Q4 2023 Check Point Software Technologies Ltd Earnings Call

Kip E. Meintzer: Head of Investor Relations, and joining me today are our founder and CEO, Gil Shwed, and our Chief Financial Officer, Roy Galan. Before we begin, I'd like to remind everyone that this conference is being recorded and will be available for replay on our website at Checkpoint.com. During the formal presentation, all participants are in listen-only mode, to be followed by a Q&A session.

<unk> and our Chief Financial Officer, Roy Golan before we begin I'd like to remind everyone that this conference is being recorded and will be available for replay on our website at checkpoint dot com.

The formal presentation all participants are in listen only mode to be followed by a Q&A session. During the presentation checkpoints Representatives may make forward looking statements within the meaning of section 27, a of the Securities Act of 1933 and section 20, <unk> of the Securities and Exchange Act of $19 34.

Operator: During the presentation, Check Point's representatives may make forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These statements involve risk and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, those discussed in Check Point Software's latest filings with the Securities and Exchange Commission. Any forward-looking statements made speak only as of the date hereof, and Check Point Software undertakes no obligation to update publicly any forward-looking statements. In our press release, which has been posted on our website, we present GAAP and non-GAAP results, along with a reconciliation of such results, as well as the reasons for our presentation of non-GAAP information. If you have any questions after the call, please feel free to contact Investor Relations by email at kipatcheckpoint.com. Now, I'd like to turn the call over to Gil Schwett.

These statements involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward looking statements factors that could cause actual results to differ materially include but are not limited to those discussed in check point software as latest filings with the Securities and Exchange Commission any forward looking statements.

Made speak only as of the date hereof and checkpoint software undertakes no obligation to update policy update publicly any forward looking statements in our press release, which has been posted on our website, we present GAAP and non-GAAP results along with a reconciliation of such results as well as the reason.

For our presentation of non-GAAP information, if you have any questions. After the call. Please feel free to contact Investor relations by email at <unk> checkpoint Dot com now I'd like to turn the call over to Gil Schweppes.

Gil Shwed: Hi, everyone. And I'm pleased to see you all. I want to start with this picture, and then I'll turn it into the financial results. But I started my journey in Check Point exactly 31 years ago, just before we started the company in February of 1993. And since then, it's been an amazing journey and amazing growth, which is not over. And I just want to, I think you've all read the announcement today that I intend to transition my role into an executive chairman, which means that I'm going to, I want to be super involved in Check Point, super involved in the future of Check Point and shift a lot of my attention from the day to day management of the company into shaping the future of the cybersecurity market and Check Point in particular, and I think I've gone the long way I didn't start quite that but I started when I was 24 years old I've grown a lot with Check Point I think I've changed my I've learned a lot I've changed my management style and I think I'm ready for that next step which is to move into an executive chairman role and, So I want to thank you all for your support. It's on, we are not doing anything today.

Gil Shwed: Hi, everyone I'm very pleased to see you all and I want to start with this picture and then I'll turn it into the financial results, but I started my journey checkpoint executive for 31 years ago, just before we started the company in February of 1993, and since then it's been an amazing journey, an amazing growth which would.

Speaker Change: Not all of them and I just want to thank you all read the announcement today that I intend to transition my role into an executive chairman, which means what I'm going to I want to be super involving checkpoints super involved in the future of checkpoint and shift a lot of my attention from.

Speaker Change: The day to day management of the company to shaping the future of the <unk>.

Speaker Change: Cyber security market in check point in particular.

Speaker Change: I think I've gone a long way I didn't start quite wet, but they started when I was 24 years old and grown a lot with checkpoint I think I've changed my I've learned a lot of change my management style, and I think I'm ready for that.

Speaker Change: Next step, which is to move into an executive chairman role.

So I want to thank you all for your support its own we are not doing anything today, we're actually starting the journey in the.

Gil Shwed: We're actually starting the journey, and I think starting tomorrow, we will start a more thorough succession planning process. We will start a search for a replacement for my current role as the office will take anything from again. We may be lucky and it will be very short, but to find the right person to find the right men, women, or men that can be the Check Point CEO can take anything from six months to two years.

Speaker Change: I think starting tomorrow, we will start to more.

Speaker Change: A more thorough with succession planning process, we will start to search for a replacement for my current role as CEO, which will take anything from me again.

Speaker Change: We may be lucky and it will be very short, but to find the right.

Speaker Change: Person to find the right.

Speaker Change: Men women or men with.

Speaker Change: That can be the checkpoint to see Oh can take usually would take anything from six months to two years.

Speaker Change: We are all in checkpoint Super energetic about 2024, I'll talk more about that in the slides later.

Gil Shwed: We are all in Check Point super energetic about 2024. I'll talk more about that in the slides later and about what's going on. And I'm very excited to start the year and also start the journey into finding a replacement. And in the future, and I hope it will be in the near future, step into the executive chairman role. So with that, I think I'm ready to move the torch to Rui, who will take us through the numbers. And then I'll talk more about the vision, and the business trends that we've seen this quarter and this year. Thank you, Gil.

Speaker Change: What's going on and I'm very excited too.

Speaker Change: To start the year and also started the journey to finding a replacement and in the future and I hope it will be in the near future.

Speaker Change: Step into the executive Chairman room. So we built I think I'm ready to move the torch to relieve it will take us through the numbers and then I'll talk more about the vision.

Speaker Change: The business trends that we've seen.

Speaker Change: Quarter.

Speaker Change: Each year.

Speaker Change: Thank you Neil.

Roy Galan: And thank you, everyone, for joining the call today. I'm excited to be with you today and begin the review of the fourth quarter of 2023. We had a strong quarter with operating income of $319 million, representing 7% growth year over year, with a very strong operating margin of 47%. Non-Gap Operating Margin of 37%, our revenues reached $664 million, $3 million above the midpoint of our projection, while our non-gap EPS was $2.57, 2 cents above the top end of our projection. And for the full yield.

Neil: And thank you everyone for joining the call today, so I need to be with you to date and begin the review of the fourth quarter for 2020 slate. We're in a strong quarter with operating income of $9 million up the presenting a growth of 7%.

Neil: We did a very strong operating margin.

Neil: non-GAAP operating margin of about 7% our revenues reached $664 million.

Neil: So let me go in above the midpoint of our projection, while our non-GAAP EPS was $2.57 to stand above the top end of our projection.

Neil: And for the full year.

Roy Galan: As for the full year, our revenues for the full year of 2023 reached $2,450,000,000, representing a growth of 4% year over year, while our EPS reached $8.42, a 14% growth year over year, actually the highest growth we have had in EPS since 2011. Moving to revenue and deferred revenues and billings. So, as indicated, our revenues grew by 4%. Our deferred revenues reached $1,908,000,000, presenting an increase of 2% year-over-year, while our shortened deferred revenues reached $1,414,000,000, a growth of 4% year-over-year.

Neil: For the full year, our revenues and portfolio of 2020 revenues reached <unk> $450 million preventative or 4%, while our EPS reached $8 and bulk into 14.

Neil: 14% growth.

Neil: Actually the highest quanta to have EPS since 2008.

Neil: Moving to the revenues and <unk>.

Neil: And deferred revenues and billings sorry.

Neil: Indicated our revenues grew by 4% our deferred revenues reached $1.908 billion.

Neil: Increase of 2% the old the Lille, while our short term revenues reached 1 billion in bonds and $40 million a growth of 4% below our calculated billing reached $862 million.

Roy Galan: Our calculated billing reached $862,000,000, while our current calculated billings reached $831,000,000. And, same as I mentioned in the prior quarter, actually, since I think the beginning of 2020, due to our interest rate environment, we saw also in this quarter fewer customers are willing to pay up-front for multi-year deals, which were only short on billing duration. Also, in infinity deals, our billing terms are more flexible. We have much more infinity.

Neil: Our current calculated billings reached $831 million and same as I mentioned in my.

Neil: <unk> actually seen.

Neil: That being the beginning of 2023 due to high interest rate environment. We saw our saying is for those few customers willing to pay upfront deals.

Neil: Which resulted in total meeting duration also an infinity deal as our billing terms are more flexible we are much more infinity infinity become more and more significant to our business and the billing terms are much more.

Roy Galan: The infinity is becoming more and more significant to our business, and the billing terms are much more flexible there. So, some of the annualized bookings that we'll show you in the next two slides are not billed yet, but they are included in our backlog. The remaining performance obligation, which is actually also our backlog, is approximately $2,250,049,000, representing a growth of 5% year-over-year. Therefore, our revenue growth was driven mainly by our subscription revenue. We see consistent strong subscription revenues growth of 15% this quarter to $266 million. This growth is mainly driven by strong performance and strong demand for our Infinity platform, our Infinity Consolidated platform, and the Harmony email. We continue to see strong momentum for both of them, and that's what we see here, the 15% growth in the last quarter. Moving into something that I want to show you this quarter, we did see a real positive turnaround this quarter. I think what we've seen is something, it's an internal method that we are following, but this is the new business annualized booking that we saw this quarter.

Neil: So so some of the analyst booking that will show in the next two slides are not built yet.

Neil: But they're all included in our backlog.

Neil: Remaining performance obligation, which is actually also our backlog is approximately proximity 2.250 billion to $49 million.

Neil: Presenting a vocal 5% E mobility.

Neil: So our revenue growth was driven mainly by our subscription revenue, we see consistent strong.

Neil: Subscription revenues growth of 15% this quarter totaled $266 million on this call is mainly driven by strong performance and strong demand falling seen any platform our consulting in the consolidated platform and our E mail.

Neil: To see strong momentum both of them in that that's bringing that that's what we see is a 15% growth in the last the hotel moving in today, but something that we want to show. This quarter did that we did see a real positive turnaround this quarter I think what we've seen and it's something that you've seen that our message is we're calling.

Neil: But this is the new business annualized bookings that we've seen this quarter, we did see double digit new business growth across all <unk> by the way, it's not only specific geo we did see double digit new business growth in <unk>, we do see the turnaround are really pan out as we started those in Q3, we mentioned it in Q3, all things New fleet was still.

