Third Quarter 2022:
- Total Revenue: $578 million, an 8 percent increase year over year
- Security Subscription Revenues: $216 million, a 13 percent increase year over year
- Deferred Revenues:
$1,647 million, a 13 percent increase year over year - GAAP Operating Income: $221 million, representing 38 percent of revenues
- Non-GAAP Operating Income: $263 million, representing 45 percent of revenues
- GAAP EPS: $1.47, a 5 percent increase year over year
- Non-GAAP EPS:
$1 .77, a 7 percent increase year over year
“We delivered strong third quarter results reflecting solid execution during the quarter. Revenues came in toward the high-end of our projections, while non-GAAP earnings per share exceeded projections. Product and Security Subscription revenues increased by thirteen percent driven by double-digit growth in Harmony, CloudGuard and Quantum network security gateways.” said
“Additionally, this is to update that starting November,
Financial Highlights for the Third Quarter of 2022:
- Total Revenue:
$578 million compared to$534 million in the third quarter of 2021, an 8 percent increase year over year. - GAAP Operating Income:
$221 million compared to$225 million in the third quarter of 2021, representing 38 percent and 42 percent of revenues in the third quarter of 2022 and 2021, respectively. - Non-GAAP Operating Income:
$263 million compared to$261 million in the third quarter of 2021, representing 45 percent and 49 percent of revenues in the third quarter of 2022 and 2021, respectively. - GAAP Taxes on Income:
$49 million compared to$47 million in the third quarter of 2021. - GAAP Net Income:
$184 million compared to$187 million in the third quarter of 2021. - Non-GAAP Net Income:
$221 million compared to$220 million in the third quarter of 2021. - GAAP Earnings per Diluted share:
$1.47 compared to$1.40 in the third quarter of 2021, a 5 percent increase year over year. - Non-GAAP Earnings per Diluted share:
$1.77 compared to$1.65 in the third quarter of 2021, a 7 percent increase year over year. - Deferred Revenues: As of
September 30, 2022 , deferred revenues were$1,647 million compared to$1,456 million as ofSeptember 30, 2021 , a 13 percent increase year over year. - Cash Balances,
Marketable Securities and Short-Term Deposits:$3,570 million as ofSeptember 30, 2022 , compared to$3,835 million as ofSeptember 30, 2021 . - Cash Flow: Cash flow from operations was
$240 million , compared to$251 million in the third quarter of 2021. - Share Repurchase Program: During the third quarter of 2022, we repurchased approximately 2.67 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:
- RBC 2022 Technology,
Internet, Media & Telecommunications Conference November 15-16, 2022 , NY, NY – 1x1’s - Credit Suisse 2022 Technology Summit
November 28 - 30, 2022 ,Scottsdale, AZ – Fireside Chat & 1x1’s - Wells Fargo 6th Annual TMT Summit
December 1, 2022 ,Las Vegas, NV – 1x1’s Raymond James 2022 Technology ConferenceDecember 5-6, 2022 , NY, NY – 1x1’s- Barclays 2022 Technology Conference
December 7-8, 2022 , SF, CA – 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.
