Check Point Software Technologies Q1 2025 Earnings Report

Check Point Software Technologies EPS Results

• Actual EPS: $2.21
• Consensus EPS: $2.19
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: $2.04

Check Point Software Technologies Revenue Results

• Actual Revenue: $637.80 million
• Expected Revenue: $635.80 million
• Beat/Miss: Beat by +$2.00 million
• YoY Revenue Growth: +6.50%

Check Point Software Technologies Announcement Details

• Quarter: Q1 2025
• Date: 4/23/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, April 23, 2025
• Conference Call Time: 8:30AM ET

Check Point Software Technologies (NASDAQ:CHKP) develops, markets, and supports a range of products and services for IT security worldwide. The company offers a multilevel security architecture, cloud, network, mobile devices, endpoints information, and IOT solutions. It provides Check Point Infinity Architecture, a cyber security architecture that protects against fifth generation cyber-attacks across various networks, endpoint, cloud, workloads, Internet of Things, and mobile. In addition, the company offers security gateways and software platforms that support small and medium sized business. Further, it provides cloud network security, cloud native application protection, security and posture management, cloud identity and entitlement, cloud workload protection, cloud detection and response, and cloud web application protection for web applications and APIs; and Check Point Harmony that delivers endpoint and secure connectivity for remote user access. Additionally, the company offers technical customer support programs and plans; professional services in implementing, upgrading, and optimizing Check Point products comprising design planning and security implementation; and certification and educational training services on Check Point products. It sells its products through distributors, resellers, system integrators, original equipment manufacturers, and managed security service providers. Check Point Software Technologies Ltd. was incorporated in 1993 and is headquartered in Tel Aviv, Israel.

Check Point Software Technologies Q1 2025 Earnings Call Transcript

Presentation

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Greetings, and welcome to the Check Point Software twenty twenty five First Quarter Financial Results Video Conference. I'm Kippy Meintzer, Global Head of Investor Relations. And joining me on the call today are Chief Executive Officer, Nadav Zafriar and our Chief Financial Officer, Roy Galan. Before we begin, I'd like to remind everyone 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 that will be followed by a Q and A session.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

During this presentation, Check Point's representatives may make forward looking statements. Forward looking statements generally relate to future events or future financial and or operating performance. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward looking statements. Any forward looking statements made speak only as the date hereof, and Check Point 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.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

If you have any questions after the call, please feel free to contact investor relations by email at kip@checkpoint.com. Now it's my pleasure to turn the call over to Roy Gulan.

[Roei Golan, Chief Financial Officer at Check Point Software]

Thank you, Keith, and thank you everyone for joining the call. So in the first quarter of twenty twenty five, we did see a continued strong demand for our Quantum Force appliances that drove our revenues above the midpoint of our guidance. Our revenues grew by 7% to $638,000,000 4 million dollars above the midpoint of our projections, while our non GAAP EPS was $2.21 per diluted shares $03 above the midpoint of our projection represent 9% growth year over year. Moving into the deferred revenues. Our deferred revenues grew by 5% to $1,950,000,000 Our calculated billing reached $553,000,000 which represents 7% growth year over year, while our current calculated billing grew by 5% year over year.

[Roei Golan, Chief Financial Officer at Check Point Software]

Let me remind you that our billing is affected by duration and payment terms. And I also want to remind you about the next quarter modeling that in the second quarter of last year, we did have a benefit of approximately two points from upfront billing from two large multi year deals. If we're looking in our remaining performance obligation, the RPO, the RPO grew another quarter by double digit 11% and reached $2,424,000,000 So as I mentioned, we did see another strong quarter of demand from our Quantum Force appliances. Since launching these appliances in the beginning of twenty twenty four, we do see strong trend of demand for these new appliances and that was the main driver for the revenues growth in this quarter and resulted 14% growth year over year in the product and license revenues. Moving into Infinity, so another strong quarter for Infinity, we continue to flow in which continue to flow in an accelerated way to the revenues with a strong double digit growth year over year.

[Roei Golan, Chief Financial Officer at Check Point Software]

Same as in previous quarters, the revenues from Infinity agreements are keep increasing and already exceeded 15% of our total revenues. We can see more and more customer adapting our platform which answering their needs under one umbrella of products and services. For looking on our global revenue distribution, so we can see that 45% of our revenues came from EMEA, which represent 5% growth year over year. 42% came from America, with 6% growth year over year, while the remaining 13% came from Asia Pacific with 12% growth year over year. Moving into our P and L, so as indicated, our revenues grew by 7%, while our gross profit grew by 5% to $564,000,000 represent 88% gross margin.

[Roei Golan, Chief Financial Officer at Check Point Software]

Our operating expenses increased by 7% to $3.00 $5,000,000 This increase was mainly as a result of our recent acquisition of CyberInk that was closed in the end of Q3 last year and the continued investment in our workforce organically during the quarter. Our non GAAP operating income continues to be strong at $259,000,000 or 41% operating margin. Our net income was $246,000,000 represent 5% growth year over year, while our non GAAP EPS grew by 9% to $2.21 Moving into our cash flow. So our cash flow was operating cash flow was strong this quarter with $421,000,000 represents 70% growth year over year. If we are excluding the reduction in the income tax paid, the growth was 14% year over year.

[Roei Golan, Chief Financial Officer at Check Point Software]

Our cash balances as of the end of the

[Roei Golan, Chief Financial Officer at Check Point Software]

in there. So we'll be back with the resolution. So apologize for any disruption to your workflow. Still able to click on the link, but just not go into the portal.

[Roei Golan, Chief Financial Officer at Check Point Software]

Our cash balances as of the end of the was $2,900,000,000 During the quarter, we continued our buyback program and purchased approximately 1,500,000.0 shares $325,000,000 at an average price of $211 So to summarize our financial results, revenues and EPS above the midpoint of our projection, we did see another quarter with strong Quantum Force demand for Quantum Force appliances, strong operating cash flow and maintaining high profitability margin. Happy to move the call to into Nadev. You are on mute, Nadav?

[Nadav Zafrir, CEO at Check Point Software]

Hey, folks. Great to be with you again. As Roy said, indeed, a solid quarter. And when we look at the appliances demand, I think this all really shows a a trajectory that's been going on for the last four the last four or five quarters. So it's a continuous positive trajectory, which makes us optimistic.

