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Check Point profit tops estimates, buys cloud security firm
TEL AVIV (Reuters) - Network security provider Check Point Software Technologies reported quarterly net profit that beat expectations and said it has acquired Israel’s Dome9 to strengthen its position in cloud security.
FILE PHOTO: The logo of network security provider Check Point Software Technologies Ltd is seen at their headquarters in Tel Aviv, Israel August 14, 2016. REUTERS/Baz Ratner/File Photo
Founded in 2011, Dome9 enables security and compliance for rapid public cloud adoption.
Full financial details of the acquisition were not disclosed, but Israel-based Check Point said on Wednesday there was a cash payment of $175 million as well as other components.
“They are going on the offensive with this cloud strategy,” Daniel Ives, managing director of equity research at Wedbush Securities, told Reuters. “This is another great poker move by Check Point with cloud front and center.”
Ives rates the shares, which were up 0.3 percent to $113.5 in Nasdaq premarket trade, a “buy”.
Check Point earned $1.38 per diluted share excluding one-time items in the third quarter, up from $1.30 a year earlier. Revenue grew 4 percent to $471 million.
FILE PHOTO: Gil Shwed, Founder and CEO, Check Point Software Technologies Ltd, speaks at a Cyber security conference in Tel Aviv, Israel January 31, 2017. REUTERS/Baz Ratner
It was forecast to earn $1.36 a share on revenue of $466 million, according to I/B/E/S data from Refinitiv.
“Third quarter results reached the top end of our projections, with better than anticipated strength coming from the U.S. and Europe,” Chief Executive Gil Shwed said.
He said the acquisition will reduce fourth quarter adjusted earnings by 2-4 cents a share.
For the fourth quarter, Check Point forecast adjusted earnings per share of $1.56-$1.67 on revenue of $520 million-$528 million. Analysts on average estimated earnings of $1.65 a share on revenue of $515 million.
The company maintained its full year estimate for EPS excluding items of $5.45-$5.75 and revenue of $1.85-$1.93 billion.
Dome9 has raised a little over $25 million from investors including Japan’s Softbank. It has just over 100 workers and annual sales of several million dollars.
“Dome9 is not just a feature for us. It is a platform for everything we will do,” Shwed told a news conference.
Reporting by Tova Cohen and Ari Rabinovitch; Editing by Adrian Croft and Alexandra Hudson
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