MIL-OSI: Check Point Software Reports Fourth Quarter and 2023 Full Year Results

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Source: GlobeNewswire (MIL-OSI)

SAN CARLOS, Calif., Feb. 06, 2024 (GLOBE NEWSWIRE) — Check Point® Software Technologies Ltd. (NASDAQ: CHKP), today announced its financial results for the fourth quarter and full year ended December 31, 2023.

Fourth Quarter 2023        

  • Total Revenues: $664 million, a 4 percent increase year over year
  • Security Subscriptions Revenues: $266 million, a 15 percent increase year over year
  • Deferred Revenues: $1,908 million, a 2 percent increase year over year
  • GAAP Operating Income: $252 million, representing 38 percent of revenues
  • Non-GAAP Operating Income: $309 million, representing 47 percent of revenues
  • GAAP EPS: $2.15, a 2 percent decrease year over year
  • Non-GAAP EPS: $2.57, a 5 percent increase year over year

Full Year 2023

  • Total Revenues: $2,415 million, a 4 percent increase year over year
  • Security Subscriptions Revenues: $981 million, a 14 percent increase year over year
  • GAAP EPS: $7.10, a 13 percent increase year over year
  • Non-GAAP EPS: $8.42, a 14 percent increase year over year

“We finished the year with a strong quarter, delivering 14 percent non-GAAP EPS growth for the year, the highest in more than a decade. This was complemented by non-GAAP operating margin of 45 percent, among the highest of all public companies. Our industry leading AI powered, and cloud-delivered Infinity security platform continued to drive customer adoption and bolstered our 15 percent growth in security subscriptions revenues for the quarter. Our R&D organization continues to deliver industry leading threat prevention rates and innovative AI technologies. While our salesforce executed a turnaround in customer engagement, delivering double-digit new business growth in the fourth quarter,” stated Gil Shwed, Founder and CEO of Check Point Software.

“In 2023 Check Point hit the 30-year milestone as a company. We have delivered 30 years of growth and achieved record highs in almost every parameter for the year. We have an incredibly strong security platform with a super-strong team around the world and proven execution. I feel it is the right time for me to focus on the evolution of Check Point and its next stage. I intend to transition into the role of Executive Chairman charting the future of Check Point and the cyber security market. We’re initiating the succession process to hire a new CEO, and once completed I will transition into my new position as Executive Chairman. I’m excited to enter 2024 with a great technology pipeline, and a fully energized global team that is ready to deliver a bright and secure future for our customers,” concluded Mr. Shwed.

Financial Highlights for the Fourth Quarter of 2023

  • Total Revenues$664 million compared to $638 million in the fourth quarter of 2022, a 4 percent increase year over year.
  • GAAP Operating Income: $252 million compared to $254 million in the fourth quarter of 2022. representing 38 percent and 40 percent of revenues in the fourth quarter of 2023 and 2022, respectively.
  • Non-GAAP Operating Income: $309 million compared to $289 million in the fourth quarter of 2022, representing 47 percent and 45 percent of revenues in the fourth quarter of 2023 and 2022, respectively.
  • GAAP Taxes on Income (Benefit): $21 million expenses compared to $1 million benefit in the fourth quarter of 2022.
  • GAAP Net Income & Earnings per Diluted Share: GAAP net income was $249 million compared to $270 million in the fourth quarter of 2022. GAAP earnings per diluted share were $2.15 compared to $2.20 in the fourth quarter of 2022, a 2 percent decrease year over year.
  • Non-GAAP Net Income & Earnings per Diluted Share: Non-GAAP net income was $298 million compared to $301 million in the fourth quarter of 2022. Non-GAAP earnings per diluted share were $2.57 compared to $2.45 in the fourth quarter of 2022, a 5 percent increase year over year.
  • Deferred Revenues: As of December 31, 2023, deferred revenues were $1,908 million compared to $1,878 million as of December 31, 2022, a 2 percent increase year over year.
  • Cash Balances, Marketable Securities & Short-Term Deposits: $2,960 million as of December 31, 2023, compared to $3,503 million as of December 31, 2022. The decrease in cash is primarily a result of $484 million net of cash consideration utilized for the Perimeter 81, Atomsec, and rmsource acquisitions in 2023.
  • Cash Flow: Cash flow from operations was $236 million compared to $230 million in the fourth quarter of 2022.
  • Share Repurchase Program: During the fourth quarter of 2023, the company repurchased approximately 2.2 million shares at a total cost of approximately $313 million.