[Nadav Zafrir, CEO at Check Point Software]

If you remember, we met last time, my first time as CEO at the January, and I told you that I was gonna be focusing on listening and learning with a target of meeting over a hundred customers, partners, prospects, and hundreds of our own checkpointers. So a hundred days my first hundred days are over, plus twenty eight days and counting. So happy to report that I think I exceeded my target of the meetings that I told you I was going to do in listening to our partners, customers, etcetera. I think that regarding our strategy, which we articulated, which is to provide the leading platform for the hybrid mesh architecture, at the end of the day, it resonates well with everybody I've met so far and is well received. Also very pleased to say that, in speaking to channel partners, I believe there's a genuine, want to reinforce the partnering with Check Point, and we definitely intend to double down on that.

[Nadav Zafrir, CEO at Check Point Software]

And then finally, February was our CPX, which is our user conferences. We had them across the world. So traveling the world, meeting Check Point, there's thousands of customers and partners in Vienna, in Bangkok, in Vegas, we enthused me at least in our potential going forward in in our strategy. You know, what we emphasized to the world is that we believe, first and foremost, that when you are securing a hyper connected world in the AI era, first and foremost, we need to remind ourselves and everybody else that security is about security. As I've shared with you, our strategy is to provide a real platform for this hyper connected reality, and I think it literally provides the best prevention that there is out there today.

[Nadav Zafrir, CEO at Check Point Software]

When you think about the hybrid mesh architecture, you always need to remember that we're living in a hyper connected reality. And in this hybrid mesh architecture, I I believe that the Infinity platform really provides the best solution that there is out there today based on the flexibility, and it meshes together or brings together our three families of products, quantum products, our CloudGuard products, and our Harmony products. And the way we are providing this, I think, optimizes for flexibility, performance, and cost. And at the end of the day, by providing this agility, not only we can provide a better security, but also a better user experience. And finally, you know, when you look at organizations and enterprise today, probably the second line item in their budget, is cloud.

[Nadav Zafrir, CEO at Check Point Software]

And this flexible hybrid approach allows, for a better capability to control that, cloud cost. Beyond that, in q one, we also announced our partnership with Wiz. The reason I bring it up here is I think it exemplifies what we mean when we say that a real platform is also an open platform with an OpenGarden approach and architecture. So it's not just Wiz, but Wiz is a good example of how you bring together one plus one best of breed and provide our customers with the best security in this hyper connected reality. Also, with the latest recognitions of industry analysts.

[Nadav Zafrir, CEO at Check Point Software]

You you can see here, and I think they're well deserved. When I look at into our focus, two areas. One is SASE, which is front and center in our architecture. We articulated that, and that's where we're focusing. And the other, of course, is artificial intelligence.

[Nadav Zafrir, CEO at Check Point Software]

When you think about Sassy, our when you look about what we've done already so first of all, we're already serving thousands of customers. And in terms of user experience, literally 10 x faster, and that counts in different situation. And this hybrid approach allows for the flexibility. And at the end of the day, we have also embedded the checkpoint security engines. And we're talking about dozens, almost a hundred AI agents that are running and and being supported by by or supported from the cloud.

[Nadav Zafrir, CEO at Check Point Software]

Going forward, this is a major focus that I'm overlooking myself because of its criticality to our architecture. Our focus is obviously on scaling this to larger and larger enterprises. As I told you last time, we we intend to we intended to open a new r and d center in India that works well, and we're getting great talent there. And we're constantly going to improve the unified policy across the hybrid mesh network, improve user experience, and the cyber practitioner experience going forward. Beyond the the hybrid mesh and the SASE in it, then just front and center, obviously, artificial intelligence is changing the world.

[Nadav Zafrir, CEO at Check Point Software]

I don't think it's just a technological revolution, but literally a new dimension. And so when you think about it, at least from a cyber perspective, the first thing you need to understand is that enterprises must embrace this new technology. They have to embrace it. They have to leverage it. But they wanna do it in a responsible, secure way.

[Nadav Zafrir, CEO at Check Point Software]

That's where we come in. So, in our CPX events, we launched, and continue to reinforce, GenAI security as an example. But it's not only to look at the attackers perspective and what they can do, but also leveraging AI for security. And that's where Infinity Copilot, integrated into our product, was also showcased. And, again, today, we have thousands of organizations the globe using it, already.

[Nadav Zafrir, CEO at Check Point Software]

Going forward, at the same time, we're going to continue to focus on both. How do you secure AI and how do you embrace AI and leverage AI to facilitate simplification and automation, all the way to fully AI driven access, control policy, which is where our road map is taking us. I think that when you think about a new dimension, one thing that you need to be is humble. I think as humans, we have the limitation of imagination. Right?

[Nadav Zafrir, CEO at Check Point Software]

Where is this world going? And last time we spoke, we spoke about starting an AI security research center, which is already functioning. But this is also an opportunity to me for me to introduce Jonathan Zanger, who will be joining us in the next few weeks as our new CTO. If you're not sort of within the cyber and AI community, his name might might not mean much. But believe me, he's one of the sharpest and most talented minds I've ever had the pleasure to work with.

[Nadav Zafrir, CEO at Check Point Software]

I know him from our service days. And in the last few years, he's been in the startup world. And within the community, he's really a well recognized talent both in AI and cyber based on his national defense, academia, startup experience. And I also believe that him choosing us is a show of confidence in our strategy and where we're going. And, ultimately, he's also a talent magnet.

[Nadav Zafrir, CEO at Check Point Software]

And as you probably know, in this AI world, it's all about the talent and the the the critical mass of talent that you can bring into the organization. And that's going to be one of his, tasks going forward. I'm really proud that he's joining us. This is probably also a good time to, to acknowledge our current CTO, which you all know, Dorit Dorr, doctor Dorit Dorr. You know, I've known Dorit for almost thirty years.

[Nadav Zafrir, CEO at Check Point Software]

I think she's one of the most recognized leaders in cyber globally. And in Check Point, she's an icon. She was a part of building this company, and I I couldn't be more, you know, appreciative of what she's done. She's agreed to stay as a Check Point fellow and a consultant. In the next few weeks, Jonathan will have to fill really, really, really gigantic shoes.

[Nadav Zafrir, CEO at Check Point Software]

So congratulations to both. And speaking of news, and again, going back to our January discussion, we spoke about the way we're going to orchestrate and focus our go to market approach, and we spoke about creating a new division that works on SaaS. We're going to be focusing on securing the securing the workforce. When you think about the hybrid modern workforce, we work from everywhere and anywhere. We have different intents and different personas and different identities and multiple devices, and there are too many segmented too many segmented solutions right now for different channels and devices.

