Germany’s oil capacity Covering 95% of the state geography MULTINATIONAL LARGE INSURANCE LARGE HEALTH SERVICES TELECOM COMPANY COMPAN
Slide 22: Infinity Win
INFINITY WIN SAMPLE CUSTOMER CONSOLIDATED SOLUTION Large apparel manufacturer protecting Network, Endpoint, Mobile and Cloud 60,000 employees Operates in 160 countries PROVEN HIGHEST PERFORMANCE AGAINST COMPETITION 7 Digits deal SUPERIOR MANAGEMENT Easy and intuitive, centralized from single console
Slide 23: Harmony Expanding Business Momentum
HARMONY EXPANDING BUSINESS MOMENTUM DOUBLE DIGIT GROWTH ©2021 Check Point Software Technologies Ltd. 23
Slide 24: Harmony Momentum
HARMONY MOMENTUM Across geographies and industries US EMEA SEMICONDUCTOR MANUFACTURER SOFTWARE COMPANY 75,000 mobile users New Customer. Competitive replacement WATER PURIFICATION HEALTHCARE SERVICES Malware package for more than 40,000 users New customer. More than 450,000 patients a year. Replacin
Slide 25: Harmony Endpoint Win
HARMONY ENDPOINT WIN SAMPLE CUSTOMER An international health and lifestyle company July 3rd July 4th July 5th July 15th 40,000 employees Operates in 48 countries Contacted our Attacked incident response Demo Deal by ransomware team and trial signed CONSOLIDATED SOLUTION NEW Replaced multiple vendors
Slide 26: Extend Harmony with Cloud E-Mail
EXTEND HARMONY WITH CLOUD E-MAIL ©2021 Check Point Software Technologies Ltd. 26
Slide 27: Cloud Email Security Market Size
$2B Enterprises moving email to the cloud (Office 365, G-Suite) 150% $3.7B $800M Conventional email security solutions don’t fit cloud email 2021 2025E CLOUD EMAIL SECURITY MARKET SIZE (GARTNER) Source: Gartner, Information security and risk management worldwide 1Q21 ©2021 Check Point Software Techn
Slide 28: 95% of Cyber Attacks Start with E-Mail
MORE CRUCIAL THAN EVER, ATTACKED MORE THAN EVER 95% of Cyber Attacks Start with E-Mail ©2021 Check Point Software Technologies Ltd. 28
Slide 29: Check Point Acquires Avanan
CHECK POINT ACQUIRES AVANAN THE FASTEST GROWING CLOUD EMAIL SECURITY VENDOR 5,000 2.5M #1 30% Customers Protected Users on peer-insights more attacks are for email security prevented ©2021 Check Point Software Technologies Ltd. 29
Slide 30: Born in Cloud, API based, Prevention-first
Born in Cloud, API based Prevention-first Best catch rate ©2021 Check Point Software Technologies Ltd. 30
Slide 31: Great Expansion Opportunity, Important Acquisition
GREAT EXPANSION OPPORUNITY IMPORTANT ACQUISITION ©2021 Check Point Software Technologies Ltd. 31
Slide 32: Summary
SUMMARY ©2021 Check Point Software Technologies Ltd. 32
Slide 33: Solid Execution on Strategy
Strong Q3-2021 Financial Results Revenues at the Top Half of Our Guidance SUMMARY EPS Exceeded Guidance SOLID EXECUTION Infinity Gaining Momentum ON STRATEGY Double-Digit Growth in CloudGuard & Harmony Triple-Digit Growth for Infinity Deals Expanding into the cloud email security market ©2021 Check
Slide 34: One More Thing… Guidance
ONE MORE THING… GUIDANCE ©2021 Check Point Software Technologies Ltd. 34
Slide 35: Q4-2021 Projections
Q4-2021 Projections Revenues $560M - $605M EPS $2.02 - $2.22 GAAP EPS is expected to be 26 cents less Projecting future results is very challenging, there is always a high level of uncertainty Results can be better or worse than our projections ©2021 Check Point Software Technologies Ltd. 35
Slide 36: Updated 2021 Projections
Updated 2021 Projections Revenues $2,127M - $2,172M EPS $6.81 - $7.01 GAAP EPS is expected to be 94 cents less Projecting future results is very challenging, there is always a high level of uncertainty Results can be better or worse than our projections ©2021 Check Point Software Technologies Ltd. 3
Slide 37: Q&A
Q&A ©2021 Check Point Software Technologies Ltd. 37
Slide 38: GAAP to Non-GAAP Consolidated Statement of Income Reconciliation
GAAP to Non-GAAP Consolidated Statement of Income Reconciliation Three Months Ended September 30, 2020 Three Months Ended September 30, 2021 Amortization of Amortization of intangible assets Taxes on intangible assets Taxes on Stock-based Stock-based (In millions, except per share amounts) GAAP and
Slide 39: GAAP to Non-GAAP Consolidated Statement of Income Reconciliation
GAAP to Non-GAAP Consolidated Statement of Income Reconciliation Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2021 Amortization of Amortization of intangible assets Taxes on intangible assets Taxes on Stock-based Stock-based (In millions, except per share amounts) GAAP and ac