Check Point Software Technologies Reports 2018 Fourth Quarter and Full Year Financial Results

Globe Newswire 30-Jan-2019 5:01 AM

SAN CARLOS, Calif, Jan. 30, 2019 (GLOBE NEWSWIRE) -- Check Point® Software Technologies Ltd. (NASDAQ:CHKP), today announced its financial results for the fourth quarter and full year ended December 31, 2018.

Fourth Quarter 2018:

• Total Revenues: $526 million, a 4 percent increase year over year
• Deferred Revenues: $1,338 million, a 13 percent increase year over year
• GAAP EPS: $1.51, a 4 percent increase year over year
• Non-GAAP EPS: $1.68, a 6 percent increase year over year

Full Year 2018:

• Total Revenues: $1,916 million, a 3 percent increase year over year
• GAAP EPS: $5.15, a 7 percent increase year over year
• Non-GAAP EPS: $5.71, a 7 percent increase year over year

"We finished the year with record results. Our revenues were toward the top of our projections and non-GAAP EPS exceeded. Our Security Subscriptions Business continued to increase, driven by cloud, mobile and zero-day advanced threat prevention technologies.  We expanded our cloud security offering with the delivery of CloudGuard SaaS solution, and the acquisition of Dome9 and ForceNock," said Gil Shwed, Founder and CEO of Check Point Software Technologies. "We started 2019 with many new innovations including two new threat prevention optimized security appliances and the new Maestro product line that provides Cloud-type HyperScale technology to reach unprecedented levels of security." Shwed concluded.

Financial Highlights Fourth Quarter of 2018:

• Total Revenues: $526 million compared to $506 million in the fourth quarter of 2017, a 4 percent increase year over year.
• GAAP Operating Income: $250 million compared to $267 million in the fourth quarter of 2017, representing 48 percent and 53 percent of revenues in the fourth quarter of 2018 and 2017, respectively.
• Non-GAAP Operating Income: $279 million compared to $292 million in the fourth quarter of 2017, representing 53 percent and 58 percent of revenues in the fourth quarter of 2018 and 2017, respectively.
• GAAP Taxes on Income: $29 million compared to $40 million in the fourth quarter of 2017.
• GAAP Net Income and Earnings per Diluted Share: GAAP net income was $238 million compared to $239 million in the fourth quarter of 2017. GAAP earnings per diluted share were $1.51 compared to $1.46 in the fourth quarter of 2017, a 4 percent increase year over year.
• Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $264 million compared to $259 million in the fourth quarter of 2017.  Non-GAAP earnings per diluted share were $1.68 compared to $1.58 in the fourth quarter of 2017, a 6 percent increase year over year.
• Deferred Revenues: As of December 31, 2018, deferred revenues were $1,338 million compared to $1,187 million as of December 31, 2017, a 13 percent increase year over year.
• Cash Flow: Cash flow from operations of $249 million, which included a cost of $16 million related to the acquisition of Dome9, compared to $248 million in the fourth quarter of 2017.
• Cash Balances, Marketable Securities and Short Term Deposits: $4,039 million as of December 31, 2018, compared to $3,848 million as of December 31, 2017.
• Share Repurchase Program: During the fourth quarter of 2018, we purchased approximately 2.8 million shares at a total cost of approximately $305 million.

Financial Highlights for the Year Ended December 31, 2018:

• Total Revenues: $1,916 million compared to $1,855 million in 2017, a 3 percent increase year over year.
• GAAP Operating Income: $914 million compared to $924 million in 2017, representing 48 percent and 50 percent of revenues in 2018 and 2017, respectively.
• Non-GAAP Operating Income: $1,015 million compared to $1,024 million in 2017, representing 53 percent and 55 percent of revenues in 2018 and 2017, respectively.
• GAAP Taxes on Income: $158 million compared to $168 million in 2017.
• GAAP Net Income and Earnings per Diluted Share: GAAP net income was $821 million compared to $803 million in 2017. GAAP earnings per diluted share were $5.15 compared to $4.82 in 2017, a 7 percent increase year over year.
• Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $911 million compared to $888 million in 2017.  Non-GAAP earnings per diluted share were $5.71 compared to $5.33 in 2017, a 7 percent increase year over year.
• Cash Flow: Cash flow from operations of $1,130 million compared to $1,090 million in 2017.
• Share Repurchase Program: During 2018, we purchased approximately 10.3 million shares at a total cost of approximately $1,104 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."

Business Highlights:

Maestro Network Security Solution: Check Point Maestro is a revolutionary new architecture that enables businesses of any size to enjoy the power of flexible cloud-level security platforms, and to seamlessly expand their existing security gateways to hyperscale capacity. Maestro enables a single gateway to expand to the capacity and performance of 52 gateways in minutes, giving companies elasticity and enabling massive Terabit/second firewall throughput.

6000 Series Gateways: The new 6500 and 6800 security appliances set new standards of protection against advanced fifth-generation threats, while offering superior performance.  The 6500 and 6800 gateways deliver the power to inspect SSL-encrypted network traffic without compromising on performance or uptime. The 6500 provides 20Gbps raw firewall bandwidth, and 3.4Gbps of threat prevention output.  The 6800 provides 42Gbps raw firewall bandwidth and 9Gbps threat prevention output. 

SandBlast for Education:  Purpose-built content control and cybersecurity solution for school-provided devices. This solution protects Classrooms from Cybercriminals and Online Bullying and provides high levels of security for schools using Google Chromebooks.

Check Point Named a Leader in IDC MarketScape Report on Mobile Threat Management: SandBlast Mobile addresses rapidly evolving mobile security threats to enterprise data on devices. It is the second-consecutive year Check Point was named a leader in this category with its SandBlast Mobile security solution.

