Q2 profit test scores rise on ‘healthy’ cybersecurity demand

Gil Shwed, CEO of cybersecurity vendor Check Point Software Technologies, speaks during the annual Cyberweek conference at Tel Aviv University, Israel, June 20, 2016. REUTERS / Amir Cohen / File Photo

JERUSALEM, Aug. 1 (Reuters) – Check Point Software Technologies (CHKP.O) beat estimates with a 2% increase in second-quarter profit, boosted by double-digit growth in revenue from other businesses. products and subscriptions to protect the cloud and other networks from escalating Cyberattacks.

CEO Gil Shwed told reporters: “Demand for cyberspace has remained stable over the last year and I expect it to continue to do so.”

However, he warned that there is much uncertainty going on as a weak global economy and supply chain issues have increased costs and weighed on the company’s business. But “we’re still pretty active,” Shwed later told analysts.

Shares of Check Point, which have gained 7% this year, opened 4.1% lower at $119.46.

Israel-based Check Point expects Q3 revenue of $555-$585 million and adjusted earnings per share of $1.60-$1.72. According to Refinitiv I/B/E/S data, the company is forecast to post ex-stock EPS of $1.71 on revenue of $566.2 million.

Check Point said Monday that for the April-June period, it earned $1.64 per diluted share excluding one-time items, up from $1.61. a year earlier. Revenue rose 9% to $571 million. It was forecast to earn $1.62 a share on revenue of $560 million.

In the last quarter, cyberattacks grew 32%, while advanced attacks, such as ransomware, increased 59% to underscore the critical need for cybersecurity, Shwed said.

Check Point has moved to a prevention-first security system that includes corporate network security, the cloud, and remote workers. Security subscription revenue grew 14% during the quarter.

Shwed said that after making six acquisitions over the past few years, Check Point, with $3.7 billion in cash, will likely be looking for more.

“It’s always been a challenge to find the right companies and we’re (constantly looking) for the right targets,” he said. “I’m sure that in the medium to long distance we will find more opportunities.”

Check Point said it repurchased $325 million worth of stock this quarter, as part of its share buyback program.

Reporting by Steven Scheer; Editing by Jan Harvey

Our Standards: Thomson Reuters Trust Principles.