[Nadav Zafrir, CEO at Check Point Software]

And this lack of a unified solution is being taken advantage of by the hackers. Because hackers are always gonna come through the cracks even if you have disparate specific products that are doing a good job. If you can't unify it, they're gonna come through the cracks. So the idea is to design an offering to secure employees in the modern hybrid mesh environment and provide a single product experience. We're gonna be pulling together different products that we have, and we're going to be pulling this into our Infinity platform and leveraging assets such as Threat Cloud AI.

[Nadav Zafrir, CEO at Check Point Software]

Again, I'm happy to introduce Gil Friedrich. For those of you who don't know Gil Friedrich, who's going to be leading this new newly formed division to focus on the workforce. Gil joined us about three and a half years ago through the very successful acquisition of Avenon. He's six x the business so far. We announced not so long ago that we already crossed a hundred and $20,000,000 of ARR.

[Nadav Zafrir, CEO at Check Point Software]

Our goal is to cross the $200,000,000 of ARR within the next year. And building on this success and the reception of this technology, we're going to put together different products to create the single product experience. So when we talk about email, endpoint, and other products, this is a newly formed division that I'm very, very optimistic about. So welcome to Jonathan. Welcome to Gil.

[Nadav Zafrir, CEO at Check Point Software]

And and I think that's pretty much what I had to report back over q one. So, Kip, back to you.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Thank you, Nidav. We're gonna start out with a little commentary around our business outlook. Obviously, we're seeing a nice pipeline build for the second quarter and the second half of twenty five. We're very pleased with the customer response about the Infiniti platform and also our Quantum Force appliances. You know, security spending for us is healthy, but we recognize it's not immune to budget concerns.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Although history has shown it is, insulated, from most cuts. From a macroeconomic uncertainty, specifically around tariffs, we haven't seen any behavior so far, canceled project, extended sales cycles, etcetera. However, you know, you recognize these sales cycles usually occur at the or the extended sales cycles usually occur at the end of the quarter. As such, we think it's prudent to take this into consideration. And so for the second quarter, we're looking at these these dynamics in in giving you our our business outlook.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

So revenues are expected to be $6.42 to $6.82. That's two to 9% year over year growth. Non GAAP EPS is expected to be $2.32 to $2.42. Year over year growth of seven to 12%. GAAP EPS is expected to be approximately 55¢ less.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Our f y 2025 remains unchanged. And a little bit of modeling commentary to reiterate off of what Roy said earlier. Last year in the second quarter, we had three eight figure deals that totaled a hundred and 30,000,000. 2 of those were paid upfront. They contribute about 2% benefit to the calculated billings in, in the quarter.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

With that, we're gonna open the call for q and a. And, no need to raise your hands, folks. There's a predetermined list of folks, so we'll leave it at that. First up is gonna be Robbie Owens from Piper Sandler followed by Joseph Gallo

[Rob Owens, Managing Director & Senior Research Analyst at Piper Sandler Companies]

Great. Thanks, Kip, and, good afternoon, everybody. I was hoping you could drill down just a little bit more into the business outlook commentary slide that you just provided that Kip read. Maybe as you think about the the forward pipe, the obvious questions or puts and takes around the the refresh cycle, which seemed to to come through in product revenue, this quarter, but also just where are conversations with customers around tariffs and, you know, appetite to to spend in this environment, understanding that security is typically resilient. We've seen that historically, but, some of these things can push out as they sweat assets.

[Rob Owens, Managing Director & Senior Research Analyst at Piper Sandler Companies]

So just some color from the customer conversations would be appreciated. Thanks.

[Nadav Zafrir, CEO at Check Point Software]

Roy, you wanna start?

[Roei Golan, Chief Financial Officer at Check Point Software]

Yeah. I'll start. So, again, I I have to say that, again, as of today, and we had multiple discussion with our sales leader, we don't see and based on what we see in the environment today, we don't see any effect as of today from what's going on on the macro economy environment. We actually see that the pipeline is building very nicely. You mentioned the Quantum Force appliances that we see the positive trend in the last few quarters.

[Roei Golan, Chief Financial Officer at Check Point Software]

I have to say that when I'm looking on the pipeline specifically for the Quantum Force Appliances for the second quarter, looks very good. But again, it's something that we cannot avoid the volatility and what's going on in the market. And as we all know, most of the business is coming in the last month of the quarter, especially in the last two weeks. We see that every day we have news and something can be changed. Again, as of today, we don't see anything.

[Roei Golan, Chief Financial Officer at Check Point Software]

But when we built the guidance for the next quarter, we took into account more prudent approach in terms of there might be because of the macroeconomic, more deals that will be slipped to the second half of the year. And that's the main factor here.

[Nadav Zafrir, CEO at Check Point Software]

Yeah. Rob, I I don't have a lot to add, to be honest. As Roy said, I I speak to our channels and customers and, obviously, sales leaders all the time trying to be out there and understand what the sentiment is. We haven't seen anything. The only thing I can add to that and, this is looking back, doesn't mean that this will itself.

[Nadav Zafrir, CEO at Check Point Software]

In these terms of uncertainty and volatility, especially as our the, you know, the the the offense is arming itself with very sophisticated AI capabilities, unfortunately, I think we'll see a we'll also see an up an uptick in the on the offense side. So I think, you know, from a customer perspective, this cyber budget line item will probably be at the bottom of the list of something to cut. Again, this is, looking back, looking into the future. Who knows?

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Thanks. Next up is Joseph Gallo followed by Adam Tindle of Raymond James.

[Joseph Gallo, Senior Vice President at Jefferies & Company Inc]

Hey, guys. Thanks for the question. Maybe just following up on products. How should we think about the runway left in the refresh, and product versus subscription revenue growth this year? And then is there any, increased cost of goods sold from the the tariffs?

[Joseph Gallo, Senior Vice President at Jefferies & Company Inc]

Thanks.

[Roei Golan, Chief Financial Officer at Check Point Software]

Yes. So I'll start with the second question around the tariffs. So we are manufacturing now today. Most of our manufacturing is done in Taiwan with the third party ODMs. We're working closely with them mainly around the development that will that happened in the last few I do have to say that even with the high tariffs that for now it's we're not imposed, but even with these high tariffs that will be that might be in both, the max exposure on us be won't be significant and will expected to be less than half a point to our total margin.

