It’s been about a month since the last earnings report for Check Point Software (CHKP). Shares are up about 4.4% in that period, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Check Point due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Check Point Software Technologies reported third-quarter 2024 results, with the bottom line meeting the Zacks Consensus Estimate, while the top line missed estimates by 0.5%.
This IT security solutions provider reported non-GAAP earnings of $2.25 per share. Operating income rose 9% from last year’s profit of $2.07 per share.
Check Point’s quarterly revenue rose 7% year over year to $635 million. This positive result was driven by double-digit revenue growth from Harmony Email and Infinity Platform.
Security subscription revenue was $277 million, up 12% year-over-year, thanks to the acquisition of Cyberint. This expanded the product offering to the Security Operation Center market. Strong demand for the Harmony product family also helped. Our model estimate for security subscription revenue was set at $281 million, up 16.5% year over year.
Product and licensing revenues increased 4.2% year over year to $118.9 million. Our model estimate for product and licensing revenues was set at $116 million, which remained unchanged year over year.
Total product and security subscription revenues were $635.1 million, up 6.5% year over year.
Software update and maintenance revenues increased to $239.3 million, compared to $233.8 million reported in the same quarter last year. Our model estimate for software updates and maintenance revenue was set at $238 million.
As of September 30, 2024, deferred revenue was $1.745 billion, up 2% year over year.
Non-GAAP operating income for the third quarter of 2024 was $274 million, up from the $269 million reported in the prior-year quarter. Non-GAAP operating margin was 43%, but declined 2% year over year.
Check Point ended the third quarter with cash and cash equivalents, marketable securities and short-term deposits of $2.87 billion, up from $2.98 billion in the previous quarter.
The company generated cash of $249 million from operations in the third quarter of 2024. CHKP acquired Cyberint for $186 million net cash in Q3 2024, the cost of which was insignificant.
The company repurchased approximately 1.79 million shares for approximately $325 million in the reported quarter.