We continued our focus on cloud security through innovation and acquisitions including:

Dome9 Acquisition: The acquisition enhances Check Point's fully consolidated Infinity architecture and its CloudGuard security offering with advanced active policy enforcement and multi-cloud protection capabilities.

ForceNock Acquisition: A web application and API protection startup acquisition that will strengthen Check Point offerings and capabilities with advanced machine learning protection.

General Availability for CloudGuard SaaS: CloudGuard SaaS is designed to protect enterprises that use SaaS applications and cloud-based email to prevent targeted attacks intended to steal sensitive data. CloudGuard SaaS provides protection against zero-days and phishing attacks, as well as employee account takeovers. Additionally, it can discover unsanctioned use of SaaS applications and prevent data leakage, while providing instant threat visibility.

CloudGuard integrates with AWS Security Hub: This integration, together with the addition of Dome9 to the CloudGuard portfolio, allows enterprises to access multi-layered security and continuous compliance capabilities from the central console of AWS Security Hub.

Check Point Research https://research.checkpoint.com uncovered numerous findings that included Fortnite, Adobe PDF Reader and DJI Drones. We also published new findings about malware families including multiple types of Ransomware, malware on computers and mobile devices.

Vulnerabilities in Applications & Infrastructure:

DJI Drone Vulnerabilities: Check Point Research discovered a vulnerability in the cloud infrastructure of the world's leading drone manufacturer, DJI. If exploited, it could grant an attacker access to a user's DJI account without the user being aware of it and provide access to the victim's flight logs, photos and videos taken during a flight, GPS locations and flight paths, a live camera view and information connected to the user's account including profile information.

Hacking Fortnite: Check Point Research discovered multiple vulnerabilities in Epic Games' online platform that could have allowed hackers to take over accounts, view personal account information, purchase Fortnite's virtual in-game currency and eavesdrop on and record players' in-game chatter and background home conversations.

50 Adobe Vulnerabilities in 50 Days: Check Point Research discovered 50 vulnerabilities in Adobe Reader in 50 days. Over time, we would expect to see less vulnerabilities. However, the number of vulnerabilities discovered is increasing year on year.

Ransomware Research:

Dr. Shifro Ransomware: Check Point Research reveals how a Russian company, named ‘Dr. Shifro', claims to legitimately provide file decryption services to ransomware victims, though in fact merely pays the ransomware's author themselves and passes on the cost to the victim – at a massive profit margin.

New Strain of Olympic Destroyer: Check Point Research noticed new activity from Hades, the APT group behind the infamous Olympic Destroyer attack that disrupted the 2018 Winter Olympics.

New Ramnit Campaign: Check Point Research discovered a new Ramnit campaign emerged in the wild, distributing malware used mainly for stealing sensitive data via web-injects.

Zooming in on Domestic Kitten: Check Point researchers reveal an extensive and targeted attack that has been taking place since 2016 using mobile applications. The attack uses fake decoy content to entice their victims to download malicious applications, which are in fact loaded with spyware, to collect sensitive information about them.

Emergence of New Azorult: Check Point Research spotted a new version of Azorult in the wild being delivered through the RIG exploit kit, as well as other sources. Azorult is a long known information stealer and malware downloader.

Godzilla Loader: Research into the Godzilla ‘downloader', or ‘dropper', highlighted how this malware is being developed on the Dark Web in real time and how it operates on the victim's machine.

Conference Call and Webcast Information
Check Point will host a conference call with the investment community on January 30, 2019, at 8:30 AM EST/5:30 AM PST. To listen to the live webcast or replay, please visit the website www.checkpoint.com/ir.

First Quarter 2019 Investor Conference Participation Schedule:

• Goldman Sachs Technology & Internet Conference 2019
  February 12, 2019 – San Francisco, CA
• Morgan Stanley 2019 Media, Telecommunications & Technology Conference
  February 27, 2019 – San Francisco, CA
• Susquehanna 8^th Annual Semi & Technology Conference
  March 12, 2019 – New York, NY
• Piper Jaffray Security Symposium
  March 14, 2019 – Chicago, IL

Members of Check Point's management team are expected to present at these conferences and discuss the latest company strategies and initiatives. Check Point's conference presentations are expected to 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.

About Check Point Software Technologies Ltd.
Check Point Software Technologies Ltd. (www.checkpoint.com) is a leading provider of cyber security solutions to governments and corporate enterprises globally. Its solutions protect customers from cyber-attacks with an industry leading catch rate of malware, ransomware and other types of attacks. Check Point offers a multilevel security architecture that defends enterprises' cloud, network and mobile device held information, plus the most comprehensive and intuitive one point of control security management system. Check Point protects over 100,000 organizations of all sizes.

©2019 Check Point Software Technologies Ltd. All rights reserved

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, customer and market acceptance of our products and solutions, and our participation in investor conferences during the first quarter of 2019.  Our expectations and beliefs regarding these matters may not materialize, and actual results or events in the future are subject to risks and uncertainties that could cause actual results or events to differ materially from those projected.  These risks include our ability to continue to develop platform capabilities and solutions; customer acceptance and purchase of our existing solutions and new solutions; the market for IT security continuing to develop; competition from other products and services; and general market, political, economic and business conditions.  The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and  Exchange Commission, including our Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 27, 2018. The forward-looking statements in this press release are based on information available to Check Point as of the date hereof, and Check Point disclaims any obligation to update any forward-looking statements, except as required by law.

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 or include certain items. 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 in order 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 the business internally and as such has determined that it is important to provide this information to investors.