Check Point Software raises 2021 estimates after Q3 beat

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The logo of network security provider Check Point Software Technologies Ltd is seen at their headquarters in Tel Aviv, Israel

By Steven Scheer

JERUSALEM -Check Point Software Technologies beat estimates with a slight gain in third-quarter net profit and raised its 2021 estimates amid rapid growth in its consolidated cyber security platform and cloud protection products. Israel-based Check Point on Thursday said it earned $1.65 per diluted share excluding one-off items in the three-months ending Sept. 30, up from $1.64 a year earlier. Revenue grew 5% to $534 million. It was forecast to earn $1.60 a share on revenue of $530 million, according to I/B/E/S data from Refinitiv. Third-quarter growth was driven by a 172% gain in its Infinity platform that consolidates network, mobile and cloud protection. It also posted double-digit sales increases in its Harmony and CloudGuard lines. “Companies are realizing that they need a more modern architecture … that consolidation makes sense and in many cases their existing solutions don’t work together well enough and are not especially effective,” Chief Executive Gil Shwed told a news conference. Check Point’s Nasdaq-listed shares opened 2.4% higher at $120.95. They are down 11% so far in 2021 after a 20% rise last year. Shwed said large scale cyberattacks are rising, pointing to recent attacks against SolarWinds, Codecov, Colonial Pipeline and Kesaya. He said 95% of attacks start with e-mail but conventional products don’t always work with cloud-based e-mail systems. In August it bought cloud e-mail security firm Avanan. “We keep looking for acquisitions. We want to grow more,” Shwed said, adding the company has $3.8 billion left in cash. The company said with annual results back-end loaded, it expects a strong fourth quarter, with revenue of $560-$605 million and adjusted EPS of $2.02-$2.22.

For all of 2021, it projects revenue of $2.13-$2.72 billion and adjusted EPS of $6.81-$7.01. It had forecast revenue of $2.08-$2.18 billion and adjusted EPS of $6.45-$6.85, compared with 2020 results of $2.07 billion and $6.78 respectively.

Check Point said it bought back 2.64 million shares in the quarter, worth $325 million, as part of its share repurchase programme. The company said it is expanding the programme by another $2 billion and would continue to buy up to $325 million of its own shares each quarter.

(Reporting by Steven Scheer; Editing by David Goodman and Mike Harrison)