About
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©2022
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 beliefs regarding our customers’ adoption of our products and solutions, and our participation in investor conferences during the fourth quarter of 2022. 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 products and solutions and new products and solutions; the continued effects on our business of the COVID-19 pandemic, 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
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.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited, in millions, except per share amounts)
Three Months Ended | Nine Months Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Revenues: | |||||||||||||||
Products and licenses | $ | 132.4 | $ | 119.1 | $ | 381.5 | $ | 347.5 | |||||||
Security subscriptions | 215.5 | 190.0 | 627.0 | 551.1 | |||||||||||
Total revenues from products and security subscriptions | 347.9 | 309.1 | 1,008.5 | 898.6 | |||||||||||
Software updates and maintenance | 229.7 | 224.9 | 682.9 | 669.1 | |||||||||||
Total revenues | 577.6 | 534.0 | 1,691.4 | 1,567.7 | |||||||||||
Operating expenses: | |||||||||||||||
Cost of products and licenses | 35.4 | 25.9 | 103.5 | 70.7 | |||||||||||
Cost of security subscriptions | 11.3 | 9.3 | 30.8 | 26.0 | |||||||||||
Total cost of products and security subscriptions | 46.7 | 35.2 | 134.3 | 96.7 | |||||||||||
Cost of Software updates and Maintenance | 26.1 | 25.8 | 77.3 | 76.7 | |||||||||||
Amortization of technology | 2.9 | 2.2 | 9.0 | 5.6 | |||||||||||
Total cost of revenues | 75.7 | 63.2 | 220.6 | 179.0 | |||||||||||
Research and development | 86.3 | 71.3 | 259.1 | 207.2 | |||||||||||
Selling and marketing | 166.0 | 148.3 | 495.2 | 437.2 | |||||||||||
General and administrative | 28.3 | 26.7 | 86.2 | 82.7 | |||||||||||
Total operating expenses | 356.3 | 309.5 | 1,061.1 | 906.1 | |||||||||||
Operating income | 221.3 | 224.5 | 630.3 | 661.6 | |||||||||||
Financial income, net | 11.9 | 9.2 | 28.7 | 32.2 | |||||||||||
Income before taxes on income | 233.2 | 233.7 | 659.0 | 693.8 | |||||||||||
Taxes on income | 49.2 | 46.7 | 132.0 | 137.9 | |||||||||||
Net income | $ | 184.0 | $ | 187.0 | $ | 527.0 | $ | 555.9 | |||||||
Basic earnings per share | $ | 1.48 | $ | 1.41 | $ | 4.15 | $ | 4.17 | |||||||
Number of shares used in computing basic earnings per share | 124.3 | 132.6 | 127.1 | 133.3 | |||||||||||
Diluted earnings per share | $ | 1.47 | $ | 1.40 | $ | 4.11 | $ | 4.13 | |||||||
Number of shares used in computing diluted earnings per share | 125.0 | 133.4 | 128.3 | 134.4 |
SELECTED FINANCIAL METRICS
(Unaudited, in millions, except per share amounts)
Three Months Ended | Nine Months Ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenues | $ | 577.6 | $ | 534.0 | $ | 1,691.4 | $ | 1,567.7 | ||||||||
Non-GAAP operating income | 262.7 | 261.3 | 750.0 | 764.7 | ||||||||||||
Non-GAAP net income | 221.0 | 219.8 | 633.9 | 647.9 | ||||||||||||
Diluted Non-GAAP Earnings per share | $ | 1.77 | $ | 1.65 | $ | 4.94 | $ | 4.82 | ||||||||
Number of shares used in computing diluted Non-GAAP earnings per share | 125.0 | 133.4 | 128.3 | 134.4 |
RECONCILIATION OF GAAP TO NON GAAP FINANCIAL INFORMATION
(Unaudited, in millions, except per share amounts)
Three Months Ended | Nine Months Ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
