32 slides from Check Point Software Technologies's earnings presentation, Oct 30, 2023
Slide 1: 2023 Third Quarter Financial Results
2023 Third Quarter Financial Results October 30, 2023 Gil Shwed Roei Golan Kip E. Meintzer Founder & CEO CFO Global Head of IR ©2023 Check Point Software Technologies Ltd. 1
Slide 2: Forward Looking Statement
Forward Looking Statement ©2023 Check Point Software Technologies Ltd. 2
Slide 3: ©2023 Check Point Software Technologies Ltd.
©2023 Check Point Software Technologies Ltd. 3
Slide 4: Strong Profitability – 17% Growth in EPS
Strong Profitability – 17% Growth in EPS Non-GAAP Net Income $242M +10% EPS $2.07 +17% Double-Digit Growth Double-Digit Growth Second Quarter In a Row Third Quarter In a Row Non-GAAP excludes equity-based compensation charges, amortization of acquired intangibles and acquisition related expenses and
Slide 5: Revenues and EPS
Revenues and EPS Non-GAAP $596M Revenues Actual $9 Million Above the Mid-point Mid Point of our projections $570M $605M EPS $2.07 Actual At the Top-end of our projections Mid Point $1.97 $2.07 Non-GAAP excludes equity-based compensation charges, amortization of acquired intangibles and acquisition r
Slide 6: Revenues & Deferred Revenues Growth
Revenues & Deferred Revenues Growth Q3-22 Q3-23 Y/Y % Revenues $578M $596M 3% Deferred Revenues $1,647M $1,709M 4% Current Deferred Revenues $1,180M $1,246M 6% • Calculated Billings* reached $531M • Current calculated Billings $535M * Calculated Billings is a measure that we defined as total revenue
Slide 7: Security Subscription Accelerated Revenues Growth
Security Subscription Accelerated Revenues Growth 15% $248M +Highest Growth Since 2017 13% 13% Q3-20 Q3-21 Q3-22 Q3-23 ©2023 Check Point Software Technologies Ltd. 7
Slide 8: Delayed Refresh Resulted in Product Revenues Decline
Delayed Refresh Resulted in Product Revenues Decline Q3-22 Q3-23 11% -14% ©2023 Check Point Software Technologies Ltd. 8
Slide 9: Strong Adoption Of Our Infinity Strategy
Strong Adoption Of Our Infinity Strategy Consolidated Security Platform Q3-21 Q3-22 Q3-23 ©2023 Check Point Software Technologies Ltd. 9
Slide 10: Q3-23 Revenues By Geography
Q3-23 Revenues By Geography Q3 2023 Q3 2022 11% APAC 13% APAC 43% 46% EMEA EMEA 44% Americas 43% Americas ©2023 Check Point Software Technologies Ltd. 10
Slide 11: Strong Margin Performance
Strong Margin Performance Non-GAAP Q3-22 Q3-23 YOY YOY Total Revenues $578M $596M 3% Gross Profit $507M $534M 5% Gross Margin 88% 90% Research and Development* $73M $77M Selling and Marketing $153M $166M General and Administrative $18M $22M Operating Expenses $244M $265M 9% Operating Income $263M $2
Slide 12: Net Income & EPS – Industry Leading Profitability
Net Income & EPS – Industry Leading Profitability Non-GAAP Q3-22 Q3-23 YOY YOY Operating Income $263M $269M 2% Financial Income, Net $12M $18M Tax Expenses $54M $45M Net Income $221M $242M 10% EPS $1.77 $2.07 17% Non-GAAP excludes equity-based compensation charges, amortization of acquired intangibl
Slide 13: Cash Flow & Cash Position
Cash Flow & Cash Position $3.0 Billion Cash, Marketable Securities & $477 Million Net cash paid for Acquisitions Short Term Deposits $222 Million Strong Operating Cash Flow* $325 Million Third Quarter Share Repurchase * Include $22M related to Acquisitions ©2023 Check Point Software Technologies Ltd
Slide 14: Financial Summary
• 15% Growth in Subscription Revenues - Highest Growth since 2017 - Continued Strong Adoption of Infinity Platform • While Refresh Projects Have Experienced Delays, Financial Summary The Renewal Business Remains Strong & Healthy • Strong Profitability – Over 17% EPS Growth ©2023 Check Point Software
Slide 15: Business Update
BUSINESS UPDATE ©2023 Check Point Software Technologies Ltd. 15
Slide 16: Third Quarter Highlights
Third Quarter Highlights Good Financial Results Acquisition of Perimeter 81 Exceeded Projections More than 3,000 customers Strong Renewals New SASE offering Positive Indicators for Change Product Innovation Quantum SASE Horizon Playblocks ©2023 Check Point Software Technologies Ltd. 16
Slide 17: Market Expansion
