Q4 2024 Check Point Software Technologies Ltd Earnings Call
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 will be in listen-only mode, and that will be followed by a Q&A session.
During this presentation, Check Point's representatives may make forward-looking statements.
Forward-looking statements generally relate to future events or future financial or operating performance.
These statements involve risks and uncertainties that could cause action results to be materially different than projected in the forward-looking statement.
Any forward-looking statements may 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. And with that, I'd like to turn the call over to Roei Golan for the start of our presentation.
Roei Golan: Thank you Kip and thank you everyone for joining the call. So I think we're there we finished 2024 with the iNode
Roei Golan: with strong demand for all our main products. Our revenues reached $704 million, $9 million above the midpoint of our projections. Our non-GAAP EPS was $2.70 at the top end of our projections.
Moving to the...
Roei Golan: To the annual results, so our revenues reached $2,565,000,000, $15,000,000 above the midpoint of our projection in the beginning of the year, while our non-GAAP EPS reached $9.60, 9% growth year-over-year, and $0.16 above the midpoint of our projection.
Roei Golan: So I think, again, that set was driven for a strong demand for our product.
Thanks for joining us.
Roei Golan: A positive trend and a strong demand for our product. This quarter we achieved 8% growth in revenues and with $171 million revenues.
Roei Golan: We also continue to see strong adoption for Infinity Platform by existing customers and also by new customers adjoining Check Point with this platform. I think this answering their needs under one umbrella of product and services. The earnings from Infinity Platform agreements add another strong quarter with strong double-digit growth.
Roei Golan: Moving to the revenues by geographies so as you can see all our geographies grew I have to say this is the revenues but when I'm looking on the new business booking all the geographies grew by double digits in new business so I think that's the most important part because in the end that's a that's translated into revenues so again very strong demand in all geographies
Roei Golan: Our operating expenses reached $317 million, 12% increase compared to last year. That was mainly driven from our continued investment in our go-to market and also the addition of cyber industry acquired in the end of Q3. Our operating income was $306 million, 44% operating margin.
Roei Golan: Moving to the financial income, this quarter it reached $25 million as we keep investing in higher interest rates over time.
Roei Golan: Our non-gap tax rate this quarter was around 8% mainly due to updates of tax provision, due to several tax assessments worldwide. Our non-gap net income grew by 2%, to $303 million.
Roei Golan: while our gap net income was $258 million or $2.30 per diluted share.
7% increased yield value.
Our total revenue grew by 6%.
Again, growth margins similar to our last year's 89%.
Roei Golan: Our operating margin grew by increased by 10% to $1,181,000,000 while our operating expenses increased by 10% while our operating income grew by 2% to almost $1.1 billion.
Roei Golan: When I'm looking into next year and our operating margin, we need to take into account a half a point dilution related to our recent acquisition of Cybrane. I think we discussed it also when we acquired Cybrane last quarter, but again, also a reminder for 2025.
Roei Golan: Looking on the financial income for the year, again, reach $96 million because of the interest rate. We finished the year with non-gap tax rate of 13% compared to 14% last year. Again, mainly due to update in our tax provision as we had tax assessment worldwide.
Roei Golan: Our non-gap net income reached $1,039,000,000, an increase of 4% year-over-year, while our EPS was $9.60 and, as I mentioned, grew by 9% year-over-year.
Roei Golan: And when I'm looking for next year in terms of our number of shares, so we need to take into account a decrease of approximately 1 million shares every quarter. So we are starting now from 1.12 and we expect to see 1 million shares reduction every quarter.
Roei Golan: Our annual operating cash flow for 2024 was $1,059,000,000 and also we continue to do our buyback and more shares in the amount of $325,000,000 in Q4 and for the full year we bought shares for $1.3 billion.
Gil Shwed: To summarize, so we had a strong quarter, revenues and EPS above the midpoint of our projections. We had the demand, it was mainly driven by strong demand for our quantum force appliances. You did see the double-digit growth in calculated billing and also in RPO and we're maintaining strong profitability. With that, I'll hand over the call to Gil.
Thank you, Roei, and let the...
The
Glad to see here everyone. It's a pleasure being here.
Speaker Change: For me, it's a very exciting day because it marks my transition to my new role as the chairman. But before I jump into it, first about the quarter. So we have a slightly different format today. I'm not going to present the regular slide that speaks about the deals and the quarter. And Nadav is going to spend more time not talking about the quarter, but talking about his vision for Check Point and about his view of the world. I think it's very important.
Speaker Change: For me, the last quarter marks a very good one. I think you heard from Roy about the financial results. It's great to transition with such results.
