Earnings call transcript Q1 2023

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Kip Meintzer

[Call Starts Abruptly] during the formal presentation, all participants are in listen-only mode and this will be followed by a question-and-answer session.

During this presentation, Check Point's representatives may make certain forward-looking statements.

Within the -- forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934.

Forward-looking statements generally relate to future events or our future financial or operating performance.

Forward-looking statements include, but are not limited to, statements related to our expectations regarding our product solutions, expectations related to cyber security and other threats.

cause regarding events may subject those in and that beliefs actual materialize, to projected. and events uncertainties or or results the could expectations these materially not matters and risks to Our differ results from actual future are acceptance, market, solutions, develop These customer general the and economic IT continuing ability to market from conditions, a and our existing other including services, our include impact result continue developing for of risks capabilities and business of solutions competition products platform of political to solutions, purchase and new as pandemic. COVID-XX security the

presentation report These are Point more and Form hereof statement forward-looking on subject fully also forward-looking statements the XX-F. required to based those our the in to except uncertainties, to any annual information filings Check of with as Check update including this Commission, forward-looking on as in law. management Point statements date disclaims described Exchange Securities The obligation any risks are available by and and our including

our release, of our results on present we and website, of results been reasons a and has non-GAAP the for In our GAAP along information. such posted non-GAAP with which press reconciliation presentation

the after at questions any please have you contact Investor Relations call, If kip@checkpoint.com.

to review the Now of I'd like Roei a to turn our call Golan for over financial statements.

Roei Golan

call. and Thank everyone the you you, joining thank Kip, to for

the just share presentation. Yes. me Let

first for So of you I'm results present the quarter excited to with be XXXX. our to

X projections. above revenues reached Our which midpoint the this quarter our of million, million $XXX is

midpoint surpassed of and share our above per the projection $X.XX, were of projections. endpoint earnings Our our our $X.XX

X% delivered the and our in and earnings XX% reached to market delivered our the despite tough on macro and uncertainty projections environment, our $X.XX. growth projection based So growth we

dive to of let's quarter. the Now the review detailed

to X% mentioned, million. by I the revenue increased $XXX As

was to deferred Our up $X,XXX by X% million. revenues

X%. revenues Our by short-term too up deferred were

reached $XXX decline of million, Our calculated billings a X% year-over-year.

kind of payment by resulted deal, this saw which market to that quarter this in and billing uncertainty, willing is multiyear fewer terms, you billing in remind me for affected customers we shorter our duration, Let upfront pay duration.

our are year-over-year. If on it looking was we up calculated current X% actually billing,

product This deferral project that projects, was refresh deferral the sales year-over-year. and in uncertainty cycles of customers of Quantum market resulted by by in cautious Appliances around in more extended and mainly that revenues Our the and we the declined X% result of projects. projects spending refresh see

strong E-mail our $XXX a double-digit we're and If on new revenues we businesses quarter both Harmony the in growth, year-over-year This looking had both very business bookings. CloudGuard were XX% and million. both that security and by in driven was reached growth double-digit subscription, had a with growth strong

reached a and our we the -- see which of of Also, in growth of XXX% revenues revenues and out continue revenues. subscription with we year-over-year way our that plus quarter total the revenues, we recurring are maintenance XX% a key reached Actually, revenues recurring see are a milestone our great that to Infinity support of revenues revenue. and accelerated an over to of We revenues. continue in flow had to XX%

them based. the over And recurring out few a subscription of XX% And of last growth revenue, years. see our revenues subscription the of consistent XX% and our recurring are we

our A revenue from came XX% EMEA, revenues Pacific. while Asia revenues came at let's Now Americas, look the deals. revenues XX% from our by of of of came from our XX%

quarter. now the to highlights the dive P&L let's for And

increase we than by to XX% a million, that many which by Our see gross had is higher margin Those represents profit gross we was total vendors. margins of still impressive year. last increased XX%, are $XXX considering X% which pricing

XXXX. that last see this the to was supply in trend in improvement year and the chain of an continue hope see environment we remaining challenging very We

result a were this quarter. investments our infrastructures place CPX expenses operating took continuing as and that in-person of was mainly our activities, in XX%. event marketing Our increased including workforce, by cloud our This

a of margin That income operating reached strong margin So we $XXX very operating million. was quarter. of this XX% --

quarter this expect we that interest time. in million higher as we $XX in quarter. will the financial every over the few rates reached quarters million Our invest this in two increase income or by next one And last income

Our have due because assessments non-GAAP and XX%, worldwide. quarter tax was mainly tax indexation in provisions tax rates we several around for this of to update

$X.XX $X.XX, or year-over-year, and non-GAAP growth -- to which million, XX% Our growth increased net of XX% represents X% double income $XXX very -- digit year-over-year EPS results. strong

moving as or of our or I'm to GAAP share. of per the our $X.XX million and diluted income were Our position, $X.X of flow the quarter billion. end the was cash If cash so net $XXX balances cash quarter

