Enhanced Investments - Financial Portal

Published: 2023-02-13 06:55:14 ET

<<< go to CHKP company page

6-K 1 zk2329189.htm 6-K

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 February, 2023

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 ☒ Form 40-F ☐

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 ☐ No ☒

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

Investors: Kip E. Meintzer
Check Point Software Technologies, Ltd.
+1.650.628.2040
ir@checkpoint.com

Media: Gil Messing

Check Point Software Technologies, Ltd.

+1.650.628.2260

press@checkpoint.com

Check Point Software Reports Fourth Quarter and 2022 Full Year Results

SAN CARLOS, CA – February 13, 2023 — Check Point® Software Technologies Ltd. (NASDAQ: CHKP), today announced its financial results for the fourth quarter and full year ended December 31, 2022.

Fourth Quarter 2022

• Total Revenues: $638 million, a 7 percent increase year over year

• Security Subscription Revenues: $231 million, a 13 percent increase year over year

• Deferred Revenues: $1,878 million, a 10 percent increase year over year

• GAAP Operating Income: $254 million, representing 40 percent of revenues

• Non-GAAP Operating Income: $289 million, representing 45 percent of revenues

• GAAP EPS: $2.20, an 11 percent increase year over year

• Non-GAAP EPS: $2.45, a 9 percent increase year over year

Full Year 2022

• Total Revenues: $2,330 million, an 8 percent increase year over year

• Security Subscription Revenues: $858 million, a 14 percent increase year over year

• GAAP EPS: $6.31, a 4 percent increase year over year

• Non-GAAP EPS: $7.40, a 5 percent increase year over year

“We delivered solid fourth quarter and 2022 full year financial results despite a volatile year-end macro-environment. Revenue and non-GAAP earnings per share came in at the top end of our projections,” said Gil Shwed, Founder & CEO of Check Point Software Technologies. “We continued building the future of cyber security with the prevention-first Infinity architecture and realized triple-digit growth in Infinity revenues. Building on this success we are driving security innovation with a focus on the 3Cs of the Best Security – a Comprehensive set of technologies that address the key attack vectors; a Consolidated set of solutions with a unified management portal, with Collaborative security technologies - to prevent the next cyber-attack.”

Financial Highlights for the Fourth Quarter of 2022

•

Total Revenues: $638 million compared to $599 million in the fourth quarter of 2021, a 7 percent increase year over year.

•

GAAP Operating Income: $254 million compared to $246 million in the fourth quarter of 2021.

•

Non-GAAP Operating Income: $289 million compared to $285 million in the fourth quarter of 2021, representing 45 percent and 47 percent of revenues in the fourth quarter of 2022 and 2021, respectively.

•

GAAP Tax Benefit: $1 million compared to $4 million in the fourth quarter of 2021.

•

GAAP Net Income & Earnings per Diluted share: GAAP net income was $270 million compared to $260 million in the fourth quarter of 2021. GAAP earnings per diluted share were $2.20 compared to $1.98 in the fourth quarter of 2021, an 11 percent increase year over year.

•

Non-GAAP Net Income & Earnings per Diluted share: Non-GAAP net income was $301 million compared to $294 million in the fourth quarter of 2021. Non-GAAP earnings per diluted share were $2.45 compared to $2.25 in the fourth quarter of 2021, a 9 percent increase year over year.

•

Deferred Revenues: As of December 31, 2022, deferred revenues were $1,878 million compared to $1,707 million as of December 31, 2021, a 10 percent increase year over year.

•

Cash Balances, Marketable Securities & Short-Term Deposits: $3,503 million as of December 31, 2022, compared to $3,783 million as of December 31, 2021.

•

Cash Flow: Cash flow from operations was $230 million compared to $294 million in the fourth quarter of 2021. The fourth quarter of 2022 includes $3 million of costs related to our currency hedging transactions compared to $4 million of income in the fourth quarter of 2021.

•

Share Repurchase Program: During the fourth quarter of 2022, the company repurchased approximately 2.6 million shares at a total cost of approximately $325 million. In a press release today, the company’s board of directors authorized a $2 billion expansion of the company’s on-going share repurchase program. Under the extended share repurchase program, Check Point will be authorized to continue repurchasing its shares up to $325 million each quarter.

Financial Highlights for the Year Ended December 31, 2022

•

Total Revenues: $2,330 million compared to $2,167 million in 2021, an 8 percent increase year over year.

•

GAAP Operating Income: $884 million compared to $908 million in 2021, representing 38 and 42 percent of revenues in 2022 and 2021, respectively.

