SAN CARLOS, Calif., July 25, 2018 (GLOBE NEWSWIRE) -- Check Point® Software Technologies Ltd. (NASDAQ: CHKP), today announced its financial results for the second quarter ended June 30, 2018.

Second Quarter 2018:

• Total Revenue: $468 million, a 2 percent increase year over year
• Deferred Revenues: $1,158 million, a 9 percent increase year over year
• GAAP Operating Income: $224 million, representing 48 percent of revenues
• Non-GAAP Operating Income: $247 million, representing 53 percent of revenues
• GAAP EPS: $1.24, a 10 percent increase year over year
• Non-GAAP EPS: $1.37, an 8 percent increase year over year

“We are pleased with our second quarter results and the progress in our initiatives we have achieved to date. Revenues for the quarter were towards the top of our guidance while EPS over the top,” said Gil Shwed, Founder and CEO of Check Point Software Technologies. “Every major enterprise today is faced with overwhelming threats from cyberattacks. We believe that Check Point Infinity is the only platform that is focused on full prevention of Gen V attacks across the entire threat landscape, including cloud and mobile,” Shwed concluded.

Financial Highlights for the Second Quarter of 2018:

• Total Revenue: $468 million compared to $459 million in the second quarter of 2017, a 2 percent increase year over year.
• GAAP Operating Income: $224 million compared to $222 million in the second quarter of 2017, representing 48 percent of revenues in the second quarter of 2018 and 2017.
• Non-GAAP Operating Income: $247 million compared to $248 million in the second quarter of 2017, representing 53 percent and 54 percent of revenues in the second quarter of 2018 and 2017, respectively.
• GAAP Taxes on Income: $43 million compared to $45 million in the second quarter of 2017.
• GAAP Net Income and Earnings per Diluted Share: GAAP net income was $198 million compared to $188 million in the second quarter of 2017. GAAP earnings per diluted share were $1.24 compared to $1.12 in the second quarter of 2017, a 10 percent increase year over year.
• Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $218 million compared to $212 million in the second quarter of 2017. Non-GAAP earnings per diluted share were $1.37 compared to $1.26 in the second quarter of 2017, an 8 percent increase year over year.
• Deferred Revenues: As of June 30, 2018, deferred revenues were $1,158 million compared to $1,065 million as of June 30, 2017, a 9 percent increase year over year.
• Cash Flow: Cash flow from operations of $213 million compared to $226 million in the second quarter of 2017. Year over year, currency-hedging transactions had a $25 million effect on our cash flow from operations with minimal impact on our financial income as intended. This quarter includes excess payments related to our currency hedging transactions in an amount of $14 million compared to $11 million of income in the second quarter of 2017.
• Cash Balances, Marketable Securities and Short Term Deposits: $4,042 million as of June 30, 2018, compared to $3,806 million as of June 30, 2017.
• Share Repurchase Program: During the second quarter of 2018 we purchased approximately 2.5 million shares at a total cost of approximately $250 million.
• 100% Increase in the Share Repurchase Program: Today, we announced a 100 percent increase to the share repurchase program. Under the updated plan, $2 billion is allocated for share repurchase, compared to $1 billion in the previous program, with purchases of up to $325 million a quarter, compared to $250 million in the previous program.

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.”

Second Quarter Highlights:

• Check Point a “Leader in End Point Security Suites”: In the Forrester Research report, Check Point’s SandBlast Agent Complete Endpoint Protection earned the highest possible scores across a majority of the evaluation criteria that included Malware Prevention, Data Security, Mobile Security, External Integrations, and Product Support criteria, as well as Corporate Vision and Focus.
• Check Point’s ZoneAlarm Anti-Ransomware Earns “Editor’s Choice” from PC magazine Once Again: Check Point ZoneAlarm endpoint security blocks ransomware attacks and has received this quarter the top award from PC magazine. The anti-ransomware functionality can work within the ZoneAlarm full suite or in conjunction with other antivirus solutions.
• 97 Percent of Organizations Are Unprepared for Gen V Attacks: Check Point’s newly published 2018 security report provides a clear overview of a threat landscape where 5th Generation cyberattacks are becoming more and more frequent. A key finding from the report is that over 300 mobile apps in trusted, reputable app stores are infected with malware, while cloud threats, crypto-mining attacks and IoT device vulnerabilities are on the rise.