Our at million $XXX quarter. operating strong was cash this flow

During for In total the past share. quarter, $X.X million shares. buyback we million program of the -- price we and purchased continued in of billion in acquired we $XXX X.X purchased our total average an at $XXX per shares months, XX

results. our summarize financial we if So

had we CloudGuard revenues growth a double-digit E-mail and by subscription our So driven Harmony products. in

XX% of sales -- -- finished resulted the Our is very more decline in a and in our cycle in XX% milestone product of that recurring revenues a macro resulted revenues the environment our revenues, XX% total profitability of growth we key strong than in EPS. of extended

to turn Gil. the call Now I'll over

Gil Shwed

you, good Thank financial side. update Kip. was Roei. very you, on a That Thank the

give like to I'd messages business more some that some see. the the trend side, the to and the to reiterate color we of technology On

to cyber But growing. little -- need keeps The the what the see. we are of highlights the attacks As some reiterate and bit number you of quarterly remains that keeps know, attacks high. a that, sophistication level of growing with about The doing. security just for we

results. So very first, proud the very, I'm of financial

effect cycles postponed. exceptional the in of saw business that, are a challenging shows our about still still being we were midpoint. that. EPS is Having loyal a healthy and sale customers XX% care that which are above the said revenues growth actually We and project Our renewal, business operating that our we had on economy extended very economy. the with we in

think Harmony in growth decline the security Roei I'm reached the I Infinity a growth And in product we revenues, with proud in XX% sales, XXX% the also with deals still revenues. now XX% E-mail, over subscription. new shared in CloudGuard very of again, all double-digit growth recurring And that and

important many many, all This we quarter technologies by is quarter. initiatives are that many every and driven delivering this and

you give things me we some for in quarter. the first Let highlights the launched

and First foremost Services. the is Infinity Global

dive market one Operation getting is and into Horizon SOC the every Center, Security Second I'll of each And them. new XDR/XPR. with into of

market And landscape pretty and Protection. every an and good for Again last the the all least we Native that Application quarter. not with one expansion in results Cloud security the presented and each them is addresses important cloud in the did of

So the new Infinity let Global me start Services. with

all security. more shortage we I think all wants that huge skill to know security. have a better the there's that customer in market for know security, We cyber

none included. in Our partners, security, have of lot but have of our them everything expertise cyber customers all a

And managed can a services. And security something. the want the the security training can on the miss assessment optimize always here that. deployment, it and in be and idea run the It in response get Global customers the best how be Services fast whatever augment will full things to get our partners. like can and be the environment. Infinity and can with it When security is incidents need, introducing they they to It our be certifications to and they needs operation and of stage full and in side, security to

We are them. to help here

coming So many, our customers we're proposition. services customer our a them services that have, that of we to taking needs new to and have based many the a set adding value with simple whole on

believe that security We are here I to is services this billion market. that. augment very market. is help important a a serving you to $XX market The

here, not giant accelerate We're and the to their help this our realization be security are technology. going in market going we participate to value player from a but customers

capabilities So to last we Infinity few show in introduced forward next we the our years. and Services and results look Global quarter expand

Next them meaning to $X is our is think you XDR/XPR This talked sources years. market from market I to information do value. important billion of get five additional and expected in $X sub here billion Horizon. grow approach for out about almost is the security new how family It's multiple I've And today. a market collect another

they about detection prevention about, and and events. endpoint. focused response products detection, extensive about is of to all What talking most endpoint Now XDR focused today, EDR called response XDR XPR security and we're actually types

different is we things here prevention quickly. approach because very automatic very turn Our very, into

checkpoint driven connect vendors. architecture. available we AI But third-party and the the the from also include First email, tools approach. from Microsoft, We again Prevention focused are include the we on many, include the include that in we infrastructure other many to today the we network, endpoint,

it, introduced prevention. that basis that into through to All we And the a the in last environment on few we know seeing immediately find think part and since of new how our months that we turn include. system system in customers are incidents we weekly already I

the you think from ESG, see quotes Dave Gruber from I ESG. integrated unique. here approach So is The of some here analyst

change the can We across security industry. broader drive

to Point I our rest that this think the to Check the value for gives from Technologies from customer, CISO, and very they start family access Center, us. tremendous have. the it's to Operations It very, the and of access that a they Security good it's derive

of the Protection not CNAPP CloudGuard family CloudGuard expansion or is the Application Platform. Last Native least with

but security, multi-billion the combining market dollar not look technologies a six different giant at into one, one market, And big a one. we are solution. a Here when cloud you for it's

but technologies. And it's around many different many, spread

in Some we the source years. protection, DevOps, of talking other more are stars the posture mainly development about security. than management, or about in do something Others are they for market, cycle, speaking five workload pipeline the this the

think context, when need all technologies many actionable And with work I sub they many, combining there's all elements these And to that, more getting prevention. together. security, simply to the smarter CNAPP, customer into are we that the of Check many get into that more get segments. is CloudGuard, family one too Point, And

all some cloud And things application the these again, time of are web network the like prevention the and security. protection turning