•

Non-GAAP Operating Income: $1,039 million compared to $1,049 million in 2021, representing 45 and 48 percent of revenues in 2022 and 2021, respectively.

•

GAAP Taxes on Income: $131 million compared to $134 million in 2021.

•

GAAP Net Income & Earnings per Diluted Share: GAAP net income was $797 million compared to $816 million in 2021. GAAP earnings per diluted share were $6.31 compared to $6.08 in 2021, a 4 percent increase year over year.

•

Non-GAAP Net Income & Earnings per Diluted Share: Non-GAAP net income was $935 million compared to $942 million in 2021. Non-GAAP earnings per diluted share were $7.40 compared to $7.02 in 2021, a 5 percent increase year over year.

•

Cash Flow: Cash flow from operations was $1,080 million compared to $1,183 million in 2021. 2022 included $8 million in acquisition related costs and $80 million of costs related to our currency hedging transactions while 2021 included $14 million in acquisition related costs and $1 million of costs related to our currency hedging transactions. The remaining acquisition costs is included in our cash flow from investing activities.

•

Share Repurchase Program: During 2022, we repurchased approximately 10.3 million shares at a total cost of approximately $1,300 million.

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.”

Conference Call and Webcast Information

Check Point will host a conference call with the investment community on February 13, 2023, at 8:30 AM ET/5:30 AM PT. To listen to the live webcast or replay, please visit the website www.checkpoint.com/ir.

First Quarter 2023 Investor Conference Participation Schedule

•

Wolfe Research March Madness 1x1 Conference
March 1, 2023, NY, NY – 1x1 Meetings

•

Bernstein Inaugural Tech, Media, Telecom & Consumer 1x1 Forum
March 2, 2023, NY, NY – 1x1 Meetings

•

Raymond James 2023 Institutional Investor Conference
March 6, 2023, Orlando, FL – Fireside Chat & 1x1 Meetings

•

Truist 2023 Technology, Internet & Services Conference
March 7, 2023, NY, NY – 1x1 Meetings

•

Morgan Stanley 2023 Media, Telecommunications & Technology Conference
March 8-9, 2023, SF, CA – 1x1 Meetings

Members of Check Point's management team are expected to 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 hear 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.

Follow Check Point via:

Twitter: http://www.twitter.com/checkpointsw

Facebook: https://www.facebook.com/checkpointsoftware

Blog: http://blog.checkpoint.com

YouTube: http://www.youtube.com/user/CPGlobal

LinkedIn: https://www.linkedin.com/company/check-point-software-technologies

About Check Point Software Technologies Ltd.

Check Point Software Technologies Ltd. (www.checkpoint.com) is a leading provider of cybersecurity solutions to corporate enterprises and governments globally. Check Point Infinity’s portfolio of solutions protects enterprises and public organizations from 5th generation cyberattacks with an industry leading catch rate of malware, ransomware, and other threats. Infinity comprises four core pillars delivering uncompromised security and generation V threat prevention across enterprise environments: Check Point Harmony, for remote users; Check Point CloudGuard, to automatically secure clouds; and Check Point Quantum, to protect network perimeters and datacenters, all controlled by the industry’s most comprehensive, intuitive unified security management; Check Point Horizon, a prevention-first security operations suite. Check Point protects over 100,000 organizations of all sizes.

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 to our expectations regarding our products and solutions, expectations related to cybersecurity and other threats, expectations regarding our initiatives, expectation regarding our expanded share repurchase program and our participation in investor conferences during the first quarter of 2023. Our expectations and beliefs regarding these matters may not materialize, and actual results or events in the future are subject to risks and uncertainties that could cause actual results or events 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, including as a result of the impact of the Covid-19 pandemic. 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 14, 2022. 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 operating income, net income and earnings per diluted share, which are adjustments from results based on GAAP to exclude, as applicable, stock-based compensation expenses, 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 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.

¹Billings: Non-GAAP measurement that we define as total revenues in accordance with GAAP plus the change in total deferred revenue during the period.

CHECK POINT SOFTWARE TECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF INCOME

(Unaudited, in millions, except per share amounts)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2022			2021			2022		2021
Revenues:
Products and licenses	$	173.4		$	166.4		$	554.9	$	513.9
Security subscriptions		231.0			204.1			858.0		755.2
Total revenues from products and security subscriptions		404.4			370.5			1,412.9		1,269.1
Software updates and maintenance		234.1			228.6			917.0		897.7
Total revenues		638.5			599.1			2,329.9		2,166.8

