Third Quarter 2023:
- Total Revenues:
$596 million , a 3 percent increase year over year - Security Subscriptions Revenues:
$248 million , a 15 percent increase year over year - Deferred Revenues:
$1,709 million , a 4 percent increase year over year - GAAP Operating Income: $226 million, representing 38 percent of revenues
- Non-GAAP Operating Income: $269 million, representing 45 percent of revenues
- GAAP EPS: $1.75, a 19 percent increase year over year
- Non-GAAP EPS: $2.07, a 17 percent increase year over year
“Our third quarter performance was strong, marked by a 17 percent increase in earnings per share and a 15 percent rise in security subscriptions revenues. We achieved total revenues near the top of our forecast range, with earnings per share hitting the peak,” stated
“Despite the tragic events in
Financial Highlights for the Third Quarter of 2023:
- Total Revenues:
$596 million compared to$578 million in the third quarter of 2022, a 3 percent increase year over year. - GAAP Operating Income:
$226 million compared to$221 million in the third quarter of 2022, representing 38 percent of revenues in the third quarter of 2023 and 2022, respectively. - Non-GAAP Operating Income:
$269 million compared to$263 million in the third quarter of 2022, representing 45 percent of revenues in the third quarter of 2023 and 2022, respectively. - GAAP Taxes on Income:
$39 million compared to$49 million in the third quarter of 2022. - GAAP Net Income:
$205 million compared to$184 million in the third quarter of 2022. - Non-GAAP Net Income:
$242 million compared to$221 million in the third quarter of 2022. - GAAP Earnings per Diluted share:
$1.75 compared to$1.47 in the third quarter of 2022, a 19 percent increase year over year. - Non-GAAP Earnings per Diluted share:
$2.07 compared to$1.77 in the third quarter of 2022, a 17 percent increase year over year. - Deferred Revenues: As of
September 30, 2023 , deferred revenues were$1,709 million compared to$1,647 million as ofSeptember 30, 2022 , a 4 percent increase year over year. - Cash Balances,
Marketable Securities and Short-Term Deposits:$2,989 million as ofSeptember 30, 2023 , compared to$3,570 million as ofSeptember 30, 2022 . - Cash Flow: During the quarter we acquired Perimeter 81, a pioneering Security Service Edge (SSE) company, and Atmosec, an early-stage SaaS security vendor, for
$477 million net cash consideration. Cash flow from operations was$222 million , compared to$240 million in the third quarter of 2022. The operating cash flow for the quarter included a cost of$22 million related to acquisitions. - Share Repurchase Program: During the third quarter of 2023, we repurchased approximately 2.48 million shares at a total cost of approximately
$325 million .
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.”
Video Conference Information
Check Point will host a video conference with the investment community on
Fourth Quarter Investor Conference Participation Schedule:
J.P. Morgan RBC Equity Opportunities Forum November 6-7, 2023 , South BeachMiami, FL – 1x1’sStifel Midwest One-on-One Growth Conference November 9, 2023 ,Chicago, IL – 1x1’s- RBC 2023 Technology,
Internet, Media & Telecommunications Conference November 15, 2023 , NY, NY – 1x1’s - 2023
UBS Global Technology Conference November 28, 2023 ,Scottsdale, AZ – 1x1’s - Wells Fargo 7th Annual TMT Summit
November 29, 2023 ,Rancho Palos Verdes, CA – 1x1’s - Jefferies 2023 Security Summit
December 5, 2023 , SF, CA - Scotiabank 1st
US Technology Conference December 5, 2023 , SF, CA - Nasdaq 49th Investor Conference
December 6, 2023 ,London, UK BTIG Virtual Software Forum December 12, 2023 , Virtual 1x1’s
Members of Check Point's management team anticipate attending these conferences and events to discuss the latest company strategies and initiatives. Check Point’s conference presentations if applicable will be available via webcast on the company's web site. To hear 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.
