SAN CARLOS, Calif., Jan. 31, 2018 (GLOBE NEWSWIRE) -- Check Point® Software Technologies Ltd. (NASDAQ:CHKP), today announced its financial results for the fourth quarter and full year ended December 31, 2017.

Fourth Quarter 2017:
  • Total Revenue: $506 million, a 4 percent increase year over year
  • GAAP EPS : $ 1.46 , a n 11 percent increase year over year
  • Non-GAAP EPS : $ 1 . 58 , a n 8 percent increase year over year

Full Year 2017:
  • Total Revenue: $1,855 million , a 7 percent increase year over year
  • GAAP EPS : $ 4.82 , a 15 percent increase year over year
  • Non-GAAP EPS : $ 5.33 , a 13 percent increase year over year

"Fourth quarter revenues were in line with our projections while EPS exceeded the top end of our range.  As we move into 2018, the cyberattacks that organizations are experiencing today are now Gen V (5 th Generation) while most enterprise security protections deployed are still below Gen III (3 rd Generation)" Said Gil Shwed, Founder and CEO of Check Point Software Technologies. "To enable customers to bridge the gap we have launched Infinity Total Protection - a revolutionary security consumption model that is designed to enable organizations of all sizes to close the gap and prevent Gen V cyberattacks."

Financial Highlights for the Fourth Quarter of 2017:
  • Total Revenue: $506 million compared to $487 million in the fourth quarter of 2016, a 4 percent increase year over year.
  • Security Subscriptions Revenues : $130 million compared to $110 million in the fourth quarter of 2016, an 18 percent increase year over year.
  • GAAP Operating Income: $267 million compared to $241 million in the fourth quarter of 2016, representing 53 percent and 50 percent of revenues in 2017 and 2016, respectively.
  • Non-GAAP Operating Income: $292 million compared to $266 million in the fourth quarter of 2016, representing 58 percent and 55 percent of revenues in 2017 and 2016, respectively.
  • GAAP Taxes on Income: $40 million compared to $30 million in the fourth quarter of 2016.
  • GAAP Net Income and Earnings per Diluted Share: GAAP net income was $239 million compared to $222 million in the fourth quarter of 2016. GAAP earnings per diluted share were $1.46 compared to $1.31 in the fourth quarter of 2016, an 11 percent increase year over year.
  • Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $259 million compared to $247 million in the fourth quarter of 2016.  Non-GAAP earnings per diluted share were $1.58 compared to $1.46 in the fourth quarter of 2016, an 8 percent increase year over year.
  • Deferred Revenues: As of December 31, 2017, deferred revenues were $1,187 million compared to $1,066 million as of December 31, 2016, an 11 percent increase year over year.
  • Cash Flow: Cash flow from operations of $248 million compared to $183 million in the fourth quarter of 2016.
  • Share Repurchase Program: During the fourth quarter of 2017, the company repurchased approximately 2.4 million shares at a total cost of approximately $250 million.
  • Cash Balances, Marketable Securities and Short Term Deposits: $3,848 million as of December 31, 2017, compared to $3,669 million as of December 31, 2016.

Financial Highlights for the Year Ended December 31, 2017
  • Total Revenues: $1,855 million compared to $1,741 million in 2016, a 7 percent increase year over year.
  • Security Subscriptions Revenues: $480 million compared to $390 million in 2016, a 23 percent increase year over year.
  • GAAP Operating Income: $924 million compared to $852 million in 2016, representing 50 percent and 49 percent of revenues in 2017 and 2016, respectively.
  • Non-GAAP Operating Income: $1,024 million compared to $948 million in 2016, representing 55 percent and 54 percent of revenues in 2017 and 2016, respectively.
  • GAAP Taxes on Income: $168 million compared to $172 million in 2016.
  • GAAP Net Income and Earnings per Diluted Share: GAAP net income was $803 million compared to $725 million in 2016. GAAP earnings per diluted share were $4.82 compared to $4.18 in 2016, a 15 percent increase year over year.
  • Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $888 million compared to $818 million in 2016. Non-GAAP earnings per diluted share were $5.33 compared to $4.72 in 2016, a 13 percent increase year over year.
  • Cash Flow: Cash flow from operations of $1,090 million compared to $926 million in 2016.
  • Share Repurchase Program: In 2017, the company repurchased approximately 9.5 million shares at a total cost of approximately $995 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."