Speaker Change: Pretty much all the key financial metrics performed very, very well. I know that some of you were concerned last quarter on billings, and you saw that this quarter, without any particular focus, billing
Kip Meintzer, Gil Shwed
Speaker Change: Gil Shwed, Kip Meintzer, Gil Shwed, Gil Shwed, Gil Shwed, Gil Shwed, Gil Shwed, Gil Shwed,
Our Infinity Deal worked.
Speaker Change: Very good. Our email security business was also very good. We even saw some nice growth in the cloud business. So overall, all the key metrics that we had were in line with what we expect, and that's a great way.
Speaker Change: Again, to transition my job. With that in mind, I want to thank everybody that did this. Our customers that showed faith in the best security that we deliver in Check Point.
Speaker Change: Our employees, whether it's the developers or the people who ship our products, and mainly the sales people,
Speaker Change: and our GCO organization with the lead of Rupal that delivered a very good quarter.
Speaker Change: But it's more than just one quarter, and here I want to turn all these thanks to all of you, our shareholders.
Speaker Change: You see here a summary of almost 31 years of business and you see that on every business metric we have very strong fundamentals. If we look at 1995, the year before we went public.
We grew since then in revenues.
Speaker Change: 250 folds and in profit kind of very similar. EPS grew by more than 300 or close to 400 folds.
from 95...
So, on our share price...
Speaker Change: If I look at the basis of 95, it's almost 800-fold high. If I look just at the IPO price in 96, it's 80-fold high, which is also a pretty good number. So I think all of these numbers are a testament to the strength of the security of Check Point and mainly to the very, very good people that surrounded me and will now work with Nadav to create a new security system.
to take Checkpoint into new height.
Lao
Speaker Change: In the last few months I had the pleasure of working with Nadav. We did a very good
training and transition process over the last 45 days.
Nadav Tukh
Speaker Change: Role Of The CEO And Is Doing Extremely Well I Couldn'T Be Happier Than That Many People Ask Me, What Am I Going To Do With The Chairman So
Speaker Change: He put here these pictures about me riding my bike, so yes, I am riding my bike and as a chairman I intend to do it.
Speaker Change: not once a week but maybe twice a week but I still come every day to the office. I'm very, very excited about the future of Check Point and I'm actually enjoying my new role very, very much taking away
on the day-to-day operational...
responsibilities of running a large company and the ability to
Speaker Change: speak, to listen, to think about the future. It's a great pleasure for me and relaxing a little bit and over the next few months I'm going to redefine my role and mainly be a resource for everybody in Check Point
Speaker Change: And mainly to Nadav in the way I can help with thinking and experience in helping in the future. This month and a half, I think Nadav is already doing a great job. I couldn't have picked a better leader for Checkpoint. I know that Nadav or...
Speaker Change: I will take Checkpoint to new heights, and I wish him, and I anticipate that we'll have great, great success with it, and I hope it will be here.
Speaker Change: In a year from now, five years from now, ten years from now... And see how the graph that I showed you, continue to perform well. This is what I wish for everybody, for you, for our customers... ...that we get more security for our employees.
Speaker Change: And with that, I think it's a great transition to transfer the call to Nadam, so you can hear his thoughts about the future. Nadam, the floor is yours.
Nadam: Thank you so much Gil. As you can tell I have big shoes to fill.
Nadam: You know, naturally, very excited to be here and speak to you all for the first time, so glad to see you and hope to have the opportunity to see many of you more often in person in the future.
Nadam: I think it's also an opportunity for me to thank the board for selecting me.
Nadam: But especially I want to thank you Gil, you know, first of all for building an amazing company
Nadam: and also for the great transition and for the friendship that we've had for many, many years, and it's really, really awesome to work with you.
Nadam: I can tell you that I've asked Gil, with his biking, not to do any double black diamond routes or singles within the next few months, as I need you by my side here, and he said he won't, and let's see.
Thank you for coming. Thank you. Thank you.
Nadam: Look, just a little bit about my background, right, so I've been a part of this industry for the last 30 years as well. You know, I've had the opportunity to see it from different perspectives.
Nadam: I also had the opportunity to see this industry from the attacker's perspective, which I know, which I think is very, very important. And so I have this appreciation of how difficult it is to stay ahead of the race and the fact that sometimes offense and defense are sort of asymmetric.
Shabbat shalom
Gil Shwed: About 10 years ago I was part of starting team 8 and had the opportunity to watch this industry from trying to anticipate what will come in the future.
Gil Shwed: and build cutting-edge innovation startups so that we can be ready for that future and a teammate.
Gil Shwed: I've been involved as an entrepreneur, as an investor, in building over 20 companies.
Some of them are category leaders in the industry.
