Edgar Filing: CHECK POINT SOFTWARE TECHNOLOGIES LTD

zk1517451.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of October 2015

Commission File Number 0-28584

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

(Translation of registrant's name into English)

5 Ha’solelim Street, Tel Aviv, Israel

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether the registrant by furnishing the information contained in this Form, is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No x

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________

INVESTOR CONTACT:	MEDIA CONTACT:
Kip E. Meintzer	Jason Stolarczyk
Check Point Software Technologies	Check Point Software Technologies
+1.650.628.2040	1.650.628.2127
ir@checkpoint.com	press@checkpoint.com

CHECK POINT SOFTWARE TECHNOLOGIES REPORTS 2015 THIRD QUARTER FINANCIAL RESULTS

SAN CARLOS, CA – October 26, 2015 — Check Point® Software Technologies Ltd. (NASDAQ: CHKP), the largest pure-play security vendor globally, today announced its financial results for the third quarter ended Sept. 30, 2015.

Total Revenue: $404 million, representing a 9 percent increase year-over-year

Non-GAAP Operating Income: $228 million, representing 56 percent of revenues

Non-GAAP EPS: $1.04, representing a 12 percent increase year-over-year

Deferred Revenues: $772 million, representing a 17 percent increase year-over-year

“We had very good financial results in the third quarter. Revenues were toward the high-end of our projections, while earnings exceeded projections. Our combined products and software blades revenue continued to post double-digit growth, driven primarily by data center appliances, mid-size appliances, and software blades.” said Gil Shwed, founder and chief executive officer, “Mobile devices are becoming the weakest link in cyber security, and we are committed to staying one step ahead and prevent these threats. This quarter we extended our technology to smartphones and tablets, while introducing new and innovative threat prevention solutions for cloud and network infrastructure.”

Financial Highlights for the Third Quarter of 2015:

·	Total Revenue: $404 million compared to $370 million in the third quarter of 2014.

·	GAAP Operating Income: $205 million compared to $197 million in the third quarter of 2014.

·	Non-GAAP Operating Income: $228 million compared to $215 million in the third quarter of 2014.

·	GAAP Net Income and Earnings per Diluted Share: GAAP net income was $168 million compared to $161 million in the third quarter of 2014. GAAP earnings per diluted share were $0.92 compared to $0.84 in the third quarter of 2014.

·	Non-GAAP Net Income: Non-GAAP net income was $188 million compared to $177 million in the third quarter of 2014.

·	Non-GAAP earnings per diluted share were $1.04 compared to $0.93 in the third quarter of 2014.

·	Deferred Revenues: As of Sept. 30, 2015, deferred revenues were $772 million compared to $660 million as of Sept. 30, 2014.

·	Cash Flow: Cash flow from operations increased by 13 percent to $228 million from $202 million in the third quarter of 2014.

·	Share Repurchase Program: During the third quarter of 2015, the company repurchased 3.1 million shares at a total cost of $250 million.

·	Cash Balances, Marketable Securities and Short Term Deposits: $3,612 million as of Sept. 30, 2015, compared to $3,656 million as of Sept. 30, 2014.

For information regarding the non-GAAP financial measures discussed in this release, as well as a reconciliation of such non-GAAP financial measures to the most directly comparable GAAP financial measures, please see “Use of Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Information.”

BUSINESS HIGHLIGHTS:

We launched the following new products and technologies:

Mobile Threat Prevention: To battle today’s mobile threat environment, Check Point announced Mobile Threat Prevention, a new mobile security solution for stopping mobile threats on iOS and Android. Check Point Mobile Threat Prevention provides the highest level of protection against malware targeted at smartphones and tablets.

SandBlast Zero-Day Protection: A new advanced threat prevention solution designed to provide a level of cyber protection unmatched in today’s market. By utilizing CPU-level threat detection to uncover threats at the pre-infection level, Check Point SandBlast elevates threat defense with evasion-resistant malware detection and comprehensive protection from even the most dangerous attacks, significantly reducing the risk of expensive breaches.

Cloud Security: Check Point vSEC was designed for private cloud environments and works with VMware NSX to extend comprehensive, best-in-class security. The integrated solution allows customers to accelerate security deployment in virtualized datacenter environments for east-west traffic. The solution is designed to prevent zero-day attacks, APTs and other security threats within the private cloud.

We received the following industry accolades:

NSS Breach Detection Systems Results: Check Point’s Next Generation Threat Prevention Solution received a “recommended” rating in the NSS Labs Breach Detection Systems (BDS) group test. Check Point received a 100 percent catch rate of HTTP, 100 percent catch rate for email and 100 percent catch rate for drive by malware. Check Point solutions also delivered the lowest reported price per protected Mbps of traffic according to the latest published report.