GAAP operating income | $ | 221.3 | $ | 224.5 | $ | 630.3 | $ | 661.6 | ||||||||
Stock-based compensation (1) | 35.2 | 31.2 | 101.3 | 87.7 | ||||||||||||
Amortization of intangible assets and acquisition related expenses (2) | 6.2 | 5.6 | 18.4 | 15.4 | ||||||||||||
Non-GAAP operating income | $ | 262.7 | $ | 261.3 | $ | 750.0 | $ | 764.7 | ||||||||
GAAP net income | $ | 184.0 | $ | 187.0 | $ | 527.0 | $ | 555.9 | ||||||||
Stock-based compensation (1) | 35.2 | 31.2 | 101.3 | 87.7 | ||||||||||||
Amortization of intangible assets and acquisition related expenses (2) | 6.2 | 5.6 | 18.4 | 15.4 | ||||||||||||
Taxes on the above items (3) | (4.4 | ) | (4.0 | ) | (12.8 | ) | (11.1 | ) | ||||||||
Non-GAAP net income | $ | 221.0 | $ | 219.8 | $ | 633.9 | $ | 647.9 | ||||||||
Diluted GAAP Earnings per share | $ | 1.47 | $ | 1.40 | $ | 4.11 | $ | 4.13 | ||||||||
Stock-based compensation (1) | 0.28 | 0.24 | 0.79 | 0.66 | ||||||||||||
Amortization of intangible assets and acquisition related expenses (2) | 0.05 | 0.04 | 0.14 | 0.11 | ||||||||||||
Taxes on the above items (3) | (0.03 | ) | (0.03 | ) | (0.10 | ) | (0.08 | ) | ||||||||
Diluted Non-GAAP Earnings per share | $ | 1.77 | $ | 1.65 | $ | 4.94 | $ | 4.82 | ||||||||
Number of shares used in computing diluted Non-GAAP earnings per share | 125.0 | 133.4 | 128.3 | 134.4 | ||||||||||||
(1) Stock-based compensation: | ||||||||||||||||
Cost of products and licenses | $ | 0.1 | $ | 0.1 | $ | 0.3 | $ | 0.3 | ||||||||
Cost of software updates and maintenance | 1.5 | 1.2 | 3.8 | 3.2 | ||||||||||||
Research and development | 11.3 | 7.8 | 32.1 | 21.5 | ||||||||||||
Selling and marketing | 12.1 | 12.7 | 33.5 | 31.5 | ||||||||||||
General and administrative | 10.2 | 9.4 | 31.6 | 31.2 | ||||||||||||
35.2 | 31.2 | 101.3 | 87.7 | |||||||||||||
(2) Amortization of intangible assets and acquisition related expenses: | ||||||||||||||||
Amortization of technology-cost of revenues | 2.9 | 2.2 | 9.0 | 5.6 | ||||||||||||
Research and development | 2.1 | 1.3 | 6.3 | 3.9 | ||||||||||||
Selling and marketing | 1.2 | 2.1 | 3.1 | 5.9 | ||||||||||||
6.2 | 5.6 | 18.4 | 15.4 | |||||||||||||
(3) Taxes on the above items | (4.4 | ) | (4.0 | ) | (12.8 | ) | (11.1 | ) | ||||||||
Total, net | $ | 37.0 | $ | 32.8 | $ | 106.9 | $ | 92.0 |
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited, in millions)
ASSETS
2022 | 2021 | ||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 426.8 | $ | 271.9 | |||||
Marketable securities and short-term deposits | 1,187.5 | 1,421.8 | |||||||
Trade receivables, net | 306.6 | 597.8 | |||||||
Prepaid expenses and other current assets | 52.1 | 46.4 | |||||||
Total current assets | 1,973.0 | 2,337.9 | |||||||
Long-term assets: | |||||||||
Marketable securities | 1,955.3 | 2,089.7 | |||||||
Property and equipment, net | 82.4 | 83.4 | |||||||
Deferred tax asset, net | 81.7 | 51.7 | |||||||
1,298.7 | 1,257.2 | ||||||||
Other assets | 76.4 | 80.3 | |||||||
Total long-term assets | 3,494.5 | 3,562.3 | |||||||
Total assets | $ | 5,467.5 | $ | 5,900.2 |
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Current liabilities: | |||||||||
Deferred revenues | $ | 1,180.0 | $ | 1,257.4 | |||||
Trade payables and other accrued liabilities | 427.1 | 454.7 | |||||||
Total current liabilities | 1,607.1 | 1,712.1 | |||||||
Long-term liabilities: | |||||||||