Gil Shwed: And, you know, when I look at that history and that experience and the different perspectives, I think I can really appreciate how hard it is to actually defend our hyper-connected world and our complex networks.
Gil Shwed: and also how critical it is to do it. And honestly, that's the reason I joined Check Point. I think with that experience...
Gil Shwed: I've had the opportunity to talk to and get to know hundreds of our own checkpoint people.
Gil Shwed: And I have to tell you that my resolve has been galvanized because I'm super impressed.
Gil Shwed: First and foremost, by the depth of our technology. I've been following Techforwant from the sidelines for many, many years, but when you're in, you see different things. And I'm exposed to this depth.
Gil Shwed: But also the breadth of our ecosystem, you know, coming from the startup world.
Gil Shwed: It's really interesting to see the scale, the criticality of our software, and how many large organizations in the world are actually dependent and relying on our technology. And then finally, I would say the passion of the people.
and I think one thing that is unique about Checkpoint
Gil Shwed: Some of the people that we have here have been here for almost as long as Gil.
Gil Shwed: and their super passionate. You know, some of them, when I talk to them, it strikes me that they're so excited about what they're doing after decades of doing this. And I think that's a great foundation for us to continue to lead the industry.
Thank you.
Speaker Change: You know, speaking about passionate people, I think this is also a good opportunity to thank RuPaul Hollenbeck, our president.
Gil Shwed: for driving a great 2024 as Roei and Gil have already spoken about. She's asked to move on, but she will continue with us at my request to support us doing that transition in the next few months.
And given my focus, we'll be flattening our go-to-market organization.
Gil Shwed: so that on a personal level, but also as a focus, we can get more visibility and direct impact with our customers, with our partners, with the field. Because at the end of the day, I believe that our industry is going to see a
Gil Shwed: You know, I don't want to be too dramatic, but we are walking into an AI dimension and an AI era and that's going to have a huge impact and we want to be as close to the people at the trenches because the only way to understand what's happening at the trenches, from my experience, is to be at the trenches.
Gil Shwed: As well as creating a new role of a Chief Revenue Officer, who will be responsible not just to lead our sales, but also to align our product organization with our sales organization and create a synergy so that we can improve our go-to-market motion.
Thank you. Bye-bye.
Gil Shwed: Beyond that, we have also created a new leadership role to drive the success of our staff business.
Speaker Change: 2024 was a great year, both for our email security, we announced last quarter that we crossed $100 million of ARR, this last quarter we achieved a new
Speaker Change: I believe a really important milestone by getting the Magic Quadrant that Gartner for our email. Safi has been doing very well, and we will have one leader to lead this ARR-driven business.
Speaker Change: , , , , , , , , , , , , , ,
Speaker Change: and you know this actually next week we're getting on the road
Speaker Change: which is very exciting for me because now I can go from dozens to thousands. We're going to be meeting with about 10,000 people, employees, partners, customers from around the globe starting in Vienna next week in our Checkpoint User Experience Conference.
Speaker Change: and I'm going to be talking to our partners and customers and our own people about what is the road map for the new stuff that's coming out, especially around
Speaker Change: AI, you know not only protecting AI but also leveraging AI to create a more simplified unified unified version of our software.
So, again...
Speaker Change: Thank you all for being here. I look forward to the relationship.
Speaker Change: And I think with that, Kip, I'm handing it over back to you. Yes, you are.
Speaker Change: Don't forget we'll be seeing a lot of these folks next week or at the end of the month in Vegas. Looking forward to that. We're going to start out with business outlook. Next slide please.
Speaker Change: We're going to be looking at $619 million to $649 million for Q1 2025.
EPS of $2.13 to $2.23
Speaker Change: and Gap EPS 50 cents less approximately. FY 2025, for the full year, we'll be doing 2.66 billion dollars.
Speaker Change: to $2.76 billion and non-GAAP EPS of $9.60 to $10.20 with GAAP EPS approximately $2 less.
And with that, we will open the call for Q&A.
And here we go.
You who we have up first.
Thank you. Thank you.
Yeah, I see.
First on the call.
Speaker Change: First up today is Adam Tyndall from Raymond James followed by Joseph Gallo at Jeffrey
Speaker Change: and with the tech stack and innovation opportunity at Check Point, what would be sort of the top buckets that you're looking at and are you thinking about that organically or inorganically?
Thanks, Adam, and good to see you.
Speaker Change: I believe that we've done a really good job in the last couple of years. Some of our acquisitions have been very successful. I spoke about email. You mentioned SASE with the acquisition of Perimeter 81. We've had a great year in 2024.
Speaker Change: What we need to do right now is to merge everything into what we call a hybrid mesh network.
