Check Point (CHKP) Q3 Earnings & Revenues Beat Estimates
Check Point Software Technologies CHKP reported third-quarter 2023 results, wherein the bottom and top lines surpassed the Zacks Consensus Estimate and improved year over year.
The IT security solutions provider reported non-GAAP earnings of $2.07 per share, beating the Zacks Consensus Estimate of $2.02. The bottom line increased 17% from the year-ago quarter’s earnings of $1.77 per share.
Check Point’s quarterly revenues climbed 3% year over year to $596.3 million, which surpassed the Zacks Consensus Estimate of $592 million. The upside was driven by double-digit growth in Security subscription revenues.
Check Point Software Technologies Ltd. Price, Consensus and EPS Surprise
Check Point Software Technologies Ltd. price-consensus-eps-surprise-chart | Check Point Software Technologies Ltd. Quote
Quarterly Details
Security subscription revenues were $248 million, increasing 15% year over year, driven by the adoption of cloud products and strong demand for the Harmony product family. According to our model estimates, Security subscription revenues were likely to grow 11.5% to $241 million.
Products and licenses revenues decreased 13.7% year over year to $114.2 million. Our estimates for Products and licenses revenues were pegged at $116 million, suggesting a 12.4% year-over-year decline. Products, which are currently in the process of transitioning to cloud solutions, have been included in the subscription line.
Total revenues from product and security subscriptions were $362.5 million, up 4.2% year over year.
Software updates and maintenance revenues increased to $233.8 million from $229.7 million reported in the year-ago quarter. The estimates from our model were pegged at $233 million for Software updates and maintenance revenues.
As of Sep 30, 2023, deferred revenues were $1.71 billion, up 4% year over year.
Non-GAAP operating income for the third quarter of 2023 totaled $269 million, up from $263 million in the year-ago quarter. Non-GAAP operating margin remained constant at 45%.
Balance Sheet & Other Details
Check Point exited the third quarter with cash and cash equivalents, marketable securities and short-term deposits of $2.98 billion compared with the previous quarter’s $3.52 billion.
The company generated cash worth $222 million from operational activities during the third quarter of 2023.
It repurchased 2.48 million shares for about $325 million during the reported quarter.
Zacks Rank & Stocks to Consider
Currently, Check Point carries a Zacks Rank #3 (Hold).
JAKKS Pacific JAKK, Cable One CABO and AMC Networks AMCX are some better-ranked stocks that investors can consider in the broader sector. JAKK, CABO and AMCX carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of JAKKS Pacific have declined 4.9% year to date. JAKK is set to report its third-quarter 2023 results on Nov 1.
Shares of Cable One have fallen 22.3% year to date. CABO is slated to report its third-quarter 2023 results on Nov 2.
Shares of AMC Networks have decreased 26.2% year to date. AMCX is set to report its fourth-quarter fiscal 2023 results on Nov 3.
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