Check Point Software Technologies Reports 2016 Fourth Quarter and Full Year Financial Results

SAN CARLOS, Calif., Jan. 19, 2017 (GLOBE NEWSWIRE) -- Check Point® Software Technologies Ltd. (NASDAQ:CHKP), today announced its financial results for the fourth quarter and full year ended December 31, 2016.

Fourth Quarter 2016:

• Total Revenue: $487 million, a 6 percent increase year over year
• Software Blades Subscriptions Revenues: $110 million, a 26 percent increase year over year
• GAAP Operating Income: $241 million, representing 50 percent of revenues
• Non-GAAP Operating Income: $266 million, representing 55 percent of revenues
• GAAP EPS: $1.31, a 21 percent increase year over year
• Non-GAAP EPS: $1.46, a 21 percent increase year over year
• Deferred Revenues: $1,066 million, an 18 percent increase year over year

Full Year 2016:

• Total Revenue: $1,741 million, a 7 percent increase year over year
• Software Blades Subscriptions Revenues: $390 million, a 22 percent increase year over year
• GAAP Operating Income: $852 million, representing 49 percent of revenues
• Non-GAAP Operating Income: $948 million, representing 54 percent of revenues
• GAAP EPS: $4.18, a 12 percent increase year over year
• Non-GAAP EPS: $4.72, a 13 percent increase year over year

“We had a great finish to 2016 with healthy business growth in all geographies and a nice increase in new customer wins. We realized triple digit growth across our focus areas of mobile and advanced threat prevention, while security gateways delivered double digit growth,” said Gil Shwed, founder and chief executive officer, “It’s great to see the business investments made over the past few years coming to fruition and underscoring a strong quarter.”

Financial Highlights for the Fourth Quarter of 2016:

• Total Revenue: $487 million compared to $458 million in the fourth quarter of 2015.
• GAAP Operating Income: $241 million compared to $239 million in the fourth quarter of 2015.
• Non-GAAP Operating Income: $266 million compared to $262 million in the fourth quarter of 2015.
• GAAP Taxes on Income:  $30 million compared to $54 million the fourth quarter of 2015.
• GAAP Net Income and Earnings per Diluted Share: GAAP net income was $222 million compared to $195 million in the fourth quarter of 2015. GAAP earnings per diluted share were $1.31 compared to $1.08 in the fourth quarter of 2015.
• Non-GAAP Net Income: Non-GAAP net income was $247 million compared to $216 million in the fourth quarter of 2015.
• Non-GAAP Earnings per Diluted Share: $1.46 compared to $1.20 in the fourth quarter of 2015. 
• Deferred Revenues: As of December 31, 2016, deferred revenues were $1,066 million compared to $906 million as of December 31, 2015. 
• Cash Flow: Cash flow from operations of $183 million compared to $212 million in the fourth quarter of 2015.
• Share Repurchase Program: During the Fourth quarter of 2016, the company repurchased 3 million shares at a total cost of $248 million.
• Cash Balances, Marketable Securities and Short Term Deposits: $3,669 million as of December 31, 2016, compared to $3,615 million as of December 31, 2015.

Financial Highlights for the Year Ended December 31, 2016

• Total Revenues: $1,741 million compared to $1,630 million in 2015.
• GAAP Operating Income: $852 million compared to $840 million in 2015. 
• Non-GAAP Operating Income: $948 million compared to $927 million in 2015.
• GAAP Taxes on Income: $172 million compared to $188 million in 2015.
• GAAP Net Income and Earnings per Diluted Share: GAAP net income was $725 million compared to $686 million in 2015. GAAP earnings per diluted share were $4.18 compared to $3.74 in 2015.
• Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $818 million compared to $766 million in 2015. Non-GAAP earnings per diluted share were $4.72 compared to $4.17 in 2015.
• Cash Flow: Cash flow from operations of $923 million compared to $917 million in 2015.
• Share Repurchase Program: In 2016, the company repurchased approximately 12 million shares at a total cost of $988 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.”

2016 Business Highlights

January – New Data Center & Enterprise Security Gateway Series (15000 & 23000), delivering advanced threat prevention at high speeds.

February – SandBlast Agent, expanding the company’s advanced security and zero-day protection technology to PC endpoint devices.

February – Small Business Security Gateway (700 series), bringing Check Point enterprise-grade security technology to companies with less than 100 employees.

February – Check Point and IBM Partnership announced an expanding alliance that includes threat intelligence sharing.

March – Next Generation Security Management (R80), building on Check Point’s best-in-class technology to offer IT leaders the ability to consolidate security environments, with unified security policies and automation of security tasks.

April – New Branch Office, Small & Midsize Enterprise Security Gateways (1400, 3000, and 5000), delivering advanced threat prevention technology at the fastest speeds.

May – SandBlast Cloud, delivering Check Point’s advanced threat prevention solutions to Microsoft Office 365 cloud service.

August – SandBlast Agent for Browsers, providing browser level protection against downloading malicious files and breakthrough technology against data theft and phishing sites.

September – Expanded cloud security offering to the Cisco ACI environment.

November – Amazon Cloud certification for Check Point vSEC solution providing advanced threat prevention in the Amazon AWS Cloud.

