Check Point Software Technologies’ (NASDAQ: CHKP) third-quarter balance were appealing abundant in band with what administration had planned. Let’s booty a attending at the capacity abaft Check Point’s third division and what it says about the approaching administration of the company.
Starting with the banderole numbers from the quarter:
There’s annihilation to accuse about from the banderole numbers, but the advice numbers attending a little uninspiring.
That said, the devil is in the capacity and Check Point is a aggregation in the action of authoritative some attenuate but cogent changes to its bazaar strategy.
Artist’s apprehension of clouds, anniversary is imprinted with a lock figure and affiliated to others.
Check Point is authoritative advance on affairs solutions that accord with multiplatform threats. Image source: Getty Images.
Management has been highlighting the befalling for Check Point to account from alleged fifth-generation aegis threats. In a nutshell, these are awful adult aegis threats whose complication agency they can advance assorted platforms at once. For example, they could be hidden in arrangement cartage and bearded as agreeable files.
Check Point believes such threats are best addressed with holistic aegis architectonics that provides a unified aegis access beyond abounding platforms. The company’s fifth-generation aegis band-aid is Infinity, but the botheration with affairs such a high-level band-aid is that it usually requires a almost senior-level controlling to accomplish the accommodation and accept the band-aid and get bread-and-er approval.
Given this situation, Check Point has had what CEO Gil Shwed declared as “execution challenges,” decidedly in the U.S. These issues connected from the third division of 2017 until the additional division of 2018, back Shwed appear “a acceptable akin of action and results.”
Fast-forward to the accepted division and Shwed articulate a added bullish tone, adage on the balance call, “I anticipate Infinity so far is breeding a actual nice pipeline. We’re still closing alone a baby cardinal of deals because it takes a actual connected time for a aggregation to accomplish a accommodation about the abiding charge and about a change of an architecture. But we are seeing that change is starting to happen.”
In added words, Check Point appears to be active bigger on its aim of developing Infinity sales.
It’s a acceptable abstraction to accumulate an eye on Check Point’s agreement of sales. In the past, articles and licenses sales led software updates and aliment sales, but that accord has been adapted by the about-face against subscription-based sales in the software industry. As you can see below, artefact and licenses sales accept collapsed bristles abode in a row.
Check Point sales growth.
Data source: Check Point Software Technologies presentation. Chart by author.
When an analyst asked during the balance alarm about artefact sales, CFO Tal Payne had a actual absorbing answer: “… Most of the new things are subscription. Having said that, artefact can and should be absolute and that’s what we’re talking about, connected advance on the beheading of their fields.”
She went on to add that her ambition was to see artefact sales about-face absolute in the approaching — article to attending out for in approaching quarters.
Check Point exhausted its projections in the quarter. Investors will be attractive for added of the aforementioned in the advancing abode while befitting an eye on whether Check Point can body added absorption with Infinity sales and acknowledgment to artefact sales growth.
Added From The Motley Fool
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Check Point Software Technologies. The Motley Fool has a acknowledgment policy.
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