CEO Gil Shwed said Check Point can leverage the channel much more in the future by calling on solution providers to bring in new customers.
“I can’t say that I have today a huge drive of business that’s new from the channel yet, but I hope that it will come,” Shwed told Wall Street analysts during the company’s earnings call. “I mean, we are very committed to it. I think our channels are committed. And I think eventually that can lead to a business expansion and more new customers and more opportunities.”
The platform security vendor has been focused on creating the right business environment for the channel to succeed, Shwed said. In addition, Shwed said Check Point has been focused on identifying new partners where they’re needed whether that’s geographic such as national partners in the United States or technology-based such as partners that are very specialized in the cloud.
Check Point has also been impacted by bringing new leadership to its channel organization both globally and in the United States, Shwed said. VMware solution provider superstar Frank Rauch joined Check Point in January 2019 as head of worldwide channel sales, and former Cylance go-to-market leader Abigail Maines started at the company eight months later as head of channel sales for the Americas.
“I started the cybersecurity channel 26 years ago, and am very proud to say we also still exist,” Shwed said. “Having said that, we can do much more with the channel.”
From an inorganic growth standpoint, Shwed said Check Point’s appetite for mergers and acquisitions remains good, healthy and the same as before the coronavirus pandemic. However, Shwed said COVID-19 hasn’t yet created either new cybersecurity technologies or amazing business opportunities.
In fact, cybersecurity valuations in both the public market and private market remain quite healthy, and to the extent they’ve changed at all, Shwed said they’ve only increased. Check Point bought serverless security vendor Protego Labs, IoT security vendor Cymplify and web application security vendor ForceNock in 2019, but has yet to make a single acquisition this year.
“First and foremost for us is to find the right match,” Shwed said. “We do look at some opportunities, there are some good ideas and we will make acquisitions, but it remains the same type and the same things that we’ve done before, hopefully a little bit more.”
Check Point’s revenue for the quarter ended June 30 climbed to US$505.6 million, up 3.6 percent from US$488.1 million the year before. That beat Seeking Alpha’s estimate of US$488.4 million.
Net income for the quarter jumped to US$196.4 million, or US$1.38 per diluted share, up 5.9 percent from US$185.5 million, or US$1.21 per diluted share, last year. On a non-GAAP basis, net income increased to US$225 million, or US$1.58 per diluted share, up 6.4 percent from US$211.5 million, or US$1.38 per diluted share, the year before. This crushed Seeking Alpha’s projection of US$1.43 per diluted share.
Check Point’s stock climbed US$4.74 per share, or 3.81 percent, in pre-market trading Wednesday to US$129.10 per share. That’s the highest the company’s stock has traded since April 12, 2019.
The company’s software updates and maintenance sales in the second quarter jumped to US$219 million, up 0.6 percent from US$217.6 million last year. Nearly all of Check Point’s growth in the quarter was driven by security subscription revenue, with year-over-year sales growing to US$164 million, up 10.3 percent from US$148.7 million last year.
Check Point’s product and licenses practice, meanwhile, saw sales inch ahead to US$122.6 million, up 0.7 percent from US$121.8 million the year prior. From a geographic standpoint, CEO and COO Tal Payne said 46 percent of Check Point’s revenue came from the Americas, 42 percent came from Europe, the Middle East and Africa, and the remaining 12 percent came from Asia-Pacific and Japan.
Shwed said Check Point is not issuing financial guidance for the coming quarter or remainder of the fiscal year due to the circumstances around the coronavirus pandemic.