Some configuration that of and by putting the quick them operations. the turn front management right like changing very incident by configuration, things like in security of analysis, prevention information the into posture

good. is this So

the helped by some way, hope cloud last quarter. drive And revenues us of seen it we've increasing the that I

technologies. together. security think elements these a make we with with play we come It's of of of really need about. bunch not enough comprehensive, we and I All whole strategy what architecture And not up come collaborative. the We make that -- the do XC discussed lot to talked How to last different to enough security elements. into consolidated a it's the quarter, work

management at And I'm one work if putting the you together. XCs, also, the element elements of a no But other lot a of all look has of making different collaborative that I strategy, emphasis the the on security portal think Point, Check no unified with operation the and when one to management can an to single consolidate has architecture do truly automate security one into comprehensive get from that's management more and same console. architecture you one

experienced I reflected that quarter. this last think in is of some wins in And the we've the

we course, thousands deals every quarter. doing are of Of

hard an example, here our it's show that the one, the A we pick all to security CloudGuard, Infinity, the the for assessment. So that picked but Harmony, elements, different the examples leading few here. got is airline

We've of vendor delivered They approach our is using highest got the They many they vendors. XX security the different score. the with have skills this services despite the quick right And assessment that getting the to approach. a these consolidating have different don't decided in manage solutions a all platform vendors. to don't personnel using manage. weren't They

on glad I'm standardize to did we to It's We are that. see a Infinity. proud that new of fair very very very they a and customer and us process

solutions is cloud Another environment. seen complex most the accounts, the cloud in platforms, using we've that cloud media different of giant different companies, thousands of security cloud one one environments

them in and a liked found map level what almost went we have really they elevate that not went all about again, consolidate can many just that beginning road that does. how month is and showed security, live all new the cloud we the Point Check we very vision and the strong needs with elements, than to And in, of of consolidation, and it the so impossible projects of addressing drove the manage, we we less

both suffered E-mail, about actually incidents solution telco our e-mails are In that's Harmony embarrassing have we in talking two we something vendors that the won't fast-selling example to solutions giant and resulted that issues about used through multiple security from time solutions They fail that multiple next this to them fail show and their got address attack happen. now. this that is case, Last a a improve, defenses.

environment, the within showed usually, very of attack, by days We solution got our immediately more in, that that customers. a large to that block and started our we we provide we but email can them solution this midsized can the even business scale important, can kind with way,

tens a to real-world few that Harmony solution. that the And mailboxes And thousands XXX,XXX showed scale our won were achieve finally, E-mail, with customer able the to on that thousands. them and we with we over failed and to weeks, we contract protecting same here, within worked, production thing of

So we areas these that just have successes are demonstrating in of cyber of security. some the the different

So despite EPS, glad economic what we which the us to XX% slowdown, affected the very marketplace. to subscription summarize, in growth quarter, see and good exceptional. see the XX% growth, is in in growth Very double-digit we this the results had the which revenues,

family strategy. with with launches And our that we with prevention we're best of demonstrating think I with the Infinity of and part Services, the cloud XC are as values about the Global providing the securities smarter XDR/XPR new the the of Horizon talking the new strategy

that good So I a summarizes quarter. think pretty

get our projections. Before to like I I'd share question, to your

I'll for the projections unchanged. year. are with the These So start

including just that are We slide.

it's exact showed As quarter. same that slide a last reminder, we the

Revenues be between $X.XX last same challenges, Despite we expected for the slide in still are that we $X.XX. the billion. Non-GAAP the EPS, $X.XX can to expected be between are Non-GAAP same less. approximately EPS that year -- to that showed to be Ranges believe we Again, $X.XX despite range. we to thing. is billion quarter. economy, $X.XXX

between range And expected EPS haven't to to EPS million expected $X.XX, approximately landscape and quarter, the I'm the shared And be GAAP the revenues to healthy again, here, And $XXX non-GAAP before. this, to going within share which to between million. to $X.XX we is less. $X.XX EPS is are be same expected for pretty second $XXX be

be projections, to call is open So happy this your questions. Thank the and for the the the update for quarter, you. very for

Kip Meintzer

go Instructions] only come and everybody Eyal, by Thank Starting reminder, once one with BMO. As back right, through Gil. as can from ask first question our Shaul. be a Shaul and please followed today is question, a hopefully one you, we [Operator and to again. up question Bachman around Keith going All

Shaul Eyal

Gil, showing of actually guidance decline. attributed the a everybody. Infinity question on Good I How Good 'XX afternoon, that that to see, performance. very had product was keeping you're to a intact. fiscal much solid

Gil Shwed

and from are that come doesn't refresh when which that. showing of obviously mainly comprehensive It's Infinity, actually from performance decline very Product from our more are showed coming customers buying good architecture, -- more delayed. projects solutions being

fact trying That's And of our results the as of holding excellent. are I budget, change in you've our in why the since companies in November, other I'm results companies' seen achieved we first it big projects back refresh industry. it's business in mentioned, on and -- I results We've it industries I the very QX As PC tighten see results, since because the in decline you've again, other part shipments proud think up our well. seen a it in we've think seen the customers in that in quarter. the many are despite are that so to

we spending see business is again, have the very that But that sharing renewal have across recurring we we and The concern have without that do that I rates healthy. can't the the about the tightening marketplace. we

