CHECK POINT SOFTWARE REPORTS RECORD FIRST QUARTER 2010 FINANCIAL RESULTS

  • Revenue: $245.1 million, representing a 26 per cent increase year over year
  • Non-GAAP Operating Income: $137.6 million, representing a 26 per cent increase year over year and reflecting 56 per cent of revenues
  • Non-GAAP EPS: $0.55, representing a 22 per cent increase year over year
  • Deferred Revenues: $419.8 million, representing a 29 per cent increase year over year
  • Cash Flow from Operations: $217.8 million, representing a 27 per cent increase year over year

CALGARY, AB – April 26, 2010 – Check Point® Software Technologies Ltd. (NASDAQ: CHKP), the worldwide leader in securing the Internet, today announced record financial results for the first quarter ended March 31, 2010.
“We delivered record first quarter results, attaining the top end of our projections for both revenues and earnings per share, while experiencing healthy growth across all regions,” said Gil Shwed, chairman and chief executive officer of Check Point Software. “Our software blade architecture continues to make inroads with our annuity based software blades helping to drive services revenues.  In addition to these great results, we delivered a record $218 million of operating cash flow for the quarter and now have cash balances exceeding $2 billion.”

  • Total Revenues: $245.1 million, an increase of 26 per cent, compared to $195.0 million in the first quarter of 2009.
  • GAAP Operating Income: $115.9 million, an increase of 26 per cent, compared to $92.3 million in the first quarter of 2009.  The GAAP operating income in the first quarter of 2010 included additional amortization of intangible assets net of taxes in the amount of $3.3 million related to the acquisition of the Nokia security appliance business, which was completed during the second quarter of 2009.
  • Non-GAAP Operating Income: $137.6 million, an increase of 26 per cent, compared to $109.0 million in the first quarter of 2009. Non-GAAP operating margin was 56 per cent, same as in the first quarter of 2009.
  • GAAP Net Income and Earnings per Diluted Share: GAAP net income was $98.0 million, an increase of 21 per cent, compared to $80.9 million in the first quarter of 2009. GAAP earnings per diluted share were $0.46, an increase of 21 per cent, compared to $0.38 in the first quarter of 2009. GAAP net income in the first quarter of 2010 included additional amortization of intangible assets net of taxes in the amount of $3.3 million (which represented $0.02 in GAAP earnings per diluted share) related to the acquisition of the Nokia security appliance business, which was completed during the second quarter of 2009.
  • Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $116.8 million, an increase of 22 per cent, compared to $95.5 million in the first quarter of 2009, and non-GAAP EPS was $0.55, an increase of 22 per cent compared to $0.45 in the first quarter of 2009.
  • Deferred Revenues: As of March 31, 2010, we had deferred revenue of $419.8 million, an increase of 29 per cent, compared to $325.0 million as of March 31, 2009.
  • Cash Flow: Cash flow from operations was $217.8 million, an increase of 27 per cent compared to $171.8 million in the first quarter of 2009.
  • Share Repurchase Program: During the first quarter of 2010, we repurchased 1.5 million shares at a total cost of $50 million.

 
Recent Business Highlights Include:
Since the beginning of the year, Check Point has introduced several new products and technologies.

  • Check Point Data Loss Prevention (DLP) solution – a network-based solution that helps businesses move data loss protection from detection to prevention by preemptively protecting sensitive information such as regulatory, confidential and proprietary information from unintentional loss.
  • The new SmartEvent Software Blade – a unified security management solution for real-time event visibility across multiple security systems, including Firewall, Intrusion Prevention (IPS), Data Loss Prevention (DLP) and endpoints.
  • Significant antivirus and URL Filtering performance improvements – streaming technology dramatically increases software blades performance, benefiting Check Point security gateways through a software upgrade at no additional cost. In addition, Check Point extended its patented SecureXL acceleration technology to UTM-1 appliances, significantly boosting firewall throughput performance.
  • Check Point Abra –a secure virtual desktop solution deployed from an encrypted USB stick that provides companies with a secure and affordable alternative to allowing third-party PC’s access to the network.
  • ZoneAlarm DataLock Automated Encryption for Small Businesses and Consumers – equipped with Pre-boot Authentication, ZoneAlarm DataLock prevents unauthorized users from accessing stored information, automatically encrypting all hard drive content to protect private and confidential data on laptops and netbooks.

 
During the first quarter, Check Point won several awards and industry accolades.
For the sixth time, Check Point won the SC Magazine Reader Trust Award for Best Enterprise Firewall. In the UK, Check Point got a significant award from CRN: Security vendor of the year.
In the Asia Pacific region, Check Point earned five awards – two PC Market Hong Kong Best of I.T. Awards, one for Check Point Endpoint Security and the other for Check Point UTM-1 Total Security Appliances; CRN India named Check Point Channel Champion for overall network security; and PC3 Platinum Brand Election 2009 in Hong Kong recognized both Check Point Endpoint Security and Check Point SSL VPN Solutions.
Check Point’s vice president of global field operations, Amnon Bar-Lev, was named a 2010 Channel Chief by the Everything Channel’s CRN for the third consecutive year.
Mr. Shwed concluded, “The first quarter marked a great start for the year.  We posted record results and further expanded our addressable market by entering two new exciting markets: secure virtual desktop with Abra and Data Loss Prevention with our DLP solution.  With the introduction of these latest technology innovations and security solutions, Check Point is well positioned to address the security needs of any size business.”
 
Conference Call and Webcast Information
Check Point will host a conference call with the investment community on April 26, 2010 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 May 3, 2010 at the company’s website http://www.checkpoint.com/ir or by telephone at +1 201.612.7415, passcode # 348753, account # 215.

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