Roy Galan: We did see double digit new business growth across all Geos, by the way; it's not only specific Geos; we did see double digit new business growth in all Geos. We do see the turnaround, the real turnaround that we started to see in Q3, we mentioned it in Q3, also, in Q3 it was still approximately flat, but in Q4 we did see a real positive turnaround with double-digit growth, and as I mentioned, we expect it to be translated into billings and revenues in the next few quarters. As indicated, we continue to see strong adoption for the Infinity platform. Infinity's consolidated platform will continue to flow in an accelerated way to our revenues with strong double-digit growth over the years. In this quarter, the revenue from the Infinity family kept exceeding 10% of the total revenues, and we can see more and more customers, and also new customers, adopting our platform, which is answering their needs under one umbrella of product and service. As for the revenues by geography, we saw strong demand in America; in America, we see 42% of the total revenues came from America, it's represented double digit growth in revenues in America, mainly driven by Infinity, strong demand for Infinity there, and harmony even. 48% of the revenues came from EMEA, and the remaining 10% came from Asia Pacific.

Neil: And it is led by in Q4, we did see is lethal that extent around double digit growth and as I mentioned, we expect it will be translated into bid.

Neil: Billings and revenues in the next few quarters.

Neil: Okay.

Neil: As indicated is we continue to see strong adoption, Paul Infinity platform Infinity consolidated platform continuing to flow in an accelerated way to our revenues with strong double digit growth.

Neil: In this quarter the revenue on infinity firmly keep exceeding the 10% of the total revenues and we can see more and more customers and also new customers adopting our platform and bring them under one umbrella product and services.

Neil: As for the revenues by geography, we saw strong demand.

Neil: In America and in medical we see 42% of total revenues came in American political event that double digit growth in revenues in America, mainly driven by Infinity is strong demand for infinity.

Neil: And how many human business.

Neil: 48% of the revenues came from EMEA and the remaining 10% came from Asia Pacific.

Roy Galan: Important to say, as I mentioned in the previous slide, that also the new business booking, annualized booking in these geos went up double digits. So I think it's very good momentum, positive momentum that we're seeing in Q4. And now let's move to the T&L for this quarter.

Neil: Important to say as I mentioned in the previous slide that also the new business bookings annualized booking in these deals.

Speaker Change: Got it.

Speaker Change: The digits I think you said the vertical mental and positive momentum that we've seen in Q in Q4.

Speaker Change: Now, let's move to the P&L this quarter, our gross profit increased to $591 million, representing a gross margin of 89% compared to 88% last year, our operating expenses increased by 4%.

Roy Galan: Our gross profit increased to $591 million, representing a growth margin of 89% compared to 88% last year. However, our operating expenses increased by 4%. The increase was mainly as a result of our continuing investment in our workforce, our recent acquisition, and also investment in cloud infrastructure and marketing. Stronger operating income continues to be strong at $309 million, 7% growth year-over-year, and represents a 47% operating margin compared to a 45% operating margin last year. To explain, the improvement in the operating margin is a result of a 1.5 point better growth margin that we can see here, another 1.5 point benefit from FX, a stronger dollar, mainly against the shekels, which was offset by approximately 2% headwinds related to our recent pre-acquisition, so that explains the improvement that we see here in the operating margin this quarter. As for financial income, we see that our financial income this quarter reached $18 million Our non-GAAP taxes for this quarter were around 9% due to updates to our tax provision and deferred taxes.

Speaker Change: Each of those mainly as a result of our continuing investment in our workforce within acquisition and also investment in cloud infrastructure and marketing.

Speaker Change: non-GAAP operating income continues to be strong at $309 million up 7% growth in mobility and of the 47% operating margin on oil to 45% operating margin last year.

Speaker Change: So extend the improvement in the operating margin. There is also one enough point better gross margins as we can see here and there.

Speaker Change: The one five point benefit from FX on Bill Doyle, mainly around against the shekel, which offset by approximately 2% and wind related to our recently acquisition.

Thats explained the improvement that we see healing the operating margin this quarter.

Speaker Change: And for the <unk>.

Speaker Change: In financial income.

Speaker Change: Net income this quarter reached $80 million as we keep investing in infill.

Speaker Change: Input slate over time.

Speaker Change: non-GAAP taxes for this quarter was around 9% due to lower back provision in B cell boxes, we don't see that the tax expense.

Roy Galan: We do see that the tax expense expenses in this quarter were significantly higher than last year, but that's mainly because of tax accounting. And in the end, and you're going to see it in the next few slides, the effective tax rate for the full year is similar in 2023 compared to 2022. As for the non-GAAP net income, it was $298 million or $2.57 per diluted share, crossing the top end of our projection by 2 cents and a 25% growth year over year. Our GAAP net income was $249 million or $2.15 per diluted share, a 2% decrease year over year, and it's mainly due to higher amortization related to our recent acquisition of Perimeter 81.

Speaker Change: Expenses in this quarter was significantly higher than last than last year, but mainly because of tax accounting and in the end and you're going to feed in the next few slides that the effective tax rate for the full year is similar in 2000, and frankly because of 2022.

Speaker Change: And for the GAAP net income and non-GAAP net income it was $298 million or $2.57 per diluted share also in the top end of our position by two.

Speaker Change: So then the 5% golf E mobility.

Speaker Change: GAAP net income was $249 million or $2 15.

Speaker Change: Diluted share, 2% visa receivable videos, and it's mainly due to Io amortization related to our recent acquisition of mainly of perimeter AQR.

Speaker Change: Moving to our cash flow and cash position saw cash balances as of the end of deal was <unk> billion dollars.

Roy Galan: Moving to our cash flow and cash position. So, our cash balance as of the end of the year was $3 billion, the same level as we had in Q3. Our operating cash flow was strong at $236 million this quarter, presenting a growth of 3% year-over-year.

Speaker Change: At the same level as we had in Q3, our operating cash flow was strong at $236 million this quarter, but then any local 3% globally.

Speaker Change: We also continue to continue on our buyback program and purchased $2 2 million shelf hopefully $113 million at an average price of one other than <unk>.

Roy Galan: We also continued our buyback program and purchased 2.2 million shelves for $313 million at an average price of $142 per shelf. Now, let's review the 2023 annual performance. Our revenues, as mentioned before, grew by 4% to $2,415,000,000. Our gross profit increased to $2,154,000,000, representing a gross margin of 89%. This is the result of significant improvement during the year in the supply chain environment, which is much better than what we saw last year in 2022. Our operating expenses increased by 7% to $1,075,000,000.

Speaker Change: Now lets review the 2020 annual performance.

Speaker Change: While revenues has meant as mentioned before.

Speaker Change: <unk> grew by 4% to two big unemployment and $15 million.

Speaker Change: Gross profit.

Speaker Change: <unk> and interest to build on $154 million.

Speaker Change: Representing a gross margin of 89%. This is a lot of significant improvement in doing the helium supply chain environment, which is much better than what we've seen and lastly in 2022.

Speaker Change: Our operating expenses increased by 7% to $1 billion and $75 million.

Speaker Change: The increase was mainly as a book of our continued investment in <unk>, a cloud infrastructure marketing level, both in the <unk> acquisition that we have it.

Roy Galan: The increase was mainly a result of our continuing investment in our workforce, cloud infrastructure, marketing, travel costs, and of course, the recent acquisitions that we have that we completed in September and October this year. Our non-capital operating income continues to be strong at $1,079,000,000 at a 45% operating margin similar to what we've seen in 2022. Looking into next year and our operating margin, we need to take into account the recent acquisitions that we completed in September and October that will have an adwind of approximately two points on our operating margin in 2024. On the other hand, we do see a tailwind of approximately between half a point to one point related to a stronger dollar and a weaker shekel that are going to benefit us next in 2024.

Speaker Change: We completed in September and October.

Speaker Change: Our non-GAAP operating income continued to be strong at $1 billion and $79 million and 45% operating margin similar to what we've seen in 2022.

Speaker Change: Looking into next deal and our operating margin we need to take into account. The recent acquisition that we completed in September and October. This will have an element of approximately two point stall, but in margin in 2020 bolt on the other end, we do see a tailwind of proximity between up to point to one point related to storm deals all in we feel checkout.

Speaker Change: Next in 2020.

Speaker Change: Okay.

Speaker Change: So as part of the financial income detail financial income this year reached $77 million as we keep investing on our interest rate over time as for 2024, we are expecting to see incremental financial income every quarter.

Roy Galan: So as for the financial income DC, our financial income DC reached $77 million as we keep investing high interest rates over time. As for 2024, we are expecting to see incremental financial income every quarter of approximately $1 million. As for the tax expenses in 2023, they amounted to $159 million, and our non-gap tax rate was around 14%, similar to what we saw in 2022. As for the 2024 tax expense, we are expecting it to be around the same level of 14% effective tax rate, non-gap effective tax rate, in each quarter and also annually. Our non-cabinet income increased to $997 million, or $8.42 per diluted share, crossing the top end of the original projection by $0.02 and representing a growth of 14% year-over-year.

Speaker Change: <unk> 1 million.

As for the tax expenses in 2023, they amounted to $159 million and our non-GAAP tax rate. Please see was around 14% similar to what we saw in 2022 and for 2020 for tax expense, we are expecting to be around the same level of 14% effective tax rate non-GAAP effective tax rate in each quarter and also in.

Speaker Change: Ali.

Speaker Change: Our non-GAAP net income increased to 9990 $7 million or $8.02 per diluted share in the top end of our projections by a although we do not projection by <unk> <unk>.

Speaker Change: I think we had below 14% EUR 1 billion.

Speaker Change: Our GAAP net income was $840 million.

Roy Galan: Our government income was $840 million, or $7.10 per diluted share, 13% growth year-over-year. As for the number of shares for 2024, we expect the average diluted share to be somewhere around 130 million shares, starting at 160 million at the end of 2024. The E-Rent is expected to decrease to approximately 1.3 million shares every quarter as a result of our expected buyback.

Speaker Change: Seven.

Speaker Change: The diluted share 13% growth in mobility.

Speaker Change: And as for the number of shares for 2024, we expect average diluted shares to be somewhere around 113 million shelf starting in $160 million.

Speaker Change: In the end of 2020.

Speaker Change: And going down by the year end to somewhere around 111, we expect to see a decrease of approximately one 3 million shares every quarter as a result of expected buyback and we need to take into account also the I'll stop right there.