Leader in the Gartner 2015 Magic Quadrant for Unified Threat Management: Check Point is positioned as a Leader in the Gartner Magic Quadrant for Unified Threat Management for the fifth consecutive time.i

Leader in the Gartner 2015 Magic Quadrant for Mobile Data Protection: Celebrating its ninth consecutive year as a Leader in the Gartner 2015 Magic Quadrant for Mobile Data Protection, Check Point continues to secure the mobile space and recently announced Mobile Threat Prevention.ii

Number One in Worldwide Firewall Equipment Market Share: Check Point is the leader in worldwide market share in 2Q 2015 for Firewall Equipment, according to the Gartner Market Share: Enterprise Network Equipment by Market Segment, Worldwide reports.iii

Top Position in Worldwide Combined Firewall and UTM Appliance Market: Check Point continued to be the number one vendor in worldwide combined Firewall and UTM appliance revenue for 2Q 2015, according to the IDC Worldwide Quarterly Security Appliance Tracker.iv

We also expanded our partnership with VMware:

Charter Membership in the AirWatch Mobile Security Alliance: Together, Check Point and AirWatch will drive new ways for customers to protect the growing number of devices accessing corporate data and networks, delivering a comprehensive solution for stopping mobile threats before they start.

Our security research organization has also continued to expose vulnerabilities in today’s internet infrastructure, these included critical vulnerabilities in mobile equipment and applications including:

WhatsApp Web Vulnerabilities: Check Point security researchers recently discovered significant vulnerabilities that exploit the WhatsApp Web logic and allow attackers to trick victims into executing arbitrary code on their machines in a new and sophisticated way. These vulnerabilities put up to 200 million WhatsApp users at risk and it was quickly remediated by WhatsApp.

Discovered Certifi-gate Vulnerability in Android: At Black Hat, Check Point’s mobile security research team announced the discovery of "Certifi-gate," a vulnerability that allows applications to gain illegitimate privileged access rights, typically used by remote support applications that are either pre-installed or personally installed on the device. Attackers can exploit Certifi-gate to gain unrestricted device access, allowing them to steal personal data, track device locations, and turn on microphones to record conversations and more. We estimate that the Certfi-gate vulnerability exists in hundreds of millions of devices.

BrainTest related Mobile Malware: Check Point Mobile Threat Prevention multiple instances of a mobile malware variant infecting mobile devices. The malware, packaged within an Android game app called BrainTest, affected between 200,000 to million users. The Apps containing the malware were removed by Google subsequent to Check Point’s report.

“This quarter we experienced significant growth in the sales of our advanced threat prevention technologies, including the SandBlast solutions and Anti-bot. In addition, we launched our mobile threat prevention solution to address our customers growing mobile security needs. These new technologies demonstrate our commitment to stay one step ahead of cyber security threats,” Concluded Shwed.

Fourth Quarter 2015 Investor Conference Participation Schedule:

·	UBS Global Technology Conference

Nov. 17, 2015 – San Francisco, CA

·	Credit Suisse Annual Technology Conference

Dec. 2, 2015 – Scottsdale, AZ

·	Raymond James Supply Chain Conference*

Dec. 8, 2015– New York, NY

·	Barclays Global Technology Conference*

Dec. 9, 2015– San Francisco, CA

·	Cowen Cyber Security & Networking Summit*

Dec., 15, 2015– New York, NY

* Investor meetings only

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 web site. To view these presentations and access the most updated information please visit the company's web site at www.checkpoint.com/ir. The schedule is subject to change.

Conference Call and Webcast Information

Check Point will host a conference call with the investment community on Oct. 26, 2015 at 8:30 AM ET/5:30 AM PT. To listen to the live webcast, please visit the website at: www.checkpoint.com/ir. A replay of the conference call will be available through Nov. 1, 2015 on the company's website or by telephone at +1.201.612.7415, replay ID number 13622818.

About Check Point Software Technologies Ltd.

Check Point Software Technologies Ltd. (www.checkpoint.com), the largest pure-play security vendor globally, provides industry-leading solutions, and protects customers from cyberattacks with an unmatched catch rate of malware and other types of attacks. Check Point offers a complete security architecture defending enterprises’ networks to mobile devices, in addition to the most comprehensive and intuitive security management. Check Point protects over 100,000 organizations of all sizes. At Check Point, we secure the future.

Legal Notice Regarding Forward-Looking Statements

This press release contains 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. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this press release include, but are not limited to, statements related our introduction of new technologies and solutions and the functionality of such technologies and solutions. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include our ability to continue to develop platform capabilities and solutions; customer acceptance and purchase of our existing solutions and new solutions; the market for IT security continuing to develop; competition from other products and services; and general market, political, economic and business conditions. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 24, 2015. The forward-looking statements in this press release are based on information available to Check Point as of the date hereof, and Check Point disclaims any obligation to update any forward-looking statements, except as required by law.