Speaker Change: I think that when I speak to our customers, when I speak to our partners, when I sit with them and try to understand the hardships that they're going through, I think that two things come to mind. Number one is the level of complexity.
that they have to deal with.
to their benefit.
and Saurabh Mishra.
Speaker Change: When we look at 2025 and beyond, the idea of a hybrid mesh network to take the already incredible scale that we have with our quantum spiral
Speaker Change: merging that with what I believe is a great SASE product and creating the idea of a mesh architect unifying through the Infinity platform.
Speaker Change: I know that on every call with everybody from tech you're going to hear about artificial intelligence. I'm not going to I'm not going to differentiate myself on that.
Speaker Change: I think that's the next level. It's literally a new dimension that we're walking into. And on that front, we need to think about it from two perspectives. One perspective is what are the new things we need to defend?
Speaker Change: And we're going to be talking a lot about that at CPX, at our conference.
next week in Vienna and beyond.
Speaker Change: What are the new tools? How do we use existing tools to defend new places where what we call the attack surface that is becoming, that is being blown up by new ideas that attackers can go after?
Whether it's new models, model inversions, using deepfake, etc.
Speaker Change: But also, how can we leverage AI to make their lives much more simple?
Speaker Change: and Adam L. We are going to continue to build on the acquisitions that we have done and we are going to look to do more acquisitions where it fits in our strategy of the hybrid mesh architect.
Thank you.
Speaker Change: All right, next up is Joseph Gallo followed by Xiaoli Ao
Speaker Change: Hi all, thanks for the question. Gil, congrats on the increased bike rides and Adav, congrats on the new role. Look forward to working with you.
Speaker Change: Nadav, you made several go-to-market changes in your first quarter. Can you just further elaborate on what changes are needed and over what time frame you expect those to take root?
Speaker Change: and then maybe really bringing you into this, how are you thinking about the implications of COVID market changes on your guidance? Thanks.
Speaker Change: So, generally speaking, Joseph, and congrats on the new baby and my empathy on your lack of sleep. It takes about a couple of years from my experience. But anyways, look.
Speaker Change: So one thing that we want to do is we want to be as close to our customers as possible.
I want to have a direct impact.
Speaker Change: on our go-to-market and to that end we're going to make the changes in the leadership so you know instead of having two folks representing the the market sales marketing on the leadership team we'll have six.
I think that it's
Speaker Change: and the Cyber Industry. The latest and greatest adoption will be in America, and we have great folks there, and we continue to focus there.
Speaker Change: and David B. Johnson. So that's from the go-to-market side. And the last thing I'll say about that is to create a real cohesion between our product team, our marketing team, and our sales team.
Speaker Change: And to your question around the guidance, of course it was taken into account, that's why we are providing you kind of a wider range, both on the revenues and EPS. And again, I have to say that we finished strong the year, that also affects 2025 numbers, and also we're starting good with 2025, with Q1, so I think we feel confident with the guidance we provided, given the changes. Awesome, thank you all.
Speaker Change: All right, next up is Xiaoli Ao, followed by Jonathan Ho.
Xiaoli Ao: In your initial 100 days with Check Point, where do you see the product maybe needing slightly more depth or improvement?
Xiaoli Ao: That's on the one hand, and maybe the other side of that is, I think everybody understands the strength of Checkpoint, without a doubt. But from your perspective, from where you currently sit and from where you sat in the past.
Xiaoli Ao: We want to take SharePoint, so we can better align SharePoint with the overall industry growth.
Xiaoli Ao: All right, I'll say this. I think our strength is our reliability uptime and the best prevention in the industry.
Going forward with this idea of hybrid mesh
Xiaoli Ao: for the network. And when I say network, it's network everywhere. Right? So, it's your on-prem, data center, firewall, but it's also the cloud network security, the WAF on your cloud, and your remote work for your SASE, your SAS, your browser.
Xiaoli Ao: and the the idea of consolidating this on one platform, leveraging AI to simplify it, is crucial to cut through that complexity that has gotten to a point where it's really hard to deal with.
The other side of that is intelligence.
Xiaoli Ao: and Export Intelligence, because we understand that many of our large enterprise customers
Xiaoli Ao: have multiple solutions and that at the end of the day
Xiaoli Ao: If they can't get a holistic understanding of what's happening in their network, they can't do the very simple thing of trusting their infrastructure.
Xiaoli Ao: and I believe that this mesh architecture with a real platform and the best intelligence consolidated and driven and simplified by AI is a real opportunity.
All right.
Speaker Change: Next up, oh, by the way, Shobel, thanks for dressing up. Jonathan Ho, followed by Patrick Colville.
