CHECK POINT SOFTWARE TECHNOLOGIES REPORTS FOURTH QUARTER AND FULL YEAR 2012 FINANCIAL RESULTS

Full Year 2012:

  • Total Revenues: $1,342.7 million, representing an 8 per cent increase year over year
  • Non-GAAP Operating Income: $798.9 million, representing 59 per cent of revenues versus 58 per cent year over year
  • Non-GAAP EPS: $3.19, representing an 11 per cent increase year over year
  • Cash Flow From Operations: $815.8 million, representing a 14 per cent increase year over year
  • Share Repurchase Program: $466.2 million, representing a 55 per cent increase year over year

 
Fourth Quarter 2012:

  • Total Revenues: $368.6 million, representing a 3 per cent increase year over year
  • Non-GAAP Operating Income: $222.9 million, representing 60 per cent of revenues, same as last year
  • Non-GAAP EPS: $0.91, representing an 8 per cent increase year over year
  • Cash Flow From Operations: $202.4 million, representing a 17 per cent increase year over year 

CALGARY, AB – January 23, 2013 — Check Point® Software Technologies Ltd. (NASDAQ: CHKP), the worldwide leader in securing the Internet, today announced financial results for the fourth quarter and full-year ending December 31, 2012.
“Throughout 2012, customers continued to adopt the Software Blades Architecture and further consolidated their security infrastructure with our new appliance portfolio. Revenues from software blades had a significant contribution to our growth with over a 50% increase this year. Overall financial results were good with non-GAAP EPS growth of 11 per cent for the year. Cash flow from operations reached $816 million dollars representing 14 per cent growth for the year. In the fourth quarter, cash flow from operations was $202 million dollars representing 17 per cent growth,” said Gil Shwed, founder, chairman and chief executive officer at Check Point Software Technologies.
Financial Highlights for the Fourth Quarter of 2012

  • Total Revenues: $368.6 million, an increase of 3 per cent, compared to $356.8 million in the fourth quarter of 2011.
  • GAAP Operating Income: $210.5 million, an increase of 9 per cent, compared to $192.6 million in the fourth quarter of 2011. GAAP operating margin was 57 per cent, compared to 54 per cent in the fourth quarter of 2011.
  • Non-GAAP Operating Income: $222.9 million, an increase of 4 per cent, compared to $213.7 million in the fourth quarter of 2011. Non-GAAP operating margin was 60 per cent, same as in the fourth quarter of 2011.
  • GAAP Net Income and Earnings per Diluted Share: GAAP net income was $174.0 million, an increase of 9 per cent, compared to $159.8 million in the fourth quarter of 2011. GAAP earnings per diluted share were $0.85, an increase of 13 per cent, compared to $0.75 in the fourth quarter of 2011.
  • Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $185.1 million, an increase of 4 per cent, compared to $178.1 million in the fourth quarter of 2011. Non-GAAP earnings per diluted share were $0.91, an increase of 8 per cent, compared to $0.84 in the fourth quarter of 2011
  • Deferred Revenues: As of December 31, 2012, Check Point had deferred revenues of $589.7 million, an increase of 7 per cent, compared to $552.2 million as of December 31, 2011.
  • Cash Flow: Cash flow from operations was $202.4 million, an increase of 17 per cent, compared to $173.2 million in the fourth quarter of 2011.
  • Share Repurchase Program: During the fourth quarter of 2012, the company repurchased 3.6 million shares at a total cost of $160.1 million.
  • Cash Balances and Marketable Securities: $3,295.4 million as of December 31, 2012, an increase of $416.0 million, compared to $2,879.4 million as of December 31, 2011.

 
Financial Highlights for the Year Ended December 31, 2012

  • Total Revenues: $1,342.7 million, an increase of 8 per cent, compared to $1,247.0 million in 2011.
  • GAAP Operating Income: $746.5 million, an increase of 16 per cent, compared to $642.2 in 2011. GAAP operating margin was 56 per cent, compared to 51 per cent in 2011.
  • Non-GAAP Operating Income: $798.9 million, an increase of 10 per cent, compared to $725.9 million in 2011. Non-GAAP operating margin was 59 per cent, compared to 58 per cent in 2011.
  • GAAP Net Income and Earnings per Diluted Share: GAAP net income was $620.0 million, an increase of 14 per cent, compared to $544.0 million in 2011. GAAP earnings per diluted share were $2.96, an increase of 17 per cent, compared to $2.54 in 2011.
  • Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $667.9 million, an increase of 9 per cent, compared to $613.6 million in 2011. Non-GAAP earnings per diluted share were $3.19, an increase of 11 per cent, compared to $2.87 in 2011.
  • Cash Flow: Cash flow from operations was $815.8 million, an increase of 14 per cent, compared to $714.9 million in 2011.
  • Share Repurchase Program: The Company repurchased 9.5 million shares at a total cost of $466.2 million during 2012.