[Roei Golan, Chief Financial Officer at Check Point Software]

But then we're talking about the MAX exposure and we are doing a lot of work around doing some adjustment to our supply chains to try to minimize this additional cost. In terms of product, so we started to see this refresh cycle accelerating, I think, the second half of last year in 2024. First of all, we have the refresh of our existing installed base that we do see a very nice ramp up in the last few quarters. We see that they really like the new appliances that we launched a year ago. And actually see the acceleration in our revenues grow from product that's mainly include the hours.

[Roei Golan, Chief Financial Officer at Check Point Software]

As for the remaining of the refresh, so I think first of all, we have the refresh of our existing installers, but definitely there is an opportunity outside. Our competitors also some of them mentioned that they have a large refresh cycle that start that expect to start sometime in the second half of twenty twenty five and will last in 2026. So we think that this should last. I mean, this refresh and this trend, we should expect it to last in the next will last until the end of twenty twenty six. I think that we need also to take into account macroeconomic environment that sometime because of uncertainty, there will be some customer that will decide to sweat in their asset.

[Roei Golan, Chief Financial Officer at Check Point Software]

But right now, we don't see that. But again, you know, you don't know. I mean, we still there is a lot of uncertainty today around it.

[Joseph Gallo, Senior Vice President at Jefferies & Company Inc]

Thank you.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Our next caller is Brian Brian Essex followed by Keith Bachman.

[Brian Essex, Executive Director at JP Morgan]

Alright. Thanks, Keith.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

There we go.

[Brian Essex, Executive Director at JP Morgan]

Alright. We on? Yeah. Yeah. Alright.

[Brian Essex, Executive Director at JP Morgan]

Thanks, Gabe. Nadebeh, just wanted to ask you, you know, one thing about being at CPX, it was really evident that you you're very engaged with customers, partners, employees, particularly employees. The the number of employees that commented that that, you know, you're pushing them to grow the business, you know, maybe more forcefully than has been done in the past. Maybe if you could help help me understand what kind of, what kind of incentives, initiatives, and benchmarks are you holding your your management team to that are meaningful to call out that kinda hold their feet to the fire to reaccelerate growth?

[Nadav Zafrir, CEO at Check Point Software]

Yeah. So I would say that first and foremost, and we we've spoken about this in in different instances, we're focusing on accelerating our growth. In order to do that, we're also expanding our spend on go to market, the way we are orchestrated around go to market. And, also, I think, culturally, being being a more vocal and customer closer to our customer. I think that from a cultural perspective, the word that that what I like the phrase that I like to use, and I'm pushing is sense of urgency.

[Nadav Zafrir, CEO at Check Point Software]

From a compensation commission, we are more focused on ARR than we were before, subscription and ARR. And then finally, a target of putting ambitious, achievable targets and making sure that we're all, accountable for those targets, every employee, in the company. By the way, not just the people that are forward looking and and talking to customers, but also the folks here that are doing most of the r and d.

[Brian Essex, Executive Director at JP Morgan]

Alright. That's helpful. Thank you. We'll keep it to one.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. I I had a big faux pas there. The the next question is actually mister Diesel, and that'll be followed by mister Bachman.

[Adam Tindle, Managing Director at Raymond James Financial]

Naddab, you give Kip one slide to read, and he forgets how to do the q and a. So

[Nadav Zafrir, CEO at Check Point Software]

He's lost he's lost too much weight. You know? He can't think right.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Oh, there we go. There we go.

[Adam Tindle, Managing Director at Raymond James Financial]

Love it. Thanks, guys. I I wanted to ask, obviously, I think that the key theme here is the growth acceleration and product in particular. But the flip side, just to get it out there, Nadav, is from the margin standpoint, I know Roy unpacked a little bit of the drivers, but we're nearing 40% EBIT margin, sales and marketing is at record levels. You did have a filing intra quarter where you're expanding corporate headquarters.

[Adam Tindle, Managing Director at Raymond James Financial]

I think a lot of this makes sense as growth accelerates, but I think it would be helpful to maybe put some parameters around this. Just how you think about the optimal operating model? What would you would need to see, for example, to take margins into the 30s? You think about the balance of growth versus investment, broadly speaking? Thanks.

[Nadav Zafrir, CEO at Check Point Software]

Yeah. I'll start, and, Roy, you can follow-up. I shared this last time that the strategy or the targets haven't changed. We need to gradually improve our growth, but we wanna do it in a responsible, prudent manner to create sustainable growth. So I think we do have flexibility in our margin, but we need to do it very carefully.

[Nadav Zafrir, CEO at Check Point Software]

And like you said, we need to see the uptick that that brings. So I I do think there's some flexibility there. As you can see, no big changes in q one or minimal changes to our operating margins in q one. I don't see that changing in the very near future, but we are, you know, look following very closely and seeing where every dollar we put into go to market, what it brings, and how it affects our total financial situation. Roy, you wanna add anything to that?

[Roei Golan, Chief Financial Officer at Check Point Software]

Yeah. I think also we mentioned I think we we discussed it in our in in the CPX that we are doing also also part part of what we've done with Wizz, we are doing more focusing on where we need to invest. It doesn't mean that all investment needs to be increasing. If anything, I think we need we are looking, I think, Adav is doing since he joined in terms of he decided where we need more to focus as we discussed a lot with mesh and other items. And we are moving budget from high areas in that we less focus to areas that we need to focus more like SASE, like AI.

[Roei Golan, Chief Financial Officer at Check Point Software]

In the end, when you're looking on the full budget, on the full operational, I don't think that we don't expect in the near term to see any significant change to our operating margin in order to accelerate our top line.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Our next question comes from Keith Bachman followed by Shaul Lial.

[Keith Bachman, Senior Research Analyst at BMO Capital Markets]

Many thanks, team. I wanted to try to get more update on Perimeter 81 of your SASE solution. I'll break it into a couple parts is as we think about the year unfolding, how do you think about the enhancements that you need or want on the solution side? B, you talked a little bit about this CPX, but maybe maybe update us on go to market activities. And then, c, as we get to end of year, what does success look like, and and what metrics might you be able to provide to us, whether it's contribution to ARR, number of customers, anything along those lines.

[Keith Bachman, Senior Research Analyst at BMO Capital Markets]

But just maybe just a broader update on your SASE solution and Premier 81. Many thanks.

