Cyber security firm Check Point to boost AI as Q2 profits rise

By Steven Scheer

JERUSALEM (Reuters) -Check Point Software Technologies on Wednesday reported a higher-than-expected profit for the second quarter and said it was stepping up the use of artificial intelligence to protect against a growing number of AI-related cyber attacks.

The Israeli-based company said it earned $2.00 per diluted share excluding one-off items in the April-June quarter, up 22% from $1.64 a year earlier. Revenue grew 3% to $589 million.

It was forecast to earn $1.90 a share on revenue of $589 million, according to I/B/E/S data from Refinitiv.

Product and licence revenues fell by 12% to $117 million, although security subscription revenue for its cyber security platform that prevents attacks across networks, mobile and the cloud gained 14% to $239 million.

"I think we'll see more of that in the second half of the year as we launch more products and more technologies with more innovation," said Chief Executive Gil Shwed, citing positive U.S. economic data.

Check Point maintained its 2023 revenue estimate of $2.34-$2.51 billion and adjusted EPS of $7.70-$8.30. The market expects it to earn an adjusted $8.03 on revenue of $2.42 billion.

Shwed said the company was boosting the amount of AI engines in its products while it has conducted so-called hackathon events on how to incorporate new generation generative AI.

"Our research team showed that AI can be used to create more sophisticated attacks by less sophisticated people," Shwed told a news conference.

"I'm trying to focus most of our energy about how AI can work in our favour and not against us," he said.

Shwed added that Check Point was facing increased pricing pressures from customers this year but it was not overly dramatic from prior quarters.

For the third quarter, Check Point forecasts revenue of $570 million to $605 million and adjusted EPS of $1.97 to $2.07, in line with expectations of EPS of $1.97 and revenue of $600 million.

It bought back 2.6 million shares in the quarter, worth $325 million, as part of an ongoing $2 billion buyback programme.

Its Nasdaq-listed shares are up 2% in 2023 to $128.71. They were unchanged in pre-market trading.

(Reporting by Steven Scheer; editing by Jason Neely and David Evans)