Financial Highlights for the Year Ended December 31, 2023

  • Total Revenues: $2,415 million compared to $2,330 million in 2022, a 4 percent increase year over year.
  • GAAP Operating Income: $899 million compared to $884 million in 2022, representing 37 percent and 38 percent of revenues in 2023 and 2022, respectively.
  • Non-GAAP Operating Income: $1,079 million compared to $1,039 million in 2022, representing 45 percent of revenues in 2023 and 2022.
  • GAAP Taxes on Income: $135 million compared to $131 million in 2022.
  • GAAP Net Income & Earnings per Diluted Share: GAAP net income was $840 million compared to $797 million in 2022. GAAP earnings per diluted share were $7.10 compared to $6.31 in 2022, a 13 percent increase year over year.
  • Non-GAAP Net Income & Earnings per Diluted Share: Non-GAAP net income was $997 million compared to $935 million in 2022. Non-GAAP earnings per diluted share were $8.42 compared to $7.40 in 2022, a 14 percent increase year over year.
  • Cash Flow: Cash flow from operations was $1,035 million compared to $1,080 million in 2022. Cash flow from operations in 2023 included $25 million in acquisition related costs and $39 million of costs related to our currency hedging transactions while cash flow from operations in 2022 included $8 million in acquisition related costs and $80 million of costs related to our currency hedging transactions. The remaining acquisition costs is included in our cash flow from investing activities.
  • Share Repurchase Program: During 2023, we repurchased approximately 9.9 million shares at a total cost of approximately $1,288 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.”

Conference Call and Webcast Information
Check Point will host a conference call with the investment community on February 6, 2024, 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.

First Quarter 2024 Investor Conference Participation Schedule

  • Wolfe Research March Madness 1×1 Conference
    February 27, 2024, NY, NY
  • Baird Silicon Valley Slopes
    February 28-29, 2024, Park City, UT
  • Raymond James 2024 Institutional Investor Conference
    March 5, 2024, Orlando, FL
  • Morgan Stanley 2024 Media, Telecommunications & Technology Conference
    March 6, 2024, SF, CA
  • Mizuho Israel Growth Conference 2024
    March 25, 2024, NY, 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 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.

Follow Check Point via:
Twitter: http://www.twitter.com/checkpointsw
Facebook: https://www.facebook.com/checkpointsoftware
Blog: http://blog.checkpoint.com
YouTube: http://www.youtube.com/user/CPGlobal
LinkedIn: https://www.linkedin.com/company/check-point-software-technologies

About Check Point Software Technologies Ltd.
Check Point Software Technologies Ltd. (http://www.checkpoint.com) is a leading AI-powered, cloud-delivered cyber security platform provider protecting over 100,000 organizations worldwide. Check Point leverages the power of AI everywhere to enhance cyber security efficiency and accuracy through its Infinity Platform, with industry-leading catch rates enabling proactive threat anticipation and smarter, faster response times. The comprehensive platform includes cloud-delivered technologies consisting of Check Point Harmony to secure the workspace, Check Point CloudGuard to secure the cloud, Check Point Quantum to secure the network, and Check Point Infinity Core Services for collaborative security operations and services.

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, the transition of our CEO into the role of Executive Chairman and the related succession process, and our participation in investor conferences during the first quarter of 2024. 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 war and hostilities between Israel and Hamas and Israel and Hezbollah and 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 27, 2023. 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 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.

©2024 Check Point Software Technologies Ltd. All rights reserved

CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF INCOME

(Unaudited, in millions, except per share amounts)

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

  2023    

2022

    2023   2022

Revenues:

             

Products and licenses

$

158.3

 

$

173.4

   

$

497.4

 

$

554.9

Security subscriptions

 

265.8

   

231.0

     

981.2

   

858.0

Total revenues from products and security subscriptions

 

424.1

   

404.4

     

1,478.6

   

1,412.9

Software updates and maintenance

 

239.4

   

234.1

     

936.1

   

917.0

Total revenues

 

663.5

   

638.5

     

2,414.7

   

2,329.9

               

Operating expenses:

             

Cost of products and licenses

 

28.0

   

42.1

     

99.3

   

145.6

Cost of security subscriptions

 

17.2

   

10.6

     

57.0

   

41.4

Total cost of products and security subscriptions

 

45.2

   

52.7

     

156.3

   

187.0

Cost of Software updates and maintenance

 

30.5

   

28.2

     

112.3

   

105.5

Amortization of technology

 

5.8

   

2.9

     

14.0

   

11.9

Total cost of revenues

 

81.5

   

83.8

     

282.6

   

304.4

             

Research and development

 

100.0

   

90.8

     

368.9

   

349.9

Selling and marketing

 

200.5

   

180.0

     

747.1

   

675.2

General and administrative

 

29.7

   

29.9

     

117.0

   

116.1

Total operating expenses

 

411.7

   

384.5

     

1,515.6

   