Kip Meintzer

right. All

Keith Next from by Patrick Scotiabank. Colville up will BMO of be Bachman followed

Keith Bachman

course calendar mean Gil. terms to billings ask number much. things driver a or gets of a And it, by net catalyst could And at that wanted of of you Hi, Keith if during commented question Thank break changes it what you 'XX? positive a better? Thanks I you do growth call the let's get to why improvement? from about do mid-single -- very comment, driver digits BMO. the duration Bachman What's into you. even the product was, year What's It's a acceptance billings I or being of negative X%. envision in B) higher? that that,

Gil Shwed

important. is little bit But cause the the elements technicalities growth. and think I so can about improve I several on. can most I are There of the can to let us Roei think terms billings maybe a much into business speak higher which and the trend, get that in more of

do, up to we plenty again, what it's of the can not But us. can we do. that's and economy, First, there's

have the and CloudGuard that I drive we new accelerated can growth. Horizon, Infinity First, from architecture everything think products full Harmony, the

our with is Second engagement customers.

market within There don't and the we much in installed installed is outside touch potential base that so base. our our

with with so love are CISOs story. many the our they meeting We Check don't Officers. Information Chief Point like They Security Point, they brand, Check and know full

that the of them. I much much do how and to They provide so believe more covering we can value more with market. And engaging don't know by more we customers can

we -- So have all do plenty actually business. I more that to elements, if I'm think I take these to drive

doing I we're that. think

it think until the will we time takes see results. I

think, either strong headwind again, can't unfortunately. also but we headwind a is I economy, now And tailwind or forget the right very as a

Kip Meintzer

All right.

by of is Tomer up Patrick Next Zilberman, Colville Liani Tal followed BofA.

Patrick Colville

Thank you so Kip. much,

at the of week talk the RSA last So conference, CNAPP town. was

So I going you. And this guess you you the the then or of one Point launch here? just kind bundling? of allow rebranding part combined guess of to Check is, was called base? the do this and technologies question product exciting I do morning, new cross-sell technologies, Thank into expect to six -- CloudGuard, CNAPP I existing CloudGuard, six land you a customers what's it my out those of question new solution. is to be is, to the announcement? launch of be really think Or kind second Is it's into new which CNAPP kind there see mostly alongside

Gil Shwed

new infrastructure capabilities new The that There's CloudGuard, management more and the security CNAPP. is entitlement the new new, drives a of technology thousands of different security I again, mean, are several see issues. are much any infrastructure, I focused security in think you you pipeline is cloud and source there that more posture new. lot AI into things management analyze when the results or and technology the

to And months fix here important and technology part we of the our take point that's think helping. technologies few The in new several I new the with is highlight that. and the protection, last the them launch workload had is In ones, them. CNAPP also

So but technology, clearly, important a think the package. but have last don't a it's we that I it's in one. lot not very newest least, And new

latest cloud between all shell, web market proven that the one protects be the best in vulnerabilities for provide protection shell, vulnerabilities This for web that or all latest these It's to has web to the connection technology log all of the existed application technology application. vulnerability place. with prevention, the

was them blocked different vendor Point recent Check a actually XX -- the the which solution a that only by think, this security one one with tested, of was Check the security Point. that application survey recent vulnerable all was they're of zero one, and except is -- attack in on There I that around -- marketplace say by day. these the web

basically we deal our can industry Point. it, mean except said I with Check

a of take them effective think value So a an no of brings all I I all I customer here to plenty of in it combining customers there's lot can to think that all and that, these environment the mean, combining and of because new lot offer there apply is multi-cloud technologies manner.

Patrick Colville

Gil. you, Kip. you, Thank Thank

Kip Meintzer

right. All

BTIG. Liani/Tomer Powell followed Next here. Zil. Tal by is Liani All from up right, is Tal Gray

Tal Liani

Hi, Guys.

Kip Meintzer

Sorry to brother, hear your about Tal.

Tal Liani

through on, we're they to past because had products. constraints. the not in companies the understand the all had seeing the and you companies what a data, -- moves orders -- I'm and take history all if some that didn't able some the unfortunately. elevated supply between ship Life you constraints And were I now -- orders of to of were kind with not question you had us that supply on but of can the trying you. correlation historical Thank provided

year, into were go all this for thought will or the product we of companies now revenues that are we as -- deliveries be there because a of quarter safe So we two supplies.

today, Or of So worse environment because it of the now backlog despite the backlog going the kind is out some orders? get the environment. seeing of we next few historical are the of orders, in orders we you're historical question quarters see because to declines as of is, reflection running a or of product

Gil Shwed

I I huge add, we it's I the believe of been Roei, again, had I don't mean not can, you to fulfill. terms that we business. we've that can had want know, had new in the all product I backlog the a by if believe quarters. one Last that that strongest ship of able we way, QX, driving quarters but we to

So one. the last compare this to QX is a quarter tough

fair. still But I is think the comparable

real see to a were think we we our that. ship pretty we Unlike I the change supply supply. business orders clear And quarter the seeing It's the second very that I that every It's be to are expected that. quarter. first have again any environment. quarter. in don't us on not that able the vendors, We overhang in much all product other customers to want

but We really which the previous shipment extended secure components revenues side, now price little with the that for paid costs that to not us hard on of so is appliances the actually bit really, side. we've in and helping the margin years or worked on manufacturing our on, for a

Tal Liani

you. Thank Sure.