To follow this and other Check Point news visit:
- Twitter: http://www.twitter.com/checkpointsw
- Facebook: http://www.facebook.com/checkpointsoftware
- Blog: http://blog.checkpoint.com/
- YouTube: http://www.youtube.com/user/CPGlobal
- LinkedIn: https://www.linkedin.com/company/check-point-software-technologies
About
©2023
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 regarding our products and solutions, our expectations regarding our recent acquisitions and market expansion, our beliefs regarding our customers’ adoption of our products and solutions, our expectations regarding the impact of the evolving conflict in
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, net income, and earnings per diluted share, which are adjustments from results based on GAAP to exclude, as applicable, stock-based compensation expenses, amortization of intangible assets and acquisition related expenses 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 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.
(Unaudited, in millions, except per share amounts) | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Revenues: | |||||||||||
Products and licenses | $ | 114.2 | $ | 132.4 | $ | 339.1 | $ | 381.5 | |||
Security subscriptions | 248.3 | 215.5 | 715.4 | 627.0 | |||||||
Total revenues from products and security subscriptions | 362.5 | 347.9 | 1,054.5 | 1,008.5 | |||||||
Software updates and maintenance | 233.8 | 229.7 | 696.7 | 682.9 | |||||||
Total revenues | 596.3 | 577.6 | 1,751.2 | 1,691.4 | |||||||
Operating expenses: | |||||||||||
Cost of products and licenses | 22.5 | 35.4 | 71.3 | 103.5 | |||||||
Cost of security subscriptions | 13.9 | 11.3 | 39.8 | 30.8 | |||||||
Total cost of products and security subscriptions | 36.4 | 46.7 | 111.1 | 134.3 | |||||||
Cost of Software updates and Maintenance | 27.7 | 26.1 | 81.8 | 77.3 | |||||||
Amortization of technology | 3.0 | 2.9 | 8.2 | 9.0 | |||||||
Total cost of revenues | 67.1 | 75.7 | 201.1 | 220.6 | |||||||
Research and development | 90.0 | 86.3 | 268.9 | 259.1 | |||||||
Selling and marketing | 183.3 | 166.0 | 546.6 | 495.2 | |||||||
General and administrative | 29.8 | 28.3 | 87.3 | 86.2 | |||||||
Total operating expenses | 370.2 | 356.3 | 1,103.9 | 1,061.1 | |||||||
Operating income | 226.1 | 221.3 | 647.3 | 630.3 | |||||||
Financial income, net | 17.7 | 11.9 | 58.1 | 28.7 | |||||||
Income before taxes on income | 243.8 | 233.2 | 705.4 | 659.0 | |||||||
Taxes on income | 38.8 | 49.2 | 114.3 | 132.0 | |||||||
Net income | $ | 205.0 | $ | 184.0 | $ | 591.1 | $ | 527.0 | |||
Basic earnings per share | $ | 1.77 | $ | 1.48 | $ | 5.01 | $ | 4.15 | |||
Number of shares used in computing basic earnings per share | 116.0 | 124.3 | 117.9 | 127.1 | |||||||
Diluted earnings per share | $ | 1.75 | $ | 1.47 | $ | 4.96 | $ | 4.11 | |||
Number of shares used in computing diluted earnings per share | 117.3 | 125.0 | 119.2 | 128.3 |
| ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Revenues | $ | 596.3 | $ | 577.6 | $ | 1,751.2 | $ | 1,691.4 | ||||
Non-GAAP operating income | 269.0 | 262.7 | 770.5 | 750.0 | ||||||||
Non-GAAP net income | 242.4 | 221.0 | 698.6 | 633.9 | ||||||||
Diluted Non-GAAP Earnings per share | $ | 2.07 | $ | 1.77 | $ | 5.86 | $ | 4.94 | ||||
Number of shares used in computing diluted Non-GAAP earnings per share | 117.3 | 125.0 | 119.2 | 128.3 |