[Nadav Zafrir, CEO at Check Point Software]

Well, thank you. So I'll get started, and Roy's gonna talk a little bit of maybe about the framers. I'll start with the product side. On the product side, there are two things that, or three things we're focused on. Number one, this we we have a relatively nascent solution if you look at the incumbents in the market.

[Nadav Zafrir, CEO at Check Point Software]

I think it's a unique solution. Sometimes when you come late to the market, you can already see the kind of mistakes that were done and come with a more modern solution. And I think the hybrid approach allows us not just to give a better user experience, but also to provide security based on the parameters of identity, intent, geography, and location. And based on those, you can consume the security from the right place, especially in the world that's moving from the attacker's perspective into the speed of AI. I think this is crucial.

[Nadav Zafrir, CEO at Check Point Software]

So but having said that, we we knew we still have a feature parity that we need to complete, and I'm following that very, very, very closely. And the other is to go up the stack in terms of very large enterprise. So that's the other thing. On the go to market side, the way I I look at it is to really try to go out there and and and showcase by you know, in everywhere we can, but also with existing very successful deployments in large enterprise of what this really means to provide this hybrid architecture. What does it really mean to have a better user experience?

[Nadav Zafrir, CEO at Check Point Software]

What does it really mean that you have a better control of your cloud cost and go out and prove that with with our partners, with our channels, and industry events such as the one happening next week at RSA. I think that for me, is first of all, can we actually showcase in large enterprise that's consuming this? What are they saying? I think if they come and say, listen. This actually works better because because SASE, unlike other products in security, is right in front of the long tail of hundreds, thousands, and sometimes tens of thousands of employees of one enterprise.

[Nadav Zafrir, CEO at Check Point Software]

And the and the feedback that you get is very direct. So that's on the user experience side. And we're seeing the same thing here at at Checkpoint when we're when once we're deploying this here. What's the user experience? What does it mean?

[Nadav Zafrir, CEO at Check Point Software]

What does it allow us to do? Because at the end of the day, we not only wanna secure and prevent, we also wanna get better user experience. The other thing is how this as a as an infinity platform sale, that's the other metric or perimeter that I wanna look at. Not as a SaaS standalone, but SaaS is a part of our hybrid mesh and the Infinity platform. So that's the another metric that we need to look at closely.

[Nadav Zafrir, CEO at Check Point Software]

I can tell you very openly that so far so good, but it's only the beginning of the journey. I'm following this very, very closely. It's one of the like and and to the question about investment, this is one area where we don't have lack of resources.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Thank you. Next question is coming from Shauli Al followed by Shrenik Kutharis.

[Shaul Eyal, Managing Director - Equity Research at TD Cowen]

Thank you. Good afternoon, guys. Nadav, on the heels of your Wizz announcement partnership, and thank you for this slide you guys have put up. We've been getting some questions from investors on on whether Checkpoint is actually giving up on CNAP or is actually double downing on on on CNAP, maybe being one category out of the broader, cloud security arena. So maybe if you can address that.

[Shaul Eyal, Managing Director - Equity Research at TD Cowen]

And maybe, Roy, just just a word about the mix between new logos and existing customers this quarter. Thank you.

[Nadav Zafrir, CEO at Check Point Software]

Yeah. Thanks for that, Joel. So I wanna be very direct and and very simple about this. When we're doubling down on cloud, we are focusing on partnerships when it comes to observability and CNAP specifically. And we are repurposing, these resources in the areas that are core and strategic for us, such as SASE.

[Nadav Zafrir, CEO at Check Point Software]

So I wanna be very clear on that, And we're very transparent internally with our customers, with our channels, and we are within a migration process within our existing customers to start using Wiz, and we are able to actually showcase Wiz in our unified platform. Again, I believe this is also the right philosophy when you think about, an open platform. So that's a very direct answer.

[Roei Golan, Chief Financial Officer at Check Point Software]

And to your question, Shaul, about existing customer and and new customers, so I think that we're looking on looking on our product revenues. So of course, the majority is coming from refresh and from our existing customers, but definitely, we do see uptick in our in new business from new logos in from appliances. Again, I think since we launched I think since we launched the new families last year, the price performance of these appliances become much more attractive in the market than it was in before, and definitely, we we do see that in the competition.

[Nadav Zafrir, CEO at Check Point Software]

I would add one thing about new customers, Rahul. I spoke about Gil Friedrich and the newly formed workforce division. That is one of the ways that we expect to win new logos, with sometimes even different buyers within the enterprise.

[Shaul Eyal, Managing Director - Equity Research at TD Cowen]

Thank you.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Next up is Serenit Kutharis followed by Andrew Nowitzki from Wells Fargo.

[Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co]

Great. Can you guys hear me alright?

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Nice nice nice little vest there.

[Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co]

Glad to see somebody wore it. Test dress for the occasion. So you you did touch upon tariffs and and global macro uncertainty and also around around the Israeli Taiwan based supply chain. Just curious to what degree has some of your relative kind of tariffs insulation, the non US status, it's kind of helped you either win business from from other hardware heavy peers in in areas like Europe, Canada, and and anything you have seen in terms of win rates up ticking or competitive, you know, take off or take out activities specific to these dynamics. And then from a margin standpoint, very quickly, Roy, you you mentioned sub 50 basis points kind of impact.

[Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co]

Assuming that is based on some of the existing or the original tariff framework, just just wanted to clarify Could that change for the better if if things are evolving in a in a right direction? So

[Roei Golan, Chief Financial Officer at Check Point Software]

I'll start maybe because it's a short one. I that's based on the 32%. That's the high tariffs that for now, it's not we're not imposed, but that's based the the less than half a point is related to the 32 percentile, not for the 10% that already imposed.

[Nadav Zafrir, CEO at Check Point Software]

Yeah. I'll say from my perspective that, you know, these are early days and uncertainty right now is such that I'll be very honest. I'm not I don't I'm not counting on having an advantage over our peers at this point. I do believe that in an era that with the volatility that we have, unfortunately, we will see an uptick in attacks and in the sophistication of attacks. I I I I believe that our approach of prevention first and that security is about security will be heightened and well received.

[Nadav Zafrir, CEO at Check Point Software]

And I and I and I'm optimistic that we can get our points based on that.

[Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co]

Got it. Thanks a lot.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Next up is Andy Nowinski followed by Taliani of BofA.

