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Check Point Software Technologies Ltd. (CHKP - Free Report) reported second-quarter 2020 results, wherein both top and bottom lines beat the Zacks Consensus Estimate.
The company’s non-GAAP earnings per share of $1.58 beat the consensus mark by 11.27%. The figure also climbed 15% year over year.
Check Point Software Technologies Ltd. Price, Consensus and EPS Surprise
Revenues were $506 million, up 4% year over year. Moreover, the figure exceeded the Zacks Consensus Estimate of $486 million.
Double-digit growth in SaaS and IaaS cloud solutions drove revenues. Moreover, work-from-home-related solutions — Mobile Access and Sandblast Agent — continued to witness strong traction with more than 300% and 19% growth, respectively.
Quarter Details
Subscription revenues came in at $164 million, increasing 10% year over year, aided by strong demand for its advanced solutions, primarily CloudGuard, Sandblast Zero-day threat prevention and Infinity solutions. During the quarter, the company secured several Infinity deals in various industries, including government, telecommunication and industrial.
Revenues of $122.6 million from products and licenses grew 1%. Products are currently in the process of transitioning to cloud solutions, which is included in the subscription line.
Total revenues from product and security subscriptions were $287 million, growing 6% year over year.
Software update and maintenance revenues increased 1% to $219 million.
As of Jun 30, deferred revenues were $1.34 billion, up 4% year over year, reflecting strength in security subscription.
Region-wise, the Americas generated 46% of total revenues; Europe, Middle East and Africa accounted for 42%; and the Asia Pacific contributed 12%. EMEA and APAC recorded maximum growth.
The second quarter witnessed strong execution in EMEA and APAC, driven mainly by strength in financial services, technology and healthcare verticals.
Non-GAAP operating income for the reported quarter came in at $253 million, increasing 4.5% year over year. Non-GAAP operating margin remained flat at 50%.
Balance Sheet & Other Financial Details
Check Point exited the second quarter with cash and cash equivalents, marketable securities and short-term deposits of $3.96 billion compared with the previous quarter’s $3.99 billion.
The company generated cash worth $252 million from operational activities, down from the previous quarter’s $359 million.
It repurchased approximately 3.1 million shares for about $325 million in the second quarter.
Outlook
Check Point is still assessing the potential impacts of the pandemic-led disruptions on its business, and thus refrained from providing any formal guidance for the third quarter of 2020.
Long-term earnings growth rate for Micron, Dropbox and Asure is currently pegged at 10.26%, 32.51% and 14%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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.
Image: Bigstock
Check Point's (CHKP) Q2 Earnings & Revenues Surpass Estimates
Check Point Software Technologies Ltd. (CHKP - Free Report) reported second-quarter 2020 results, wherein both top and bottom lines beat the Zacks Consensus Estimate.
The company’s non-GAAP earnings per share of $1.58 beat the consensus mark by 11.27%. The figure also climbed 15% year over year.
Check Point Software Technologies Ltd. Price, Consensus and EPS Surprise
Check Point Software Technologies Ltd. price-consensus-eps-surprise-chart | Check Point Software Technologies Ltd. Quote
Revenues were $506 million, up 4% year over year. Moreover, the figure exceeded the Zacks Consensus Estimate of $486 million.
Double-digit growth in SaaS and IaaS cloud solutions drove revenues. Moreover, work-from-home-related solutions — Mobile Access and Sandblast Agent — continued to witness strong traction with more than 300% and 19% growth, respectively.
Quarter Details
Subscription revenues came in at $164 million, increasing 10% year over year, aided by strong demand for its advanced solutions, primarily CloudGuard, Sandblast Zero-day threat prevention and Infinity solutions. During the quarter, the company secured several Infinity deals in various industries, including government, telecommunication and industrial.
Revenues of $122.6 million from products and licenses grew 1%. Products are currently in the process of transitioning to cloud solutions, which is included in the subscription line.
Total revenues from product and security subscriptions were $287 million, growing 6% year over year.
Software update and maintenance revenues increased 1% to $219 million.
As of Jun 30, deferred revenues were $1.34 billion, up 4% year over year, reflecting strength in security subscription.
Region-wise, the Americas generated 46% of total revenues; Europe, Middle East and Africa accounted for 42%; and the Asia Pacific contributed 12%. EMEA and APAC recorded maximum growth.
The second quarter witnessed strong execution in EMEA and APAC, driven mainly by strength in financial services, technology and healthcare verticals.
Non-GAAP operating income for the reported quarter came in at $253 million, increasing 4.5% year over year. Non-GAAP operating margin remained flat at 50%.
Balance Sheet & Other Financial Details
Check Point exited the second quarter with cash and cash equivalents, marketable securities and short-term deposits of $3.96 billion compared with the previous quarter’s $3.99 billion.
The company generated cash worth $252 million from operational activities, down from the previous quarter’s $359 million.
It repurchased approximately 3.1 million shares for about $325 million in the second quarter.
Outlook
Check Point is still assessing the potential impacts of the pandemic-led disruptions on its business, and thus refrained from providing any formal guidance for the third quarter of 2020.
Zacks Rank and Stocks to Consider
Check Point currently has a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader technology sector are Micron Technology (MU - Free Report) , Dropbox, Inc. (DBX - Free Report) and Asure Software Inc (ASUR - 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 rate for Micron, Dropbox and Asure is currently pegged at 10.26%, 32.51% and 14%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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 >>