Roy Galan: And we need to take into account also the higher stock price, which means that, again, we're going to keep our buyback at the same, in approximately the same dollar amount. But it means that we're going to have to buy fewer shares if the stock price stays at this. As for the operating cash flow for the entire year, it was strong with $1,035,000,000 operating cash flow. In 2023, the operating cash flow also includes $25,000,000 related to our acquisitions, our founder's old debt costs related to our acquisitions, and another $39,000,000 costs related to our aging activity. As part of our buyback program, we purchased 9.9 million shares during the year for $1.3 billion, an average price of $131.

Speaker Change: That means that again, we're going to keep all by making the same in approximately the same dollar amounts, but it means that we couldnt have made we're going to buy less shelf stock prices.

Speaker Change: I would say in D C.

Speaker Change: As for the operating cash flow for the fluid for the impact that it was strong with $1.035 billion out of operating cash flow in 2020. The operating cash flow includes also $25 million related to our acquisitions. Upon the Olympics sports related to acquisition and another 39.

Speaker Change: Million dollar cost related to our AG.

Speaker Change: As part of our buyback program, we purchased during the deal almost $10 million and $9 9 million shares for $1 3 billion and average price of 131, daughter still ship.

Roy Galan: To summarize our results, so as a strong result, revenues for the quarter were above the midpoint, and EPS exceeded our projections. Acceleration in quarterly and annual subscription revenues, strong performance driven by top performance of our Infinity and our own email. We did see a very real turnaround, a positive turnaround in our business environment during Q4 with double-digit growth in new business annualized bookings and strong profitability, a 47% operating margin in Q4 and 14% EPS growth in Q4 of 2021. And now I'll turn the call over to...

Speaker Change: To summarize our results and our strong results revenues for the quarter was above the midpoint in EPS.

Speaker Change: EBITDA projections accelerating quarterly and annualized subscription revenues strong performance driven by both <unk> and <unk>, we did see a very really done on a positive turn on in our business environment. During Q4 with double digit drop in new business bookings and then bump of debate.

Speaker Change: Policy, 7% operating margin in Q4, and 14% EPS growth for the full year of 2020.

Speaker Change: And now I'll turn the call over to Keith.

Speaker Change: Okay.

Gil Shwed: Thank you very much, Rui, and thank you everyone again for joining me. Let me give you a slightly shorter discussion of what we've achieved and, mainly, what our strategy moving forward and the differentiators for checkpoints. So just to recap some of the points we've talked about, I think overall we had great results in the fourth quarter, exceeded EPS, did the 15% growth in subscriptions, double-digit growth in revenues in America, and I think overall, I think for the year, I'm very proud that we had very strong execution. We started the year, I just want to be clear, it sounds like everything was amazing, but no, we started the year, and we actually 2022 to Q3 2023. And I think last quarter we showed you that we're seeing the signs of a slight turnaround.

Keith: Thank you very much Roy and thank you everyone again for joining me, let me give you a slipped slightly.

Keith: Discussion of what we've achieved mainly what's our strategy moving forward and the differentiator of the checkpoints. So just to recap some of the points. We've talked about I think overall, we had great results in the fourth quarter exceeded EPS due to 15% growth in subs.

Keith: <unk> double digit growth in revenues in the Americas, and I think overall I think for the year, a very proud, but we had very strong execution. We started the year just want to be clear it sounds like everything was amazing, but no. We started the year. We actually ended 2022 with what we think was a very tough economy with customers held back.

Keith: <unk> projects postponed investments and they actually the level of new business was going down.

Keith: It lasted for four quarters from Q4.

Keith: 2022 to Q3, 2020 free and I think last quarter. We told you what we're seeing the signs of slight turnaround.

Gil Shwed: I don't know how much of a turnaround is the result of the economy and how much of it is the result of the great execution of the Check Point team with double customer engagement, which led to an increased pipeline in all geographies. And I'm very glad to say that in the fourth quarter, we've seen double-digit growth in our new business, on our internal measures. I think Roy showed you the slides. I will have them again at the end.

Keith: I don't know how much of the turnaround as a result of the economy and how much of that is the result of the great execution of the checkpoint team with double customer engagement, which leads to an increased pipeline in all geos and I'm very glad to say that in the fourth quarter, we've seen double digit growth in our new business.

Keith: Our internal measures I think really shows you the slides that we'll have it again at the end I think that's for me that's a very strong indicator of the change that's happened and I truly hope that this change will continue in 2024, and but we'll get the tailwind not headwinds from the economy.

Gil Shwed: I think that's, for me, that's a very strong indicator of the change that's happened. And I really hope that this change will continue in 2024 and that we'll get a tailwind and not a headwind from the economy. But let's think a little bit about some of the wins.

Keith: Let's pick up a little bit about some of the wings, we talked about the infinity platform and its importance.

Gil Shwed: We talked about the Infinity platform and its importance. We have hundreds of customers now on Infinity. These are generally customers with a high volume of business with us that take our platform, we use it with multiple layers of security. And you can see here some of the names, a company like the best names in the best brands in the world, companies like FedEx, Benetton, Bayer, and Pirelli.

Keith: We have hundreds of customers now on Infinity visa generally customers with high volume business with us with takeover platform, we use it on multiple.

Keith: Layers of security and you can see here some of the names.

Keith: A company like the best names in the best brands in the World companies like Fedex Benetton buyer Pirelli and again you can see here that we have it on almost every industry and different parts of the world very proud of that.

Gil Shwed: And again, you can see here that we have it in almost every industry and different parts of the world. Very proud of that, that continuous achievement that continued throughout the year and throughout, and I think also in terms of our recognition in the industry. You can see here industry analyst leadership, and you can see the number of leadership mentions that we got every year 2019, 2021, 22, 23, and you can see that it's increasing in a very drastic manner every single year, which means that our products are getting better, our marketing is getting better, our security is getting better, customers, and analysts all recognize that, and you can see the different spaces to the left. Endpoint, firewall, cloud network security, email security, workload protection, and cloud posture management.

Keith:

Keith: With continuous achievement with continued throughout the year and throughout Q4.

Keith: And I think also in terms of our recognition in the industry you can see here industry analyst leadership and you can see number of leadership I mentioned, but we got every year 2019, 2021 'twenty two 'twenty free and you can see that it's increasing in a very drastic measure every single year, which means that for <unk>.

Keith: <unk> are getting better or marketing is getting better our security is getting better customers analyst all recognize that and you can see the different spaces to the left endpoint firewall.

Keith: Cloud metrics security email security workload protection cloud cross tremendous moment.

Gil Shwed: SASE, Secure Access Service Edge, XDR, I think it's a very good testament to the Check Point product team to be able to get into the leadership position, Transcribed by https://otter.ai. The infinity platform that we have, we've talked about it in the past, but it's getting more and more important and more and more focused. And there are two main attributes that I want to emphasize when we speak about the Infinity Platform, and then we'll be the third one, one, Cloud Delivered, so many services that are delivered and assisted from the Check Point Cloud. And second, that it's AI-powered. And we talked about the beginning of 2023. That's going to be the year of AI. I'm going to tell you a little bit about the fact that it was the year of AI.

Keith: Subsea secure access service edge Xdr, I think it's a very good testimony to the checkpoint product team to be able to get into a leadership.

Keith: Into a leadership position in so many categories. So we're very proud of it and I think it shows.

Keith: I think for 'twenty to 'twenty four we're focus is what we call the platform company.

Keith: <unk> platform that we have we've talked about it in the past, but it's getting more and more important and more and more focused.

Keith: And there is two main attributes that I want to emphasize when we speak about the infinity platform and when will be deferred one.

One <unk>.

Keith: Cloud delivered so many services that are delivered assistance from the checkpoint cloud and.

Keith: And second with AI powered than we talked about the beginning of 2020 free that is going to be the year of AI I'm going to demonstrate to a little bit about the fact that it was a year of AI.

Gil Shwed: And now we have AI very, very much embedded into every aspect of our product. And I think we're pioneering and leading in that aspect of AI in cybersecurity and AI in the kind of products that we produce. Last but not least, we talked about the three C's, comprehensive, consolidated, and collaborative for cybersecurity. And I'm going to touch on that, and especially focus on one element of that, and that's the collaborative nature. The plug.

Keith: And now we have.

Keith: Are you very very much embedded into every aspect of our product and I think we're pioneering and leading in with aspects of AI in cyber security and AI on the kind of products, which we produce.

Keith: Last but not least we talked about the free seas comprehensive consolidator and collaborative for cyber security and I'm going to touch on that and especially focusing on one element of that and with the collaborative nature.

Keith: Platform.

Gil Shwed: But let's start a little bit with Red Cloud. Threat Cloud today has more than 90 security engines, and I know how to identify and block every type or many types of threat. Over 50 of those engines are already AI powered. It was 40 last year, it was 80 engines and 40 AI-powered last year. You see, both the number and the percentage grew that year, which means that every month we introduced approximately one more, one new engine to the Infinity platform. That's a huge strength.

Keith: But let's start with between <unk> cloud.

Keith: Threat cloud today for his more than 90 security engines.

Keith: I know how to identify block.

Keith: Every type of many types of attacks.

Keith: Over 50 of those engines are already AI powered it was <unk> 40 last year. It was 80 engines and 40 AI powered last year, you'll see both the number and the percentage grew both year, which means that every month, we introduced approximately one more one engine to the infinity platform, that's a huge strength.

Keith: And what makes it a platform as with these engines can be used by many different delivery vehicles delivery vehicle can be the network security gateway. It can be the email security it can be the cloud security in every engine.

Gil Shwed: And what makes it a platform is that these engines can be used by many different delivery vehicles. A delivery vehicle can be the network security gateway, it can be the email security, it can be the cloud security, and every engine. We did an internal audit. Almost every engine here is used by multiple delivery methods.

Keith: Our internal audit almost every engine here is used by multiple delivery methods investors shrink of the checkpoint platform, we make an investment in advanced security vis investments can then be used by.

Gil Shwed: And that's the strength of the Check Point platform. We make an investment in advanced security. These investments can then be used by the customer in multiple places on multiple vectors.

Keith: The customer in multiple places and multiple vectors and the result is that we block 3 billion yearly attacks with preventive 3 billion attacks just last year with a huge number think about today.

Gil Shwed: And the result is that we block 3 billion yearly attacks and prevent 3 billion attacks just last year. It's a huge number to think about, and we talked about AI power. So what you've seen in the previous slide is how it's AI powered on the back end on the threat cloud.

Keith:

Keith: I've talked about the AI powered so what you've seen in the previous slide is how its AI powered in the backend on the threat cloud, but thats the big.