[Andrew Nowinski, Analyst at Wells Fargo]

Okay. Good morning. Thank you for the question. So, Nadab, you know, you have a very impressive background. I'm sure you've seen more, cyber attacks than most executives, in the market.

[Andrew Nowinski, Analyst at Wells Fargo]

So I'm wondering, have have you been able to leverage your background to speak with CSOs? And and how how might that be driving new logo growth, has historically been the Achilles heel of Checkpoint? And then just a quick clarification, the maintenance decline this quarter, is that just a lagging impact? I think that lags even though product revenue is really strong, typically has lagging impact and it comes back to growth later. Thank you.

[Roei Golan, Chief Financial Officer at Check Point Software]

I can start and Adam maybe regarding the support. So yes, it's lagging. We do expect it to pick up in the second half of deal if we wanna see the trend continue with the refresh. And definitely, we expect it to be to be positive back in the in the second half of deal. And, Nadav, to your Yeah.

[Nadav Zafrir, CEO at Check Point Software]

Look, I

[Nadav Zafrir, CEO at Check Point Software]

the answer is yes. I always, you know, from the nascent days when the Internet started, and I've been doing this for the last thirty years, remind myself that at the end of the day, it's a learning competition between offense and defense. That's true for Checkpoint. When we protect Checkpoint, that was true in my previous life when I was at the front lines protecting national infrastructure. It's always a learning And in a learning competition, what you need to do is appreciate how the world is changing, try to imagine different futures, assign probability, come back to the to the present, and decide how you want to allot your risk management and your budget.

[Nadav Zafrir, CEO at Check Point Software]

I'm super passionate about this, and I've seen it from many, many different aspects in the last thirty years. And for me to talk to leaders, in the enterprise world, whether it's board, CEOs, CFOs, CIOs, and CSOs, is something that I'm very passionate about. And, I am very enthusiastic about I'm very enthused about going out there and and talking about how we approach this at Checkpoint generally. Specifically, that all of us are, you know, sort of trying to understand how we leverage this incredible new technology that's a double edged sword. We all get it.

[Nadav Zafrir, CEO at Check Point Software]

And so I think if we can be a good partner for the journey of embracing AI for our customers, that's a very, very important capability that we have. Jonathan Zanger joining us in that respect, being able to hire some of the best talent in the industry, trying to imagine what it's gonna look like. I I I don't fool myself. We're gonna imagine a thousand scenarios, and we're gonna get hit with scenario thousand and one. By thinking about it, practicing it, simulating it, I think is a great advantage.

[Nadav Zafrir, CEO at Check Point Software]

Now when you think about Checkpoint with thirty years of experience, a hundred thousand customers, the the vast data that we have, the fact that we've seen every mutation and every permutation doesn't mean that we're gonna get it all right, but I think it means that that that we're in a good springboard.

[Andrew Nowinski, Analyst at Wells Fargo]

Thank you.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Next up is Taliani followed by Patrick Colville.

[Tal Liani, Analyst at Bank of America]

Hello? Here you go. Now you can see me also. Nadav, I have a kind of high level question for you. So the stock went up following your entry to the company, and what we are looking for now is for the growth not to be in the 7% area.

[Tal Liani, Analyst at Bank of America]

That's not exciting. We wanted to see above 10%. And the question is, how long does it take you and what needs to happen to get to this 10% level in order to justify additional upside in the stock? And I I just wanna I looked at the numbers differently. I know that firewalls will go through a refresh cycle, but firewall market is not gonna grow in the long term.

[Tal Liani, Analyst at Bank of America]

And when I look at your other parts of the portfolio outside of firewall, it needs to grow substantially to get to 10%. If I remove this firewall refresh temporary kind of, you know, upside, it needs to grow substantially to get to a sustainable 10% level. So how do you get there? What do you need to add? How do you what do you do with go to market?

[Tal Liani, Analyst at Bank of America]

I know these are big questions, but I think that's what

[Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co]

Yeah.

[Tal Liani, Analyst at Bank of America]

Is gonna drive the share price from here. Thanks.

[Nadav Zafrir, CEO at Check Point Software]

Yeah. I first of all, I agree. You know, take as as as an example, the newly formed workforce division led by Gil Friedrich is one way or one vector to get there to that sustainable double digit growth that we are, aiming to achieve. And like you said, I don't expect anything to happen overnight, and we wanna reach it in a sustainable manner. Having said that, this is an example which I'm happy to elaborate on.

[Nadav Zafrir, CEO at Check Point Software]

You know, Gil came here, as an acquisition. It was a very successful acquisition. This is completely outside of our quantum business. This is, completely outside of our sort of thirty years of experience and in a very mature, sort of saturated market. But we've been able, to innovate, and get a meaningful part of this market.

[Nadav Zafrir, CEO at Check Point Software]

Again, crossing the hundred and 20,000,000 and and leading it this into 200,000,000 within the or our goal is to get to 200,000,000. That's that's becoming meaningful. And adding other components to this and creating a a a distinct division that's working, and that that's one way to get there. The other is to reinvigorate and focus on our go to market. I think that and and you can look at our spend, and it'll grow.

[Nadav Zafrir, CEO at Check Point Software]

I think that we have some of the best products out there. If you ask me one of things that surprised me is how little the world knows about what we're doing. We need to be more vocal. We've been shy. We need to be more vocal.

[Nadav Zafrir, CEO at Check Point Software]

We will be. Other thing is focus, focus, focus. That's why we decided to get out of different businesses. We spoke about that, focus on our hybrid mesh platform approach so that where we play, we play to win. Where we play, we play to become a podium player.

[Nadav Zafrir, CEO at Check Point Software]

Beyond that, we're obviously always looking at potential acquisitions to close some of the gaps that we have in our strategy and getting some of the best leaders and talent in the world. And I think that when you combine all that, that's the path. That's the the strategy that that I don't fool myself that this is gonna happen overnight, and I don't fool myself that we that we're not gonna have our hurdles along the way. But I can tell you that I'm optimistic, and, you know, we'll come back to report every quarter.

[Tal Liani, Analyst at Bank of America]

Right.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Thank you. Next up is Patrick Colville followed by Jonathan Ho of William Blair.

[Patrick Colville, Lead Equity Research Analyst at Scotiabank]

Thank you so much for taking my question. I guess I I wanna focus on the demand environment. I mean, the message in the prepared remarks was was very clear that no effect from the macro. I I think I just wanna make sure that we, you know, we're clear on the timing of that comment. I mean, the the do those comments refer to post close, you know, of the quarter, so post March and including the last few weeks?