Speaker Change: Thank you. You spoke a little bit about AI and with the opening of your new dedicated facility, can you give us a sense of where you see the most opportunities around AI? I don't want to cover what you've already sort of talked about before, but I just on a forward-looking basis, you know, try to understand, you know, how that becomes a differentiator for a checkpoint. Thank you.
Yeah, thanks Jonathan.
So, you know, if I try to zoom out for
Speaker Change: That is accelerating, and I don't think that's going back. I think when you couple that with a new dimension and a new era of AI, things are about to change. And I would like to put it in three different buckets.
Speaker Change: Bucket number one are the things that actually will probably remain similar.
Speaker Change: That's where we believe, at the end of the day, you will need an infrastructure that enables competitiveness, usability, efficiency for our enterprise customers primarily.
Speaker Change: That's not going to change, and you know what else is not going to change, at least for the foreseeable future? At the end of every one of those nodes in the mesh, you're going to find a human being with all of our flaws. It is what it is.
Speaker Change: In that sense, the AI can create more autonomous capabilities. We will be showing our roadmap to zero trust using AI and autonomous capabilities.
Speaker Change: looking into autonomous capabilities in the near future. The second bucket are things that have already changed dramatically.
Speaker Change: When you look at it from the attacker's perspective, attackers that in the past we used to look at as, you know, relatively amateurish
Speaker Change: can now come and pose, and we're seeing it happening already.
Speaker Change: Roei Golan spoke to me on a much more convenient subject...
Speaker Change: We're seeing them being at a larger scale and we're seeing that the ROI for attackers is improving dramatically.
Speaker Change: So stuff that could have taken them a couple of years can take a couple of weeks.
Speaker Change: stuff that will take hundreds of engineers on the attacker side can take a few. From what we need to defend, all the way from, you know, defending our prompts as we use genAI,
Speaker Change: so that we know critical data or sensitive data that doesn't go out of our information.
Gil Shwed: Gil Shwed, Kip Meintzer, Gil Shwed, Gil Shwed, Gil Shwed, Gil Shwed, Gil Shwed, Gil Shwed,
Speaker Change: And forgive me for being a little bit philosophical here, it's a bucket of what we don't know.
We believe our research is constantly trying to understand
Speaker Change: What's around the corner that can really change our industry dramatically? I don't know if it's going to happen next week.
Speaker Change: or in two years, but I think there will be big things that will change our industry. To that matter, our research center...
Speaker Change: will look and try to predict different futures, put different probabilities to them, come back to the present and say, OK, so if this is the route that's going to happen, what do we do about it?
Speaker Change: and the last thing I'll say about that is that we need to be humble because when we go into a new dimension there's also this limitation of imagination that we have. So we need to take care of all these three buckets when we think about AI.
Patrick Colville: All right, next up is Patrick Colville, followed by Joel E. Fishbein, Jr.
Patrick Colville: All right, cheers. I mean, Gil, you know, you're a godfather of the foul industry. I mean, you're a godfather of the Israeli BBC ecosystem and Kip's the godfather of IR. So, you know, looking forward to this.
See you in the next chapter.
RPO rose 12% in Fiscal 2014
You know, that's a big disconnect.
Patrick Colville: So can you just talk through maybe the RPO of Sprint in 4Q and just put some taste to that Fiscal 25 guidance and is there a realm where we could see double-digit revenue growth in this coming year?
Patrick Colville: Yes, so first of all, RPO, I remind you that it's not only, it's not, it's not backlog that's gonna be, everything will be translated into revenues in the next 12 months.
Kip Meintzer, Gil Shwed
Patrick Colville: I think Joe asked me about the guidance and about the changes. I think we feel confident with the guidance. We hope to finish in DC. We hope to finish more close to the high end of our guidance. But definitely, I don't think, again, double-digit DC. Again, I don't want to talk about DC or double-digit, but definitely we are starting the year.
Patrick Colville: with the great momentum, with great Q4. Also when I'm looking on the pipeline for Q1, looks good.
Patrick Colville: So I think we are starting great the year and hopefully when we finish 2025 will be we show that the revenues will be on the eye more closer to the eye end of our guidance and not
and far from the from the midpoint.
Okay, thank you so much.
Speaker Change: Alright, next up is Joel P. Fishbein Jr. followed by Cheyenne Patel
Speaker Change: The Dove, I'm going to come back to you if you don't mind. I love what you've outlined so far in terms of changes to go-to-market.
Speaker Change: I don't think anybody will argue that Check Point's got a fantastic product portfolio. One of the things that's been missing, though, is net new customers, right? And can you just talk a little bit about the strategy about going after some of these net new customers, particularly in light of some of your competitors that are really discounting very aggressively in the market to gain market share amongst this platformization strategy, et cetera, vendor consolidation? That'd be really helpful. Thank you.