1,445.6

               

Operating income

 

251.8

   

254.0

     

899.1

   

884.3

Financial income, net

 

18.4

   

15.3

     

76.5

   

44.0

Income before taxes on income

 

270.2

   

269.3

     

975.6

   

928.3

Taxes on income (tax benefit)

 

21.0

   

(0.6

)

   

135.3

   

131.4

Net income

$

249.2

 

$

269.9

   

$

840.3

 

$

796.9

Basic earnings per share

$

2.19

 

$

2.22

   

$

7.19

 

$

6.37

Number of shares used in computing basic earnings per share

 

114.0

   

121.8

     

116.9

   

125.2

Diluted earnings per share

$

2.15

 

$

2.20

   

$

7.10

 

$

6.31

Number of shares used in computing diluted earnings per share

 

115.9

   

122.9

     

118.3

   

126.3

CHECK POINT SOFTWARE TECHNOLOGIES LTD.
SELECTED FINANCIAL METRICS
(Unaudited, in millions, except per share amounts)
   

Three Months Ended

 

Year Ended

   

December 31,

 

December 31,

     

2023

   

2022

   

2023

   

2022

             

Revenues

 

$

663.5

 

$

638.5

 

$

2,414.7

 

$

2,329.9

Non-GAAP operating income

   

308.6

   

288.9

   

1,079.1

   

1,038.9

Non-GAAP net income

   

298.5

   

301.0

   

997.1

   

934.9

Diluted Non-GAAP Earnings per share

 

$

2.57

 

$

2.45

 

$

8.42

 

$

7.40

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

   

115.9

   

122.9

   

118.3

   

126.3

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

(Unaudited, in millions, except per share amounts)

   

Three Months Ended

 

Year Ended

   

December 31,

 

December 31,

     

2023

     

2022

     

2023

     

2022

 
                 

GAAP operating income

 

$

251.8

   

$

254.0

   

$

899.1

   

$

884.3

 

Stock-based compensation (1)

   

39.9

     

30.1

     

145.3

     

131.4

 

Amortization of intangible assets and acquisition related expenses (2)

   

16.9

     

4.8

     

34.7

     

23.2

 

Non-GAAP operating income

 

$

308.6

   

$

288.9

   

$

1,079.1

   

$

1,038.9

 
                 

GAAP net income

 

$

249.2

   

$

269.9

   

$

840.3

   

$

796.9

 

Stock-based compensation (1)

   

39.9

     

30.1

     

145.3

     

131.4

 

Amortization of intangible assets and acquisition related expenses (2)

   

16.9

     

4.8

     

34.7

     

23.2

 

Taxes on the above items (3)

   

(7.5

)

   

(3.8

)

   

(23.2

)

   

(16.6

)

Non-GAAP net income

 

$

298.5

   

$

301.0

   

$

997.1

   

$

934.9

 
                 

Diluted GAAP Earnings per share

 

$

2.15

   

$

2.20

   

$

7.10

   

$

6.31

 

Stock-based compensation (1)

   

0.34

     

0.24

     

1.23

     

1.04

 

Amortization of intangible assets and acquisition related expenses (2)

   

0.15

     

0.04

     

0.29

     

0.18

 

Taxes on the above items (3)

   

(0.07

)

   

(0.03

)

   

(0.20

)

   

(0.13

)

Diluted Non-GAAP Earnings per share

 

$

2.57

   

$

2.45

   

$

8.42

   

$

7.40

 
                 

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

   

115.9

     

122.9

     

118.3

     

126.3

 
                 

(1) Stock-based compensation:

               

Cost of products and licenses

 

$

0.1

   

$

0.1

   

$

0.4

   

$

0.4

 

Cost of software updates and maintenance

   

2.4

     

1.2

     

7.3

     

5.0

 

Research and development

   

14.2

     

9.9

     

48.7

     

42.0

 

Selling and marketing

   

15.2

     

9.7

     

56.3

     

43.2

 

General and administrative

   

8.0

     

9.2

     

32.6

     

40.8

 
     

39.9

     

30.1

     

145.3

     

131.4

 
                 

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

               

Amortization of technology-cost of revenues

   

5.8

     

2.9

     

14.0

     

11.9

 

Research and development

   

2.0

     

0.8

     

7.0

     

7.1

 

Selling and marketing

   

9.1

     

1.1

     

13.7

     

4.2

 
     

16.9

     

4.8

     

34.7

     

23.2

 

(3) Taxes on the above items

   

(7.5

)

   

(3.8

)

   

(23.2

)

   

(16.6

)

Total, net

 

$

49.3

   

$

31.1

   

$

156.8

   

$

138.0

 

CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEET DATA

(In millions)