[Patrick Colville, Lead Equity Research Analyst at Scotiabank]

And and then, you know, if I think back to 2020, Checkpoint, this quarter five years ago pulled the fiscal year guidance. You know, was there a world where you considered pulling the fiscal year guidance, and and what were the puts and takes there? Thank you.

[Roei Golan, Chief Financial Officer at Check Point Software]

I'll start maybe on the first of all, yeah, that's based on what we see. I mean, the comments are based based on what we see today, not based what we've seen in the last quarter. I mean, that's following deliberation day and all the development since this announcement in deliberation day. So I have to say again, I don't want to compare to 2020. I'm talking about what we see do see today.

[Roei Golan, Chief Financial Officer at Check Point Software]

We are as Natav also mentioned, we are doing a lot of we had a lot of discussions with channels, with customers, with our sales leaders. As of today, we're talking today in this earning, we don't see any changes in the macro environment in terms of the demand for the security for the security. And as I say, actually even the pipeline is building up for this quarter, mainly around the Quantum Force appliances. And that's what we see today. It mean that we won't see a change because there is we all see what's going on in the market.

[Roei Golan, Chief Financial Officer at Check Point Software]

We all see the volatility. And it doesn't mean that it won't be changed in the next few weeks. That's why we need to be more cautious in terms of when we are providing guidance for the second quarter. But definitely what based on what we see, that's currently what we see today on the demand. And therefore, we also didn't change the guidance for the full year.

[Roei Golan, Chief Financial Officer at Check Point Software]

I mean, because that's based on what we see today, we didn't think that there is a need to change the full year guidance.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Hey, Patrick. Thanks for wearing the competitive gear. Hey. Next up is Jonathan Ho followed by Brad Zelnick.

[Jonathan Ho, Research Analyst at William Blair]

Hi. Good morning. You know, Nadenh, you spoke a little bit about reinvigorating sort of the the messaging and the go to market for the company. Can you talk a little bit about the messaging around the hybrid mesh firewall and, you know, maybe how that's resonating with customers, how you can maybe change the narrative around Checkpoint over time. Just give us a little bit more detail.

[Jonathan Ho, Research Analyst at William Blair]

Thank you.

[Nadav Zafrir, CEO at Check Point Software]

Yeah. For sure. My favorite topic. You know, the the the the debate around, whether the world is, going to be on prem or in the cloud or multi cloud, we're gonna be working from the offices or working remotely, I think that debate is over. The answer is yes, yes, and yes.

[Nadav Zafrir, CEO at Check Point Software]

We're gonna be doing both, and that's sort of the hybrid environment. Now the hyper connectivity that the world is going into is also not going to change. AI is not gonna change that. Some people anticipate that AI will change the way we operate, but at least in the foreseeable future, we need to remember that at the end of the mesh, there are humans like you and I. And we're fallible, and we get lazy, and sometimes we're we do stupid things, and sometimes we're useful idiots.

[Nadav Zafrir, CEO at Check Point Software]

And so the idea of providing a platform for the hybrid mesh is the idea of acknowledging that this is the real architecture that the world has embraced and that you need a platform to support that. At front and center of this hybrid mesh is the network. If you cannot have, you know, the trust that your infrastructure is actually your infrastructure, then it's very, very difficult to operate. When you add the need to embrace AI, this is where you really need a platform that provides three or four things. Number one, it needs to provide real security.

[Nadav Zafrir, CEO at Check Point Software]

And real security starts with prevention. Because in the AI world, don't prevent it, it'll be it might be too late. Trying to trying to run after it after it's reached your network through your SOC system, for example, could mean that it's you're just telling you're just a historian telling everybody about the past, but the damage is already done. And the second thing is user experience. At the end of the day, you and I and all of us are traveling the world.

[Nadav Zafrir, CEO at Check Point Software]

We have multiple devices, and we are looking for user experience with security. And we don't want to, you know, give up on our user experience, speed, and capability to work from anywhere and anywhere from everywhere and anywhere. And so that's sort of the hybrid mesh reality. When we look at it at at the center of that, we're providing a suite of products that at the end of the day have a unified management, the Infinity platform, and are all, taking or ingesting the data and the intelligence, from our from our threat cloud AI. What that means is that you're getting flexibility because sometimes you're going to receive and consume security from an endpoint device.

[Nadav Zafrir, CEO at Check Point Software]

Sometimes you want your data center to be able to connect directly. Sometimes you want to and and you're working in a multi cloud environment. That's sort of the the the essence of what we're saying with a hybrid mesh platform. Beyond that, you also must remember that, it's not only about security and usability, it's also about cost. This hybrid approach allows you to optimize the connectivity, not just per security and usability, but also per cost.

[Nadav Zafrir, CEO at Check Point Software]

That's the message that we're going out there to the world with. And now we're augmenting this with a single product experience at the workforce level, and both of those are complementing this hybrid mesh environment. It's not everything, and that's why it's an open platform. I can tell you that so far, it's resonating. There is a it's a process because this is sort of a concept that is not that hasn't been around.

[Nadav Zafrir, CEO at Check Point Software]

So we need to invest in explaining and showcasing. And to the point that we spoke about before, it also means that we're gonna have to up our our marketing game.

[Jonathan Ho, Research Analyst at William Blair]

Thank you. I can see the passion.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Next up is Brad Zelnick followed by Saket Kalia.

[Brad Zelnick, Managing Director at Deutsche Bank]

Great. Thanks, Kip, and nice to see everybody. Nidav, along the lines of Taliani's question, Checkpoint's in a stronger position as we've seen in years, and and everybody's got a lot of enthusiasm that you're here to win and not just win small but to win big. The company's on a strong footing, has a really strong balance sheet. Now that you're over a hundred days in, how are you thinking about corporate development opportunities, and and what criteria are you using as you're looking at deals?

[Brad Zelnick, Managing Director at Deutsche Bank]

Thanks.

[Nadav Zafrir, CEO at Check Point Software]

Thank you. So the criteria is is very straightforward. Have our North Star and our strategy and our focus areas. Acquisitions are are a a means to fulfill that strategy. So that's how we're looking at it.

