Check Point (CHKP) Q4 Earnings and Revenues Top Estimates
Check Point Software Technologies Ltd. CHKP ended 2023 on a strong note by reporting overwhelming fourth-quarter results, wherein revenues and earnings both surpassed the respective Zacks Consensus Estimates and marked a significant year-over-year improvement.
The IT security solutions provider reported non-GAAP earnings of $2.57 per share, beating the Zacks Consensus Estimate of $2.46. The bottom line increased 5% from the year-ago quarter’s earnings of $2.45 per share and came ahead of its previously provided guidance range of $2.35-$2.55. The year-over-year growth was primarily attributable to increased revenues and improved margins, partially offset by higher income taxes.
Check Point’s quarterly revenues increased 4% year over year to $664 million and surpassed the Zacks Consensus Estimate of $660.3 million. The upside was driven by double-digit growth in Security subscription revenues. The company’s top line also came higher than the midpoint of the previous guidance range of $636-$686 million (midpoint $661 million).
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 $265.8 million, increasing 15% year over year, driven by the adoption of the Infinity platform and the strong demand for the Harmony product family. Products and licenses revenues decreased 8.7% year over year to $158.3 million. Products that 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 $424.1 million, up 4.9% year over year.
Software updates and maintenance revenues increased to $239.4 million from $234.1 million reported in the year-ago quarter.
As of Sep 30, 2023, deferred revenues were $1.91 billion, up 2% year over year.
Non-GAAP gross profit increased 6% year over year to $591 million, while the margin improved 100 basis points (bps) to 89%. Non-GAAP operating income for the fourth quarter of 2023 totaled $309 million, up from $289 million in the year-ago quarter. The non-GAAP operating margin expanded 200 bps to 47%.
Full-Year 2023 Highlights
Check Point’s 2023 revenues increased 4% year over year to $2.42 billion and surpassed the Zacks Consensus Estimate of $2.41 billion. The top line was also almost in line with the midpoint of the previous guidance range of $2.34-$2.51 billion (midpoint $2.425 billion).
The IT security solutions provider reported non-GAAP earnings of $8.42 per share for 2023, beating the Zacks Consensus Estimate of $8.32. The bottom line increased 14% from the 2022 earnings of $7.40 per share and came ahead of its previously provided guidance range of $7.70-$8.30.
Balance Sheet & Other Details
Check Point exited the fourth quarter with cash and cash equivalents, marketable securities and short-term deposits of $2.96 billion compared with the previous quarter’s $2.98 billion.
The company generated cash worth $236 million from operational activities during the fourth quarter and $1.04 billion in 2023. It repurchased 2.2 million shares for about $313 million during the reported quarter. In 2023, the company bought back 9.9 million shares for $1.29 billion.
Zacks Rank & Stocks to Consider
Currently, Check Point carries a Zacks Rank #3 (Hold). Shares of CHKP have soared 27.4% over the past year.
Some better-ranked stocks from the broader technology sector are CrowdStrike Holdings CRWD, Amazon.com AMZN and NVIDIA Corporation NVDA. While CrowdStrike and Amazon each sport a Zacks Rank #1 (Strong Buy), NVIDIA carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CrowdStrike’s fiscal 2024 earnings has been revised upward by a penny to $2.95 per share in the past 60 days, suggesting year-over-year growth of 91.6%. The long-term estimated earnings growth rate for the stock stands at 36.1%. Shares of CRWD have jumped 163.9% over the past year.
The Zacks Consensus Estimate for Amazon’s 2024 earnings has been revised upward by 30 cents to $3.97 per share in the past seven days, which calls for an increase of 36.9% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 28.5%. AMZN stock has returned 69.1% over the past year.
The consensus mark for NVIDIA’s fiscal 2024 earnings has been revised downward by a penny to $12.30 per share over the past 30 days, indicating a whopping 268.3% increase from fiscal 2023. It has a long-term earnings growth expectation of 13.5%. In the trailing 12 months, NVDA stock has surged 207.3%.
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