Operating expenses:
Cost of products and licenses		42.1			40.0			145.6		110.7
Cost of security subscriptions		10.6			9.9			41.4		35.9
Total cost of products and security subscriptions		52.7			49.9			187.0		146.6
Cost of Software updates and maintenance		28.2			26.3			105.5		103.0
Amortization of technology		2.9			2.9			11.9		8.5
Total cost of revenues		83.8			79.1			304.4		258.1

Research and development		90.8			85.5			349.9		292.7
Selling and marketing		180.0			160.6			675.2		597.8
General and administrative		29.9			28.0			116.1		110.7
Total operating expenses		384.5			353.2			1,445.6		1,259.3

Operating income		254.0			245.9			884.3		907.5
Financial income, net		15.3			9.9			44.0		42.1
Income before taxes on income		269.3			255.8			928.3		949.6
Taxes on income (tax benefit)		(0.6	)		(3.9	)		131.4		134.0
Net income	$	269.9		$	259.7		$	796.9	$	815.6

Basic earnings per share	$	2.22		$	1.99		$	6.37	$	6.13
Number of shares used in computing basic earnings per share		121.8			130.3			125.2		133.1

Diluted earnings per share	$	2.20		$	1.98		$	6.31	$	6.08
Number of shares used in computing diluted earnings per share		122.9			130.9			126.3		134.1

CHECK POINT SOFTWARE TECHNOLOGIES LTD.
SELECTED FINANCIAL METRICS
(Unaudited, in millions, except per share amounts)

	Three Months Ended				Year Ended
	December 31,				December 31,
	2022		2021		2022		2021

Revenues	$	638.5	$	599.1	$	2,329.9	$	2,166.8
Non-GAAP operating income		288.9		284.5		1,038.9		1,049.2
Non-GAAP net income		301.0		294.0		934.9		942.0
Diluted Non-GAAP Earnings per share	$	2.45	$	2.25	$	7.40	$	7.02
Number of shares used in computing diluted Non-GAAP Earnings per share		122.9		130.9		126.3		134.1

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(Unaudited, in millions, except per share amounts)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2022			2021			2022			2021

GAAP operating income	$	254.0		$	245.9		$	884.3		$	907.5
Stock-based compensation (1)		30.1			32.6			131.4			120.3
Amortization of intangible assets and acquisition related expenses (2)		4.8			6.0			23.2			21.4
Non-GAAP operating income	$	288.9		$	284.5		$	1,038.9		$	1,049.2

GAAP net income	$	269.9		$	259.7		$	796.9		$	815.6
Stock-based compensation (1)		30.1			32.6			131.4			120.3
Amortization of intangible assets and acquisition related expenses (2)		4.8			6.0			23.2			21.4
Taxes on the above items (3)		(3.8	)		(4.3	)		(16.6	)		(15.3	)
Non-GAAP net income	$	301.0		$	294.0		$	934.9		$	942.0

Diluted GAAP Earnings per share	$	2.20		$	1.98		$	6.31		$	6.08
Stock-based compensation (1)		0.24			0.25			1.04			0.90
Amortization of intangible assets and acquisition related expenses (2)		0.04			0.05			0.18			0.16
Taxes on the above items (3)		(0.03	)		(0.03	)		(0.13	)		(0.12	)
Diluted Non-GAAP Earnings per share	$	2.45		$	2.25		$	7.40		$	7.02

Number of shares used in computing diluted Non-GAAP Earnings per share		122.9			130.9			126.3			134.1

(1) Stock-based compensation:
Cost of products and licenses	$	0.1		$	0.1		$	0.4		$	0.4
Cost of software updates and maintenance		1.2			1.2			5.0			4.4
Research and development		9.9			10.3			42.0			31.8
Selling and marketing		9.7			11.3			43.2			42.8
General and administrative		9.2			9.7			40.8			40.9
		30.1			32.6			131.4			120.3

(2) Amortization of intangible assets and acquisition related expenses:
Amortization of technology-cost of revenues		2.9			2.9			11.9			8.5
Research and development		0.8			1.7			7.1			5.6
Selling and marketing		1.1			1.4			4.2			7.3
		4.8			6.0			23.2			21.4
(3) Taxes on the above items		(3.8	)		(4.3	)		(16.6	)		(15.3	)
Total, net	$	31.1		$	34.3		$	138.0		$	126.4

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(Unaudited, in millions)

ASSETS

	December 31,		December 31,
	2022		2021
Current assets:
Cash and cash equivalents	$	196.0	$	271.9
Marketable securities and short-term deposits		1,441.6		1,421.8
Trade receivables, net		644.2		597.8
Prepaid expenses and other current assets		50.0		46.4
Total current assets		2,331.8		2,337.9

