Check Point CEO: We're Winning 'Nicely' Against Large Networking Players

As Check Point Software Technologies positions itself to focus on mobile security and threat prevention, Founder and CEO Gil Shwed said he is seeing the Tel Aviv, Israel-based company in "good standing" against large networking players, such as Cisco and Juniper.

Shwed said on the company's second-quarter earnings call Wednesday that he is seeing "many" of Check Point's customer wins coming from previous installations of large networking providers, in response to a question about the competitive landscape against Cisco and Juniper.

"We are seeing a very healthy competition in the marketplace, but I think we are winning quite nicely against the large networking providers," Shwed said.

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That competition led to better-than-expected results for the security vendor, with total revenue of $395 million, a 9 percent increase over the same quarter last year. Net income for the quarter, which ended June 30, was $163 million, up from $160 million in the second quarter of 2014.

Success in areas such as security management products, small business appliances, and data center and super-high-end appliances drove total product revenue up 11 percent year over year. Software updates and maintenance revenues were up 7 percent year over year.

Check Point has been busy in the year so far, acquiring two security companies, Lacoon Mobile Security in April and Hyperwise in February, and forming an extended partnership with VMware around securing the software-defined data center. Those acquisitions fit right in with the company's focus on building out its mobile security and threat prevention portfolios, Shwed said, referring to them as "essential areas for the future of cybersecurity." Shwed said Check Point is seeing significant interest and sales growth, and is boosting its head count in both areas going forward.

"Overall, I am pleased with our progress this year. We are headed in the right direction with the investments we’re making. I would like to see results earlier, but, naturally, these things take time," Shwed said.

Check Point also has been actively working to increase its head count significantly in recent months, adding hundreds of people over the last quarter, CFO and COO Tal Payne said. In particular, that has been around R&D, sales and marketing, Shwed said, and the company is "on target" with its hiring goals. While also hiring new graduates, Shwed said Check Point also is focused on recruiting more seasoned software developers, which it has been luring away from other companies and competitors.

The sales and marketing hires are expected to help drive the company's new focus areas, Shwed said on the call. For resellers, that means a new structure to handle Check Point channels and more account managers to reduce the number of partners per account.

Going forward, Check Point expects third-quarter revenue to be between $392 million and $410 million. The company expects non-GAAP earnings per share to be between $0.92 and $1.02 per share.