Fourth Quarter 2010:
• Total Revenue: $318.5 million, representing a 17 percent increase year over year;
• Non-GAAP Operating Income: $183.6 million, representing 58 percent of revenues;
• Non-GAAP EPS: $0.73, representing a 20 percent increase year over year.
Fiscal Year 2010:
• Total Revenue: $1,097.9 million, representing a 19 percent increase year over year;
• Non-GAAP Operating Income: $622.7 million, representing 57 percent of revenues;
• Non-GAAP EPS: $2.48, representing a 21 percent increase year over year;
• Cash Flow from Operations: $674.1 million, representing a 23 percent increase year over year.
“I am very pleased with the all-time record results we achieved during the year. We exceeded our own expectations delivering close to $1.1 billion in revenues and $2.48 in earnings per share (Non-GAAP), " said Gil Shwed, founder, chairman, and chief executive officer of Check Point Software Technologies. "Our exceptional performance was driven by demand for our network security products, which is a market in which we continued to gain share. We also extended our market reach with our Intrusion Prevention System (IPS), Data Loss Prevention (DLP) and Mobile Access Software Blades™.”
Financial Highlights for the Fourth Quarter ended December 31, 2010:
• Total Revenue: $318.5 million, an increase of 17 percent, compared to $272.1 million in the fourth quarter of 2009.
• GAAP Operating Income: $162.0 million, an increase of 24 percent, compared to $130.6 million in the fourth quarter of 2009. GAAP operating margin was 51 percent, compared to 48 percent in the fourth quarter of 2009.
• Non-GAAP Operating Income: $183.6 million, an increase of 20 percent, compared to $152.7 million in the fourth quarter of 2009. Non-GAAP operating margin was 58 percent, compared to 56 percent in the fourth quarter of 2009.
• GAAP Net Income and Earnings per Diluted Share: GAAP net income was $137.4 million, an increase of 25 percent, compared to $109.5 million in the fourth quarter of 2009. GAAP earnings per diluted share were $0.64, an increase of 25 percent, compared to $0.51 in the fourth quarter of 2009.
• Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $156.2 million, an increase of 21 percent, compared to $129.5 million in the fourth quarter of 2009. Non-GAAP earnings per diluted share were $0.73, an increase of 20 percent, compared to $0.61 in the fourth quarter of 2009.
• Deferred Revenues: As of December 31, 2010, we had deferred revenues of $464.6 million, an increase of 9 percent, compared to $425.3 million as of December 31, 2009.
• Cash Flow: Cash flow from operations was $162.8 million, an increase of 18 percent, compared to $138.1 million in the fourth quarter of 2009.
• Share Repurchase Program: During the fourth quarter of 2010, we repurchased 1.16 million shares at a total cost of $50 million.
• Cash Balances and Marketable Securities: $2,414.9 million as of December 31, 2010, an increase of $567.9 million, compared to $1,847.0 million as of December 31, 2009.
Financial Highlights for the Year ended December 31, 2010:
• Total Revenue: $1,097.9 million, an increase of 19 percent, compared to $924.4 million in 2009.
• GAAP Operating Income: $535.0 million, an increase of 29 percent, compared to $415.0 million in 2009. GAAP operating margin was 49 percent, compared to 45 percent in 2009.
• Non-GAAP Operating Income: $622.7 million, an increase of 23 percent, compared to $505.7 million in 2009. Non-GAAP operating margin was 57 percent, compared to 55 percent in 2009.
• GAAP Net Income and Earnings per Diluted Share: GAAP net income was $452.8 million, an increase of 27 percent, compared to $357.5 million in 2009. GAAP earnings per diluted share were $2.13, an increase of 26 percent, compared to $1.68 in 2009.
• Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $528.0 million, an increase of 21 percent, compared to $435.3 million in 2009. Non-GAAP earnings per diluted share were $2.48, an increase of 21 percent, compared to $2.05 in 2009.
• Cash Flow: Cash flow from operations was $674.1 million, an increase of 23 percent, compared to $548.7 million in 2009.
For information regarding the non-GAAP financial measures discussed in this release, please see “Use of Non-GAAP Financial Information” and “Reconciliation of Non-GAAP to GAAP Financial Information.”
During 2010 Check Point entered, or expanded its presence in the most critical areas of security:
• Data Security – Set a new standard for data security with the introduction of Data Loss Prevention (DLP), making DLP product simple and accessible to a broad range of customers and further augments our data security product portfolio that include disk encryption, media control and the recent acquisition of document security technology.
• Mobile Security – Expanded our secure mobile offering with the introduction of the Mobile Access Software Blade providing secure, one-click access to corporate data from the iPhone and iPad.
• Network Security – Expanded the core network security firewall functionality with the introduction of Application Control technology, classifying and controlling over 100,000 Web 2.0 widgets and over 4,500 distinct applications. In addition, attained leadership in the Intrusion Prevention (IPS) market by providing an integrated IPS blade that can extend every security gateway to become an IPS device. For the first time in the industry, Check Point has proven that customers can get an integrated IPS that attains the highest standards in security as demonstrated by the latest NSS Labs test report.