[Nadav Zafrir, CEO at Check Point Software]

It's not a very broad aperture, but like we said, SASE AI, so that's where we're looking. You know, unified management, that's where we're looking. And there are many opportunities out there. And so our our you know, we last time we spoke, I announced that Roy Caro is joining us. And alongside with Alan Eley, who leads this, they're constantly looking.

[Nadav Zafrir, CEO at Check Point Software]

And we have a real appetite. Sometimes it will be to accelerate the road map. Sometimes it will be because somebody something we will see is truly novel on it, and it's not just an add on, but something that can actually leap for. And so we're looking at both and stay tuned.

[Brad Zelnick, Managing Director at Deutsche Bank]

Great. Thank you.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Next up is Saket Kalia followed by Roger Boyd.

[Saket Kalia, Managing Director at Barclays Capital]

Okay. Great. Hey, guys. Thanks for thanks for fitting me in here. Nadav, maybe maybe to go back to the the SASE discussion.

[Saket Kalia, Managing Director at Barclays Capital]

Again, front and center, no no shortage of of resources. Maybe the question is, how do you sort of see the swim lanes in this market developing? You know, you have some established pure play SASE vendors like the Zscalers and and others in the private side. You have other firewall vendors that are providing this as well. Maybe you have some that are very focused on secure web gateway, some that are really focused on private access or or VPN as a service.

[Saket Kalia, Managing Director at Barclays Capital]

Where do you see Checkpoint SaaSy sort of fitting into into this market as you think about SaaSy in the coming years?

[Nadav Zafrir, CEO at Check Point Software]

Yeah. Great question. So the first thing I wanna say is that we're focused on enterprise customers when we think about the hybrid mesh architecture at its best. These organizations are usually quite complex. They have some of everything.

[Nadav Zafrir, CEO at Check Point Software]

They have data centers. They have branches. They have multi and they and and and they work in different geographies with different regulations, with many moving parts and a changing environment, that they must embrace, and continue the competition. So that's the kind of customer that we're looking at. So we're talking about big and complex.

[Nadav Zafrir, CEO at Check Point Software]

Many of our customers are also financial organizations with incredible regulation needs. They're industrial companies that are working globally, and you're seeing what's happening in the world right now. Our focus is, first and foremost, to come up with a solution, and I think we're already showing showcasing how this works that allows that doesn't compromise security for usability. And this is where the unique architecture that we have at our SASE, which is hybrid, I think is going to win. Most of the incumbents have a cloud only SASE.

[Nadav Zafrir, CEO at Check Point Software]

And I'll be very honest, it made a lot of sense when they come up with it many years ago. But I think now having the ability and the flexibility to be both on prem and cloud, multi cloud is a big advantage. And then beyond that, it's the unified approach so that you can look at your connectivity infrastructure as one, and build on that. So that's where I think, we can win. Again, being very transparent, we don't have all the features.

[Nadav Zafrir, CEO at Check Point Software]

We, we have to mature some of our things, and that's where we're gonna focus both internally and by corp dev, to make sure that, we find the right solutions and and with a and with a big sense of urgency because this is still a relatively nascent approach, the SASE approach. If you look at the market today, I think that below 20% of enterprise is already embracing this. But it'll continue to grow because that's what a margin infrastructure calls for.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Our last question of the day is gonna come from Roger Boyd of UBS.

[Roger Boyd, Executive Director at UBS Group]

Awesome. Thanks, Kip. I'm wondering if you we can come back to the macro assumptions and the commentary around the potential for slipped deals in 2Q. When I look at the revenue and EPS guides for 2Q and the full year, I think they still look pretty good. And I know you don't guide to it, but wonder if you could speak to any directionality around your expectations for billings or RPO in 2Q or any color on the one half versus, two half seasonality, acknowledging the color you gave around large deals in

[Roger Boyd, Executive Director at UBS Group]

the year ago quarter? Thanks.

[Nadav Zafrir, CEO at Check Point Software]

Golan, you're on mute. You're on mute.

[Roei Golan, Chief Financial Officer at Check Point Software]

Yes. So for billing, are not providing I'll start with billing and RPO. We're not providing any guidance for billing and RPO. I do have to we did mention that in the second quarter last year, we did have two large deals that were build up from that benefit us approximately two points last year. But we should think about, again, bidding should grow in line with what we see in the revenues.

[Roei Golan, Chief Financial Officer at Check Point Software]

So you should think something in this area. In terms of, again, what was taken into the guidance, again, we didn't see I'll repeat myself, but we didn't see anything any change as of today. Of course, the significant portion of our revenues is already is in our backlog, mainly the subscription and support. But I remind you to all that the main the main and not uncertainty, but the main revenues that we still need to to bring out the product revenues that usually are coming our building and are recognized immediately. And in terms of that, we do see very good pipeline for the Quantum Force Appliances, both for Q2 and for the second half of the year.

[Roei Golan, Chief Financial Officer at Check Point Software]

Even I would say that for the second half of the year, we do see even a better even a stronger pipeline. And we do expect that again, taking aside the macro environment effects because we never I mean, it's tough to expect that to predict that. But putting aside that macro environment, we do expect to see even acceleration in terms of Quantum Falls refresh in the second half of the year.

[Roger Boyd, Executive Director at UBS Group]

Very helpful. Thank you.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright, everyone. We appreciate you guys attending the call today, and, we look forward to seeing you throughout the quarter. And, have a great day out there. Bye bye now. Thank you.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Bye.

Participants

Analysts

• Kip Meintzer, Head of Global Investor Relations at Check Point Software
• Roei Golan, Chief Financial Officer at Check Point Software
• Nadav Zafrir, CEO at Check Point Software
• Rob Owens, Managing Director & Senior Research Analyst at Piper Sandler Companies
• Joseph Gallo, Senior Vice President at Jefferies & Company Inc
• Brian Essex, Executive Director at JP Morgan
• Adam Tindle, Managing Director at Raymond James Financial
• Keith Bachman, Senior Research Analyst at BMO Capital Markets
• Shaul Eyal, Managing Director - Equity Research at TD Cowen
• Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co
• Andrew Nowinski, Analyst at Wells Fargo
• Tal Liani, Analyst at Bank of America
• Patrick Colville, Lead Equity Research Analyst at Scotiabank
• Jonathan Ho, Research Analyst at William Blair
• Brad Zelnick, Managing Director at Deutsche Bank
• Saket Kalia, Managing Director at Barclays Capital
• Roger Boyd, Executive Director at UBS Group