Latest Business Highlights The threat landscape has evolved into its 5 th generation. All business sectors are now experiencing Gen V  cyber-attacks which are characterized by polymorphic malware that is moving fast and attacks a broad set of targets.  These sophisticated attacks on mobile, cloud and enterprise networks utilize sophisticated code and bypass conventional, static detection-based defenses being used by most organizations today.  To protect networks and data against these attacks, organizations need to advance to Gen V cyber-security utilizing Check Point Infinity, which combines real-time threat prevention, behavioral analysis, shared intelligence and the most advanced security across networks, cloud and mobile.

Infinity Total Protection is a game-changing new consumption model with a simple all-inclusive, per-user, per-year subscription.  The offering enables enterprises to fully utilize Gen V security across their entire network.  Infinity Total Protection is a subscription solution that includes both network security hardware and software, with fully integrated endpoint, zero-day threat prevention, cloud and mobile protections, combined with unified management and 24×7 premium support.

'Gen V' Security Management: The latest Smart-1 Appliances power Gen V security management by delivering management storage capacity of up to 48TB, logging rates of up to 100,000 logs/sec and a performance boost of up to 8x compared to previous models. This enables exceptional security management performance across network, cloud and mobile environments for efficient Gen V cyber protection with holistic, single-console security management and the ability to correlate, store and analyze huge amounts of new and historic data from thousands of network devices. Highest Security Effectiveness and Lowest TCO Scores:  In NSS Labs' First-Ever Breach Prevention System Test Check Point SandBlast received a recommended rating while achieving the highest level of security effectiveness and the lowest total cost of ownership. The recommended rating further validates Check Point's substantial ability to protect organizations by preventing even the most advanced cyber-attacks.

"Our industry is at an inflection point where cyber-attacks are becoming increasingly more sophisticated and security infrastructure needs to significantly advance to effectively combat these threats. Enterprises need to adopt Gen V cyber protections. This year, we will focus on enabling our customers to make this generational leap in security infrastructure," concluded Shwed.

Conference Call and Webcast Information Check Point will host a conference call with the investment community on January 31, 2018, at 8:30 AM ET/5:30 AM PT. To listen to the live webcast or replay, please visit the website at: www.checkpoint.com/ir.

First Quarter 2018 Investor Conference Participation Schedule:
  • Goldman Sachs Technology & Internet Conference 2018 February 14, 2018 -San Francisco, CA
  • Morgan Stanley 2018 Media, Telecommunications & Technology Conference February 26, 2018 -San Francisco, CA
  • Susquehanna 7 th Annual Semi & Technology Conference March 14, 2018 - New York, NY

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 view 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.

©2018 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, including the Check Point Infinity architecture and our participation in investor conferences during the first quarter of 2018.  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 28, 2017.  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, 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 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 business internally and as such has determined that it is important to provide this information to investors.
 
CHECK POINT SOFTWARE TECHNOLOGIES LTD. CONSOLIDATED STATEMENT OF INCOME
 
(In thousands, except per share amounts)
 
  Three Months Ended   Year Ended
  December 31,   December 31,
  2017   2016   2017   2016
  (unaudited)   (unaudited)   (unaudited)   (audited)
Revenues:              
Products and licenses $165,709   $177,055   $559,026   $572,964
Security subscriptions 130,013   110,482   480,352   389,885
Total revenues from products and security subscriptions 295,722   287,537   1,039,378    962,849
               
Software updates and maintenance 210,286   199,170   815,280   778,452
Total revenues 506,008   486,707   1,854,658   1,741,301
               
Operating expenses:              
Cost of products and licenses 29,743   32,559   104,210   105,967
Cost of security subscriptions 5,616   4,146   18,869   10,841
Total cost of products and security subscriptions 35,359   36,705   123,079   116,808
Cost of Software updates and maintenance 22,534   21,475   87,700   83,011
Amortization of technology 546   546   2,184   2,184
Total cost of revenues 58,439   58,726   212,963   202,003
               
Research and development 50,704   47,741   192,386   178,372
Selling and marketing 106,596   116,824   433,427   420,526
General and administrative 23,758   22,006   91,965   88,130
Total operating expenses 239,497   245,297   930,741   889,031
               