• Endpoint – Shipped a unified endpoint security system with an integrated client and management that provide the industry’s most comprehensive set of endpoint security technologies (Antivirus / malware protection, remote access VPN, WebCheck, and data security with full disk encryption and removable media controls).
Check Point security leadership was recognized during 2010 in many countries and publications, including a Leader’s Position in three Gartner Magic Quadrants – Enterprise Firewall, Mobile Data Protection and Unified Threat Management.
In addition, Check Point’s founder and CEO, Gil Shwed, was named by Ernst and Young the 2010 “Entrepreneur of the Year” in Israel – highlighting Shwed’s personal contribution to Check Point’s growth and role in pioneering the global security market.
Shwed concluded, “2010’s excellent results underscore Check Point’s commitment to our customers - providing the best security platform for their environment. I would also like to recognize and thank our employees, partners and customers for their contribution to the results.”
First Quarter Investor Conference Participation Schedule:
• Stifel Nicolaus Technology, Communications & Internet Conference 2011
February 11, 2011 – San Francisco, CA
• Morgan Stanley Technology, Media and Telecommunications Conference
February 28, 2011 – San Francisco, CA
• Raymond James 31st Annual Investor Conference
March 7, 2011 – Orlando, FL
• UBS Technology Conference
March 10, 2011 – London, UK
Members of Check Point's management team will present at these conferences and discuss the latest company strategies and initiatives. Check Point’s conference presentations are expected to be available via webcast on the company's website. To view these presentations and access the most updated information please visit the company's website. The schedule is subject to change.
Conference Call and Webcast Information
Check Point will host a conference call with the investment community on January 31, 2011 at 8:30 AM ET/5:30 AM PT. To listen to the live webcast, please visit Check Point’s website at: checkpoint.com/ir. A replay of the conference call will be available through February 7, 2011 at the company's website or by telephone at +1.201.612.7415, replay ID number 365088.
About Check Point Software Technologies Ltd
Check Point Software Technologies Ltd. (checkpoint.com), the worldwide leader in securing the Internet, is the only vendor to deliver Total Security for networks, data and endpoints, unified under a single management framework. Check Point provides customers with uncompromised protection against all types of threats, reduces security complexity and lowers total cost of ownership. Check Point first pioneered the industry with FireWall-1 and its patented stateful inspection technology. Today, Check Point continues to innovate with the development of the Software Blade Architecture™. The dynamic Software Blade Architecture delivers secure, flexible and simple solutions that can be fully customized to meet the exact security needs of any organization or environment. Check Point customers include tens of thousands of businesses and organizations of all sizes including all Fortune 100 companies. Check Point's award-winning ZoneAlarm solutions protect millions of consumers from hackers, spyware and identity theft.
©2011 Check Point Software Technologies Ltd. All rights reserved
*Magic Quadrant Disclaimer
The Magic Quadrant is copyrighted 2010 by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the "Leaders" quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Check Point uses non-GAAP measures of net income, operating income, operating margin and earnings per share, which are adjustments from results based on GAAP to exclude non-cash equity-based compensation charges, amortization of acquired intangible assets, restructuring-related charges, other than temporary impairment of marketable securities, net, and the related tax affects. Check Point’s management believes the non-GAAP financial information provided in this release is useful to investors’ understanding and assessment of Check Point’s ongoing core operations and prospects for the future. Historically, Check Point has also publicly presented these supplemental non-GAAP financial measures in order to assist the investment community to see the Company “through the eyes of management, ” and thereby enhance understanding of its operating performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in this press release. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such has determined that it is important to provide this information to investors.
Safe Harbor Regarding Forward Looking Statements
This press release and the conference call related to our earnings for the fourth quarter and fiscal year ended December 31, 2010 contain or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to, statements related to our plans to further increase the breadth of our security solutions portfolio, and to continue delivering products based on our unified security architecture; our expectations regarding our products and services; our expectation that we will continue to innovate and deliver products to address our customers’ security requirements – at every size of organization worldwide; and our expectations regarding our share repurchase program. Because these statements pertain to future events they are subject to various risks and uncertainties, actual results could differ materially from Check Point's current expectations and beliefs. Factors that could cause or contribute to such differences include, but are not limited to: Check Point’s development and delivery of its security products; general market conditions in the Check Point’s industry; economic and political uncertainties; the impact of political changes and weaknesses in various regions of the world, including hostilities or acts of terrorism in Israel where Check Point’s international headquarters are based; inclusion of network security functionality in third-party hardware or system software; any foreseen and unforeseen developmental or technological difficulties with regard to Check Point's products; changes in the competitive landscape, including new competitors or the impact of competitive pricing and products; rapid technological advances and changes in customer requirements to which Check Point is unable to respond expeditiously, if at all; a shift in demand for products, such as Check Point's; factors affecting third parties with which Check Point has formed business alliances; the timely availability and customer acceptance of Check Point's new and existing products; the timing and amount of our share repurchases, if any; and the economic environment in which Check Point operates. The forward-looking statements contained in this press release are subject to other factors and risks, including those discussed in Check Point's Annual Report on Form 20-F for the year ending December 31, 2009, which is on file with the Securities and Exchange Commission. Check Point assumes no obligation to update these forward-looking statements.