Check Point Software Technologies (NASDAQ: CHKP), the worldwide leader in securing the Internet, today announced revenue of $199.7 million for the quarter ended 30 September 2008. GAAP net income and diluted earnings per share for the quarter were $80.1 million and $0.37, respectively. Non-GAAP net income [1] and diluted earnings per share for the quarter were $94.2 million and $0.44, respectively.
“We are very pleased with our performance during the quarter and believe it can be attributed to the continued implementation of our total security strategy,” said Gil Shwed, chairman and chief executive officer at Check Point. “During the quarter we added many new customer accounts across all industries despite the challenging economic environment. As a result of our successful execution we achieved financial results at the upper range of our guidance for both revenues and earnings per share.”
Financial highlights for the third quarter of 2008:
* Total revenue: $199.7 million compared to $184.0 million in the third quarter of 2007.
* GAAP net income: $80.1 million or $0.37 per diluted share as compared to $76.7 million or $0.34 per diluted share in the third quarter of 2007.
* Non GAAP net income: $94.2 million or $0.44 per diluted share compared to $91.9 million or $0.41 per diluted share in the third quarter of 2007.
* Operating income: GAAP operating income was $90.4 million, compared to GAAP operating income of $77.7 million in the third quarter of 2007. Non-GAAP operating income was $106.2 million, or 53% of revenues, compared to non-GAAP operating income of $96.3 million, or 52% of revenues, in the third quarter of 2007.
* Deferred revenue: As of 30 September 2008, Check Point had deferred revenues of $272.9 million, an increase of $45.7 million or 20% compared to deferred revenues as of 30 September 2007.
* Operating cash flow: $115.1 million in cash flow from operations compared to $88.8 million in the third quarter of 2007. During the third quarter Check Point received a $22.5 million refund from the Israeli tax authorities.
* Cash: As of 30 September 2008, Check Point had $1.4 billion in cash and cash equivalents, deposits and marketable securities.
* Share repurchase programme: During the third quarter of 2008, Check Point repurchased approximately two million shares at an approximate cost of $49.8 million.
1. See “Use of non-GAAP financial information” and “Reconciliation of non-GAAP to GAAP financial information” below for more information regarding Check Point's use of non-GAAP measures.
Business highlights for the third quarter of 2008:
Check Point's total security strategy was extended this quarter with the general availability of Check Point Endpoint Security, the first single agent for PCs to combine the highest-rated firewall, network access control, program control, remote access, anti-virus, anti-spyware, full disk encryption and media encryption with port protection. By creating a single endpoint security agent with a single client interface the company dramatically simplified endpoint deployment and management for its customers.
Check Point's endpoint solution was also recognised as a leader in Gartner's Magic Quadrant for Mobile Data Protection during the quarter.
The company continued to offer open choice for deployment of its network security solutions and introduced VPN-1 Virtual Edition (VE), making Check Point the first security vendor to provide unified security management for both physical networks and virtual applications. Check Point's VPN-1 VE restores the separation and security of applications on virtualised servers.
Shwed concluded: “During the quarter, we continued to deliver new and innovative products and experienced success with our Power-1 and UTM-1 appliance product lines that were introduced earlier this year. Moving forward, we will continue to execute on our total security strategy and focus on addressing the ever-changing security challenges facing our customers every day.”
Conference call and Webcast information
Check Point will host a conference call with the investment community on 28 October 28 at 8:30 AM ET/5:30 AM PT. To listen to the live Webcast, please visit Check Point's website at http://www.checkpoint.com/ir. A replay of the conference call will be available through 11 November 11 by telephone at +1.201.612.7415 passcode # 299895 account #215, or at the company's Web site http://www.checkpoint.com/ir.
Please click here to see Check Point Software reports financial results for the third quarter 2008
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Check Point Software Technologies
Check Point Software Technologies (www.checkpoint.com) is the leader in securing the Internet. Check Point offers total security solutions featuring a unified gateway, single endpoint agent and single management architecture, customised to fit customers' dynamic business needs. This combination is unique and is a result of the company's leadership and innovation in the enterprise firewall, personal firewall/endpoint, data security and VPN markets.
Check Point's award-winning ZoneAlarm solutions protect millions of consumer PCs from hackers, spyware and identity theft. Check Point solutions are sold, integrated and serviced by a network of Check Point partners around the world and its customers include 100% of Fortune 100 companies and tens of thousands of businesses and organizations of all sizes.
(c)2003-2008 Check Point Software Technologies. All rights reserved.
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 net income, operating income and earnings per share, which are adjustments from results based on GAAP to exclude non-cash equity-based compensation charges in accordance with SFAS 123R, in-process R&D expense, acquisition related charges and impairment of marketable securities in accordance with SFAS 115. 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.
Safe harbour 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, including, but not limited to, statements related to Check Point's expectations regarding the continued execution of its total security vision. Because these statements pertain to future events they are subject to various risks and uncertainties, actual results could differ materially from Check Point's current expectations and beliefs. Factors that could cause or contribute to such differences include, but are not limited to: Check Point's development and delivery of its security products; general market conditions in the Check Point's industry; economic and political uncertainties; the impact of political changes and weaknesses in various regions of the world, including hostilities or acts of terrorism in Israel, where Check Point's international headquarters are based; inclusion of network security functionality in third-party hardware or system software; any foreseen and unforeseen developmental or technological difficulties with regard to Check Point's products; changes in the competitive landscape, including new competitors or the impact of competitive pricing and products; rapid technological advances and changes in customer requirements to which Check Point is unable to respond expeditiously, if at all; a shift in demand for products such as Check Point's; factors affecting third parties with which Check Point has formed business alliances; and the timely availability and customer acceptance of Check Point's new and existing products. The forward-looking statements contained in this press release are subject to other factors and risks, including those discussed in Check Point's Annual Report on Form 20-F for the year ended 31 December 2007, which is on file with the Securities and Exchange Commission. Check Point assumes no obligation to update these forward-looking statements.