Cyber security company Check Point Software Technologies Ltd. (Nasdaq: CHKP) today opened the reporting season for Israeli companies listed on Wall Street with overall good results for the first quarter of 2016. Revenue matched the analysts' expectations and the company's forecast range, while profit outperformed forecasts by both the analysts and Check Point itself. In contrast to its custom in recent years, Check Point did not hold a press conference in its Tel Aviv offices when its results were published, due to an event the company was holding in France.
Founded by CEO Gil Shwed, Check Point provides Internet and information security solutions. The company posted $404 million in revenue in the first quarter of 2016, up 8.5%, compared with the corresponding quarter in 2015, and within the company's $395-410 million forecast range provided in the preceding quarter. Revenue from the sale of products and licenses grew 7.4% to $123 million, revenue from subscribers to the Software Blades line of products jumped 18.5% to $88.1 million, and revenue from software maintenance and updates increased by 5.2% to $193 million.
Check Point's first quarter GAAP operating profit was $202 million, and its net profit totaled $167 million, up 2.6% and 4.1%, respectively, compared with the corresponding quarter in the preceding year. Excluding various accounting expenses, such as registering capital remuneration for employees and depreciation of intangible assets, the company's non-GAAP net profit totaled $187 million, 4.6% more than in the first quarter of 2015. Net profit per share rose 11.6%, among other things due to a drop in the number of shares caused by Check Point's buyback campaign. Net profit per share was $1.06, compared with a company forecast range of $0.99-1.05, and $0.03 per share higher than the analysts' forecast.
Generating more cash
Check Point continued to generate cash at a fast pace in the first quarter of 2016, with a $324 million cash flow from current activity. The company had $3.7 billion in cash and short and long-term investments at the end of the first quarter. During the first quarter, Check Point spent $247 million on buying back shares at an average share price of $78.90. The current share price is higher, $88.90, reflecting a $16.1 billion market cap for the company.
Shwed said, "Revenues grew 9%, while non-GAAP earnings per share achieved 11% growth and exceeded our projections. This success was driven primarily by advanced threat prevention capabilities, which was evident in our subscription revenue growth."
Published by Globes [online], Israel business news - www.globes-online.com - on April 20, 2016
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