Gil Shwed

Roei, on anything add want to that? you

Roei Golan

Yes, was in yes, mentioned, we on definitely affected in the and first it's of it numbers cost, didn't quarter. quarter. have on significant did. first time. didn't the have increased terms mainly delivered environment What mean, as cost delivering the the but that mainly you it's our right. in that seen the environment Gil of We we I the general, effect we Again, year in environment it's QX what we of in any effect issues had any, The last think we see now, mainly in time, we've the in see I

Tal Liani

Thanks. Okay.

Kip Meintzer

call For list be the to the has been been brought it's up. called that those of has that order the in new you you'll the predetermined call, call are --

Wolfe Gray Tilton Joshua Next Powell by up followed Research. is from from BTIG,

Gray Powell

slowdown uncertainty the question. Great. SBV, Thanks possible that temporary the more it versus are can sector back of in helpful. anything refresh And parse that billings things November? Thanks. and really to taking how like related April activity much you weakness say that to in saw in was in around just the nature we general would maybe then in trends right. Is in out All be for the QX banking dynamics

Gil Shwed

Do that want terms -- it saw it, we quantify. not we cannot terms not In certain specifically -- can in I start? broadly. refresh to terms it's I in of project that's you we mean me being industry. think of I quantifying something mean postponed in

I your it's So something dollars. again, something can you terms quantify second Gray? see for that what is And -- that, in -- as don't had, not in of we the second question that

Gray Powell

on Just or the say? in we closed in anything and April of that on terms recovery trends you April terms deals anything have that April of in slipped that just can

Gil Shwed

don't first, it's salespeople the First, pipeline, when I think we the say call, our marketplace to we are about saying. in we -- collect for about about where do ready for everything in information all projections, trends the we But this usually again the early about the getting quarter are. are too provide our

actually positive quarter. the generally second an are pipeline. salespeople have Our increased on They

they and I in are -- think a range positive us in I want bit more to I projection Roei what we if realistic. I be people honest, tend pessimistic, be but be Again, that are Salespeople little provide. our more and very, to our that's a that think usual of because think very are say don't cautious the I saw. we optimistic. salespeople realistic mean, the I say bit Finance think that tend to want to little And me trend. I I would than

Gray Powell

Thanks. candour the there. appreciate I Understood.

Kip Meintzer

All right.

up Deutsche is followed Next Bank. Brad from Tilton Joshua by Zelnick

Joshua Tilton

macro baked just year worse Hey, us to what I terms expectations full you year? want guidance in And Thanks could for for you environment impacts my today rest that in for of the then of taking you the in that guys. the XQ. just that macro Did remind actually clarify saw is get reiterated exactly the quickly. into question. XQ your

Gil Shwed

think little compare worse I what to I very was because from had became that QX the tough we've quarter. But trends internal a also exceptional we think bit in year So QX, situation -- an the in seen. last QX a

think the we of the think exceptional of decade. that a was that we don't I QX in internal I have in terms saw quarter metrics XXXX

is compare So the tough.

I the really mean, change. we in I think we for the the year year, optimistic preparing of we are did more when little for bit a the than the no year, the now. there's plan were for terms forecast full

deliver of so half still on we're is lot remember of in that. expectation a And range, think and in we have to that that. for I second but us there's the improvement put the range there involved, the upper risks to would hope the we But end still also in

Joshua Tilton

guys. Thanks,

Kip Meintzer

Josh. Thanks,

Next Ray Brad McDonough. Zelnick by up followed is

Brad Zelnick

Gil, space in appreciated for that generative much so of bad I've Thanks impact Any taking Great. have used be the might always thoughts question. it particular, vision AI the by the both you the on cybersecurity. within how on and and good Thanks. actors.

