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Check Point's (CHKP) Q2 Earnings and Revenues Beat Estimates
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Check Point Software Technologies Ltd. (CHKP - Free Report) reported solid results for second-quarter fiscal 2018, wherein its top line and bottom line beat the Zacks Consensus Estimate.
The company’s non-GAAP earnings per share (EPS) of $1.37 beat the Zacks Consensus Estimate of $1.31. Also, the bottom line climbed 8% year over year, driven mainly by higher security subscriptions, reduced cost of revenues and a lower share count, partially offset by higher operating expenses.
Fiscal second-quarter revenues came in at $468 million, up approximately 2% year over year. The revenue figure came within the company’s guidance of $445-$475 million and beat the Zacks Consensus Estimate of $461 million.
Its share price increased about 5.22% in the trading session following the results.
Check Point Software Technologies Ltd. Price, Consensus and EPS Surprise
Security subscription revenues continued to be strong at $132.1 million, increasing 12% year over year. However, revenues of $125.7 million from Products lagged the year-ago quarter by 9.1%.
Software updates and maintenance revenues increased to $210 million, representing 3.8% growth.
Geographically, the Americas generated 48% of the total revenues, Europe accounted for 36% of total revenues, while the Asia Pacific, Japan and the Middle East and Africa accounted for the remaining 16%.
Notably, performance of the U.S sales force, which had negatively impacted the revenues of the previous quarter, showed improvement in the fiscal second quarter and results were on par with the company’s expectation.
Talking about deal size, the number of new customers — who signed deals worth $1 million or more — totaled 58. Customers, who signed deals worth $50,000 and more, contributed 76% to the total order value.
Operating Results
Non-GAAP operating income came in at $247.1 million, falling 0.4% year over year. Non-GAAP operating margin contracted 130 basis points (bps) tos 52.8%. This can be attributed to increased investments in sales and marketing efforts by the company.
Non-GAAP net income was $218.2 million or $1.37 per share, up from $212 million or $1.26 reported in the year-earlier quarter.
Balance Sheet & Other Financial Details
Check Point exited the second quarter with cash balances of $4.042 billion, compared with $4.009 billion in the previous quarter.
During the reported quarter, the company generated cash worth $213 million from operational activities, compared with $419 million in the last quarter.
The company repurchased approximately 2.5 million shares for $250 million. Check Point also announced doubling its share repurchase plan to $2 billion and increasing the quarterly repurchase by 30%, subject to quarterly variations.
Outlook
The company has provided guidance for the third quarter of fiscal 2018. Revenues are expected to be between $454 million to $474 million. Non-GAAP EPS is projected in the range of $1.30 to $1.40.
Check Point reiterated its guidance for the full year fiscal 2018, wherein revenues are anticipated to be in the range of $1.85-$1.93 billion. Non-GAAP earnings are projected in the band of $5.45-$5.75 per share.
Zacks Rank and Other Stocks to Consider
Check Point currently carries a Zacks Rank #2 (Buy).
Long-term earnings growth for Adobe, Qualys and Verint is projected to be 16.20%, 8% and 10%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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Check Point's (CHKP) Q2 Earnings and Revenues Beat Estimates
Check Point Software Technologies Ltd. (CHKP - Free Report) reported solid results for second-quarter fiscal 2018, wherein its top line and bottom line beat the Zacks Consensus Estimate.
The company’s non-GAAP earnings per share (EPS) of $1.37 beat the Zacks Consensus Estimate of $1.31. Also, the bottom line climbed 8% year over year, driven mainly by higher security subscriptions, reduced cost of revenues and a lower share count, partially offset by higher operating expenses.
Fiscal second-quarter revenues came in at $468 million, up approximately 2% year over year. The revenue figure came within the company’s guidance of $445-$475 million and beat the Zacks Consensus Estimate of $461 million.
Its share price increased about 5.22% in the trading session following the results.
Check Point Software Technologies Ltd. Price, Consensus and EPS Surprise
Check Point Software Technologies Ltd. Price, Consensus and EPS Surprise | Check Point Software Technologies Ltd. Quote
Quarter Details
Security subscription revenues continued to be strong at $132.1 million, increasing 12% year over year. However, revenues of $125.7 million from Products lagged the year-ago quarter by 9.1%.
Software updates and maintenance revenues increased to $210 million, representing 3.8% growth.
Geographically, the Americas generated 48% of the total revenues, Europe accounted for 36% of total revenues, while the Asia Pacific, Japan and the Middle East and Africa accounted for the remaining 16%.
Notably, performance of the U.S sales force, which had negatively impacted the revenues of the previous quarter, showed improvement in the fiscal second quarter and results were on par with the company’s expectation.
Talking about deal size, the number of new customers — who signed deals worth $1 million or more — totaled 58. Customers, who signed deals worth $50,000 and more, contributed 76% to the total order value.
Operating Results
Non-GAAP operating income came in at $247.1 million, falling 0.4% year over year. Non-GAAP operating margin contracted 130 basis points (bps) tos 52.8%. This can be attributed to increased investments in sales and marketing efforts by the company.
Non-GAAP net income was $218.2 million or $1.37 per share, up from $212 million or $1.26 reported in the year-earlier quarter.
Balance Sheet & Other Financial Details
Check Point exited the second quarter with cash balances of $4.042 billion, compared with $4.009 billion in the previous quarter.
During the reported quarter, the company generated cash worth $213 million from operational activities, compared with $419 million in the last quarter.
The company repurchased approximately 2.5 million shares for $250 million. Check Point also announced doubling its share repurchase plan to $2 billion and increasing the quarterly repurchase by 30%, subject to quarterly variations.
Outlook
The company has provided guidance for the third quarter of fiscal 2018. Revenues are expected to be between $454 million to $474 million. Non-GAAP EPS is projected in the range of $1.30 to $1.40.
Check Point reiterated its guidance for the full year fiscal 2018, wherein revenues are anticipated to be in the range of $1.85-$1.93 billion. Non-GAAP earnings are projected in the band of $5.45-$5.75 per share.
Zacks Rank and Other Stocks to Consider
Check Point currently carries a Zacks Rank #2 (Buy).
A few other stocks worth considering in the broader Computer and Technology sector are Adobe (ADBE - Free Report) , Qualys, Inc. (QLYS - Free Report) and Verint (VRNT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Adobe, Qualys and Verint is projected to be 16.20%, 8% and 10%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>