Long-term deferred revenues | 467.0 | 449.7 | |||||||
Income tax accrual | 456.5 | 454.9 | |||||||
Other long-term liabilities | 22.3 | 26.4 | |||||||
945.8 | 931.0 | ||||||||
Total liabilities | 2,552.9 | 2,643.1 | |||||||
Shareholders’ equity: | |||||||||
Share capital | 0.8 | 0.8 | |||||||
Additional paid-in capital | 2,457.6 | 2,276.7 | |||||||
(11,484.8 | ) | (10,550.7 | ) | ||||||
Accumulated other comprehensive loss | (116.9 | ) | (0.6 | ) | |||||
Retained earnings | 12,057.9 | 11,530.9 | |||||||
Total shareholders’ equity | 2,914.6 | 3,257.1 | |||||||
Total liabilities and shareholders’ equity | $ | 5,467.5 | $ | 5,900.2 | |||||
Total cash and cash equivalents, marketable securities and short-term deposits | $ | 3,569.6 | $ | 3,783.4 |
SELECTED CONSOLIDATED CASH FLOW DATA
(Unaudited, in millions)
Three Months Ended | Nine Months Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Cash flow from operating activities: | |||||||||||||||
Net income | $ | 184.0 | $ | 187.0 | $ | 527.0 | $ | 555.9 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation of property and equipment | 6.1 | 4.8 | 16.6 | 15.0 | |||||||||||
Amortization of intangible assets | 3.4 | 2.6 | 10.1 | 6.8 | |||||||||||
Stock-based compensation | 35.2 | 31.2 | 101.3 | 87.7 | |||||||||||
Realized (gain) loss on marketable securities | - | 0.5 | - | (1.0 | ) | ||||||||||
Decrease in trade and other receivables, net | 41.0 | 44.5 | 287.9 | 219.8 | |||||||||||
Increase (decrease) in deferred revenues, trade payables and other accrued liabilities | (26.7 | ) | (23.1 | ) | (92.5 | ) | 0.9 | ||||||||
Deferred income taxes, net | (2.7 | ) | 3.2 | (0.4 | ) | 3.7 | |||||||||
Net cash provided by operating activities | 240.3 | 250.7 | 850.0 | 888.8 | |||||||||||
Cash flow from investing activities: | |||||||||||||||
Payment in conjunction with acquisitions, net of acquired cash | - | (219.7 | ) | (48.3 | ) | (219.7 | ) | ||||||||
Investment in property and equipment | (4.2 | ) | (4.3 | ) | (15.6 | ) | (11.4 | ) | |||||||
Net cash used in investing activities | (4.2 | ) | (224.0 | ) | (63.9 | ) | (231.1 | ) | |||||||
Cash flow from financing activities: | |||||||||||||||
Proceeds from issuance of shares upon exercise of options | 25.0 | 140.0 | 120.4 | 187.5 | |||||||||||
Purchase of treasury shares | (325.0 | ) | (325.0 | ) | (975.0 | ) | (974.6 | ) | |||||||
Payments related to shares withheld for taxes | (1.6 | ) | (0.7 | ) | (8.1 | ) | (6.5 | ) | |||||||
Net cash used in financing activities | (301.6 | ) | (185.7 | ) | (862.7 | ) | (793.6 | ) | |||||||
Unrealized loss on marketable securities, net | (41.0 | ) | (8.4 | ) | (137.2 | ) | (29.1 | ) | |||||||
Decrease in cash and cash equivalents, marketable securities and short term deposits | (106.5 | ) | (167.4 | ) | (213.8 | ) | (165.0 | ) | |||||||
Cash and cash equivalents, marketable securities and short term deposits at the beginning of the period | 3,676.1 | 4,002.0 | 3,783.4 | 3,999.6 | |||||||||||
Cash and cash equivalents, marketable securities and short term deposits at the end of the period | $ | 3,569.6 | $ | 3,834.6 | $ | 3,569.6 | $ | 3,834.6 |
INVESTOR CONTACT: +1.650.628.2040 ir@checkpoint.com | MEDIA CONTACT: Check Point Software Technologies +1.650.628.2260 press@checkpoint.com |
Source: Check Point Software Technologies INC
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