Check Point’s Research Team https://research.checkpoint.com exposes vulnerabilities and attacks to ensure our customers have the highest levels of prevention and protection. In the second quarter, our publications included the following:

• Necurs is Back, Just in Time for Easter: Necurs, considered to be the world’s largest botnet, was previously used to distribute several malware families such as the Locky and Jaff ransomware. Check Point researchers picked up new activity from Necurs that showed the infamous botnet is back once again and is spreading QuantLoader malware through email attachments.
• SiliVaccine: Inside North Korea’s Anti-Virus: In an exclusive piece of research, Check Point Researchers carried out a revealing investigation into North Korea’s home-grown anti-virus software, SiliVaccine. One of several interesting factors is that a key component of SiliVaccine’s code is a direct copy of one of Trend Micro’s software components.
• Remote Code Execution Vulnerability on LG Smartphones: Check Point Research discovered two vulnerabilities that reside in the default keyboard on all mainstream LG smartphone models. Both vulnerabilities could have been used to remotely execute code with elevated privileges on LG mobile devices by manipulating the keyboard updating process, act as a keylogger and thereby compromise the users’ privacy and authentication details.
• Return of the Festi Rootkit: After the author of the Festi Rootkit was arrested in 2012, his once popular lay dormant – until Check Point researchers noticed it was again active and back in the wild, distributed mainly by the RIG exploit kit. The new variants of Festi are accompanied by a tricky new dropper that masquerades as an Adobe Flash Player update in order to elevate privileges.
• Uncovering Drupalgeddon 2: Drupal, the open-source content management system (CMS) that is used by more than one million sites around the world (including governments, e-retail, enterprise organizations, financial institutions and more), published a highly critical vulnerability, nicknamed Drupalgeddon2, that allowed an unauthenticated attacker to perform remote code execution on default or common Drupal installations. Details of the vulnerability were not available to the public, however, until Check Point Research expanded upon this vulnerability and revealed exactly how it works.
• A New Phishing Kit on the Dark Net: Check Point Research discovered the next generation in phishing kits, currently being advertised on the Dark Net. Unlike previous kits that are primarily composed of just one or two pages to collect personal or financial data, this new and advanced phishing kit offered much more in order to create a more convincing fake site.
• NTLM Credentials Theft via PDF Files: Just a few days after it was reported that malicious actors can exploit vulnerabilities in MS outlook using OLE to steal a Windows user’s NTLM hashes, the Check Point Research team revealed that NTLM hash leaks can also be achieved via PDF files with no user interaction or exploitation.
• Telegram, Cyber Crime’s Channel of Choice: Threat actors no longer need to use the Dark Net to communicate and promote their malicious plans and tools. Instead, they have shifted to new channels, such as the popular mobile messaging app, Telegram, to evade authorities. Check Point Research reveals how it works.
• GlanceLove: Spying Under the Cover of the World Cup: Check Point researchers got hold of samples of the mobile malware, dubbed ‘GlanceLove’ that had been used by the Hamas terrorist organization to target Israeli military personnel under the guise of a World Cup scheduling app. The malware recorded the infected victims’ phonecalls, tracked their GPS location, stole photos, SMS messages and contact lists and took photos of the victim’s surroundings.
• Cryptomining Malware Targeting Unpatched Server Vulnerabilities: With the emerging threat of miners and the rise of cryptocurrencies that have taken the world by storm lately, Check Point Research discovered a large scale crypto-mining operation which had already infected over 6000 machines.
• Banking Trojans Up 50 Percent Among Threat Actors: Check Point’s latest Global Threat Index for June 2018, revealed the global impact of banking Trojans has increased by 50% during the past four months, with two Trojan malware families entering the Index’s top ten ‘most wanted’ ranking.

Conference Call and Webcast Information Check Point will host a conference call with the investment community on July 25, 2018, at 8:30 AM EDT/5:30 AM PDT. To listen to the live webcast or replay, please visit the website www.checkpoint.com/ir.

Third Quarter Investor Conference Participation Schedule:

• Oppenheimer 21st Annual Technology Conference August 7, 2018 – Boston, MA
• KeyBanc Capital Markets 20th Annual Global Technology Leadership Forum August 13, 2018 – Vail, CO
• Citi 2018 Global Technology Conference September 5, 2018 – New York, NY
• Deutsche Bank 2018 Technology Conference September 12-13, 2018 – Las Vegas, NV (Meetings Only)

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 StatementsThis 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 third 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 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 and adjusted cash flow from operations, 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, liquidity 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.

CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share amounts)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues:
Products and licenses	$	125,666		$	138,288		$	243,805		$	264,614
Security subscriptions		132,076			117,947			259,327			230,011
Total revenues from products and security subscriptions		257,742			256,235			503,132			494,625
Software updates and maintenance		210,028			202,338			416,964			399,398
Total revenues		467,770			458,573			920,096			894,023
Operating expenses:
Cost of products and licenses		21,595			26,207			40,973			50,093
Cost of security subscriptions		4,085			5,349			7,726			9,429
Total cost of products and security subscriptions		25,680			31,556			48,699			59,522
Cost of Software updates and maintenance		22,381			21,291			43,058			42,076
Amortization of technology		546			546			1,092			1,092
Total cost of revenues		48,607			53,393			92,849			102,690
Research and development		50,289			46,368			103,652			92,460
Selling and marketing		124,493			114,681			244,251			220,868
General and administrative		20,421			22,489			41,959			45,533
Total operating expenses		243,810			236,931			482,711			461,551
Operating income		223,960			221,642			437,385			432,472
Financial income, net		16,415			11,311			31,275			21,679
Income before taxes on income		240,375			232,953			468,660			454,151
Taxes on income		42,689			44,591			83,834			83,238
Net income	$	197,686		$	188,362		$	384,826		$	370,913
Basic earnings per share	$	1.26		$	1.15		$	2.44		$	2.26
Number of shares used in computing basic earnings per share		156,982			163,328			157,571			164,197
Diluted earnings per share	$	1.24		$	1.12		$	2.40		$	2.21
Number of shares used in computing diluted earnings per share		159,669			167,685			160,674			168,090

CHECK POINT SOFTWARE TECHNOLOGIES LTD.
SELECTED FINANCIAL METRICS
(In thousands, except per share amounts)
		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2018			2017			2018			2017
		(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues		$	467,770		$	458,573		$	920,096		$	894,023
Non-GAAP operating income			247,123			248,279			486,121			481,443
Non-GAAP net income			218,183			212,006			428,074			413,506
Diluted Non-GAAP Earnings per share		$	1.37		$	1.26		$	2.67		$	2.46
Number of shares used in computing diluted Non-GAAP earnings per share			159,669			167,685			160,674			168,090

CHECK POINT SOFTWARE TECHNOLOGIES LTD.
RECONCILIATION OF GAAP TO NON GAAP FINANCIAL INFORMATION
(In thousands, except per share amounts)
		Three Months Ended								Six Months Ended
		June 30,								June 30,
			2018				2017				2018				2017
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
GAAP operating income		$	223,960			$	221,642			$	437,385			$	432,472
Stock-based compensation (1)			20,827				23,378				43,141				42,453
Amortization of intangible assets and acquisition related expenses (2)			2,336				3,259				5,595				6,518
Non-GAAP operating income		$	247,123			$	248,279			$	486,121			$	481,443
GAAP net income		$	197,686			$	188,362			$	384,826			$	370,913
Stock-based compensation (1)			20,827				23,378				43,141				42,453
Amortization of intangible assets and acquisition related expenses (2)			2,336				3,259				5,595				6,518
Taxes on the above items (3)			(2,666	)			(2,993	)			(5,488	)			(6,378	)
Non-GAAP net income		$	218,183			$	212,006			$	428,074			$	413,506
Diluted GAAP Earnings per share		$	1.24			$	1.12			$	2.40			$	2.21
Stock-based compensation (1)			0.13				0.14				0.27				0.24
Amortization of intangible assets and acquisition related expenses (2)			0.02				0.02				0.04				0.04
Taxes on the above items (3)			(0.02	)			(0.02	)			(0.04	)			(0.03	)
Diluted Non-GAAP Earnings per share		$	1.37			$	1.26			$	2.67			$	2.46
Number of shares used in computing diluted Non-GAAP earnings per share			159,669				167,685				160,674				168,090
(1) Stock-based compensation:
Cost of products and licenses		$	39			$	23			$	76			$	39
Cost of software updates and maintenance			851				675				1,537				1,232
Research and development			4,212				3,913				8,248				7,598
Selling and marketing			4,448				5,732				9,738				8,464
General and administrative			11,277				13,035				23,542				25,120
			20,827				23,378				43,141				42,453
(2) Amortization of intangible assets and acquisition related expenses:
Amortization of technology-cost of revenues			546				546				1,092				1,092
Research and development			974				1,897				2,871				3,794
Selling and marketing			816				816				1,632				1,632
			2,336				3,259				5,595				6,518
(3) Taxes on the above items			(2,666	)			(2,993	)			(5,488	)			(6,378	)
Total, net		$	20,497			$	23,644			$	43,248			$	42,593

CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
ASSETS
				June 30,			December 31,
				2018			2017
				(unaudited)			(audited)
Current assets:
Cash and cash equivalents				$	236,270		$	245,014
Marketable securities and short-term deposits					1,445,521			1,165,716
Trade receivables, net					325,560			472,223
Prepaid expenses and other current assets					50,012			81,478
Total current assets					2,057,363			1,964,431
Long-term assets:
Marketable securities					2,359,914			2,437,315
Property and equipment, net					79,174			77,767
Deferred tax asset, net					113,477			119,431
Goodwill and other intangible assets, net					828,527			830,407
Other assets					54,632			33,575
Total long-term assets					3,435,724			3,498,495
Total assets				$	5,493,087		$	5,462,926

LIABILITIES AND
SHAREHOLDERS’ EQUITY
Current liabilities:
Deferred revenues			$	855,979			$	878,287
Trade payables and other accrued liabilities				345,934				328,638
Total current liabilities				1,201,913				1,206,925
Long-term liabilities:
Long-term deferred revenues				302,470				308,286
Income tax accrual				352,197				337,453
Accrued severance pay				9,643				10,139
				664,310				655,878
Total liabilities				1,866,223				1,862,803
Shareholders’ equity:
Share capital				774				774
Additional paid-in capital				1,399,433				1,305,130
Treasury shares at cost				(6,344,203	)			(5,893,182	)
Accumulated other comprehensive loss				(36,118	)			(15,634	)
Retained earnings				8,606,978				8,203,035
Total shareholders’ equity				3,626,864				3,600,123
Total liabilities and shareholders’ equity			$	5,493,087			$	5,462,926
Total cash and cash equivalents, marketablesecurities and short-term deposits			$	4,041,705			$	3,848,045

CHECK POINT SOFTWARE TECHNOLOGIES LTD.
SELECTED CONSOLIDATED CASH FLOW DATA
(In thousands)
	Three Months Ended								Six Months Ended
	June 30,								June 30,
		2018				2017				2018				2017
	(unaudited)				(unaudited)				(unaudited)				(unaudited)
Cash flow from operating activities:
Net income	$	197,686			$	188,362			$	384,826			$	370,913
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		4,144				3,017				8,032				5,998
Amortization of intangible assets		940				940				1,880				1,880
Stock-based compensation		20,827				23,378				43,141				42,453
Realized loss on marketable securities		87				68				89				143
Decrease (increase) in trade and other receivables, net		341				(49,248	)			181,736				141,934
Increase (decrease) in deferred revenues, trade payables and other accrued liabilities		(12,013	)			44,147				7,194				(8,606	)
Deferred income taxes, net		1,096				15,632				5,043				26,994
Net cash provided by operating activities		213,108				226,296				631,941				581,709
Cash flow from investing activities:
Investment in property and equipment		(4,767	)			(6,122	)			(9,439	)			(14,075	)
Net cash used in investing activities		(4,767	)			(6,122	)			(9,439	)			(14,075	)
Cash flow from financing activities:
Proceeds from issuance of shares upon exercise of options		79,152				39,324				99,097				63,706
Purchase of treasury shares		(249,549	)			(247,987	)			(498,957	)			(495,849	)
Payments related to shares withheld for taxes		(3,124	)			(3,855	)			(3,423	)			(4,064	)
Net cash used in financing activities		(173,521	)			(212,518	)			(403,283	)			(436,207	)
Unrealized gain (loss) on marketable securities, net		(2,169	)			1,991				(25,559	)			5,955
Increase in cash and cash equivalents, marketable securities and short term deposits		32,651				9,647				193,660				137,382
Cash and cash equivalents, marketable securities and short term deposits at the beginning of the period		4,009,054				3,796,759				3,848,045				3,669,024
Cash and cash equivalents, marketable securities and short term deposits at the end of the period	$	4,041,705			$	3,806,406			$	4,041,705			$	3,806,406

INVESTOR CONTACT:			MEDIA CONTACT:
Kip E. Meintzer			Chris Navalta
Check Point Software Technologies			Check Point Software Technologies
+1.650.628.2040			+1.650.628.2260
[email protected]			[email protected]

Source: Check Point Software Technologies Ltd.

Press Releases

Checkpoint Software (CHKP) PT Raised to $115 at RBC CapitalJuly 26, 2018 7:24 AM Checkpoint Software (CHKP) PT Raised to $130 at OppenheimerJuly 25, 2018 2:04 PM Checkpoint Software (CHKP) PT Raised to $125 at FBN SecuritiesJuly 25, 2018 1:34 PM Checkpoint Software (CHKP) PT Raised to $132 at JefferiesJuly 25, 2018 12:50 PM Check Point Software Technology (CHKP) Tops Q2 EPS by 7c, Revenues BeatJuly 25, 2018 5:43 AM