Gil Shwed: But that's the big relevance for this year and for the beginning of 2024. We make AI also go to the forefront, and we take full advantage of generative AI. So what you can see in this demo, I won't do it, but it generated a lot of excitement when I showed it on stage last week at our CPX conference, something that would have taken an analyst anything from a few minutes to a few hours to analyze, to understand why Emily Jones couldn't access the SAP server in America. And as you can see, with one sentence to our generative AI, the Infinity Co-Pilot, it It asks the user whether they want to implement this change and whether they want to install the new policy.

Keith: Realization for this year for the beginning of 2024, we make AI also go to the front and we take full advantage of generative AI. So what you can see this demo I won't do it but it's generated a lot of excitement when I showed it on stage last week.

<unk> <unk> conference something that would have taken an analyst anything from <unk>.

Keith: Few minutes too few hours to analyze to understand why MLB Jones cannot access the server in America and as you can see with one sentence to our regenerative AI.

Keith: Trinity Co pilot.

Keith: Analyzing the situation. It explains why she wasn't able to access it suggest a solution either to a certain group to ask the user wherever you want to implement this change in wherever they want to install the new policy and boom.

Gil Shwed: And boom, in a matter of one or two minutes, everything is done. Now, it's not as simple as it sounds because, I mean, we're all experiencing regenerative AI and we know how powerful it is, but to connect it to that system, we're not uploading all the user data to the... AI Cloud, which is huge amounts of data; it's not real time; it's actually the opposite. We taught OpenAI, we taught The AI tool, about all our interfaces, all our different systems around the world, some are cloud-based and some will be even on-site; we connect them all, and we let the generative AI tool create the right calls and use to the full advantage the Check Point architecture, the Check Point platform, to make very smart moves on behalf of us as the users. It can be used for troubleshooting, it can be used for This is not what will happen in 2025. This is happening now.

Keith: In a matter of.

Keith: One or two minutes everything is done now it's not.

Keith: Simple as it sounds because I mean, we're all experiencing regenerative AI and we know how powerful it is.

Keith: But to connect to vet system, we're not uploading all the user data to the.

Keith: AI cloud, we're not which is huge amounts of data it's not three times its actually the opposite we talked openly we talk.

Keith: The AI tools about all our interfaces all our different systems around the world Summer.

Keith: Cloud based and some will be even onsite we connect it all and we let the generative AI tool.

Keith: Create the right calls and used to the full advantage of the checkpoint architecture. The checkpoint platform to make very smart moves on behalf of fastest users. It can be used for troubleshooting forgive you for policy management can be used to analyze security events and it will give you.

Keith: Advising second and this is not the future which is not what will happen in 2025, we see the opening now customers can work with the customer can use it. We just opened it last week to customers and they know where Cps in Mccook, we had huge lines of customers that wanted to experiment with that and our Expo and many users of it start to drill.

Gil Shwed: Customers can work with it, customers can use it. We just opened it last week to customers, and at CPX in Bangkok, we had huge lines of customers that wanted to experiment with it at our expo, and many users that started registering to use that on their instances on Infinity, on our Infinity portal. So I think that shows you some of the things we are doing. As far as I know, we are pioneering in the industry in that, and we are way ahead of everybody in the industry in showing the use compared to other companies similar to us in that. I've talked about the cloud-delivered aspect of the platform, and I've shown you the infinity architecture and the cloud in the middle, just to understand how much this part is really in our platform. 80% plus of our security gateways, which is a big part of our network, already use the Threat Cloud. They already use a few services from the Threat Cloud.

Keith: <unk>, who use that on their instance on infinity.

Keith: Sure.

Keith: Infinity portal. So I think that shows you some of the things we are doing as far as I know we are pioneering in the industry in that and we are way ahead of everybody in the industry and showing the use compared to our aim.

Keith: Two our companies similar to us in that aspect.

Keith: I've talked about the cloud delivered aspect of the platform and I've showed you the infinity architecture in the cloud in the middle just to understand how much. This part is really in our platform.

Keith: 80% plus of our security gateways, which is a big part of our network already used the threat cloud we already used few services from the cloud and whenever they get the connection or whenever the good the relevant connection they call. The threat cloud the consultant may ask for advice and this is an threat cloud gives them real time advice about.

Gil Shwed: And whenever they get the connection, or whenever they get the relevant connection, they call the Threat Cloud, they consult, and they ask for advice. And the Threat Cloud gives them real-time advice about how to handle a certain type of threat. And 100% of our email, endpoint, mobile, and cloud workloads work with the Infinity Threat Cloud. So almost all of our customers and installations are already part of the Threat Cloud. And there's so much room for growth in that because, again, not only can we go to 100%, but we can also use more and more cloud services by each and every customer. And I think that's huge in terms of making it a true platform that is cloud delivered.

Keith: How to handle a certain type of threat and a 100% of our email endpoint mobile and cloud workloads work with Infinity threat cloud so almost all of our customers and installations are already part and the threat cloud and there's so much room for growth in that because again not because the only but we can go to 100% but.

Keith: You can also use more and more cloud services by each and every customer and I think that's huge in terms of making it a true platform that is cloud delivered. So this is a pretty big part of our business. These days and we're very proud in what we.

Gil Shwed: So this is a pretty big part of our business these days, and we're very proud of what we've done with it and the value and the security that we can deliver to customers that nobody else can. And last but not least, I will speak about the most important element I think that we'll focus on in 2024, and that's the collaborative nature of the platform. What makes this platform unique? What makes this platform more powerful and better for every customer is the fact that actually all the elements here collaborate. So if we see an attack, we know how to block the attacker everywhere. If we see an attack, we see the indicators in that attack and make sure, for example, that we see in the malicious file that the indicators that we find in the file are not present anywhere else, that we quarantine the compromised endpoint, that we've... If we see somebody scanning on our network.

Keith: Dan we vet them the value and the security that we can deliver to customers that nobody else can.

Keith: And last but not least I will speak about the most important element I think that will focus in 2024 and that's the collaborative nature of the platform. What makes this platform unique what makes this platform more powerful and better for every customer is the fact with actually all the elements here.

Keith: So if we see an attack we know how to block the attacker everywhere. If we see an attack do we see the indicators that attack and make sure.

Keith: Example, we've seen a malicious file the indicators that we filed and the file.

Keith: We're not present anywhere else that we quarantined the compromised endpoint that we've.

Keith: If we see somebody scanning on our network.

Gil Shwed: No reason why we will let them complete the scan and do more scans and come from another place until they find the weak link. The opposite. Let's block them. Let's make sure that if we identify a scanner, we will put them in a way that they won't be able to access our network at all, which is a very powerful platform unlike other very complicated systems that exist in the market that require many, many months of training and millions of dollars of investment. This is simple. It works out of the box.

Keith: No reason, we would let them complete the scan and do more scan and come from a number of place until they fly find the weak link the opposite let's block of them, let's make sure that if we identify a scanner we will put them.

Keith: In a way that they won't be able to access our network at all.

Keith: So which is a very powerful platform. Unlike other very complicated.

Keith: Our systems with existing in the market with requires many many months of training and millions of dollars of investment. This is simple it works out of the box and the idea here is to unveil the power of the collaboration of the checkpoint part platform and also by the way it's available for third party product.

Gil Shwed: And the idea here is to unveil the power of the collaboration of the Check Point platform. And also, by the way, it's available for third-party products, every customer. So I think we're making the first few steps. And I think it's very important. It's not just a vision. It's not just a technology.

Keith: Every customer so I think we're making here the first few steps and I think it's a very important it's not just a vision. It's not just the technology, it's actually technology that works and can be used by every customer.

Gil Shwed: It's actually technology that works and can be used by every customer. And when we see collaboration on many, many other aspects of our platform, and my focus is to make sure that all our products collaborate. So I think when we look at all of that, the threat cloud AI, the brain behind that, the fact that it's cloud delivered to almost every customer and every installation, and the collaborative element of all the different elements within one customer installation and even between multiple customers through the cloud, that creates an automated response to deliver the best security, one need to ask yourself, okay, so what does it end up being? Does it end up generating or delivering the best security or better security than average?

Keith: And when we see collaborations and many many other aspects of our.

Keith: Platform and my my focus is to make sure that we with all our products collaborate.

Keith: So I think when we look at all of that the threat cloud AI the brain behind with the fact that it's cloud delivered to almost every customer in every installation and the collaborative element of all the different elements within one customer installation and even between multiple customers through the cloud that creates automation response delivered the best six.

Keith: <unk> wanted to ask yourself, okay. So what does it end up does it end up generating delivering the best security or a better security than others.

Gil Shwed: And what I want to share with you here is a little bit of that, the latest Miracom report that shows the effectiveness of that. So Miracom did this survey last year, which I think we scored like 99.7. This year, they did it again. And we scored 99.8.

Keith: And what I want to share with you here is a little bit of threat is the latest <unk> report, which shows the effectiveness of Fe tomorrow compete with.

Keith: The survey last year, which I think we scored like $99 seven this year. We did it again, we scored a $99 eight so it's nice to see an improvement even with such numbers. We're talking here about what's called zero day, plus one attacks with attacks that exist for one day, so very new usually platforms don't know how to deal with.

Gil Shwed: So it's nice to see an improvement even with such numbers. We're talking here about what's called zero day plus one attacks. That's attacks that exist for just one day. So they are new, and usually platforms don't know how to deal with them.

Keith:

Gil Shwed: And they did a test for 100, I think almost 500 different attacks like that, that were very fresh, and you can see the effectiveness, you can see where checkpoint stands, blocking pretty much all the attacks, and you can see that the competitors are way, way, way behind. Now, I think we all understand the difference between 70% to 100%. But it's not just 50% better. It's much, much more than that. Actually, it's almost infinitely better.

Keith: <unk>.

Keith: And we did a test for 100, I think almost 500 different attacks like that which were very fresh and you can see the effectiveness you can see where checkpoint stance blocking pretty much all the attacks that you can see what the competitors are way way way behind.

Keith: I think we all understand the difference between 70% to two.

Keith: 100%.

Keith: But it's not just 50% better it's much much more than that actually.

Keith: Almost infinitely better because let's understand what it means and we ask our researchers the checkpoint.

