For its fiscal fourth quarter, the company saw revenue jump to $75.6 million -- representing an increase of 88% and topping the $40.2 million it reported in the same quarter of a year ago. Also impressive was its reported loss, which narrowed to $4.6 million on a GAAP basis or 18 cents per share. This compares favorably to its net loss of $6 million in the same period of a year ago.
Clearly there is enough evidence in Palo Alto's numbers to suggest it has begun to steal market share from Check Point. It remains to be seen how significant this will become. But certainly, investors of Check Point can't rest easy seeing such impressive growth numbers from a new rival. Also causing some uneasiness is that Cisco, Fortinet and even Dell (DELL - Get Report), which just acquired SonicWall, have all begun to make great strides in the enterprise security space. How will Check Point grow when there are so many gunning for its business?
There are always at least two ways to meet the competition head on -- either through investments in R&D or an acquisition. While Dell and Cisco appear to have taken the latter route, investors of Check Point have grown frustrated that the company has yet to decide which path it wants to take.
While it can be argued that Check Point has indeed spent on R&D, $28.5 million during the quarter, it pales in comparison to Cisco, which spent $1.4 billion trying to win its market.