• Quarterly Revenue: $704 million, $9 million above the midpoint of projections.
• Annual Revenue: $2.565 billion, $50 million above the midpoint of projections.
• Non-GAAP EPS (Quarterly): $2.70, at the top end of projections.
• Non-GAAP EPS (Annual): $9.60, 9% growth, $0.16 above the midpoint of projections.
• Deferred Revenues Growth: 5% to $2 billion.
• Calculated Billings Growth: 11% to $959 million.
• Gross Margin: 89%, similar to last year.
• Operating Expenses: $317 million, 12% increase year-over-year.
• Operating Income: $306 million, 44% operating margin.
• Non-GAAP Net Income (Quarterly): $303 million, 2% growth.
• GAAP Net Income (Quarterly): $258 million, 7% increase.
• Operating Cash Flow (Quarterly): $249 million, 6% increase.
• Annual Operating Cash Flow: $1.059 billion.
• Share Buyback (Q4): $325 million.
• Share Buyback (Annual): $1.3 billion.

• Warning! GuruFocus has detected 5 Warning Sign with CHKP.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Check Point Software Technologies Ltd (NASDAQ:CHKP) reported strong financial performance with revenues reaching $704 million, surpassing projections.
• The company's non-GAAP EPS was $2.70, at the top end of projections, indicating strong profitability.
• There was a significant demand for Quantum Force appliances, contributing to an 8% growth in revenues.
• The Infinity platform saw strong adoption, with double-digit growth in agreements.
• All geographical regions experienced double-digit growth in new business bookings, reflecting widespread demand.

Negative Points

• Operating expenses increased by 12% due to continued investment in the go-to-market strategy and the acquisition of Cyberint.
• The company's non-GAAP tax rate was around 8%, influenced by global tax assessments, which could impact future financials.
• Despite strong bookings, the revenue guidance for fiscal 2025 is only 6%, indicating potential challenges in sustaining high growth.
• The transition to a new CEO may introduce uncertainties as the company adjusts to new leadership and strategic directions.
• The competitive landscape, particularly in the US, remains challenging, requiring reinvigoration of growth strategies.

Q & A Highlights

Q: Nadav, you mentioned different perspectives and innovation opportunities at Check Point. How do you see the tech stack evolving, and are you considering organic or inorganic growth? A: Nadav Zafrir, CEO: We've done well with recent acquisitions, like Perimeter One for SASE. Our focus is on merging these into a hybrid mesh network to address customer complexities and point solution gaps. We'll continue building on acquisitions and consider more where they fit our strategy.

Q: Nadav, you've made several go-to-market changes. Can you elaborate on these changes and their impact on guidance? A: Nadav Zafrir, CEO: We aim to be closer to customers, increasing leadership representation from two to six. This will enhance focus on America and create cohesion between product, marketing, and sales teams. Roei Golan, CFO: These changes are factored into our guidance, providing a wider range for revenues and EPS.

Q: Nadav, where do you see the product needing more depth or improvement, and what are the points of improvement for Check Point? A: Nadav Zafrir, CEO: Our strength is reliability and prevention. We aim to consolidate network security into a unified platform, leveraging AI to simplify complexity. We also plan to open up our systems for data import/export to provide a holistic network understanding.

Q: Nadav, what does an industry-leading growth rate look like for Check Point over the next few years? A: Nadav Zafrir, CEO: We aim for healthy, sustainable growth without drastic changes. Maintaining efficiency while accelerating growth responsibly is key to leading the industry.

Q: How do you differentiate in the SASE market with Perimeter 81, and what is the size of the Infinity business? A: Nadav Zafrir, CEO: Our hybrid architecture allows flexibility, operating point-to-point or through the SASE cloud, enhancing prevention and cost-effectiveness. Roei Golan, CFO: Infinity makes up about 15% of revenues, with expectations for significant growth in 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.