(Unaudited, in millions, except per share amounts) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
GAAP operating income | $ | 226.1 | $ | 221.3 | $ | 647.3 | $ | 630.3 | ||||||||
Stock-based compensation (1) | 36.5 | 35.2 | 105.4 | 101.3 | ||||||||||||
Amortization of intangible assets and acquisition related expenses (2) | 6.4 | 6.2 | 17.8 | 18.4 | ||||||||||||
Non-GAAP operating income | $ | 269.0 | $ | 262.7 | $ | 770.5 | $ | 750.0 | ||||||||
GAAP net income | $ | 205.0 | $ | 184.0 | $ | 591.1 | $ | 527.0 | ||||||||
Stock-based compensation (1) | 36.5 | 35.2 | 105.4 | 101.3 | ||||||||||||
Amortization of intangible assets and acquisition related expenses (2) | 6.4 | 6.2 | 17.8 | 18.4 | ||||||||||||
Taxes on the above items (3) | (5.5 | ) | (4.4 | ) | (15.7 | ) | (12.8 | ) | ||||||||
Non-GAAP net income | $ | 242.4 | $ | 221.0 | $ | 698.6 | $ | 633.9 | ||||||||
Diluted GAAP Earnings per share | $ | 1.75 | $ | 1.47 | $ | 4.96 | $ | 4.11 | ||||||||
Stock-based compensation (1) | 0.31 | 0.28 | 0.88 | 0.79 | ||||||||||||
Amortization of intangible assets and acquisition related expenses (2) | 0.06 | 0.05 | 0.15 | 0.14 | ||||||||||||
Taxes on the above items (3) | (0.05 | ) | (0.03 | ) | (0.13 | ) | (0.10 | ) | ||||||||
Diluted Non-GAAP Earnings per share | $ | 2.07 | $ | 1.77 | $ | 5.86 | $ | 4.94 | ||||||||
Number of shares used in computing diluted Non-GAAP earnings per share | 117.3 | 125.0 | 119.2 | 128.3 | ||||||||||||
(1) Stock-based compensation: | ||||||||||||||||
Cost of products and licenses | $ | 0.1 | $ | 0.1 | $ | 0.3 | $ | 0.3 | ||||||||
Cost of software updates and maintenance | 1.9 | 1.5 | 4.9 | 3.8 | ||||||||||||
Research and development | 12.1 | 11.3 | 34.5 | 32.1 | ||||||||||||
Selling and marketing | 15.0 | 12.1 | 41.1 | 33.5 | ||||||||||||
General and administrative | 7.4 | 10.2 | 24.6 | 31.6 | ||||||||||||
36.5 | 35.2 | 105.4 | 101.3 | |||||||||||||
(2) Amortization of intangible assets and acquisition related expenses: | ||||||||||||||||
Amortization of technology-cost of revenues | 3.0 | 2.9 | 8.2 | 9.0 | ||||||||||||
Research and development | 1.1 | 2.1 | 5.0 | 6.3 | ||||||||||||
Selling and marketing | 2.3 | 1.2 | 4.6 | 3.1 | ||||||||||||
6.4 | 6.2 | 17.8 | 18.4 | |||||||||||||
(3) Taxes on the above items | (5.5 | ) | (4.4 | ) | (15.7 | ) | (12.8 | ) | ||||||||
Total, net | $ | 37.4 | $ | 37.0 | $ | 107.5 | $ | 106.9 |
(In millions) ASSETS | |||||||
2023 | 2022 | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 294.4 | $ | 196.0 | |||
Marketable securities and short-term deposits | 1,162.1 | 1,441.6 | |||||
Trade receivables, net | 355.0 | 644.2 | |||||
Prepaid expenses and other current assets | 53.4 | 50.0 | |||||
Total current assets | 1,864.9 | 2,331.8 | |||||
Long-term assets: | |||||||
Marketable securities | 1,532.2 | 1,865.6 | |||||
Property and equipment, net | 81.5 | 82.8 | |||||
Deferred tax asset, net | 63.5 | 77.6 | |||||
1,760.8 | 1,295.5 | ||||||
Other assets | 99.0 | 71.5 | |||||
Total long-term assets | 3,537.0 | 3,393.0 | |||||
Total assets | $ | 5,401.9 | $ | 5,724.8 |
LIABILITIES AND | |||||||||
Current liabilities: | |||||||||
Deferred revenues | $ | 1,246.3 | $ | 1,363.4 | |||||
Trade payables and other accrued liabilities | 475.2 | 475.8 | |||||||
