Check Point Reports Strong First Quarter

The figures were up 11 percent from the first quarter of 2003, when Check Point reported revenues of $104.8 million.

Excluding the impact of the Research and Development charge associated with the March 26 acquisition of endpoint security firm Zone Labs, the vendor posted a first quarter net income of $65.0 million, an increase of 8 percent over the $60.1 million net income it posted during the first quarter of 2003.

According to company President Jerry Ungerman, the numbers reveal positive customer reaction to a variety of new products unveiled at the end of last year and the beginning of this one.

"Customers are going through a major upgrade now," Ungerman said Monday from the firm's corporate headquarters in Ramat Gan, Israel. "We brought out a lot of new products, and as [customers] are switching over, we are reaping the benefits."

Specifically, Ungerman cited the company's VPN-1 Edge and Application Intelligence products as key factors in its first-quarter success. He also mentioned the firm's InterSpect solution, which was released this January.

Ungerman added that Check Point posted its second straight quarter of strong growth among small- and medium-sized businesses, a trend he said would ultimately create hundreds of new opportunities for channel partners looking for new markets to serve. Ungerman pinned much of the momentum in this area on the success of Check Point Express, a security product specifically tailored to protect midsize businesses.

During the company's quarterly earnings call Monday morning, Check Point officials said that the company's deferred revenues increased during the first quarter of 2004 by a total of $18.5 million. Of that amount, $9.8 million was generated by Check Point business, and $8.7 was attributed to the consolidation of Zone Labs.

Gil Shwed, the company's chairman and CEO, said these figures were supplanted by a strong cash flow. Excluding the Zone Labs acquisition, the company generated a first quarter net cash flow of $75 million, he said.

"Check Point successfully executed our planned strategy of delivering perimeter and internal security solutions and delivered groundbreaking technology to protect networks from internal threats," Shwed boasted. "We will continue to deliver innovative technologies and execute on our perimeter, internal and Web-security strategy."

Looking toward the future, Shwed noted that Check Point will introduce a new line of Web security products that will offer "unique and unified" solutions for addressing Web access challenges. He also said that by incorporating endpoint security products from Zone Labs, Check Point would expand its overall product offering.

Ungerman reiterated that the firm's prediction that revenues for the second quarter of 2004 are expected to fall in the range of $123 to $127 million. He added that the company, whose U.S. headquarters is in Redwood City, Calif., had "no plans" to stray from its 100 percent channel focus in the months ahead.