Check Point Software Technologies Ltd. today posted first-quarter financial results that topped revenue and earnings per share expectations.
Nasdaq-traded Check Point is one of the largest players in the enterprise cybersecurity market. The company provides software products that organizations use to protect their cloud and on-premises infrastructure. It also offers hardware products, such as firewall appliances for securing the network traffic in data centers.
Check Point’s revenue reached $534 million in the first quarter after growing 7% year-over-year. Analysts polled for the Zacks Consensus Estimate were expecting revenue of $507.6 million.
The company’s quarterly sales jump was the result of multiple factors. The cybersecurity products it sells on a subscription basis generated 14% more revenue in the first quarter than a year earlier, with sales reaching $202 million. There was also strong demand for the company’s Quantum line of firewall appliances, which can be installed in data centers and branch offices, as well at the edge of the network to protect connected devices.
Two more products that contributed to Check Point’s strong quarter are CloudGuard and Harmony. The offerings focus on protecting public cloud environments and employee devices, respectively.
Check Point improved profitability in the first quarter. The company’s adjusted operating income in the three months through March 31 was $239 million, or 44% of its quarterly revenue, up from 37% a year ago. The result: adjusted earnings of $1.57 per share, more than the $1.54 per share that analysts polled by Zacks had anticipated.
“Total revenues and earnings per share reached the high-end of our projections,” stated Check Point founder and Chief Executive Officer Gil Shwed. “We had strong product demand in our Quantum family and continued strength in our CloudGuard and Harmony products. The global escalation of cyberattacks is making companies rethink the dated approach of disparate point solutions and they are transitioning to a more unified approach to prevent the next cyber pandemic.”
Check Point stated in February that it expects to achieve 10% revenue growth during 2022. The company disclosed today that deferred revenues, a measure of future sales, jumped 14% in the first quarter, to about $1.45 billion.
According to the company, demand for its Quantum series of firewall appliances is one of the factors driving its sales momentum.
In January, Check Point introduced a new firewall appliance series called Quantum Lightspeed that is described as the fastest on the market. The appliances use Nvidia Corp.’s ConnectX accelerator cards to speed up computations. According to Check Point, a Quantum Lightspeed system is capable of processing up to 3 terabits of network data per second with latency as low as three microseconds.
Check Point closed the first quarter with $3.8 billion on its balance sheet. The company has reportedly been using its strong balance sheet to facilitate higher margins for ecosystem partners and offer supporting services, such as training. In the long term, this strategy could also help advance the company’s revenue growth efforts.