December – No More Ransom (NMR) Check Point has joined the global project, to contribute our expertise to help develop new solutions and offer new possibilities to the victims of ransomware. Members include enforcement agencies from 22 countries across Europe, as well as The European Commission and cybersecurity specialist companies.

Industry Accolades:  Check Point Technology Leadership in 2016

Gartner
Leader Enterprise Network Firewall Market Quadrant 2016 (17^th year in a row)
Leader Unified Threat Management Magic Quadrant 2016 (5^th year in a row)
Only vendor to be a Magic Quadrant Leader for both market segments

NSS Labs
Recommended in Next Generation Firewall Test 2016
Recommended in Breach Detection Systems Test 2016
Recommended in Intrusion Prevention Systems Test 2016
13^th consecutive NSS Labs win, only vendor with 100% Recommended ratings from NSS Labs

Forrester: Leader in the Forrester Automated Malware Analysts Wave 

Common Criteria Certification: Check Point was awarded Common Criteria (CC) certification for R77.30, following a rigorous third-party evaluation and testing process.

CRN Channel Chief Award: Check Point President, Amnon Bar-Lev, was named one of CRN’s 2015 Channel Chiefs for the 9^th year in a row.

Our security research organization has also continued to expose vulnerabilities in today’s internet infrastructure, which included critical vulnerabilities in mobile equipment and applications, such as:

2016 Security Report – Check Point researchers analyzed the activity of more than 31,000 Check Point gateways worldwide, revealing specific details on the challenges enterprises are encountering with unknown malware, attack trends, and the impact of having more mobile devices in the enterprise. 

Gooligan – Check Point revealed over one million Google accounts were compromised. This began with Android malware that roots Android devices and steals email addresses and authentication tokens stored on them. With this information, attackers can access users’ sensitive data from Gmail, Google Photos, Google Docs, Google Play, Google Drive, and G Suite.

SideStepper – A vulnerability that can be used to install malicious enterprise apps on iPhone and iPad devices enrolled with a mobile device management (MDM) solution.

EZCast Vulnerability – HDMI dongle-based TV streamer that converts non-connected TVs into smart TVs allowing hacker’s ability to gain unauthorized access to an EZCast subscriber’s home network.

HummingBad – Malware to control 10 million mobile devices globally allowing hackers to manipulate the devices into downloading apps and clicking on advertisements to benefit the coalition of developers behind the malware.

Viking Horde – Android malware campaign on Google Play that conducts ad fraud, but can also be used for other attack purposes such as DDoS attacks, spam messages and more.

Nuclear Exploit Kit – One of the world’s largest attack infrastructures used in the Malware-as-a-Service industry which facilitate the delivery of various types of malware such as ransomware and banking Trojans.

Cerber – Check Point researchers had unprecedented behind-the-scenes insight into one of the largest active ransomware campaigns.

QuadRooter – A set of four vulnerabilities in QualComm chipset drivers making at least 900 million Android smartphones and tablets vulnerable for hackers to gain complete control of devices and unrestricted access to the sensitive personal and enterprise data on them.

ImageGate – A new attack vector which embeds malware in image and graphic files that are sent in social networks such as Facebook.

DressCode – Android malware discovered on Google Play which was embedded into more than 40 apps, and found in more than 400 additional apps on third party app stores. Between 500,000 and 2,000,000 users downloaded the malicious apps from Google Play.

“2016 was a great year for Check Point.  We continued to expand on our industry-leading security platform with the introduction of new and innovative security solutions for the cloud, mobile and advanced threat prevention.  In addition, we introduced a complete refresh of our security gateways products enabling customers to deploy increasing layers of security to address the escalating number of cyberattacks.  As we move into 2017, we continue to focus on providing customers with an industry-leading security platform designed to prevent cyber threats from penetrating the business environment,” concluded Shwed.

First Quarter 2017 Investor Conference Participation Schedule:

• Goldman Sachs Technology & Internet Conference 2017
  February 16, 2017 –San Francisco, CA
• JMP Securities 2017 Technology Conference
  February 27, 2017 –San Francisco, CA
• Raymond James 38^th Annual Institutional Investor Conference
  March 6, 2017 – Orlando, FL
• Susquehanna 6^th Annual Semi & Technology Conference*
  March 9, 2017 – New York, NY

* Investor meetings only

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 view 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.

Conference Call and Webcast Information
Check Point will host a conference call with the investment community on January 19, 2017, at 8:30 AM ET/5:30 AM PT. To listen to the live webcast, please visit the website at: www.checkpoint.com/ir. A replay of the conference call will be available through January 26, 2017 on the company's website or by telephone at +1.201.612.7415, replay ID number 13652946.

About Check Point Software Technologies Ltd.
Check Point Software Technologies Ltd. (www.checkpoint.com) is the largest network cyber security vendor globally, providing industry-leading solutions and protecting customers from cyberattacks with an unmatched catch rate of malware and other types of threats. Check Point offers a complete security architecture defending enterprises – from networks to mobile devices – in addition to the most comprehensive and intuitive security management. Check Point protects over 100,000 organizations of all sizes.

©2017 Check Point Software Technologies Ltd. All rights reserved

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, our continued focus on providing customers with an industry leading security platform designed to prevent cyber security attacks on their evolving infrastructure and our participation in investor conferences during the first quarter of 2017.  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.  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 28, 2016.  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 charges, 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.