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Demand For Check Point's Remote Access VPN Surges Amid Coronavirus

‘By moving to remote access, companies open huge amounts of holes in their security. The corporate network is now open in ways it wasn’t before, and hackers are going to exploit it,’ says Check Point CEO Gil Shwed.

Check Point Software Technologies CEO Gil Shwed said many customers have accelerated their implementation and scaling of remote access VPN deployments due to the coronavirus pandemic.

The San Carlos, Calif.-based platform security giant has witnessed a seven-fold increase in traffic to its product webpage discussing remote access VPN since COVID-19 began forcing employees around the globe to work from home, Shwed said. The spike in interest spans the gamut from financial services and transportation to industrial and health care, according to Shwed.

“By moving to remote access, companies open huge amounts of holes in their security,” Shwed told Wall Street analysts during the company’s earnings call Monday. “The corporate network is now open in ways it wasn’t before, and hackers are going to exploit it.”

[Related: Check Point To Buy Serverless Security Firm Protego To Protect Cloud]

Check Point’s VPN product has saved the day for many organizations, Shwed said, allowing doctors who have been quarantined for coronavirus exposure to continue to monitor patients at the hospital by leveraging a remote connection. This is something that most health-care organizations had never done before, according to Shwed.

The demand for remote access VPN has been particularly pronounced among large enterprises, Shwed said, with one major global corporation expanding its employee remote access from 8,000 daily users to 80,000 daily users, while another has scaled up to 130,000 concurrent users relying on the VPN tool every day.

Some of the remote access VPN expansions have driven additional business for Check Point, Shwed said, while others have been accommodated by increased access to licenses the customer already owns. In one instance, Shwed said a customer took equipment that was planned for another project and actually used it for the VPN extension.

The transition to remote work has expedited the planning process, Shwed said, with companies going from having a pipeline of projects set out a year in advance to needing things done in days or hours. In fact, Shwed said the need for remote access VPN was so great that Check Point was actually shipping the equipment to some customers before even receiving the order so they could get set up more quickly.

“There will be new security threats and many new holes to close,” Shwed said. “Surveys show that security professionals are very much aware of this and concerned about it.”

Check Point’s revenue for the quarter ended March 31 climbed to $486.5 million, up 3.1 percent from $471.8 million the year before. That beat Seeking Alpha’s estimate of $481.3 million.

Net income for the quarter dipped to $178.7 million, or $1.23 per diluted share, down 0.7 percent from $179.9 million, or $1.15 per diluted share, last year. On a non-GAAP basis, net income inched ahead to $205.9 million, or $1.42 per diluted share, up 0.2 percent from $205.5 million, or $1.32 per diluted share, the year before. This edged out Seeking Alpha’s projection of $1.38 per diluted share.

Check Point’s stock climbed $4.01 per share, or 3.84 percent, in midday trading to $108.38 per share. Earnings were announced before the market opened Monday.

The company’s software updates and maintenance sales in the first quarter jumped to $217.5 million, up 1.2 percent from $215 million last year. Most of Check Point’s growth in the quarter was driven by security subscription revenue, with year-over-year sales growing to $158.8 million, up 10.3 percent from $144 million last year.

Check Point’s product and licenses practice, meanwhile, saw sales tumble to $110.2 million, down 2.3 percent from $112.8 million the year prior.

The company had 56 customer transactions worth more than $1 million in the quarter, up from 47 last year, said CFO and COO Tal Payne. From a geographic standpoint, Payne said 46 percent of Check Point’s revenue came from the Americas, 43 percent came from Europe, the Middle East and Africa, and the remaining 11 percent came from Asia-Pacific and Japan.

Shwed said Check Point is not issuing financial guidance for the coming quarter or remainder of the fiscal year due to the circumstances around the coronavirus pandemic.

“Everybody is trying to move business, but there’s a very high level of uncertainty, so we have to live with the uncertainty at this point,” Shwed said.

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