Thank you, Joel.
Speaker Change: The next thing that I want to say is that, yes, we are going to be focusing our go-to-market motion, but we're not going to change one thing, which I love about a checkpoint and I don't want to change.
Security is about security and we're going to keep that.
Having said that, um...
Speaker Change: You know one thing that I've already announced as an example is this new formed leadership role on my leadership team that's going to lead all of our SAS Hydro business and we finished last year with a nice 27 percent growth.
Speaker Change: that's something that we want to accelerate. And so I think with our SaaS-y business, with our email business and the consolidation that we're doing at the Infinity Platform level with the idea of a hybrid mesh
Great, thank you.
Next up is Cheyenne Patil, followed by Joshua Totem.
Hey guys, congrats Adav, congrats Gil.
Speaker Change: I guess I had a question around the firewall refresh that some of your competitors have talked about. You know, I'm just curious, you know, as they kind of go through sizable refreshes this year, how big of an opportunity is that for you guys? And then, Roei, I guess when you kind of look at your outlook for the year,
Speaker Change: Anything material you're contributing or factoring in from that, or is that potentially an upside driver as we go through the year?
Speaker Change: So I can start and Adav you can add afterwards. So I think when I'm looking first from on what we on our business outlook on the guidance for the full year. So we didn't take into account the, I mean it's probably it's going to be upside if we'll be able again I think as you mentioned our competitors.
I think disclosed that they have a significant install base.
Speaker Change: that will be end of support by the end of 2025 and 2026.
Speaker Change: So definitely it's something that's a huge opportunity for everyone in the market. We also see, by the way, the very positive traction around our firewall in the last few quarters. So definitely, we want to see this momentum continue.
Speaker Change: So, in terms of the guidance, again, we didn't take any significant factor from that, but of course, it can be a significant upside for us. We have a lot of plans around.
Speaker Change: Firewall refresh and also gaining net new customers from our competitors. But that's definitely going to be upside for our guidance. Anadav, you want to add something around it?
Speaker Change: You know, the only thing I would add is that we're going to be watching it closely, and hopefully it's not just an opportunity for us, for the Firewall and Appliances.
Speaker Change: but also for customers that are looking for this idea of a hybrid mesh on the Infinity platform because for us, in 2025, one of our focus areas is SaaSy.
Speaker Change: and the viral component with, you know, three decades of experience where we've seen every permutation, every mutation, coupled with our differentiated SAASI.
Speaker Change: which is more agile, which can allow not only to send everything to the SASE every time, but actually
Speaker Change: use it, or sometimes do the protection at the edge, sometimes do it through the cloud, sometimes go direct, makes it more efficient, makes it more efficient, and I hope that if this refresh cycle actually gets there, it's an opportunity to introduce, not just our firewalls, but also our soft key products.
Speaker Change: Great thank you guys. Thank you. All right up next is Joshua Tilton followed by Robbie Owen.
Hey guys, and a blanketed congrats to everyone.
Speaker Change: From your perspective, what does an industry-leading growth rate look like for Check Point over that time frame? And then maybe just, Roei, for you really quick, I understand the strong growth exiting the year, but can you help us understand maybe on an organic basis how some of those metrics look from a growth perspective coming out of Q4?
Speaker Change: Yeah, so for me, I'll just shortly say two things. Again, the springboard that I'm coming out of is great, and I'm very thankful for that, to the whole team and especially to Gil, which is handing over the baton at a good time to me. I think that leading the industry is, first of all, not just...
Speaker Change: Obviously not just about the growth but also about the technology, but we spoke a lot about that. In terms of growth, what I want to be able to do is a continued healthy, sustainable growth.
Right, so you're not going to see any mega changes.
Speaker Change: because I think that one of the great things about Check Point is the efficiency and the healthy growth.
Speaker Change: And in terms of your question around the organic versus non-organic, so we had Cyberint, of course, acquisition that we closed in the end of Q3. They contributed less than 1.12 billions in revenues, so it's not significant, it's less than 1.12.
Billings and Revenues, so the odds of everything is organical.
Super helpful guys, thank you so much. Thanks Joshua.
Speaker Change: All right up next is Robbie Owens followed by Fatima. I'm soon out on maternity leave, Bulani.
Speaker Change: Thanks Kip and good afternoon everyone. I was hoping maybe you could parse for us just
Speaker Change: what you're seeing across the various theaters relative to geos and
Speaker Change: You know, as you look to reinvigorate growth, I look at that North American number, obviously you want to do better. You talked about the Americas being significant.
Speaker Change: and you did mention in some of the go-to-market changes, but what is really gonna take to start moving the needle the other way on that front, obviously very hyper-competitive here in the U.S., thanks.