ASSETS

     

December 31,

 

December 31,

     

2023
(Unaudited)

 

2022
(Audited)

Current assets:

         

Cash and cash equivalents

   

$

537.7

 

$

196.0

Marketable securities and short-term deposits

     

992.3

   

1,441.6

Trade receivables, net

     

657.7

   

644.2

Prepaid expenses and other current assets

     

70.0

   

50.0

Total current assets

     

2,257.7

   

2,331.8

           

Long-term assets:

         

Marketable securities

     

1,429.7

   

1,865.6

Property and equipment, net

     

80.4

   

82.8

Deferred tax asset, net

     

81.8

   

77.6

Goodwill and other intangible assets, net

     

1,748.5

   

1,295.5

Other assets

     

97.4

   

71.5

Total long-term assets

     

3,437.8

   

3,393.0

           

Total assets

   

$

5,695.5

 

$

5,724.8

LIABILITIES AND
SHAREHOLDERS’ EQUITY

Current liabilities:

         

Deferred revenues

   

$

1,413.8

   

$

1,363.4

 

Trade payables and other accrued liabilities

     

502.3

     

475.8

 

Total current liabilities

     

1,916.1

     

1,839.2

 
           

Long-term liabilities:

         

Long-term deferred revenues

     

493.9

     

514.4

 

Income tax accrual

     

436.1

     

419.7

 

Other long-term liabilities

     

28.4

     

22.2

 
       

958.4

     

956.3

 
           

Total liabilities

     

2,874.5

     

2,795.5

 
           

Shareholders’ equity:

         

Share capital

     

0.8

     

0.8

 

Additional paid-in capital

     

2,732.5

     

2,500.7

 

Treasury shares at cost

     

(13,041.2

)

   

(11,802.1

)

Accumulated other comprehensive gain (loss)

     

(39.2

)

   

(97.9

)

Retained earnings

     

13,168.1

     

12,327.8

 

Total shareholders’ equity

     

2,821.0

     

2,929.3

 

Total liabilities and shareholders’ equity

   

$

5,695.5

   

$

5,724.8

 

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

   

$

2,959.7

   

$

3,503.2

 

CHECK POINT SOFTWARE TECHNOLOGIES LTD.
SELECTED CONSOLIDATED CASH FLOW DATA

(Unaudited, in millions)

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

   

2023

     

2022

     

2023

     

2022

 

Cash flow from operating activities:

             

Net income

$

249.2

   

$

269.9

   

$

840.3

   

$

796.9

 

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

             

Depreciation of property and equipment

 

5.7

     

6.1

     

23.1

     

22.7

 

Amortization of intangible assets

 

13.5

     

3.4

     

24.3

     

13.5

 

Stock-based compensation

 

39.9

     

30.1

     

145.3

     

131.4

 

Realized loss on marketable securities

 

     

     

6.7

     

 

Increase in trade and other receivables, net

 

(324.3

)

   

(332.7

)

   

(61.0

)

   

(44.8

)

Increase in deferred revenues, trade payables and other accrued liabilities

 

270.6

     

253.3

     

65.5

     

160.8

 

Deferred income taxes, net

 

(18.8

)

   

(0.1

)

   

(9.5

)

   

(0.5

)

Net cash provided by operating activities

 

235.8

     

230.0

     

1,034.7

     

1,080.0

 
               

Cash flow from investing activities:

             

Payment in conjunction with acquisitions, net of acquired cash

 

(3.8

)

   

     

(458.8

)

   

(48.3

)

Investment in property and equipment

 

(4.7

)

   

(6.5

)

   

(18.6

)

   

(22.1

)

Net cash used in investing activities

 

(8.5

)

   

(6.5

)

   

(477.4

)

   

(70.4

)

               

Cash flow from financing activities:

             

Proceeds from issuance of shares upon exercise of options

 

16.0

     

20.7

     

133.7

     

141.1

 

Purchase of treasury shares

 

(313.2

)

   

(324.9

)

   

(1,287.6

)

   

(1,299.9

)

Payments related to shares withheld for taxes

 

(1.2

)

   

(1.1

)

   

(11.0

)

   

(9.2

)

Net cash used in financing activities

 

(298.4

)

   

(305.3

)

   

(1,164.9

)

   

(1,168.0

)

               

Unrealized gain (loss) on marketable securities, net

 

42.1

     

15.4

     

64.1

     

(121.8

)

               

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

 

(29.0

)

   

(66.4

)

   

(543.5

)

   

(280.2

)

               

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

 

2,988.7

     

3,569.6

     

3,503.2

     

3,783.4

 
               

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

$

2,959.7

   

$

3,503.2

   

$

2,959.7

   

$

3,503.2

 

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