 For information regarding the non-GAAP financial measures discussed in this release, please see “Use of Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Information.”
 
2012 Business Highlights
Over the course of 2012, Check Point introduced new and innovative products focused on fighting cyber threats and making enterprises more secure including:
Check Point ThreatCloud™ – The first collaborative network to fight cybercrime. ThreatCloud gathers attack data from thousands of gateways and sensors around the world and distributes the intelligence to participating security gateways. In the fourth quarter, the company continued to expand the ThreatCloud offering with the introduction of new managed security services.
Anti-Bot Software Blade – The Anti-bot software blades address one of the key cyber threats used by the most sophisticated attacks. Bots are malicious software agents that hide inside personal computers awaiting instructions from their remote operators. They are utilized to steal data and attack other computers as well as other malicious activities. The anti-bot software blades detect the bot presence on the network using a multi-dimensional approach and block their activity.
New Appliance Product Line Transition – Over 90 per cent of appliances sold during the fourth quarter were from the new appliance product line. Our 2012 Appliances models are optimized for Check Point’s Software Blade Architecture™ and deliver approximately three times the performance of previous generations.
New Secure OS (GAiA) – GAiA is our new secure operating system that unifies the operations of the company’s new and existing appliances, integrating the functions and features of multiple product lines.

  • Software Version R74.40 – New software version for the company’s core network security products. This version includes more than 100 new features, including the Anti-Bot Software Blade and an updated version of the company’s Anti-Virus Software Blades powered by Check Point ThreatCloud.
  • Check Point Virtual Systems – New solution for private cloud environments and data centers that enables the consolidation of up to 250 security gateways on a single hardware platform.
  • DDoS Protector™ Appliances – Check Point expanded into a new and critical security market segment. These new solutions combat a wide range of Distributed Denial of Service (DDoS) attacks and are integrated with the Check Point Security Management environment.
  • Security Acceleration Module – The Security Acceleration Module with advanced SecurityCore™ technology enables customers in high-performance and low latency environments, such as financial trading floors, to significantly boost network performance by accelerating key security operations.

Customers are able to achieve 110 Gbps of firewall throughput and sub-five micro second (5 µs) latency – enabling the industry’s highest-performing two rack-unit firewall.
 
Industry Accolades & New Research:
Check Point continued to receive industry recognition and published a whitepaper on a new attack, including:
 

  • Top Position in Worldwide Combined Firewall and UTM Appliance Market – Check Point is positioned as the number one vendor in worldwide combined Firewall and UTM appliance revenue for Q2 2012 according to the IDC Worldwide Q2 2012 Security Appliance Tracker.
  • Leader in Gartner’s Magic Quadrant for Mobile Data Protection – Check Point is recognized as a leader for its ability to encrypt data and secure mobile endpoints.
  • 2012 Frost & Sullivan Asia Pacific ICT Award – Named “Network Security Vendor of the Year.” This is the third time that Check Point has received this prestigious distinction.
  • MIS Asia Top 100, Singapore – Global Top 75 IT Vendors.
  • IT Pro Editor’s Choice 2012 Hong Kong – Check Point DDoS Protector Appliance and Check Point Threat Prevention Gateway
  • SMB World Awards 2012, Hong Kong – Check Point DDoS Protector Appliance
  • New Eurograbber Attack – Check Point along with Versafe, uncovered a highly sophisticated attack, called Eurograbber, which was used to steal millions from corporate and private banking customers across Europe. The two companies published “A Case Study of Eurograbber: How 36 million euros was stolen via malware.”

“During the year, we expanded the power of the Software Blades Architecture by introducing the Check Point ThreatCloud, the industry’s first collaborative network to fight cyber threats globally with thousands of gateways worldwide that contribute attack information into ThreatCloud. In 2013, we will continue to innovate and extend our leadership, focusing on threat prevention and mobile security,” said Gil Shwed, founder, chairman and chief executive officer at Check Point Software Technologies.

First Quarter Investor Conference Participation Schedule:

  • Stifel Nicolaus Technology & Telecommunications Conference

February 6, 2013 – San Francisco, CA

  • Goldman Sachs Technology & Internet Conference

February 13, 2013 – San Francisco, CA

  • Morgan Stanley Global Technology, Media and Telecommunications Conference

February 25, 2013 – San Francisco, CA

  • Raymond James 33rd Annual Institutional Investor Conference

March 4, 2013 – Orlando, FL

  • UBS Technology Conference

March 13, 2013 – London, UK
 
 Members of Check Point’s management team will 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 23, 2013 at 8:30 AM ET/5:30 AM PST. 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 30, 2013 on the company’s website or by telephone at +1.201.612.7415, replay ID number 407539.

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