Check Point Execs Say They Don't See The Same Sales Headwinds As Palo Alto Networks
Check Point Software Technologies top executives said they don't expect to hit the same sales bump in the road that their competitor Palo Alto Networks saw last quarter.
Palo Alto Networks posted a disappointing sales performance in its second quarter earnings report in February, blaming some challenges on its go-to-market strategy. The company has since retooled its sales strategy for the rest of the year and says it is confident that it has solved the issues going forward.
However, CEO Gil Shwed said Check Point doesn't see those same effects. He said he sees customers who bought into the competitors a few years ago now looking to return to buying Check Point, driven in part by the company's management console capabilities.
"I think we are seeing with the majority of some of these competitors, the customers are saying we bought their products a year ago, three years ago, because it was hot and interesting and considered new. And now you realize that [Check Point's] product is better," Shwed said.
Check Point CFO Tal Payne said on the company's Q1 earnings call Thursday that the Israeli security company has been "expanding on our focus areas" over the past two years, including around mobility and advanced threat protection.
"We are starting to see the results of this investment. So, for us, it's clear why it's not happening to us," Payne said. "Hopefully, we continue to execute on that."
Check Point sales for the quarter, which ended March 31, were $435 million, up 8 percent year-over-year. Earnings for the quarter were $182 million, up 9 percent.
The company saw growth in its core appliance business, with product and software blade revenues up 13 percent to $238 million, as well as its subscription revenues, up 27 percent year over year to $112 million. Payne said subscription growth was particularly strong around the company's advanced threat protection solution Sandblast.
Last week, Check Point rolled out a new security architecture that it calls Check Point Infinity. The architecture brings together the company's portfolio of security solutions. The platform includes Check Point's technologies for security management, mobile, cloud, threat prevention, and its network security appliances. Shwed said the company is already starting to see the benefit of the launch.
"Customers are continuing to consolidate their infrastructure with Check Point, and our value proposition of exceptional security with our unified architecture is resonating quite well," Shwed said.
Shwed said the company has no plans to change its strategy with resellers and other partners, saying the company is recruiting some new partners and has seen turnaround in some of its lower performing partners.
"There's no change in strategy … I think all the relationships in the channels are very good and we are expanding and we are growing them," Shwed said.
Check Point said it expects its second-quarter sales to be between $440 million and $465 million. It expects non-GAAP earnings per share between $1.17 and $1.25.