Gil Shwed: Because we want to understand what it means, and we ask our researchers at Check Point. How many different types of new attacks can an organization face or exist or can come up in an organization way in a period of time, let's say for a year. And they said that facing 177 new families like that could be very typical for an organization per year. Now let's see how many of them would be blocked by each product. And you can see with Check Point, it will be 100%. Zero attacks will get through.

Keith: How many different families types neurotoxin organization faced or exist.

Keith: It can come up with an organization way in a period of time, let's say for a year and we said like.

Keith: Facing a 177 new families like that can be very typical for an organization per year now lets see how many of them would be blocked by each product and you can see with checkpoint. It will be 100% zero attacks will get through nobody will be able to cross this platform with nos.

Gil Shwed: Nobody will be able to cross this platform that knows how to address this kind of attack. And you can see with your competitors that anything from 28 to 92 attacks can get through their security. And that means that you both have something invested in, and yet dozens of attacks can go through your security and your infrastructure because we are new. And that's not what we need. We need a platform that can prevent known and unknown attacks, the most sophisticated attacks, fifth-generation attacks.

Keith: To address this kind of an attack and you can see with your competitors anything from <unk>.

Keith: The LTA to 92 attacks can get through their security.

Keith: And that means that you both have something you invested and yet dozens of attacks can go through your securities.

Keith: Infrastructure, because we are a new and that's not what we need we need a platform that can prevent against the known and the unknown attacks. The most sophisticated attack the fifth generation of attacks and I'm very proud with virtual tomorrow confound the checkpoint deliveries in the first quarter as CEO, we set it last year, even though what you see here.

Gil Shwed: And I'm very proud that Myrkom found that Check Point delivers. And if I'll quote our CEO, we said it last year, even though what you see here is the results from last week, these are very updated results from January of this year. He says basically prevention is number one, number two is the victim, and you don't want to be that victim.

Keith: The results from last week. This is very updated results from January of this year.

Keith: He says basically prevention is number one number two is the victim and you don't want to be.

Keith: That victim and I think thats, what we are aiming to deliver it and I think I'm very very proud of our team around the world with works very hard to deliver these results.

Gil Shwed: And I think that's what we are aiming to deliver. And I think I'm very, very proud of our team around the world that works very hard to deliver these results. So I think all together, and if we see the platform, we have the Quantum family to secure the network, the Cloud Guard to secure the cloud, Harmony to secure the workspace, including email, endpoint, everything. All of them use the Infinity core services, the Threat Cloud, the Play Blocks, all of that, and many, many other core services that we have in the middle to deliver the best security.

Keith: So I think altogether, we see that and if we see the platform we have the quantum family to secure the network the cloud or to secure the cloud harmonia to secure the work space, including email endpoint everything all of them use the infinity core services the threat cloud play blocks all.

Keith: <unk> and many many other core services that we are in the middle to deliver the best security and I'm very proud that we're able to do so.

Gil Shwed: And I'm very proud that we were able to do that. So before I conclude, I have just one more thing to share with you. We opened the year last week with our CPX experience, Check Point Experience Conference. First time in four years that we are doing it in full force physically; thousands of people are going to participate in that, and we had the first one, which was our kind of pilot one in Bangkok last week. 1500 people participated, a very high rate of participation and even of attendance; almost everybody that registered actually showed up, which is also a good indication of the enthusiasm. The highest satisfaction rate ever, over nine, and the highest satisfaction we measure on many, many different aspects. They were all very, very strong.

Speaker Change: So before I conclude let me just one more thing to share with you. We've opened the year last week with our Cps experienced checkpoint experience conference.

Speaker Change: First time in four years, but we're doing it in full force physically.

Thousands of people are going to participate in wet and we have the first one which our kind of our pilot one in <unk>.

Speaker Change: Core plus week.

Speaker Change: 1500 people participated very high rate of participation and even of attendance almost everybody with registered actually showed up which is also a good indication of the enthusiasm the highest satisfaction rate ever over nine and the highest satisfaction we measure it on many many different aspects. They were all very very strong.

Gil Shwed: Not just the organization and the conference, it's the content, it's the relevance, it's the fitness of Check Point, and we rate even each individual session; all the sessions got very high scores, which I was very proud of. www.checkpointsoftware.com means hundreds, 100 to 200 day customers, partners, um..., in these days, and I got a lot of feedback. And I mean, I'm, again, now after COVID, it's like four years since I had such an experience.

The organization and the conference is the content. The relevance is the fitness of checkpoint and we rate even each individual session. All the sessions got very high score, which I was very proud of all the people in checkpoint to do that.

Speaker Change: And for me it was great to see so many people after solar such a long time and the level of enthusiasm. It was heartwarming to see what people are truly enthusiastic and truly need for the best security like met personally.

Speaker Change: Round tables.

Speaker Change: I mean, one hundreds 100 to 200 customers partners.

Gil Shwed: And it was an amazing experience to see what we saw. And I hope it will mean good things for the next two conferences that we are going to hold in Europe in two weeks and in America, exactly a month from now, in Las Vegas. So I think that's a good start, sharing all the product news, showing AI in action, and getting the customer to participate in that. So if I need to summarize, we finished and we started 2023, and you see it here in the graph, with a very challenging market condition. And despite those challenging conditions, I'm very proud of our team that was able to produce good results every single quarter.

Speaker Change: In these days and I got a lot of feedback and I'm.

Speaker Change: Again now after Covid is like four years that they never had such an experienced and it was an amazing experience to see what we've seen and I hope it will mean good for the next two conferences, which we are going to hold in Europe in two weeks and in America exactly in a month from now in Las Vegas. So.

Speaker Change: I think thats a good start sharing all the product news showing <unk> and getting the customer to participate in that so if I need to summarize we finished we started 2023 and you see here in the graph with a very challenging market condition and despite very challenging conditions I'm very proud with our team that was able to.

Speaker Change: To produce good results every single quarter, we finished it with a very strong finish turning into double digit growth in new business, which is my main indicator.

Gil Shwed: We finished it with a very strong finish, turning into double digit growth in new business, which is my main indicator. 2am to 2023 that will deliver now in 2024. Again, AI powered and cloud delivered.

Speaker Change: Yeah.

Speaker Change: To the health of the business driven by the momentum of Infinity strong profitability, 47% last quarter, 45% for the year and I think I'm very proud of all the innovation that the checkpoint team didn't.

Speaker Change: 2020 free that will deliver now in 2024 again AI powered and cloud delivered so.

Gil Shwed: So, I think it's a good summary, and you can see how enthusiastic I am about the future of Check Point and with our team. And before I open the call to your question, let's just quickly go through our projections for 2024 and the first quarter. You know, my usual caveat that you cannot predict the future.

Speaker Change: I think it's a good summary, and you can see how enthusiastic I am for the future of checkpoint and with our team.

Speaker Change: And before I open the call for your question, let's just quickly go through our projections for 2024 in the first quarter you know my regular caveat, but you cannot predict the future.

Gil Shwed: But despite that, I'm always sharing our projections based on what we see in our pipeline with our sales force and a little bit about the market trends. And so I'm ready to share the 2024 projections and Q1. So let's look at 2024. Revenues are going to be in the range of 2.475 billion dollars to 2.625 billion dollars, which means growth of 6% in the midpoint and 9% growth at the high end. Non-GAAP EPS is expected to be between $8.70 to $9.30, 7% growth in the midpoint and 10% growth at the high end. GAAP EPS is expected to be approximately $1.70 less than that, and And I think this is a pretty good number that we are starting with. I think Roy also indicated the challenge. It's not a challenge.

Speaker Change: Jim.

Speaker Change: But despite that I'm always sharing our projections based on what we see in our pipeline, we have our sales force a little bit of the market trends.

Speaker Change: <unk>.

Speaker Change: And so I'm ready to share that 2024 projections in Q1, so let's look at 2024.

Speaker Change: Revenues are going to be in the range of two 475.

Speaker Change: Billions of dollars to $2 $6 $5 billion, which means growth of 6% in the midpoint and 9% growth at the high end.

Speaker Change: non-GAAP EPS is expected to be between $8 70 to $9 and <unk> <unk>.

7% growth in the midpoint, 10% growth at the high end GAAP EPS is expected to be approximately $1 70 less than that.

Speaker Change:

Speaker Change: And I think this is pretty good.

Speaker Change: Number two we're starting with I think you also indicated the challenge it's not the challenge I think if you look at the EPS I think is very healthy and I mean, it's great numbers, but with the number of shares.

Gil Shwed: I think if you look at the EPS, I think it's very healthy and it's great numbers, but with the number of shares not declining at the rate that we anticipated, thanks to you guys and thanks to the increase in share price. So I think it's a good phenomenon. And let me maybe focus on the last slide on the first quarter and the projection there. Revenues are expected to be between $575 million and $610 million, 5% growth at the midpoint and 8% growth at the high end. And non-GAAP EPS is expected to be between $1.95 and $2.05, 11% growth at the midpoint and 14% growth at the high end. GAAP EPS is expected to be $0.44 less.

Speaker Change: Not declining in the rates, but we anticipated. Thanks to you guys and thanks to the increase in share price. So.

Speaker Change: It's a good phenomena and let me maybe focus last slide on the first quarter and the projections <unk> revenues are expected to be between 575 million to $610 million, 5% growth at the midpoint and 8% growth at the high end and non-GAAP EPS is expected to be between dollars.

Speaker Change: <unk> 95 to $2 five.

11% growth at the midpoint and 14% growth at the high end <unk>.

Speaker Change: GAAP EPS is expected to be 44 less.

Gil Shwed: And again, I think it's going to be pretty healthy numbers to start the year. And I hope that all the effort and the trend that we've seen in customer engagement, building pipeline, technology pipeline, products that we are launching, and hopefully, with some help, some tailwind from the industry and from the economy, we'll be able to translate that into these numbers and maybe even better numbers. And so, thank you, everyone, and I think we are ready to open the call to your questions. All right. As a refresher, please limit your question to one. So we can get through as many folks as possible at year end here, but we end up with a limited amount of time for Q&A. So our first question is going to come from Adam Tindall at Raymond James, followed by Patrick Colville from Scotiabank. Thanks, Kip.

Speaker Change: And again I think as you go are going to be pretty healthy numbers to start the year and I hope with all the effort and the trend that we've seen in customer engagement building pipeline technology pipeline products that we're launching and hopefully with some help some tailwind from the from the industry and <unk>.

Speaker Change: The economy will be able to translate that into these numbers and maybe even better numbers.

