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Check Point Software Technologies Reports 2022 First Quarter Financial Results

April 27, 2022 5:00 AM

SAN CARLOS, Calif., April 27, 2022 (GLOBE NEWSWIRE) -- Check Point® Software Technologies Ltd. (NASDAQ: CHKP), today announced its financial results for the quarter ended March 31st, 2022.

First Quarter 2022:

“We had an excellent first quarter,” said Gil Shwed, Founder and CEO of Check Point Software Technologies. “Total revenues and earnings per share reached the high-end of our projections. We had strong product demand in our Quantum family and continued strength in our CloudGuard and Harmony products. The global escalation of cyber-attacks is making companies rethink the dated approach of disparate point solutions and they are transitioning to a more unified approach to prevent the next cyber pandemic. Our customers continue to adopt more of our technologies and consolidate their security infrastructure with our Infinity architecture.”

Financial Highlights for the First Quarter of 2022

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.”

Conference Call & Video Cast InformationCheck Point will host a conference call with the investment community on April 27, 2022, at 8:30 AM ET/5:30 AM PT. To listen to the live webcast or replay, please visit the website www.checkpoint.com/ir.

Second Quarter 2022 Investor Conference Participation Schedule

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 Check Point Software Technologies Ltd.Check Point Software Technologies Ltd. (www.checkpoint.com) is a leading provider of cyber security solutions to corporate enterprises and governments globally. Check Point Infinity´s portfolio of solutions protects enterprises and public organizations from 5th generation cyber-attacks with an industry leading catch rate of malware, ransomware, and other threats. Infinity comprises three core pillars delivering uncompromised security and generation V threat prevention across enterprise environments: Check Point Harmony, for remote users; Check Point CloudGuard, to automatically secure clouds; and Check Point Quantum, to protect network perimeters and datacenters, all controlled by the industry’s most comprehensive, intuitive unified security management. Check Point protects over 100,000 organizations of all sizes.

Follow Check Point via:Twitter: http://www.twitter.com/checkpointswFacebook: https://www.facebook.com/checkpointsoftwareBlog: http://blog.checkpoint.com YouTube: http://www.youtube.com/user/CPGlobalLinkedIn: https://www.linkedin.com/company/check-point-software-technologies

©2022 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, expectations regarding customer adoption of our products and solutions, expectations related to cybersecurity and other threats, and our participation in investor conferences during the second 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 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, including as a result of the impact of the Covid-19 pandemic. 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 14, 2022. 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.

Investors: Kip E. MeintzerMedia: Gil Messing
Check Point Software Technologies Check Point Software Technologies
+1.650.628.2040+1.650.628.2260
[email protected] [email protected]

CHECK POINT SOFTWARE TECHNOLOGIES LTD.CONSOLIDATED STATEMENT OF INCOME

(Unaudited, in millions, except per share amounts)

Three Months Ended

March 31,

2022

2021

Revenues:

Products and licenses

$

115.9

$

109.3

Security subscriptions

201.6

177.4

Total revenues from products and security subscriptions

317.5

286.7

Software updates and maintenance

225.2

220.9

Total revenues

542.7

507.6

Operating expenses:

Cost of products and licenses

31.4

21.6

Cost of security subscriptions

10.0

8.0

Total cost of products and security subscriptions

41.4

29.6

Cost of Software updates andmaintenance

25.5

25.3

Amortization of technology

3.2

1.7

Total cost of revenues

70.1

56.6

Research and development

86.5

68.4

Selling and marketing

158.6

140.0

General and administrative

27.3

27.8

Total operating expenses

342.5

292.8

Operating income

200.2

214.8

Financial income, net

7.1

12.6

Income before taxes on income

207.3

227.4

Taxes on income

37.9

44.5

Net income

$

169.4

$

182.9

Basic earnings per share

$

1.32

$

1.35

Number of shares used in computing basic earnings per share

128.3

136.0

Diluted earnings per share

$

1.30

$

1.33

Number of shares used in computing diluted earnings per share

129.8

137.3

CHECK POINT SOFTWARE TECHNOLOGIES LTD.SELECTED FINANCIAL METRICS

(Unaudited, in millions, except per share amounts)

Three Months Ended

March 31,

2022

2021

Revenues

$

542.7

$

507.6

Non-GAAP operating income

238.6

246.3

Non-GAAP net income

203.6

211.2

Diluted Non-GAAP Earnings per share

$

1.57

$

1.54

Number of shares used in computing dilutedNon-GAAP earnings per share

129.8

137.3

CHECK POINT SOFTWARE TECHNOLOGIES LTD.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(Unaudited, in millions, except per share amounts)

Three Months Ended

March 31,

2022

2021

GAAP operating income

$

200.2

$

214.8

Stock-based compensation (1)

32.4

26.6

Amortization of intangible assets and acquisition related expenses (2)

6.0

4.9

Non-GAAP operating income

$

238.6

$

246.3

GAAP net income

$

169.4

$

182.9

Stock-based compensation (1)