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 and earnings per share, which are adjustments from results based on GAAP to exclude stock-based compensation charges, amortization of intangible assets and acquisition related expenses 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.

1G00263955. Adam Hils, Greg Young, Jeremy D'Hoinne. 22 April 2015.

2 Gartner, Inc., Market Share: Enterprise Network Equipment by Market Segment, Worldwide, 1Q15, Christian Canales, Petr Gorodetskiy, Naresh Singh, and Joe Skorupa, June 2015. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

i-ii Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

3 Source: IDC Worldwide Quarterly Security Appliance Tracker 1Q2015, June 4, 2015.

i Gartner, Magic Quadrant for Unified Threat Management, Jeremy D'Hoinne, Adam Hils, Greg Young, August 7, 2014, ID Number: G00261973 Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

ii Gartner, Magic Quadrant for Mobile Data Protection, John Girard, October 8, 2015.

iii Gartner, Inc., Market Share: Enterprise Network Equipment by Market Segment, Worldwide, 2Q15, Christian Canales, Petr Gorodetskiy, Naresh Singh, and Joe Skorupa, September 2015.

iv IDC Worldwide Quarterly Security Appliance Tracker 2Q2015, September 14, 2015.

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

CONSOLIDATED STATEMENT OF INCOME

(In thousands, except per share amounts)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenues:
Products and licenses	$	135,218	$	126,029	$	381,799	$	358,310
Software Blades subscriptions		79,622		67,164		230,598		192,664
Total revenues from products and software blades		214,840		193,193		612,397		550,974
Software updates and maintenance		189,016		177,177		559,369		524,200
Total revenues		403,856		370,370		1,171,766		1,075,174

Operating expenses:
Cost of products and licenses		24,400		24,076		69,333		66,489
Cost of software blades subscriptions		2,351		1,269		5,662		3,871
Total cost of products and software blades		26,751		25,345		74,995		70,360
Cost of Software updates and maintenance		20,107		19,324		58,080		54,078
Amortization of technology		546		60		1,262		180
Total cost of revenues		47,404		44,729		134,337		124,618

Research and development		37,495		32,605		109,249		99,022
Selling and marketing		90,463		74,741		258,605		223,176
General and administrative		23,860		20,914		68,848		56,558
Total operating expenses		199,222		172,989		571,039		503,374

Operating income		204,634		197,381		600,727		571,800
Financial income, net		8,285		7,313		24,905		21,760
Income before taxes on income		212,919		204,694		625,632		593,560
Taxes on income		45,176		43,647		134,370		119,772
Net income	$	167,743	$	161,047	$	491,262	$	473,788

Basic earnings per share	$	0.94	$	0.86	$	2.72	$	2.50
Number of shares used in computing basic earnings per share		177,519		187,293		180,335		189,736

Diluted earnings per share	$	0.92	$	0.84	$	2.66	$	2.45
Number of shares used in computing diluted earnings per share		181,804		190,984		184,846		193,360

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

RECONCILIATION OF GAAP TO NON GAAP FINANCIAL INFORMATION

(In thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
GAAP operating income	$	204,634		$	197,381		$	600,727		$	571,800
Stock-based compensation (1)		19,956			16,979			56,534			46,037
Amortization of intangible assets and acquisition related expenses (2)		3,309			518			7,912			1,588
Non-GAAP operating income	$	227,899		$	214,878		$	665,173		$	619,425

GAAP net income	$	167,743		$	161,047		$	491,262		$	473,788
Stock-based compensation (1)		19,956			16,979			56,534			46,037
Amortization of intangible assets and acquisition related expenses (2)		3,309			518			7,912			1,588
Taxes on the above items (3)		(2,556	)		(1,751	)		(5,504	)		(8,619	)
Non-GAAP net income	$	188,452		$	176,793		$	550,204		$	512,794

Diluted GAAP Earnings per share	$	0.92		$	0.84		$	2.66		$	2.45
Stock-based compensation (1)		0.11			0.09			0.31			0.24
Amortization of intangible assets and acquisition related expenses (2)		0.02			-			0.04			-
Taxes on the above items (3)		(0.01	)		-			(0.03	)		(0.04	)
Diluted Non-GAAP Earnings per share	$	1.04		$	0.93		$	2.98		$	2.65

Number of shares used in computing diluted Non-GAAP earnings per share		181,804			190,984			184,846			193,360

(1) Stock-based compensation:
Cost of products and licenses	$	17		$	14		$	47		$	52
Cost of software updates and maintenance		396			293			1,110			718
Research and development		3,295			2,241			8,536			6,995
Selling and marketing		4,193			3,526			12,112			9,728
General and administrative		12,055			10,905			34,729			28,544
		19,956			16,979			56,534			46,037