Gil Shwed

very are Absolutely. busy subject we that That's a with.

in few now for investing AI, in general, technology. change years. the generative AI, creating in really is last something months, I five think we've And like a that the that's I been in market in everything think it's

revolution it. if in to in believe I sure be but I'm going it's not real or not, change a technology

of biggest the revolution the be one I potential saw. that we think it to has

in of the middle kind are of change. in the We the

early So too to say.

effect that [indiscernible] December access malware. Now them it to being security can write big sophisticated effect. right, use repositories, to have the showed It I a hold from it a can generative without on where AI expert, the and shown effect you take code again, researchers cybersecurity. we which, a an already how We've all has And don't change. has of can comprehend think even in

talking when other you're points the attacks perfect entry the have at into we which most but number phishing common phishing fairly perfect are or of into look that into Harmony our look are E-mail, one about organization, If see you fishing you when attack, which them, English actually, e-mail e-mails, don't and attacks the plays you language.

generative can become it you that fishing AI, seconds to a very with convincing spot write And e-mail.

real You expert, to have you the e-mail the this by information, kind of AI. this you the written that code personal can AI how instruction get actually customer say, link collect all be information. code. with generative from don't a to generative can code, create And collect be Again, let's

to So pretty access about this is scary malicious things.

new Equally generative investing lot first, AI. on last on cloud there's plenty are can we we a on for based usage we've introduced AI that engines to many, years. many can And are year, be in AI. that I get clear, just are side, our tell, mean, And We of XX just from had, we I AI. threat

within threat big our By central brain is AI-based. did on which example, surprised AI Check the XX-something we our I'm for different this was Hackathon, cloud, based kind level participating of AI in revolution, the quarter, pretty the threat this just a what let what AI, and Point, with I engines, for generative in positively can But is we with Hackathons very do. now, system XX see first of of they do years. them innovation. and are the here teams of for

Seeing the were using doesn't use something now. presented first right okay, it good I time the like, project. said, quality, innovation, maybe the belong Like XX all we them we It's can why said, they aren't here, almost not that finalist like it's technology. not the now? all And I XX XX at

will out more can of we internal, eight seven actually of products, and I Some things we were but think most into the incorporate were or our XX incorporate them.

potential well. So the to as market our has generative AI change

Brad Zelnick

Gil. Thanks,

Kip Meintzer

right. All

Goldman Next is Ray Sachs. Gambrell Max followed by from up

Raymond McDonough

how point? level would deal of discounting of increase characterize have you you as more taking you, is you're concessions pricing along impact that in seeing activity environment. how it this for Would do recent months? costs financing think this apparent in become industry-wide? for about much has And And an the customers having characterize material? maybe it to in that, with And you the Thanks on bear, the question. Gil, Great. how at

Gil Shwed

don't I materially. think changed it

We quarter. environment, in are something the know, high increase -- a this Roei? a discounts. tough, in see was I it operating are in have tough big, but last did consistent. not environment competitive think relatively customers sometimes but get I an don't and we we on in I Roei, didn't

Roei Golan

consistently raised discount higher Relatively we quarter. bit a prices this because our also

what with discounts, bit we've we the seen in had higher end, So quarters. consistent in last pretty the few a but

Gil Shwed

we've the thing means they And with again, encouraged technology. I which think using I'm Customers this quarter. past healthy a) are renewal that the renewing, in is the are very seen that business X

they sign. Second, very, like -- good it. they that's And very a are actually

not the other other the is business That for cyber renewal expansion, was source under this always business especially colleagues, necessarily but I'm also them in a And hearing suddenly, vendors. industry, and for pressure. SaaS from industries. growth

that I'm we was that, a ask but drive more seen, were I've want discounts. far, fewer even people healthy lower people for consistent type deals tough can't in that spotted. it's even it Actually, some for the samples seeing So this the I year seen, again, say relatively discounts, haven't in discounts

Raymond McDonough

Thank it. you. Got

Kip Meintzer

right. All

of by followed Saket Next Kalia Barclays. up, Max,

Unidentified Analyst

do grow substantially especially question. this Yeah, you changes force of year? your taking for my to you the productivity organization towards And playing given thanks still XXXX? double-digits I year wanted end out that that to year. hired made on sales are plan in to headcount in of the sales you your ask XXXX, by last the some How go-to-market

Gil Shwed

I Sales similar. and for our salespeople productivity remains remains target remains, healthy the mean,

to productive the far with not more the engage we fact want more do customers. force We given grow year, digest and this sales we significantly given force the people hire our economy make can which believe we productive, to that to are and and want sales I planning the that be

more. We can do

we So I more with think can we the people that that do have.

watch freedom have we people the On to we it because everything, and time, not makes flexibility sense. because we overspending same add the are because are see I we we think cautious I think whenever the

it's add see if to opportunities them people, if I that from certain that, people even add our add certain places add can. hearing be countries, segments, have force you're we you value, same So message hears to you I'll the in me because from you'll sales happy certain if certain mean that

Kip Meintzer

All right.