32.4

26.6

Amortization of intangible assets and acquisition related expenses (2)

6.0

4.9

Taxes on the above items (3)

(4.2

)

(3.2

)

Non-GAAP net income

$

203.6

$

211.2

Diluted GAAP Earnings per share

$

1.30

$

1.33

Stock-based compensation (1)

0.25

0.19

Amortization of intangible assets and acquisition related expenses (2)

0.05

0.04

Taxes on the above items (3)

(0.03

)

(0.02

)

Diluted Non-GAAP Earnings per share

$

1.57

$

1.54

Number of shares used in computing diluted Non-GAAP earnings per share

129.8

137.3

(1) Stock-based compensation:

Cost of products and licenses

$

0.1

$

0.1

Cost of software updates and maintenance

1.0

0.9

Research and development

10.5

6.5

Selling and marketing

11.1

8.3

General and administrative

9.7

10.8

32.4

26.6

(2) Amortization of intangible assets and acquisition related expenses:

Amortization of technology-cost of revenues

3.2

1.7

Research and development

2.0

1.3

Selling and marketing

0.8

1.9

6.0

4.9

(3) Taxes on the above items

(4.2

)

(3.2

)

Total, net

$

34.2

$

28.3

CHECK POINT SOFTWARE TECHNOLOGIES LTD.CONDENSED CONSOLIDATED BALANCE SHEET DATA

(Unaudited, in millions)

ASSETS

March 31,

December 31,

2022

2021

Current assets:

Cash and cash equivalents

$

261.1

$

271.9

Marketable securities and short-term deposits

1,480.3

1,421.8

Trade receivables, net

331.3

597.8

Prepaid expenses and other current assets

55.1

46.4

Total current assets

2,127.8

2,337.9

Long-term assets:

Marketable securities

2,058.9

2,089.7

Property and equipment, net

83.1

83.4

Deferred tax asset, net

64.2

51.7

Goodwill and other intangible assets, net

1,305.5

1,257.2

Other assets

86.3

80.3

Total long-term assets

3,598.0

3,562.3

Total assets

$

5,725.8

$

5,900.2

LIABILITIES ANDSHAREHOLDERS’ EQUITY

Current liabilities:

Deferred revenues

$

1,222.8

$

1,257.4

Trade payables and other accrued liabilities

427.3

454.7

Total current liabilities

1,650.1

1,712.1

Long-term liabilities:

Long-term deferred revenues

443.6

449.7

Income tax accrual

457.3

454.9

Other long-term liabilities

28.8

26.4

929.7

931.0

Total liabilities

2,579.8

2,643.1

Shareholders’ equity:

Share capital

0.8

0.8

Additional paid-in capital

2,353.6

2,276.7

Treasury shares at cost

(10,853.2

)

(10,550.7

)

Accumulated other comprehensive gain

(55.5

)

(0.6

)

Retained earnings

11,700.3

11,530.9

Total shareholders’ equity

3,146.0

3,257.1

Total liabilities and shareholders’ equity

$

5,725.8

$

5,900.2

Total cash and cash equivalents, marketable securities, and short-term deposits

$

3,800.3

$

3,783.4

CHECK POINT SOFTWARE TECHNOLOGIES LTD.SELECTED CONSOLIDATED CASH FLOW DATA

(Unaudited, in millions)

Three Months Ended

March 31,

2022

2021

Cash flow from operating activities:

Net income

$

169.4

$

182.9

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation of property and equipment

5.0

4.7

Amortization of intangible assets

3.3

2.1

Stock-based compensation

32.4

26.6

Realized gain on marketable securities

-

(1.3

)

Decrease in trade and other receivables, net

253.4

200.2

Decrease in deferred revenues, trade payables and other accrued liabilities

(66.8

)

(39.3

)

Deferred income taxes, net

1.3

(1.4

)

Net cash provided by operating activities

398.0

374.5

Cash flow from investing activities:

Payment in conjunction with acquisitions, net of acquired cash

(48.3

)

-

Investment in property and equipment

(4.7

)

(3.8

)

Net cash used in investing activities

(53.0

)

(3.8

)

Cash flow from financing activities:

Proceeds from issuance of shares upon exercise of options

66.9

33.1

Purchase of treasury shares

(325.0

)

(324.9

)

Payments related to shares withheld for taxes

(0.7

)

(0.9

)

Net cash used in financing activities

(258.8

)

(292.7

)

Unrealized loss on marketable securities, net

(69.3

)

(14.7

)

Increase in cash and cash equivalents, marketable securities, and short-term deposits

16.9

63.3

Cash and cash equivalents, marketable securities, and short-term deposits at the beginning of the period

3,783.4

3,999.6

Cash and cash equivalents, marketable securities, and short-term deposits at the end of the period

$

3,800.3

$

4,062.9

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Source: Check Point Software Technologies INC

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