Speaker Change: So thank you everyone and I think we are ready to open the call for your questions.

Speaker Change: All right.

Speaker Change: As a refresher please limit your question to one.

So we can get through as many folks as possible at year end here. We ended up with limited amount of time for Q&A. So our first question is going to come from Adam Tyndall at Raymond James followed by Patrick Colville Sancha batch.

Adam Charles Borg: Gil, I just wanted to start with your announcement and congratulate you on many years of building such a strong, profitable company. But I guess I'd like to start by asking why now? It sounds like, you know, based on the initial guidance, we're at a point of acceleration at Check Point. So why was this the time to make that announcement? And secondly, the characteristics that you'd be looking for in a successor, the key vision items that you and the board would like. Okay, so first, an excellent question. I think there's no good time to do these kinds of changes. And I'm struggling with that question. I mean, people ask me, when are we going to move on?

Adam Charles Borg: Thanks, Kevin.

Adam Charles Borg: Wanted to start with your announcement and congrats on many years of building such a strong profitable company, but I guess I'd like to start with asking why now it sounds like based on the initial guidance. We're at a point of acceleration that checkpoint. So why was this the time to make that announcement and secondly, the characteristics that you'd be looking for in a successor.

Adam Charles Borg: Key vision items that you and the board would like to see Okay. So first certain excellent question I think there is no. Good time to do these kinds of changes and I'm struggling with that question. I mean people ask me when are we going to move on whether youre going to do something else for APA.

Gil Shwed: When are we going to do something else for? Approximately 27 years now, almost since we went public, and I think my answer was pretty straightforward every single year. I like what I'm doing. I like Check Point.

Adam Charles Borg: Approximately 27 years now almost since we went public and I think my answer was pretty straightforward every single year I like what Im doing a light checkpoint. That's my life mission I want to stay here and I want to make it successful of course when times are tough you always ask yourself, maybe I should do something else, but when it's against the time, you're safe times are tough than they need.

Gil Shwed: That's my life mission. I want to stay here, and I want to make it successful. Of course, when times are tough, you always ask yourself, "Maybe I should do something else."

Gil Shwed: But then again, it's the time you say, if times are tough, then I need to be here. I need to make sure Check Point is successful, and it's not the right time. And in the last few months, I would say I've been struggling again with that question. Now again, I'm fully committed to Check Point. I intend to stay at Check Point and work at Check Point. So don't get me wrong.

Adam Charles Borg: To be here I need to make sure checkpoint is successful and it's not the right time.

Adam Charles Borg: And in the last.

Adam Charles Borg: A few months I would say.

Speaker Change: <unk> again, we vet question now again I'm fully committed to checkpoint I intend to stay in checkpoint and work at checkpoints. So don't get me wrong.

Gil Shwed: I'm not going away. Check Point remains my life mission. And I like what I'm doing, and I think you can see that in everything I do and what we have. And I finally got to the decision to announce it now and start the process now, I think last week, when I saw that everything is working and everything is in its place, the products are delivering, the results are excellent, the trends that I've seen internally in the fourth quarter were excellent. And again, I got it last week because I met the people in Bangkok at CPX and I saw the level of enthusiasm and the customers. Actually, I was even more encouraged when Now, remember. I think it's important to understand we're just starting the process. We haven't started the search yet. So it will take time. I wish we were able to find somebody very quickly, but these processes usually take between six months to two years.

Speaker Change: Not going away checkpoint remains my life mission and they like what I'm doing and I think you'll see.

Speaker Change: Everything I am.

Speaker Change: <unk> in the what we have and I finally got to the decision to announce it now and start the process now I think last week.

Speaker Change: When I so that everything is working and everything has its place the products are delivering.

The results are excellent the trends that <unk> seen internally in the fourth quarter were excellent.

Speaker Change: And again I got it last week, because I met the people in Bangkok in CTX and they show the I've seen the level of enthusiasm and the end customers that actually I was even more.

Speaker Change: Courage when I, so even prospects that came to the conference and wanted to hear about checkpoint and I said.

Speaker Change: The top and that's the time to start the process now remember.

Speaker Change: I think it's important to understand we're just starting the process.

Speaker Change: We haven't started the search yet.

Speaker Change: So it will take time.

Speaker Change: We will able to find somebody very quickly, but with processes usually takes between six months to two years. So.

Gil Shwed: So I'm not, again, I'm here, I'm staying. And once we identify the right person, I will work with her or him to do the right Passes of the Torches, and then I intend to stay here.

Speaker Change: So I'm not again I'm here I'm, staying and once we identify the right person.

Speaker Change: I will work.

Speaker Change: Her or him to do the right cost.

Speaker Change: As of the torches and then I intend to stay here executive Chairman means it's not just the title I want to stay a checkpoint I want to dedicate more time and I want to select the subjects that I'm working on wherever it is the future of cyber wherever it's new security technologies wherever it's making everything in the checkpoint platform work can tikkun simple.

Gil Shwed: Executive Chairman means it's not just a title, I want to stay at Check Point, I want to dedicate more time, and I want to select the subjects that I'm working on, whether it's the future of cyber, whether it's new security technologies, whether it's making everything in the Check Point platform work and tick and simple like I would like it to be, whether it's meeting more customers, partners, because it will give me more time to hear them and understand them, and maybe supporting the management, which is, by the way, maybe the last point that I didn't mention about the timing is the management of Check Point, I think we have an amazing team that runs the business, so I mean it gives me the comfort that the Check Point is in good hands, and I think that's maybe the most important element when you think about that. So, I think that's the explanation for the timing. The characteristics of the candidates.

Speaker Change: I would like it to be.

Speaker Change: And wherever it's meeting more customers partners because it will give me more time to hear them and understand them and maybe it's supporting the management, which is by the way the maybe the last point that I didn't mention about the timing as the management of checkpoint I think we had an amazing team.

Speaker Change: That runs the business. So I mean, it gives me the comfort with.

The checkpoint is in good hands and I think that's maybe the most important element when you think about.

Speaker Change: About that so.

Speaker Change: I think that's that's the explanation for the timing.

Speaker Change: The characteristics of the candidates so as I mentioned again, we're starting the process and we will refine that.

Gil Shwed: So, as I mentioned, again, we are starting the process, and we will refine that, and I would look for somebody that's very passionate about cybersecurity. I think what Check Point stands for is the best security. So I want somebody to promote that value, care about it, understand it, and so on. I would look for somebody that has many Check Point characteristics, that's detail-oriented, understands the big picture, understands the details, and so on. But I would look for somebody that's very outbound, that's very sales-oriented, that can go out and meet with customers and partners and travel the world and represent Check Point at every step of the way. We have people like that at Check Point.

Speaker Change: I would look for somebody that is very passionate about cyber security I think with checkpoint stands for is the best security. So I want somebody to promote wet value care about it understands that.

Speaker Change: And so on so that's one.

Speaker Change: I would look for somebody with.

Speaker Change: <unk>.

Speaker Change: But there's many checkpoint characteristics.

Speaker Change: Can.

Speaker Change: Can the detail oriented understands the big picture understands the details and so on but I would look for somebody that's very outbound with very sales oriented that can go out and meet with customers and partners and traveled the world and represent checkpoint in every step of the way we have people like venting checkpoint we have strongly.

Gil Shwed: We have strong leadership today, at the top levels of the company, but you can always do more in that. The opportunity that we have is huge, and I think the more we get there, the better we will do. These will be my top characteristics from a candidate. Somebody that can be a good partner for me, augment my skills with other things that I think can work for the benefit

Speaker Change: They're shipped today.

Speaker Change: At the top levels of the company, but you cannot.

You can always do more in the opportunity, which we have is huge and I think the more we get there the better we will do.

Speaker Change: This will be my top characteristics from.

Speaker Change: From a candidate.

Speaker Change: If somebody that can be a good partner.

Speaker Change: For me.

Speaker Change: Okay meant my skills, we've other things.

Speaker Change: That I think can be debated can work for the benefit of checkpoint.

Patrick Colville: All right. Our next questioner is Patrick Colville from Scotiabank, followed by Joseph Gallo from Jeff. Yeah, just to reiterate that, Gil, it's been a real pleasure working with you. I think we can all agree you're definitely one of the OGs of the security industry, and we wish you all the best in your new executive chairman role. Let me ask you about the guidance. The fiscal 24 guidance is no doubt impressive. My kind of quick math suggests it's a re-acceleration.

Speaker Change: Alright.

Our next questioner is Patrick Colville from Scotiabank, followed by Joseph Gallo of Jefferies.

Patrick Colville: Thanks Kipp.

Patrick Colville: Yeah, just to reiterate that I mean, it's been a real pleasure working with you I think we can all agree you were definitely one of the lgs of the security industry and we.

Joseph Gallo: We wish you all the best in your new Exec Chairman role let.

Patrick Colville: Let me ask you about the guidance.

Patrick Colville: The fiscal 'twenty guidance is no doubt impressive my quick math suggests isn't a reacceleration.

Gil Shwed: Can you just talk about the inputs to your guidance? I mean, touching on the product line and the kind of key subscription line as to how you got to that forecast. And so, first, thank you very much.

Patrick Colville: Can you just talk about the inputs to your guidance I mean touching on the product line and the kind of key subscribe to mine as to how you got to that forecast.

Speaker Change: So first thank you very much.

Gil Shwed: I'm Roy Kinnaird, and once I finish, I'll give the high level. I think what we're basing that forecast on is primarily the projections from the same source and the pipeline that we see. And I think the idea of the engagement that we did in 2023. If you remember, in 2023, I spoke a lot about customer engagement and how much we need to go out and meet with our customers and prospects. We did extremely well with that, met with double the amount of customers, and met with three times more prospects, and I think we want to continue with that trend. But I think what you should translate is an increased pipeline, and we do have an increased pipeline.

I'm Roy you can add there and once I finish I will give the high level I think what we are what we are basing led.

Speaker Change: And that forecast is primarily on them.

Speaker Change: On the projections from the same source in the pipeline that we see and I think the idea.

Speaker Change: The engagements that we did in 2023, if you remember in 2023 I spoke a lot about customer engagement and how much we need to go out and meet with our customers and prospects. We did extremely well on that met we've doubled the amount of customers, which we have three times more prospects and I think we want to continue with that trend.

