Seeking Alpha

Check Point gains on Q2 beat, solid guidance

  • Check Point (CHKP +2.1%) guided on its CC for Q3 revenue of $365M-$375M and EPS of $0.88-$0.92 vs. a consensus of $365.9M and $0.90.
  • Q2 results beat estimates with the help of a 21% Y/Y increase in software blade subscription revenue to $63.7M. Like several enterprise security peers, Check Point has been trying to grow its reliance on subscription-based software/services revenue streams. Subscription growth also fueled a 14% Y/Y increase in Check Point's deferred revenue balance to $660M.
  • Standard product/license revenue grew 4% to $124.3M, and software update/maintenance revenue grew 3% to $174.5M. Opex rose 10% to $172.7M.
  • $194M was spent on buybacks. With Check Point's cash balance at $3.6B at quarter's end, the company says it's looking for M&A targets.
  • FBR predicts "brighter days are on the horizon for 2H14/2015 as consistent license growth is now here to stay," thanks to a "next-generation firewall refresh" that's still in its early stages. Palo Alto Networks (49% April quarter revenue growth) remains the next-gen firewall market's leader.
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