Market Expansion 3 Acquisitions in 60 Days (20 So Far) Enhancing SaaS Security Quantum SASE $2.2B Market Game Changing SASE Security $3.4B Market (SSE) Expanding Infinity Global Services +30 Services & 400 Security Consultants ©2023 Check Point Software Technologies Ltd. 17
Slide 18: Organizations Need SASE to Protect Distributed Enterprises
Organizations Need Secure Access Service Edge (SASE) to Protect Distributed Enterprises Data Center • Secure Internet access for sites and roaming users Offices Cloud • Zero Trust Access to business applications • Optimized branch connectivity and network security Corporate Network Internet Remote U
Slide 19: We Have a Game Changer
We Have a Game Changer Current Solutions Cloud only inspection On-device and cloud network protections slows down internet speed 2x FASTER INTERNET SECURITY & Jeopardizes Privacy Multiple products, complex Full mesh integrated secure connectivity to manage and deploy ZERO TRUST ACCESS THAT WORKS Poi
Slide 20: Collaborative Security in Action
Collaborative Security in Action Collaborative Consolidated Automatic Stops threats from spreading Across Check Point Out-of-the-box security across the organization and 3rd party products and operational oriented playbooks “The collaborative nature of the platform means that all our security produ
Slide 21: Infinity Continues to Gain Momentum
Infinity Continues to Gain Momentum US Defense Logistics Agency Asia Americas Financial & Americas Federal Government Insurance Services Aerospace Manufacturing • Quantum and CloudGuard • Quantum Gateways and SASE • Full Infinity Architecture: • Infinity commercial agreement • Security scalability a
Slide 22: Best Security – Analysts Recognition
Best Security – Analysts Recognition Magic Quadrant for Network Firewalls The Forrester Wave™: Zero Trust Platform Providers, Company of The Year Award 2023 “Best In Class Global Next Generation Firewall Industry Frost Radar Next Generation Firewalls, Market Guide for Cloud-Native Application Protec
Slide 23: Cyber Security's Most Trustworthy Company, Best Employer
Cyber Security’s Most Trustworthy Company, Best Employer Ranking’s 1st Year 4th Consecutive Year ©2023 Check Point Software Technologies Ltd. 23
Slide 24: "Iron Swords" – Uptick in Cyber Attacks
“Iron Swords” – Uptick in Cyber Attacks + 18% increase on overall attacks + 52% attacks on Government Sector 1 out of 19 Orgs. Attacked by Ransomware Weekly (More than Double VS. Oct 22) ©2023 Check Point Software Technologies Ltd. 24
Slide 25: Summary
• Financial Results - 15% Growth in Subscription – Highest Growth Since 2017 - Strong Profitability Over 17% EPS Growth SUMMARY • Game Changing Innovation - 3 Acquisitions – Expediting Market Expansion - Quantum SASE – Game Changing SASE - Horizon Playblocks - Collaborative Security ©2023 Check Poin
Slide 26: Thank you!
Thank you! ©2023 Check Point Software Technologies Ltd. 26
Slide 27: Projections
e @ cueEck POINT PROJECTIONS YOU DESERVE THE BEST SECU
Slide 28: Q4-2023 Projections
Q4-2023 Projections Revenues $636M - $686M Non-GAAP EPS $2.35 - $2.55 GAAP EPS is expected to be 32 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 charges,
Slide 29: 2023 Projections
2023 Projections: Revenues Middle of the Range – EPS Revised Upward Revenues $2,387M Updated $2,437M Original $2,340M $2,510M Non-GAAP EPS $8.20 Updated $8.40 Original $7.70 $8.30 GAAP EPS is expected to be $1.23 less Projecting future results is very challenging, there is a high level of uncertaint
Slide 30: Thank You!
e @ cueEck POINT THANK YOU! YOU DESERVE THE BEST SECU
Slide 31: GAAP to Non-GAAP Consolidated Statement of Income Reconciliation
GAAP to Non-GAAP Consolidated Statement of Income Reconciliation Three Months Ended September 30, 2023 Amortization of Three Months Ended September 30, 2022 Amortization of intangible assets Taxes on intangible assets Taxes on Stock-based Stock-based (In millions, except per share amounts) GAAP and
Slide 32: GAAP to Non-GAAP Consolidated Statement of Income Reconciliation
GAAP to Non-GAAP Consolidated Statement of Income Reconciliation Nine Months Ended September 30, 2023 Nine Months Ended September 30, 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 ac