Operating income 266,511   241,410   923,917   852,270
Financial income, net 13,127   10,494   47,029   44,402
Income before taxes on income 279,638   251,904   970,946   896,672
Taxes on income 40,330   29,950   168,023   171,825
Net income $239,308   $221,954   $802,923   $724,847
               
Basic earnings per share $1.49   $1.33   $4.93   $4.26
Number of shares used in computing basic earnings per share 160,398   167,220   162,720   170,155
               
Diluted earnings per share $1.46   $1.31   $4.82   $4.18
Number of shares used in computing diluted earnings per share 164,334   169,557   166,662   173,296

 
CHECK POINT SOFTWARE TECHNOLOGIES LTD. SELECTED FINANCIAL METRICS
 
(In thousands, except per share amounts)
 
    Three Months Ended   Year Ended
    December 31,   December 31,
    2017   2016   2017   2016
    (unaudited)   (unaudited)   (unaudited)   (unaudited)
                 
Revenues    $506,008   $486,707   $1,854,658   $1,741,301
Non-GAAP operating income   292,129   266,380   1,024,412   948,132
Non-GAAP net income   259,224   247,197   888,027   818,242
Diluted Non-GAAP Earnings per share   $1.58   $1.46   $5.33   $4.72
Number of shares used in computing diluted Non-GAAP earnings per share   164,334   169,557   166,662   173,296

 
CHECK POINT SOFTWARE TECHNOLOGIES LTD. RECONCILIATION OF GAAP TO NON GAAP FINANCIAL INFORMATION
 
 (In thousands, except per share amounts)
 
    Three Months Ended   Year Ended
    December 31,   December 31,
    2017   2016   2017   2016
    (unaudited)   (unaudited)   (unaudited)   (unaudited)
                 
GAAP operating income   $266,511   $241,410   $923,917   $852,270
Stock-based compensation (1)   22,359   21,698   87,459   82,732
Amortization of intangible assets and acquisition related expenses (2)   3,259   3,272   13,036   13,130
Non-GAAP operating income   $292,129   $266,380   $1,024,412   $948,132
                 
GAAP net income   $239,308   $221,954   $802,923   $724,847
Stock-based compensation (1)   22,359   21,698   87,459   82,732
Amortization of intangible assets and acquisition related expenses (2)   3,259   3,272   13,036   13,130
Taxes on the above items (3)   (5,702)   273     (15,391)     (2,467)
Non-GAAP net income   $259,224   $247,197   $888,027   $818,242
                 
Diluted GAAP Earnings per share   $1.46   $1.31   $4.82   $4.18
Stock-based compensation (1)   0.13   0.13   0.52   0.48
Amortization of intangible assets and acquisition related expenses (2)   0.02   0.02   0.08   0.07
Taxes on the above items (3)   (0.03)   -     (0.09)     (0.01)
Diluted Non-GAAP Earnings per share   $1.58   $1.46   $5.33   $4.72
                 
Number of shares used in computing diluted Non-GAAP earnings per share   164,334   169,557   166,662   173,296
                 
(1) Stock-based compensation:                
Cost of products and licenses   $38   $16   $115   $66
Cost of software updates and maintenance   694   552   2,626   2,087
Research and development   4,252   3,427   16,233   12,718
Selling and marketing   4,836   5,857   18,278   19,168
General and administrative   12,539   11,846   50,207   48,693
    22,359   21,698   87,459   82,732
                 
(2) Amortization of intangible assets and acquisition related expenses:                
Amortization of technology-cost of revenues   546   546     2,184     2,184
Research and development   1,897   1,897   7,588   7,588
Selling and marketing   816   829   3,264   3,358
    3,259   3,272   13,036   13,130
                 
(3) Taxes on the above items   (5,702)   273   (15,391)   (2,467)
                 
Total, net   $19,916   $25,243   $85,104   $93,395

 
CHECK POINT SOFTWARE TECHNOLOGIES LTD. CONDENSED CONSOLIDATED BALANCE SHEET DATA
 
(In thousands)
 
ASSETS
                  December 31,    December 31,
                  2017   2016
                  (unaudited)   (audited)
Current assets:                      
Cash and cash equivalents                 $245,014   $187,428
Marketable securities and short-term deposits                 1,165,716   1,185,499
Trade receivables, net                 472,223   478,507
Prepaid expenses and other current assets                  81,478   41,021
Total current assets                 1,964,431   1,892,455
                       