Ho. Saket up is by Kalia, followed Next Jonathan

Saket Kalia

but impact Great. how you that thanks rest on within you a having is just we maybe billings, be industry. on was would good you even to talk thinking changes helpful. thoughts could that you're everyone. ITP of and the about guide know for this of on Any the if year ITP, Roei, through Okay. a higher obviously, year balance billings. can touch you. about sort I wondering mix of duration the morning, I Hey, of little And just have billings as you qualitatively, for billings sort bit don't the could

Roei Golan

Yes. Thanks Saket. question, for the

upfront. again, being in digital think, billed Infinity not payment front. I general, So specific the not of have a Infinity, annual up it's most them, paid we Most of terms. payment Usually, terms,

usually deals So duration one year. Infinity are the more not the billing than of for

again, very -- that see that's Infinity So environment. strong something we

it fluctuate it all very Infinity terms we deal. We see and see of implementation in But terms it's payment specifically on for regions. in billing, of can again, the strong because platform, our based each growing

In seen the have general, customers intend that again, see deals. multiyear quarters that in terms we less market higher Again, we billing this environment we've to this kind interest that for of in upfront last so repay behaviour rates. two as of in

that we see and I -- we -- can something it's So we can understand.

pillars, billings, healthy healthy, renewals, see all annual But of and business. the E-mail in again, Harmony the healthy terms growth the cloud LTE billing still mentioned, billing, mainly as business around of Gil

the in So me quarter, will we how that's it to it end, just how billing to finished XXXX again, of it. the affect for because impact but we it first tough terms say in how the building see annual will

Saket Kalia

Very helpful. Thanks, guys.

Kip Meintzer

is by Jonathan Jr. followed Blair Ho Truist. up from Next William Joel P. Fishbein, from

Jonathan Ho

confidence and giving sort and to -- on of take not the opportunity Fantastic. Can take that you. talked quarter, of the a conservative delays to about perhaps impact to view you that the quantify What's the the you there's deal here? from guidance, us the way support you that? Thank relative why maybe more maybe like to some a if help postponements understand

Gil Shwed

that. new the you impact in think again, we that especially, some were that -- seen I revenues, about business. in of very what straightforward business the that's product refresh That's see changes new think call of have it's the and we in deals, I we the First, the the impact we've

projection year. in the guidance basing we that future. the better we support lower forecast on the to on. sales they right About don't definitely show don't, forecast, projection can based and now, don't our still again, so so numbers our I just want to for are And I the based really seem pipeline on our

think have be I we here. to responsible very

There's a arrangement good as risk upper potential the the I a hand. is said, So on be that we There that that will we is have wide. want.

We have to take it into consideration.

realistic not range I that let's put to provide. hit way. want unless I'm don't are the sure to kind I'm it think we that very that about it, I going And lower we range of

three very point. get growth. or two that including high the and has all last It's will mean, mind take half to a that don't -- to to will quarter to I up that but no last over predict I something mean, guys, three second will last [indiscernible] we in two modest in hard -- half whether way, really to and we the years, nobody two years, if my this what the pretty could quarters happen And I by to were go want quarter last experience, there it at think, a clue. downs dramatic take my at the mean have I a back the in that's to know. I or think take I quarter and don't have predicted whether just growth stabilize, or look the been I

Jonathan Ho

you. Thank

Kip Meintzer

All right.

is Moskowitz. P. by Our followed caller Joel next Gregg Fishbein

Joel Fishbein

billion for just balance the And on my sheet. question. cash in curious Thanks taking Gil you have $X.X

love been your any to more side? lot lot ask the looks your input you, a that? get buying M&A. the cash. What for You change like you. back of of in on doing from stock. been potential for wanted environment would appetite If know, M&A generate Thank I I to a I there's you've

Gil Shwed

to we M&A. So have first, absolutely, more doing appetite

additional deals. looking at are We

will about realistic understand a I of because someone because the that part, that of cautiously more it's economy happen. in become need supply market is, think money seeing I market -- which company's rule, the little more to consolidation bit part see just from kind partner to like companies I that happen again, with unlimited in valuation they optimistic to the of that think we're change I'm the bound profitability,

what's so the too. that's in happen hard still point, I happening. At cybersecurity to this think see like fragmented consolidation industry I think, it's will

give Some the of of few -- without companies, not I'll are companies, the you down, not profitable. the but still some a went examples, valuation specific

that, opportunities. hard companies to I we'll I hope are right more -- We and I I feel that in it's justify as midsized that So into mean companies from cautiously but optimistic. and opportunities to all say, segments find small see mean I -- that. we market the looking

Joel Fishbein

you. Thank

Kip Meintzer

Joel. Thanks,

followed is by Moskowitz up Seyrafi. Gregg Next Shebly

Gregg Moskowitz

Yeah. taking you Thank the questions. for

also there degree? lowest I macro on attribute So call, the product you Point that we've to a execution Gil, this since we've would just macro? were to that weakness the is entirely mid-XXXX, ask, wanted lot Check but may spoken growth some about Thanks. Or areas from the revenue since have this to contributed any seen

Gil Shwed

to want want sound I be to here. -- don't I arrogant

of the have Point, much But the I economy. sales completely is potential in result our think with so much can better force. do Check now see and what we we so we

every I at I I I'm think Again think do think our productivity. so that can into. they that much sales I mean better, XXX% that on parameter can don't force is better are more. doing looking performing is we

force much force, improving. from sales I sales productivity but is think our we get can our more

and year, last hire last months, level actually the XXXX. good a the of new in did people lot on. In second we attrition people the some the We of in of went so down half hired six drastically

in remember, aggressive into I when you for came force. the targets I think if sales hiring went we with XXXX, pretty

Some of the only hired of to the them in that year, second the year. the first half got in hiring half some

clearly source force not is our is I the the source But the the sales think of challenge I of still the mean economy. challenge,

Gregg Moskowitz

Thanks, Gil.