Speaker Change: We have, you know, under RuPaul's tenure, we've built a solid, boots-on-the-ground leadership team.
Speaker Change: But that's not enough. We need to reinvigorate that in many ways. First and foremost, get out there. That's one of the reasons that the board hired me.
Gil Shwed: That's one of the reasons that Gil believes that I can take it.
Gil Shwed: So get out there, sit with the customers, look them in the eye, understand what works, what we need to improve.
Gil Shwed: and also look at it from different industries' perspective. So for example, we're very strong in the financial, but we need to see what each industry needs. What are the planning blocks that we need to add for other industries?
Gil Shwed: and hopefully with the idea of simplifying a lot of this and creating an ROI which is superior, we can start accelerating our growth in the United States and the rest of the Americas.
Speaker Change: Roy, any comments on the various theaters and what you're seeing, the Mayo versus US?
Roy: So, I have to say that the U.S. had a great quarter. I mean, you don't see it in the booking and on the revenues, but on the booking side, definitely we had a great quarter in the U.S. and all in all America's region.
Roy: America and also I'm looking on 2025, looking on the first quarter, it looks great in the US and America, we hope it will continue for the remaining of the year and of course long term. So again, we are in a definitely we see significant improvement.
Speaker Change: Thanks for throwing that one in, Rob. Next up is Fatima Gulani, followed by Brad Zelnick.
Madema, congrats in advance.
Speaker Change: Thank you very much for that very kind introduction. Yes, I'm baking away over here. Very nice to meet you, Nadav. I very much look forward to working with you. You know, it's very clear you're bringing a ton of new energy and really redoubling on some of the the focal points and efforts.
Speaker Change: you are going to be making from a segmentation, a verticalization perspective in the go-to-market organization. Thank you. Yeah. Thank you, Tim. I agree. Great to meet you. Looking forward to work with you as well.
Speaker Change: I'll say the following two things. Number one is this is not going to happen overnight. I know that the expectations are very high, but I also want to be responsible and reasonable and this is not going to happen overnight, but yes, we want to grow faster, but it'll be a process.
Speaker Change: because we want to grow faster in a sustained, healthy, responsible way.
Speaker Change: On the segmentation, the first two things that we're going to do is I'm adding the marketing leader to my leadership team and creating the new role of the staff's high growth.
Speaker Change: to include email and SaaSy, cloud network security endpoints. So that's going to be consolidated because some of the consumption of these solutions and these software is also changing.
Speaker Change: and it's not necessarily the same buyers as well so we need to change that as well. So look at it from the buyer's perspective, look at it from the consumption perspective.
Gil Shwed: Gil Shwed, Kip Meintzer, Gil Shwed, Gil Shwed, Gil Shwed, Gil Shwed, Gil Shwed, Gil Shwed,
and a real platform.
Thank you, Fatima. Hoping to see you at CPX.
Next up is Brad Zelnick, followed by Hamza Atterwala.
Brad Zelnick: Thanks very much, Kip, and nice to see everybody. Nadav, welcome.
My question, Nadav, for you follows Fatima's.
Brad Zelnick: Go-to-market, your message of being as close to the customer as possible makes a ton of sense.
Speaker Change: I'm curious to understand what does that mean for the channel? And then related to that, Roei, the growth and sales and marketing expense in Q4 is the greatest.
Speaker Change: since 2018, how much of this is direct sales headcount ads as you hit the ground running into next year? Or is it more variable marketing and incentives? How should we think about the composition and timing of sales and marketing expense hitting the P&L into next year as you bring the Doves go-to-market vision to life?
Speaker Change: I'll start with the channels. Our partners and channels are imperative to our success. They've always been, and we want to be the best partners to them. And if we want to do this at scale, we must do it with them.
And so, like I've said before, I'm...
Halfway through my first 90 days
Speaker Change: I've met a few. In the next four weeks, I'm going to meet with dozens more. And so, yeah, being out there is not just being out there at the trenches where security actually happens, but also understanding from our partners, whether it's the partners that are going after the large enterprise, all the way down to our MSSP partners.
Speaker Change: What is the way that they want to use our products, consume our services? How do we work together to, at the end of the day, be better stewards for the end customers?
Speaker Change: which I really understand how hard it is for them day in day out to actually work through the complexity of their network.
Speaker Change: 3 points to the 18% that you see. And the others is around incentives. Of course we added some other cells that come but also around incentives. I mentioned that our new business and also new logos. And that's all for today.
Gil Shwed: Gil Shwed, Kip Meintzer, Gil Shwed, Kip Meintzer, Gil Shwed, Golan
Alright, next up is Hamza Parwala, followed by Saqib Ghalia
Alright, thank you for taking my question and congrats.