Long-term assets:                      
Marketable securities                 2,437,315   2,296,097
Property and equipment, net                 77,767   61,859
Deferred tax asset, net                 119,431   94,608
Goodwill and other intangible assets, net                 830,407   834,167
Other assets                 33,575   38,450
Total long-term assets                 3,498,495   3,325,181
                       
Total assets                 $5,462,926   $5,217,636

 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:        
Deferred revenues      $878,287       $814,418  
Trade payables and other accrued liabilities      328,638     351,440  
Total current liabilities   1,206,925     1,165,858  
         
Long-term liabilities:        
Long-term deferred revenues   308,286     251,166  
Income tax accrual   337,453     300,536  
Accrued severance pay   10,139     8,953  
    655,878     560,655  
         
Total liabilities   1,862,803     1,726,513  
         
Shareholders' equity:        
Share capital   774     774  
Additional paid-in capital   1,305,130     1,139,642  
Treasury shares at cost   (5,893,182 )   (4,956,172 )
Accumulated other comprehensive loss   (15,634 )   (9,250 )
Retained earnings   8,203,035     7,316,129  
Total shareholders' equity   3,600,123     3,491,123  
             
Total liabilities and shareholders' equity   $5,462,926     $5,217,636  
Total cash and cash equivalents, marketable securities and short-term deposits   $3,848,045     $3,669,024  

 
CHECK POINT SOFTWARE TECHNOLOGIES LTD. SELECTED CONSOLIDATED CASH FLOW DATA
 
(In thousands)
 
  Three Months Ended   Year Ended
  December 31,   December 31,
  2017   2016   2017   2016
  (unaudited)   (unaudited)   (unaudited)   (unaudited)
Cash flow from operating activities:              
Net income $239,308     $221,954     $802,923     $724,847  
Adjustments to reconcile net income to net cash provided by operating activities:              
               
Depreciation of property and equipment     3,586         2,391     12,876     10,883  
Amortization of intangible assets 940     953     3,760     3,853  
Stock-based compensation 22,359     21,698     87,459     82,732  
Realized loss (gain) on marketable securities 4     (126 )   176     (2,993 )
Decrease (increase) in trade and other receivables, net (185,036 )   (218,044 )   11,899     (56,510 )
Increase in deferred revenues, trade payables and other accrued liabilities (*) 130,781     194,785     105,875     213,935  
Excess tax benefit from stock-based compensation -     (9,180 )   -     (17,380 )
Deferred income taxes, net 36,124     (31,611 )   64,630     (33,487 )
Net cash provided by operating activities 248,066     182,820     1,089,598     925,880  
               
Cash flow from investing activities:              
               
Investment in property and equipment (6,297 )   (6,257 )   (28,784 )   (24,050 )
Net cash used in investing activities (6,297 )   (6,257 )   (28,784 )   (24,050 )
               
Cash flow from financing activities:              
Proceeds from issuance of shares upon exercise of options 7,488     49,357     127,518     129,196  
Purchase of treasury shares (249,704 )   (247,960 )   (995,322 )   (987,897 )
Excess tax benefit from stock-based compensation -     9,180     -     17,380  
Payments related to shares withheld for taxes (*) (561 )   (94 )   (5,397 )   (3,031 )
Net cash used in financing activities (242,777 )   (189,517 )   (873,201 )   (844,352 )
               
Unrealized loss on marketable securities, net (15,546 )   (25,877 )   (8,592 )   (3,868 )
               
Increase (decrease) in cash and cash equivalents, marketable securities and short term deposits (16,554 )   (38,831 )   179,021     53,610  
               
Cash and cash equivalents, marketable securities and short term deposits at the beginning of the period 3,864,599     3,707,855     3,669,024     3,615,414  
               
Cash and cash equivalents, marketable securities and short term deposits at the end of the period $3,848,045     $3,669,024     $3,848,045     $3,669,024  
 
(*)Payments related to shares withheld for taxes during the three and twelve month periods ending December 31, 2017 were reclassified from operating activity to financing activity following ASU 2016-09 adoption.
 

INVESTOR CONTACT:              Kip E. Meintzer                  Check Point Software Technologies+1.650.628.2040 ir@checkpoint.com

MEDIA CONTACT:Adolph Hunter                                    Check Point Software Technologies+1.650.628.2260 press@checkpoint.com

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