Speaker Change: But I think what you should translate to increased pipeline and we do have an increased pipeline now obviously just to be able to understand when you do more meetings and more customers. The pipeline doesn't grow in the same percentage because the sales for usually what we do is the you know the low hanging fruit and then it's an extra effort and lower success rate with <unk>.

Gil Shwed: Now, obviously, just to be able to understand, when you do more meetings and more customers, the pipeline doesn't grow at the same rate because the sales for what they usually do are the, you know, the low hanging fruit. And then it's an extra effort and lower success rate with the increased engagement, but we definitely see an increased pipeline across the board. And there is a very direct correlation between the engagement with customers and the size of the pipeline.

Speaker Change: The increased engagement, but we definitely see an increased pipeline across the board and very very direct correlation between the engagement with customers to the size of the pipeline.

Gil Shwed: And so we are basing that on that. We are looking at the trends and the industry growth rates and the economy. I think with the economy, we see some positive signs, but we are not I'm not sure whether the challenge that the market saw last year is over. We've actually seen with some of our competitors that they're being hit by the slowdown that we saw a year ago. So it's probably not over in that regard.

Speaker Change: And so we are basing veterans that we are looking at the trends in the industry growth rates in the economy I think with the economy, we see some positive signs, but we are not I'm not sure.

Speaker Change: The challenge with the market as seen last year is over we have actually seen with some of our competitors that they are being hit.

Speaker Change: By the slowdown that we've seen a year ago.

Probably not over invest regards of it balances that from being a more optimistic.

Gil Shwed: So that balances that from being a more optimistic outlook. And yet, at the same time, let's remember there's a lot of uncertainties. Even if there's one thing I've learned from the last, again, after 30 years of business, if there's one thing I've learned from the last three or four years, you can always be more surprised than you were before. And I think we'll face that in 2020 with CO

Speaker Change: Outlook and yet on the same time, let's remember there is a lot of uncertainties, even if theres one thing ive learned from the last again after 30 years of business. If there's one thing that I learned from the last three or four years, you can always be more surprised when you've been before and I think we faced it in 2020 with Covid. We felt it was 2021.

Gil Shwed: We've faced it in 2021 and 2022, that despite COVID, the economy actually went kind of in the opposite direction and did extremely well. We faced it in 2023 or at the end of 2022, that once we exited the pandemic, instead of the economy flying through the roof, when everybody went back to spending. There was a Check Point Software Technologies Ltd., Roli. I don't know if there's anything you want to add to the quantity. I think you mentioned almost everything.

Speaker Change: In 2022 with <unk>.

Despite COVID-19 the economy actually did kind of went the opposite direction and did extremely well we faced it in 2020 free or at the end of 2022, but once we exited the pandemic instead of the economy flying through the roof when everybody goes back to spending.

Speaker Change: There was.

Speaker Change: Jim.

Speaker Change: The challenge, though of course, you do your job to explain it and I think in retrospect, we couldnt explain all of it but the time almost every one of these moves is a surprise and even now with the situation in Israel shows us, but you can always be surprised.

Speaker Change: Proud within checkpoint, we had consistent execution, even with those trends and what they wish, but we will be able to to.

Speaker Change: To do even better that's what I'm, saying it for a long time in nine minutes.

Roy Galan: I think, again, we are looking, we looked at the last quarter, as we mentioned, and it's not only the last quarter, but I think the real turnaround came last quarter. It started in Q3. We see more demand for our products, for appliances. We see strong demand for our Infiniti, our subscription business. And, again, we feel more optimistic. Still, it's a wider range, but we believe that the guidance is good, and we hope it will be in the high end of the range. All right. Next up is Joseph Gallo from Jefferies, followed by Jared Pomerantz from Susquehanna. It was awesome.

Speaker Change: Ravi I don't know if theres anything want to add on the <unk> you mentioned.

Ravi: <unk> again, we are looking a lot on the last quarter, we mentioned in last quarter, but the team there.

Ravi: <unk> came last quarter Q3, C multi mentor product classes, and we see strong demand falling infinity, it's all subscription business.

Ravi: Phil models.

Ravi: Still it's a wide range, but we we believe that the guidance is good and we hope this will be even then we will be in the high end of the range.

Ravi: Alright, our next phase of Joseph Gallo from Jefferies, followed by Jared power at Susquehanna.

Awesome. Thanks for the question Gil Congrats on the 31 years of success.

Joseph Gallo: Thanks for the question. Gil, congrats on the 31 years of success. I'm glad you are staying involved with the company. Guys, great double-digit new business growth in 4Q. What should we think about it in calendar 24?

Joseph Gallo: Glad you are staying involved with the company.

Joseph Gallo: Hey, guys, great double digit new business growth in <unk>, how should we think about it in calendar 'twenty four.

Roy Galan: And how does that correlate to billions of growth in calendar 24? You know, what is needed to drive billions of growth to double digits? And can we expect that in 24?

Joseph Gallo: How does that correlate to billings growth in calendar 'twenty for you what is needed to drive billings growth of double digits and can we expect that in 'twenty four.

Roy Galan: I'll answer, so I think again, Q1 was a great quarter in terms of W2Growth in new business. In the end, it will also be translated into billing. I remind you all that, again, I mentioned it in our presentation, we see more flexible billing terms. I think in the market in general, also our competitors are offering more flexible terms in terms of more flexible billing terms. But in the end, if we're going to see consistent growth in our new business, as we've seen in Q4, and I believe that also in the end, you're going to see it also in the billing. I remind you also of the billing duration, which again, because of the interest environment, in 2023, the billing duration was, in general, lower than compared to 2022. So it seems like it's been stabilized.

Speaker Change: I'll answer on the exciting again, it's ultimately again Q1 was a great quarter in terms of say double digit growth in new business and it also will be transferred into billing I remind you all that again I mentioned it also in our presentation. We have provided we see more flexible buildings in the market in general our competitors.

Speaker Change: Offering more flexible in terms of flex it more flexible billing terms, but in the end if we're going to see consistent growth in all <unk>.

Speaker Change: New business as we've seen in Q4, and we I believe this also in Dan do you want to see it also in the building.

Speaker Change: I remind you also the billing duration that again because of the 9% environment under <unk>. The BT ablation in general was lower than compared to 2022. So it seems like it stabilized. So again hopefully also we just want to see it also in the next few quarters, we're going to see also the growth underpinning not only in the new business.

Roy Galan: So again, hopefully, we're going to see growth from the beginning, not only in the new business. And, of course, it will be reflected in revenues, yeah. And I want to add that I think that we should use our financial power and the fact that we are cash rich to actually use that in a positive way, not just to win customers, but also to create more business models that are annuity-based, turning some capital investment business models into annuity ones, both because it can benefit, by the way, which is a win-win, because it benefits the customers that are now getting more and more used to a So I think and that again can have an impact on short-term buildings when you get things forward looking. Thank you. Next up is Jared Pomerantz from Susquehanna, followed by Tal Liani of B of A.

Speaker Change: And on that one.

Speaker Change: Translating to revenues yet.

Speaker Change: And I want to add that I think that we should use our financial power and the fact that we are cash reached to actually use that in a positive way not just to win customers into gear.

Speaker Change: But also to create more business models that our annuity base turns some capital investment business model into annuity one both because it can vary by the way, which is a win win because it benefited the customers.

Speaker Change: That are now getting more and more used to subscription kind of model and it's good for us because the more you create it you get more predictable and long lasting business. So I think that again can have.

Speaker Change: Any impact on the short term billings when you.

Speaker Change: Get things are forward looking like that.

Speaker Change: Okay. Thank you alright net.

Speaker Change: Next step is Jared power ads from Susquehanna, followed by <unk> of Bofa.

Jared Pomerantz: Hey guys, thanks for taking the question and preemptive congratulations to you Gil as you begin the transition to your next role as the Executive Chairman. Maybe just one question for me: you guys spent some time in the prepared remarks speaking to the Infinity platform and strength that you're seeing there. Maybe if you could just dive in a bit further, how much of that new business strength that you pointed to would you attribute to Infinity? And how are you thinking about the go to market and potential shifts there down the road? Roy... Well, again, in terms of, it's not something that we discussed, but I can tell you that a significant part of our new business today is coming from Infiniti. And every quarter, the portion of Infiniti is higher; it's growing very fast.

Jared Power: Hey, guys. Thanks for taking the question and preemptive Congratulations to you guys you began the transition to <unk> executive Chairman.

Jared Power: Maybe just one for me you guys spent some time at <unk>.

Jared Power: Paired remarks speaking to the infinity platform and strength that Youre seeing there maybe if you could just dive in a bit further how much of that new business strength that you pointed here would you attribute to infinity and how are you thinking about the go to market and potential shifts there down the road.

Jared Power: Sorry.

Speaker Change: Well again in terms of something that we decided not to continue the significant part of our new business today is coming from Infinity.

Speaker Change: Every quarter.

Speaker Change: Olsen of Infinity is higher is growing very fast we are talking about strong double digit growth in new business bookings.

Roy Galan: We're talking about strong double-digit growth in new business bookings. And we've shown you in the last few quarters that we are showing a consistent, strong double-digit growth in revenues. So it's also, we see consistent double-digit growth in strong double-digit growth in new business related to Infiniti. So I think in the end, we expect that this portion of the new business that will be related to Infinity will grow every quarter based on the demand that we see today and the pipeline that we see today for their whole Infinity. All right, thank you. Next up is Tal Liani.

Speaker Change: We've showed you in the last two quarters were showing a consistent.

Speaker Change: Double digit growth in revenues. So it was also we see consistent double digit growth.

Speaker Change: Strong double digit growth in new business related to infinity.

Speaker Change: So in the end the weeks after the auction on the new business will be related to MPC will grow.

Speaker Change: Also based on the.

Speaker Change: The demand as we see today in the pipeline that we see today for their own.

Speaker Change: Solution.

Speaker Change: All right. Thank you next step for Sally.

Gil Shwed: I want to be clear, it's still about 10 to 20% of our business and revenues. It's not the majority of the business. That means that there is plenty of room for growth as we extend the platform. All right, next up is Tal Liani, followed by Shaul Eyal of TD Cowell.

Speaker Change: It's still about 10% to 20% of our business in revenues just to be clear, it's notwithstanding majority of the bank.

And that means that there is plenty of room for growth as we extend the platform.

Alright.

Speaker Change: Liana, followed by Shallowly al TD gallon.