(2) Amortization of intangible assets and acquisition related expenses:
Amortization of technology-cost of revenues		546			60			1,262			180
Research and development		1,897			-			4,249			-
Selling and marketing		866			458			2,401			1,408
		3,309			518			7,912			1,588
(3) Taxes on the above items		(2,556	)		(1,751	)		(5,504	)		(8,619	)
Total, net	$	20,709		$	15,746		$	58,942		$	39,006

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(In thousands)

ASSETS

	September 30,		December 31,
	2015		2014
	(unaudited)		(audited)
Current assets:
Cash and cash equivalents	$	258,030	$	261,970
Marketable securities and short-term deposits		1,041,088		1,050,492
Trade receivables, net		219,054		366,700
Prepaid expenses and other current assets		75,236		68,673
Total current assets		1,593,408		1,747,835

Long-term assets:
Marketable securities		2,313,184		2,370,471
Property and equipment, net		44,366		41,549
Severance pay fund		5,323		5,491
Deferred tax asset, net		17,744		14,368
Goodwill and other intangible assets, net		839,011		741,960
Other assets		45,132		27,144
Total long-term assets		3,264,760		3,200,983

Total assets	$	4,858,168	$	4,948,818

LIABILITIES AND

SHAREHOLDERS’ EQUITY

Current liabilities:
Deferred revenues	$	614,128		$	651,281
Trade payables and other accrued liabilities		294,573			281,554
Total current liabilities		908,701			932,835

Long-term liabilities:
Long-term deferred revenues		158,343			132,732
Income tax accrual		265,570			235,705
Deferred tax liability, net		306			504
Accrued severance pay		9,369			9,483
		433,588			378,424

Total liabilities		1,342,289			1,311,259

Shareholders’ equity:
Share capital		774			774
Additional paid-in capital		935,878			859,124
Treasury shares at cost		(3,823,224	)		(3,126,685	)
Accumulated other comprehensive income (loss)		5,773			(1,070	)
Retained earnings		6,396,678			5,905,416
Total shareholders’ equity		3,515,879			3,637,559

Total liabilities and shareholders’ equity	$	4,858,168		$	4,948,818
Total cash and cash equivalents, marketable securities and short-term deposits	$	3,612,302		$	3,682,933

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

SELECTED CONSOLIDATED CASH FLOW DATA

(In thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Cash flow from operating activities:
Net income	$	167,743		$	161,047		$	491,262		$	473,788
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		2,658			2,244			7,541			6,683
Amortization of intangible assets		990			518			2,622			1,588
Stock-based compensation		19,956			16,979			56,534			46,037
Realized loss (gain) on marketable securities		176			(152	)		97			(306	)
Decrease in trade and other receivables, net		28,973			22,167			124,176			152,182
Increase (decrease) in deferred revenues, trade payables and other accrued liabilities		14,388			913			32,098			(128,587	)
Excess tax benefit from stock-based compensation		(3,772	)		(874	)		(6,073	)		(2,826	)
Deferred income taxes, net		(3,285	)		(381	)		(3,116	)		(6,068	)
Net cash provided by operating activities		227,827			202,461			705,141			542,491

Cash flow from investing activities:

Cash paid in conjunction with acquisitions, net of acquired cash		-			-			(96,544	)		-
Investment in property and equipment		(4,361	)		(3,584	)		(10,206	)		(8,115	)
Net cash used in investing activities		(4,361	)		(3,584	)		(106,750	)		(8,115	)

Cash flow from financing activities:
Proceeds from issuance of shares upon exercise of options		20,074			14,067			54,089			61,485
Purchase of treasury shares		(249,763	)		(192,401	)		(736,445	)		(573,271	)
Excess tax benefit from stock-based compensation		3,772			874			6,073			2,826
Net cash used in financing activities		(225,917	)		(177,460	)		(676,283	)		(508,960	)

Unrealized gain (loss) on marketable securities, net		4,150			(8,248	)		7,261			613

Increase (decrease) in cash and cash equivalents, marketable securities and short term deposits		1,699			13,169			(70,631	)		26,029

Cash and cash equivalents, marketable securities and short term deposits at the beginning of the period		3,610,603			3,642,784			3,682,933			3,629,924

Cash and cash equivalents, marketable securities and short term deposits at the end of the period	$	3,612,302		$	3,655,953		$	$3,612,302		$	3,655,953

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CHECK POINT SOFTWARE TECHNOLOGIES LTD.

	By:	/s/ Tal Payne
		Name: Tal Payne
		Title: Chief Financial Officer & Chief Operating Officer
Date: October 26, 2015