Congrats to Gil and the Dove.
Speaker Change: No, Dov, a question for you. You've been, you mentioned, at Checkpoint now for just about 90 days and one of the things you did really well at Team A is you had a really strong network of CISOs.
Speaker Change: So you mentioned some of the things Check Point does well.
Speaker Change: When you talk to customers, when you talk to CISOs, what are the one or two things that Check Point could do better? And then for Rui, I'm sorry if I missed it earlier, but in your guidance, what is the assumption around operating margin for this year? And was there any, you know, FX benefit to that?
Thank you.
Speaker Change: Thanks Hamza. I think I would say two things. Number one is I think our customers are expecting us to innovate and to be out there with our SaaS models, with our SaaS-y solution to leverage AI both to make their lives simpler but also to secure their AI assets.
Speaker Change: I also think that, and that's something that we're going to try to do faster.
Speaker Change: But the one thing that they love about us, that we don't want to change, is that we do it responsibly. So that is innovate,
Speaker Change: at scale with the highest uptime and not losing the eye in the prize at the end of the day which is about security Right, so we need to bake all that in and I hope that we can accelerate this process but not lose the magic of
Speaker Change: High up time, scalable, easy to use, et cetera. And again, I know that I've said that a few times but you can't overstate the importance of understanding the opportunity that comes with new AI capabilities to do that.
Speaker Change: And around the guidance and the operating margin. So we expect similar margin might be a half percent below than what we've seen this year. Again, mainly because of the cyber interquisition that I mentioned it as part of our presentation. We don't expect to see significant FX benefit next year in 2025, again, so that's in terms of the margin for next.
Speaker Change: That was half a point, Rui? Half a point. Simply half a point below what we are seeing. Thank you.
Speaker Change: Alright, our next up is Saqib Khalil, followed by our last question of the day, which will be from Roger Boyce.
Saqib Khalil: Okay, great. Hey guys, thanks for taking my questions here. Congrats to the whole team and Nadav, really good to meet you here virtually.
Roger Boyce: How do you sort of think about differentiating in that market with Perimeter 81? And maybe relatedly, Roei, for you, how do you sort of size that business, or maybe the total infinity business, just to sort of put a line in the sand as we think about that becoming a bigger business in the future?
Roger Boyce: So, on the differentiation side, the architecture is different, and when I say hybrid, that means that we have the ability to work point-to-point on a mesh, but also the ability to work through the soft-seed cloud.
and have the ability to also operate at the edge.
So that gives us flexibility and agility.
Roger Boyce: I think it gives us the opportunity to make better prevention and it also makes it more cost effective because not everything has to go through the cloud.
Roger Boyce: and based on that, make a decision on the spot, what is the most secure, but also the most cost-effective way to do it. And right now, at least to the best of our knowledge, the best of my knowledge, this hybrid architecture
Roger Boyce: Hybrid mesh architecture is unique and that's what the folks from Perimeter 81 brought. Now when we merge that with the firewall capabilities and the depth and breadth that we have, I think this is for enterprise customers.
Roger Boyce: end of, you know, long-tail meets, I think that this brings a real differentiation.
Thank you.
Speaker Change: okay did you ask me you ask a question about infinity can you ask it again just to the size of infinity the question was yeah yeah yeah that's right Rory so the size of infinity or the size of 481 however you want to size it just to just to sort of get a sense for that kind of that's that's part of the business
Speaker Change: So I think Infinity we made approximately 15% of our revenues today. In terms of booking it's much higher, so we expect it to see in 2025.
Speaker Change: In terms of Sassy, again, it's still small, but again we did it very nice, I mean, Sassy grew very nicely in 2024. And we do expect to see another uptick in 2025 with all the improvements, and all the work that was done in the last 12 months around this product.
Speaker Change: Very helpful. Thanks guys. Thanks Sackett. And our last question is going to come from Roger Boyd.
Roger Boyd: Give it your shot, Roger. Thanks, Kip. I'll echo my congrats to both Gil and Nadav. On CloudGuard, I think Gil mentioned it was a strong quarter. I would love to get a little more color on what went well, any metrics there. And then specifically for Nadav, we'd love to get your vision on how competitive you think you can be in that space. I know you mentioned 2025 will be a focus on SASE, but where does cloud security stack up in terms of focus areas? Thanks.
Roger Boyd: Yeah, so for the cloud part, where we want to shine is creating one policy across all of your network states.
Roger Boyd: All right, so instead of having, you know, one policy for your data center, one policy for your branch,
One policy for every one of your clouds.
Roger Boyd: software for WAF and we're going to again put that into this idea of the mesh architecture.
All right.