Israeli network security company Check Point Software Technologies Ltd. (Nasdaq: CHKP) reported its first quarter 2015 results today. At $373 million, quarterly revenue was up 9% in comparison with $342 million in the corresponding quarter of 2014. Non-GAAP operating profit was $216 million, 58% of revenue, the same percentage as in the first quarter of 2014. Non-GAAP net profit was $179 million, 9% more than the $164 million net profit in the first quarter of 2014. Non-GAAP earnings per share were $0.95, 14% higher than in the corresponding quarter.
Both revenue and non-GAAP earnings per share beat the consensus analysts' estimate, which was for earnings per share of $0.91 on revenue of $370.35 million.
On a GAAP basis, Check Point's first quarter net profit was $161 million, representing an increase of 5%, compared with $153 million in the first quarter of 2014. GAAP earnings per diluted share were $0.86, compared with $0.78 in the first quarter of 2014.
Cash flow from operations was $285 million, which compares with $172 million in the first quarter of 2014. Net of costs incurred during the first quarter of 2015 related to the acquisition of Hyperwise, as well as tax transactions related to previous years in 2014, Check Point's cash flow from operations increased by 8% from $284 million in the first quarter of 2014 to $307 million in the first quarter of 2015. At the end of the first quarter, Check Point had cash and investments of over $3.7 billion.
Check Point founder and CEO Gil Shwed said, "We are very pleased with the results of the first quarter. We continued to see success in all major geographies and delivered 11 percent growth in combined product and software blade revenues. Our pace of innovation has accelerated with a focus on two key areas: threat prevention and mobility. So far this year we completed two acquisitions in both of these spaces and introduced Threat Extraction, an innovative and revolutionary technology in this category. In addition, we increased our development, sales and marketing teams to capitalize on the expanding security market opportunity. We expect these investments to continue through the coming quarters."
"Performance was good in all geographic regions, especially in Asia," Shwed said at a press conference at the company's offices in Tel Aviv, "Our performance in Europe was mostly good, but Russia, where we enjoyed growth until the fourty quarter, was not in a greta state as far as we were concerned in the first quarter because of the crisis there.
Shwed commented on the substantial growth in revenue from the software blades product line, sales of which rose by 20% in comparison with the corresponding quarter to $74 million. "These are our newest security capabilities and modules, and this demonstrates that our most advanced technologies for catching new types of attacks are being well received by the market," Shwed said.
During the first quarter, Check Point bought two Israeli companies, Hyperwise and Lacoon (the latter acquisition was completed after the end of the quarter), for a total of less than $200 million. At the same time, Check Point continued to buy back its own shares, spending $242 million on buying three million shares at an average price of $80.7 per share, slightly lower than the current market price.
Commenting on the acquisitions, Shwed said that they would expand the company's capabilities in threat prevention and protection of mobile devices. Asked what Check Point intended to do with its pile of cash, he responded, "It's always better to have cash in the bank than debts. But we'll gladly make more acquisitions if we find more companies in technologies connected to threat prevention and mobility."
Beyond acquisitions, Check Point plans to expand its workforce. In the first quarter, it hired another 200 people, and a similar number is expected to join in the second quarter. The company currently employs about 3,500 people, about 1,600 of them in Israel.
"It's important for us to invest more in marketing and sales," Shwed said, "We have fantastic technology and we need to be more aggressive in marketing."
Check Point, which has a market cap of $15.1 billion, leaves its guidance for 2015 unchanged, at revenue of $1.6-1.65 billion and non-GAAP earnings per share of $3.9-4.02. For the second quarter, Check Point's guidance is similar to the consensus analysts' estimate, at revenue of $380-400 million and earnings per share of $0.90-0.99, or $177 million profit in total.
Published by Globes [online], Israel business news - www.globes-online.com - on April 20, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015