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CHKP slides 5% in pre-market as revenues come in line with expectations
AInvestTuesday, Feb 6, 2024 9:04 am ET
1min read
CHKP --

Check Point Software (CHKP), a leading AI-powered, cloud-delivered cybersecurity platform provider protecting over 100,000 organizations worldwide. The company leverages the power of AI everywhere to enhance cybersecurity efficiency and accuracy through its Infinity Platform.

Check Point reported EPS of $2.57, surpassing both the previous year's figure of $2.45 and estimates of $2.47. In terms of net income, Check Point reported $249 million for the fourth quarter, compared to $270 million in the same quarter last year.

Check Point's revenue for the quarter reached $663.5 million, reflecting a 3.9% year-over-year increase. The company's product and license revenue declined by 8.7% to $158.3 million, in line with expectations. The company's revenue growth was driven by a 15% year-over-year increase in security subscriptions revenue, which partially offset the decline in product and license revenue.

Security subscriptions revenue showed a positive trend with a 15% year-over-year increase, totaling $265.8 million, in line with expectations.

The company's deferred revenue, a key metric for measuring future performance, reached $1.91 billion, representing a 1.6% year-over-year increase but slightly below the estimated $1.92 billion. Additionally, the change in deferred revenues, trade payables, and other accrued liabilities was reported at $270.6 million, higher than forecasts of $197.8 million. 

Check Point demonstrated solid operating performance. Adjusted operating margin improved to 47% compared to 45% in the previous year, beating the estimated 45%. Costs related to products and security subscriptions decreased, with product and license costs falling by 33% year-over-year while security subscriptions costs increasing by 62% year-over-year. 

Expenses such as software updates and maintenance showed an upward trend, reaching $30.5 million, surpassing the estimated $28.2 million. Research and development (R&D) expenses increased by 10% year-over-year, amounting to $100 million.

The company's GAAP earnings per diluted share experienced a 2% decrease, reaching $2.15, while non-GAAP earnings per diluted share increased by 5% to $2.57 compared to the previous year. 

In conclusion, Check Point Software Technologies delivered a solid performance in the fourth quarter, surpassing estimated adjusted EPS and demonstrating overall revenue growth. Despite a slight decrease in GAAP EPS, the company showcased its ability to improve operating margin and effectively adapt to the cybersecurity landscape. With its AI-powered solutions and focus on customer-centricity, Check Point remains well-positioned to capitalize on future opportunities in the industry.

$CHKP(CHKP)

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