Kip Meintzer

Gregg. Thanks,

followed Seyrafi Shebly Dan Ives is up from by Wedbush. Next

Shebly Seyrafi

the vertical and vertical Any the especially vertical? you. callouts, in technology services Thank financial

Gil Shwed

wins in No, financial is I maybe in that? again, some financial sector. want we've are which I must terms think very with largest of marketplace anything the the seen say. the Roei, We the is trends And sector, sector you big sector. to what marketplace trends think pretty the our Same add I to in universal, that's in sectors. the had challenges financial are the universal. in had some technology We the

Roei Golan

I other broadly vertical everything, industry we've some not or something finance vector it specific mean or industry. or -- industries. I in other in mean, didn't Not see in seen we specifically, enabled. or

Shebly Seyrafi

you. Thank Okay.

Kip Meintzer

right. other some is or like It on looks All Dan CNBC Ives place.

followed Irvin move Liu, we're Turits. So Michael to with by going forward

Irvin Liu

question. another Hi. Thanks for Perhaps the on one macro.

project accelerated customers wanted of some of our of budgets the result sales if moderating a the broadly just there of spending specific refreshes process to spend targeting I So thought years delaying cycles, behind or longer IT few are better there? cybersecurity these spending lower-than-expected a some following understand was of

Gil Shwed

From definitely, cyber. great what they see everybody you all When still is about very everybody, CFOs, I for can say for a I'm It's When industry there from nothing the is CEOs, the CISOs, source you that cyber say still is to saying that. the general I speak investment. people, in needed. and see attack the landscape, trend and much reasons

that should cybersecurity down. So spending thinking is nobody go

much IT, in the So I situation the than worse that what is industry trend other the I have see in in segments friends believe areas of cyber. is I actually general from that in other

Irvin Liu

the Great. Thanks for color.

Kip Meintzer

right. All

Our is next the who will by caller for Michael followed day. call be last Ittai Turits our Kidron,

Michael Turits

Kip. Roei and Gil Hey, and

which said, think, not you just growth, to the Gil, wanted significant sales to I back come growth. Just force

I this year. said for think you'd

I had growth think said double-digit previously. you

of and about? the to a on there engagement Are things you back pulling you're achieve mean talking so, if in is what some to your expectations? a you're And go-to-market greater change get that that sales of perspective from So there? trying terms does

Gil Shwed

sales shy see think want customer being we off. productivity will we said, to last we invested in people area believe that. that, it's see to a more We as want the can see be or coverage not we that see we've If pays to I lot force to year. We increase when that digestible. that an do hire I it

that. do to resources the have We

sales our much think be engagement I can higher.

meeting CISOs. are not think I enough we

the our think I we're -- can levels convey organization. in at not we better higher story

in good see We every we ways. think multiple customers our engage of that can day. examples I

When and I XX Point. consider today. we that you you you an amazing that architecture. I didn't know with have know working should years. such with I didn't say, well, meeting I Check you are been know customers for I've projects. have platform this for other

even good we we do have much I so that today, and people have can more think with people. So we the

Kip Meintzer

you, Thank right. All Michael.

Next up, Ittai.

Ittai Kidron

time, the guess for the Gil. you about. productivity thanks and a just talked I that question had I about Thanks

tried quite productivity. some improve for You've time to

not you to get productivity. are is So the Why to you're the it What that things process fix it internally doing you're what working that are that do What things are not think the so that trying is is hard? working. not right.

Gil Shwed

we we to improving, management all see and ranks doing. have sales the in are glad I'm we and of First, and that. doing, the a again, And in are the different are in new lot tracks force people we that

sales that's how over that I our to best technology, a force main provide serve is been pool it's the distributed best how is being being structured. been grew to customers. structured. organization the the thing a an very how not that's think the That's -- It's very years mode, in environment

organization going and doesn't And for us who instill for that customers, is environment the that I think the to more distributed don't for people or more in people the getting customers for know being aggressive, us, challenging. fighting think that to going we not -- more to creating more outbound, change just people the discipline can know X,XXX in discipline that the creating have -- I far

improved. how know customers, be good cases, very have to the changed that thing to keep But the the our it and know By we with of keep the good sales but some some be customers in can the that can may way, be in technology. force that loyal, happy customers to people work

Ittai Kidron

you. Thank

Kip Meintzer

Thank guys, seeing Thank you, the the look best going conclude to and today. That's call. for We'll guys. Bye-bye. joining our guys all you to quarter us throughout forward to everybody. you,

Gil Shwed

Bye-bye. Thank you very you. much. Thank

Check Point Software Technologies (CHKP) 1 May 232023 Q1 Earnings call transcript