Check Point Software Earns $1.61 per Share

This morning, Check Point Software (CHKP) reported Q2 earnings of $1.61 per share. That beat the Street by five cents per share. Quarterly revenues increased 4% to $526 million. That beat Wall Street’s forecast of $523.77 million.

Previously, CEO Gil Shwed said he expected Q2 revenues to range between $510 million and $535 million. For earnings, Check Point has been expecting $1.50 to $1.60 per share. So Check Point exceeded its own earnings guidance.

“We had a good second quarter. Strong execution drove double-digit growth across CloudGuard and Harmony, and triple-digit growth in Infinity platform sales. Overall we grew our security subscription revenues by 12 percent,” said Gil Shwed, Founder and CEO of Check Point Software Technologies. “We’ve seen a 93 percent increase in ransomware attacks, as Gen V attacks are now the new norm. We believe organizations can stop the next cyber pandemic by adopting a prevention-first approach to security across the network, cloud and remote users.”

Here are some details from the earnings report:

Non-GAAP Operating Income: $257 million compared to $253 million in the second quarter of 2020, representing 49 percent and 50 percent of revenues in the second quarter of 2021 and 2020, respectively.

Non-GAAP Net Income: $217 million compared to $225 million in the second quarter of 2020.

Non-GAAP Earnings per Diluted share: $1.61 compared to $1.58 in the second quarter of 2020, a 2 percent increase year over year.

Deferred Revenues: As of June 30, 2021, deferred revenues were $1,472 million compared to $1,338 million as of June 30, 2020, a 10 percent increase year over year.

Cash Balances, Marketable Securities and Short Term Deposits: $4,002 million as of June 30, 2021, compared to $3,959 million as of June 30, 2020.
Cash Flow: Cash flow from operations of $264 million compared to $252 million in the second quarter of 2020, a 4 percent increase year over year.

Share Repurchase Program: During the second quarter of 2021, the company repurchased approximately 2.7 million shares at a total cost of approximately $325 million.

On the earnings call, the company said that subscription revenues rose by 12%.

Also on the earnings call, Shwed said he sees Q3 earnings ranging between $1.54 and $1.64 per share on revenue of $515 million to $540 million. Wall Street had been expecting $1.58 per share on revenue of $527.98 million.

CHKP didn’t alter its previous full-year earnings range of $6.45 to $6.85 per share. That’s a little surprising to me. Given the first two quarters and Q3 guidance, I think they could have narrowed guidance, or raised the low end.

Posted by on July 26th, 2021 at 9:40 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.