Total current liabilities | 1,721.5 | 1,839.2 | |||||||
Long-term liabilities: | |||||||||
Long-term deferred revenues | 462.6 | 514.4 | |||||||
Income tax accrual | 407.1 | 419.7 | |||||||
Other long-term liabilities | 26.5 | 22.2 | |||||||
896.2 | 956.3 | ||||||||
Total liabilities | 2,617.7 | 2,795.5 | |||||||
Shareholders’ equity: | |||||||||
Share capital | 0.8 | 0.8 | |||||||
Additional paid-in capital | 2,682.4 | 2,500.7 | |||||||
(12,733.8 | ) | (11,802.1 | ) | ||||||
Accumulated other comprehensive loss | (84.1 | ) | (97.9 | ) | |||||
Retained earnings | 12,918.9 | 12,327.8 | |||||||
Total shareholders’ equity | 2,784.2 | 2,929.3 | |||||||
Total liabilities and shareholders’ equity | $ | 5,401.9 | $ | 5,724.8 | |||||
Total cash and cash equivalents, marketable securities and short-term deposits | $ | 2,988.7 | $ | 3,503.2 |
(Unaudited, in millions) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Cash flow from operating activities: | |||||||||||||||
Net income | $ | 205.0 | $ | 184.0 | $ | 591.1 | $ | 527.0 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation of property and equipment | 5.2 | 6.1 | 17.4 | 16.6 | |||||||||||
Amortization of intangible assets | 4.6 | 3.4 | 10.8 | 10.1 | |||||||||||
Stock-based compensation | 36.5 | 35.2 | 105.4 | 101.3 | |||||||||||
Realized loss on marketable securities | 6.0 | - | 6.7 | - | |||||||||||
Decrease in trade and other receivables, net | 38.1 | 41.0 | 263.3 | 287.9 | |||||||||||
Decrease in deferred revenues, trade payables and other accrued liabilities | (75.8 | ) | (26.7 | ) | (205.1 | ) | (92.5 | ) | |||||||
Deferred income taxes, net | 2.7 | (2.7 | ) | 9.3 | (0.4 | ) | |||||||||
Net cash provided by operating activities | 222.3 | 240.3 | 798.9 | 850.0 | |||||||||||
Cash flow from investing activities: | |||||||||||||||
Payment in conjunction with acquisitions, net of acquired cash | (455.0 | ) | - | (455.0 | ) | (48.3 | ) | ||||||||
Investment in property and equipment | (6.1 | ) | (4.2 | ) | (13.9 | ) | (15.6 | ) | |||||||
Net cash used in investing activities | (461.1 | ) | (4.2 | ) | (468.9 | ) | (63.9 | ) | |||||||
Cash flow from financing activities: | |||||||||||||||
Proceeds from issuance of shares upon exercise of options | 32.6 | 25.0 | 117.7 | 120.4 | |||||||||||
Purchase of treasury shares | (324.6 | ) | (325.0 | ) | (974.4 | ) | (975.0 | ) | |||||||
Payments related to shares withheld for taxes | (2.1 | ) | (1.6 | ) | (9.8 | ) | (8.1 | ) | |||||||
Net cash used in financing activities | (294.1 | ) | (301.6 | ) | (866.5 | ) | (862.7 | ) | |||||||
Unrealized gain (loss) on marketable securities, net | 6.1 | (41.0 | ) | 22.0 | (137.2 | ) | |||||||||
Decrease in cash and cash equivalents, marketable securities and short term deposits | (526.8 | ) | (106.5 | ) | (514.5 | ) | (213.8 | ) | |||||||
Cash and cash equivalents, marketable securities and short term deposits at the beginning of the period | 3,515.5 | 3,676.1 | 3,503.2 | 3,783.4 | |||||||||||
Cash and cash equivalents, marketable securities and short term deposits at the end of the period | $ | 2,988.7 | $ | 3,569.6 | $ | 2,988.7 | $ | 3,569.6 |
INVESTOR CONTACT: | MEDIA CONTACT: |
+1.650.628.2040 | +1.650.628.2260 |
ir@checkpoint.com | press@checkpoint.com |
Source: Check Point Software Technologies INC
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