Long-term assets:
Marketable securities		1,865.6		2,089.7
Property and equipment, net		82.8		83.4
Deferred tax asset, net		77.6		51.7
Goodwill and other intangible assets, net		1,295.5		1,257.2
Other assets		71.5		80.3
Total long-term assets		3,393.0		3,562.3

Total assets	$	5,724.8	$	5,900.2

LIABILITIES AND

SHAREHOLDERS’ EQUITY

Current liabilities:
Deferred revenues	$	1,363.4		$	1,257.4
Trade payables and other accrued liabilities		475.8			454.7
Total current liabilities		1,839.2			1,712.1

Long-term liabilities:
Long-term deferred revenues		514.4			449.7
Income tax accrual		419.7			454.9
Other long-term liabilities		22.2			26.4
		956.3			931.0

Total liabilities		2,795.5			2,643.1

Shareholders’ equity:
Share capital		0.8			0.8
Additional paid-in capital		2,500.7			2,276.7
Treasury shares at cost		(11,802.1	)		(10,550.7	)
Accumulated other comprehensive gain (loss)		(97.9	)		(0.6	)
Retained earnings		12,327.8			11,530.9
Total shareholders’ equity		2,929.3			3,257.1
Total liabilities and shareholders’ equity	$	5,724.8		$	5,900.2
Total cash and cash equivalents, marketable securities, and short-term deposits	$	3,503.2		$	3,783.4

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

SELECTED CONSOLIDATED CASH FLOW DATA

(Unaudited, in millions)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2022			2021			2022			2021
Cash flow from operating activities:
Net income	$	269.9		$	259.7		$	796.9		$	815.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		6.1			5.6			22.7			20.6
Amortization of intangible assets		3.4			3.3			13.5			10.1
Stock-based compensation		30.1			32.6			131.4			120.3
Realized gain on marketable securities		-			(0.4	)		-			(1.4	)
Increase in trade and other receivables, net		(332.7	)		(269.2	)		(44.8	)		(49.4	)
Increase in deferred revenues, trade payables and other accrued liabilities		253.3			265.1			160.8			266.0
Deferred income taxes, net		(0.1	)		(2.5	)		(0.5	)		1.2
Net cash provided by operating activities		230.0			294.2			1,080.0			1,183.0

Cash flow from investing activities:
Payment in conjunction with acquisitions, net of acquired cash		-			-			(48.3	)		(219.7	)
Investment in property and equipment		(6.5	)		(4.5	)		(22.1	)		(15.9	)
Net cash used in investing activities		(6.5	)		(4.5	)		(70.4	)		(235.6	)

Cash flow from financing activities:
Proceeds from issuance of shares upon exercise of options		20.7			6.5			141.1			194.0
Purchase of treasury shares		(324.9	)		(324.9	)		(1,299.9	)		(1,299.5	)
Payments related to shares withheld for taxes		(1.1	)		(0.4	)		(9.2	)		(6.9	)
Net cash used in financing activities		(305.3	)		(318.8	)		(1,168.0	)		(1,112.4	)

Unrealized gain (loss) on marketable securities, net		15.4			(22.1	)		(121.8	)		(51.2	)

Decrease in cash and cash equivalents, marketable securities, and short-term deposits		(66.4	)		(51.2	)		(280.2	)		(216.2	)

Cash and cash equivalents, marketable securities, and short-term deposits at the beginning of the period		3,569.6			3,834.6			3,783.4			3,999.6

Cash and cash equivalents, marketable securities, and short-term deposits at the end of the period	$	3,503.2		$	3,783.4		$	3,503.2		$	3,783.4

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/ Roei Golan Roei Golan Acting Chief Financial Officer

February 13, 2023

Enhanced Investments, Inc.
329 South Oyster Bay Road #2085
Plainview, NY 11803
team@eninvs.com

Important disclosures

Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.

Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities.
Past performance is no guarantee of future results. Any historical returns, expected returns [or probability projections] are hypothetical in nature and may not reflect actual future performance.
All the strategies assume investments in equity invstrumenta only and are more relevant for "agressive investment profile". Eastern European flagship strategy assumes using up to 20% leverage of total portfolio. GlobalCommodities and US Growth strategy currently assume no leverage.
Results for the Enhanced Investments strategies as compared to the performance of Illustrative Benchmarks is for informational purposes only. Our investment program does not mirror that of the Illustrative Benchmarks and the volatility may be materially different from the volatility of Illustrative Benchmarks. Reference or comparison to an Illustrative Benchmark does not imply that strategies of Enhanced Investments will be constructed in the same way as the Illustrative Benchmark or achieve returns, volatility, or other results similar to those of the Illustrative Benchmark. The S&P 500 is an unmanaged market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.
Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.