Tal Liani: Hi, questions one is what are the trends of new customers versus existing customers; are you able to grow with new customers more than in the past? Can you give us kind of the last few years' kind of trends of contributions from new customers? And second, when I look at your numbers, the services are flat, 2% growth a year, the maintenance piece. The subscription is growing very consistently, about 15% a year, with a little bit of acceleration. The real change we're seeing is actually in the products and licenses that are going down less than before. So the question is, what are the underlying trends in products and licenses? And can you take us into kind of the numbers, beneath the numbers? What could this look like the next year, the next two years, and what drives it? Thanks. So I'd like to try and give you an answer. First, as we said, I mean, it's a first we are getting every product in Check Point with a subscription base that is growing very fast. Harmony email is a good example.

Speaker Change: Hi.

Speaker Change: Two.

Speaker Change: <unk> one is what are the trends of new customers versus existing customers are you able to grow with.

Speaker Change: With new customers more than in the past can you give us kind of even last few years kind of trends of contribution of new customers.

Speaker Change: And second when I when I look at your numbers.

Speaker Change: The services are flat, 2% growth for the year the maintenance piece. The subscription is growing very consistently about 15% a year a little bit of acceleration the real change what we're seeing is actually in the products and licenses that are going down less than before.

Speaker Change: So the question is what are the underlying trends and products and licenses and can you take us into kind of the numbers beneath the numbers.

Speaker Change: But how could this look like the next year. The next two years.

Speaker Change: And what drives it thanks, so I'd like to try and give you. His first day as we said I mean, it's first we are getting every product in checkpoint with subscription based is growing very fast high ammonia is a good example, it's sold as a subscription and it's growing.

Gil Shwed: It's sold as a subscription, and it's growing very, very fast. So that's a good example. But there are a few others that are like that, and most of them are growing quite nicely. On top of that, each gateway that we sell, which is a product, comes with a bunch of subscriptions, and they are also growing, and there are more services like that that are being consumed, subscription services that are being consumed with every gateway. As I mentioned last year, we had a very tough three quarters at the beginning of the year, where new projects were delayed and postponed, and new business and products were going down. And despite that, because of the strength of the subscription and the fact that 80% of our business is already annuity, we've been able to meet the quarterly results every single quarter, which again, don't take lightly.

Speaker Change: Very very fast so that's a good example, but very few offers that are like that and most of them are growing are growing quite nicely on top of that each gateway that we sell which is a product comes with a bunch of subscriptions and we're also growing in versus more services like that which are being consumed.

Speaker Change: <unk> services that are being consumed every gateway.

Speaker Change: Mentioned last year, we had the very tough three quarters at the beginning of the years were actually new projects were delayed postponed.

Speaker Change: And the new business and the products, we're going down.

Speaker Change: And despite that because of the strength of the subscription and the fact that 80% of our business is already annuity we've been able to meet the quarterly results every single quarter, which again don't take it lightly smart.

Gil Shwed: It's not trivial, but I think that's the strength of what we have, and last quarter, it changed. In the last quarter, you were still seeing product revenues go down, but product orders went up, and went up double digits. So I think that's a good sign as we head into 2024. The indicators for the first quarter are positive, too. Keep in mind that when it's part of an infinity deal, the revenue recognition or the delivery of the product may take time because in infinity deals, in a regular deal, you buy a product, you get it. In an infinity deal, you sign up for a free year, and you get the product whenever you want. You don't have to get the products on day one, and actually, you have, sometimes you even have the freedom to pick the products along the way.

Speaker Change: It's not trivial, but I think that's the strength of what we have.

Speaker Change: Last quarter. It has changed in the last quarter you were still seeing the product revenues go down, but the product orders went up and went up double digit.

Speaker Change: So I think that's a good sign as we head into 2024.

Speaker Change: Indicators for the first quarter are positive too.

Speaker Change: Keep in mind with when it's part of an infinity deal the revenue recognition or the delivery of the product may take time, because in infinity deals in a regular daily byproduct you get it an infinity deal you sign up for a free year and you get the product whenever you want you don't have to get the products on day, one and actually sometimes you even have the freedom to pick the product.

Speaker Change: Along the way so.

Gil Shwed: So we... Some of that growth will take time, but the indicator is very positive.

Speaker Change: So.

Speaker Change: So some of that growth will take time, but.

But the indicator is very positive and if that trend will continue that's very important.

Gil Shwed: And if that trend continues, that's a very important kind of vehicle to drive and push growth higher into the future. New customers, by the way. Oh, sorry. So new customers, we had a very nice jump in new customers, I think in 2001 and 2000 2021, sorry, 2021 and 2022. A big increase in new customers, not enough, it's still not a big enough percentage of our aim for our business, but it's still good numbers. And by the way, it's across all sectors; we get a lot of small customers, especially from some of our acquisitions, and we get hundreds of very large customers in our enterprise and very large enterprise business. And in 2023, despite the tough economy, and despite the fact that for three quarters, we had a decline in new business, we had it stable. So it didn't; it grew a little bit, but not by a lot.

Speaker Change: The vehicle to drive and push the growth higher into the future.

Speaker Change: New customers by the way.

Speaker Change: Sorry, new customers, so new customers, we have a very nice jump of new customers I think in 2001 in 2020 to 21, sorry, 2021, and 2022, a big increase in new customers not enough, it's still not a big enough percentage of our of our business, but it's still good numbers and by the way it's on all sectors.

Speaker Change: Get a lot of small customers, especially from some of our acquisition and we get hundreds.

Very large customers on our.

Speaker Change: Enterprise and very large enterprises business.

Speaker Change: In 2020 free despite the tough economy and despite the fact that for three quarters. We had the decline in new business. We added stable. So it didn't it grew a little bit but not by a lot and I open for 2024 first I hope, but again, all the efforts that we're making and.

Gil Shwed: And I hope and for 2024. First, I hope that all the efforts that we're making and the investment that we are making are going to bear fruit in new logos and new customers. And we're putting a lot of emphasis on that as a priority for the company. So we are focusing the sales force on not just growing the existing customers, which is always very important, but also winning new logos. That's kind of one of our top two or three priorities for 2020.

Speaker Change: And the investments that we're making are going to bear fruit on new logos and new customers and we're putting a lot of emphasis on that.

Speaker Change: Alrighty for the company, but we are focusing the sales force not just grow the existing customers, which is always very important but also with new logos.

Speaker Change: <unk>.

Speaker Change: Kind of one of our top two or three priorities for 2024.

Gil Shwed: Thank you. All right. Our last question is going to come from Shaul Eyal. And away we go. Thank you. Good afternoon, everybody.

Speaker Change: Thank you all right. Our last question is going to come from shallow Liao.

Shaul Eyal: And away we go.

Shaul Eyal: Thank you good afternoon, everybody congrats scale.

Shaul Eyal: Congratulations, Gil. Maybe you can share with us some color on seven-digit transactions, government business, and with respect to the incoming CEO. Is there a prerequisite that he or she will be Israeli-based, or could they also be US-based? Lori, do you want to start? on YouTube.

Shaul Eyal: Sure.

Shaul Eyal: You can share with us some color on seven figure transactions government business and with respect to the.

Shaul Eyal: Incoming CEO.

Shaul Eyal: Is there a prerequisite that he or she will be Israeli base. So could they also be U S based.

Speaker Change: Are you do you want to start.

Speaker Change: On mute muted right.

Roy Galan: Ian, Shaul, about the 7-digit transaction, the government transaction? 7-digit transaction, and also maybe a word about the federal government vertical this quarter, and for Gil, about the incoming CEO. We did see, so I would say that when we are looking at our large deals, the mega deals, about the 7-digit of that, we did see a nice growth this quarter compared to last quarter. Actually double-digit growth, both in the number of deals and in the dollar value. So I think we did see a very nice trend in Q4. It was part of the positive momentum that we mentioned.

Speaker Change: Again, showing about the <unk> transaction and the government transaction <unk> transaction and also maybe what about the government federal vertical this quarter and.

Speaker Change: Sure Gail about incoming CEO.

Speaker Change: So.

Gail: When we're looking on our large the mega deals above 74 that we did see a nice growth. This year this quarter compared to last quarter actually double digit growth in number of any dollar value. So.

Speaker Change: And we did see a very nice trend in Q auto and the most of the positive.

Speaker Change: Mentioned as for the government I think we did well in the government again still we keep Robusto scheme, you can do better, but I think we have the 90%.

Roy Galan: As for the government, I think we did well in the government. Again, not still, we can grow faster, we can do better, but I think we have a nice, decent business also on the government side, and Gil, to your question around the... As I mentioned, first, I think we're in the beginning of the process, but I will share with you openly my requirements and my preferences. I would like to conduct a global search and look for the best possible person, she or he, around the world. It is very likely that we'd like it to be somebody who will reside in Israel. Our headquarters in Israel, the main hub for operations of Check Point, is in Tel Aviv. So I would like the person to be in Tel Aviv. That actually increases the chances that they'll also be Israelis, and, of course, they will need to travel. I'd like them to spend a lot of time around the world, but that would be the preference. Again, a global search for the best person in the world, but most likely will require to reside and be part of the team at the headquarters.

Speaker Change: And on the government side.

Speaker Change: And Gabe to your question around <unk>.

Speaker Change: As I mentioned first I think we're in the beginning of the process, but I will share with you openly.

Speaker Change: It.

Speaker Change: My requirements and my preferences I do would like to conduct a global search and look for the best possible person Shearer here around the world. It is very likely that we'd like it to be somebody that will reside in Israel our headquarters in Israel.

Speaker Change: The main hub for operations and of.

Speaker Change: Checkpoint is in Tel Aviv.

Speaker Change: So I would like the person to be in Tel Aviv that actually increases the chances that will also be Israeli.

Speaker Change: But of course, they will lead to travel I'd like them to spend a lot of time around the world.

Speaker Change: But that would be the preference again global search best person in the world, but most likely two will require to reside and be part of the team in the headquarters.

Speaker Change: Congrats.

Gil Shwed: All right. Thank you all for joining us today. We appreciate you coming and spending the time with us, and we look forward to seeing you throughout the quarter. Thank you. Thank you very much, everyone. We appreciate it. Bye-bye.

Speaker Change: Thank you all for joining US today, we appreciate you coming and spending the time with us and we look forward to seeing you throughout the quarter. Thank you. Thank you very much.

Speaker Change: I appreciate that thank you <unk>.

Speaker Change: Yeah.