Check Point presented a strong report; The market is waiting for the publication of the forecasts for the future

The Israeli cyber security company Check Point Gil Shvid’s exceeded analysts’ expectations when it reported adjusted earnings per share of $2.04 per share (a 13% increase compared to the corresponding quarter) on revenues of $598.8 million (a 6% increase compared to the corresponding quarter). Analysts were expecting a profit of $2 per share on revenue of $594.9 million.

In doing so, the company also surpassed its own forecast, which it presented last quarter. The company expected adjusted profit (Non-GAAP) of $2 (mid-term) on revenues of $592.5 million (mid-term). For the entire year, the company expected growth of about 6% to revenues of 2.475-2.625 billion dollars, and a net profit of 8.7-9.3 dollars per share. The annual analyst expectation is for earnings per share of $9.07 per share on revenues of $2.56 billion.

Now the market is expected to wait for the forecast that the company will publish, as usual, at 16:00. The analysts expect that in the second quarter the adjusted profit will be $2.16 per share on revenues of $623.3 million.

The amount of cash of the company is reduced to 3.04 billion dollars, compared to 3.62 billion dollars compared to the corresponding quarter. In addition, the company’s cash flow was lower in the past quarter and stood at $361 million, compared to $386 million in the corresponding quarter last year.

Check Point also continued its tradition and bought back shares (buyback) in the same amount of 325 million dollars. As you know, the company does not distribute dividends to investors and for it, repurchasing the shares is equivalent to distributing dividends to its investors.

“The first quarter delivered excellent results with revenue and EPS at the upper end of our forecasts. We delivered strong double-digit growth in Infinity Platform contracts, which now account for over 13% of total revenue. Our recurring and cumulative revenue now represent 83% of total revenue,” said Gill Shvid, founder and CEO of the company.

“We introduced Quantum Force, a new line of security gateways that empowers organizations of all sizes with next-generation firewall technology. Additionally, we launched new technologies including Harmony SaaS that protects SaaS platforms and data, and Infinity AI Copilot, a security assistant powered by artificial intelligence which improves the effectiveness of security in organizations”.

Check Point is looking for a new CEO

We will recall that with the publication of the previous reports, the company’s founder and CEO Gil Shvid announced his retirement from the position of CEO, after more than 30 years in the position, and the procedure for choosing a new CEO.

Check Point stock is now trading at a price of $161 per share and a market value of approximately $18.2 billion, close to an all-time high for it. The company is currently the second largest Israeli company in the world, after Mobileye, which trades according to a value of about 25 billion dollars.

In the last year, Shvid enjoyed a total salary increase of approximately 17.9 million dollars, with most of it being capital compensation, similar to the entire last decade, since he decided to give up monthly salary, with the exception of minimum wage. However, this is a decrease in his salary compared to the year 2022 when he will enjoy a total salary cost of approximately 22.6 million dollars. In the last decade, Shvid enjoyed a total salary increase of more than 300 million dollars and he owns more than a quarter of Check Point’s shares, with a value of more than 4.6 billion dollars.

According to the company’s annual reports, it employs approximately 6,450, of which 2,672 are in Israel, with a 6% increase in the number of employees in Israel. Almost half of the employees are employed in the fields of marketing, sales and business development. Another 29% are employed in research and development and the rest are support and management employees and have options worth more than $250 million. Check Point stock jumped 20.5% in 2023 and since the beginning of the year it continues to rise more than 5%.

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