Check Point Software Technologies Ltd.

Greetings. Welcome to the Check Point Software third quarter 2019 earnings conference call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note, this conference is being recorded. At this time, I'll turn the conference over to Kip Meintzer, Global Head of Investor Relations. Mr. Meintzer, you may begin.

Thank you, Rob. I'd like to thank you all for joining us today to discuss Check Point's third quarter 2019 financial results. Joining me today on the call are Gil Shwed, founder and CEO, along with our CFO and COO, Tal Payne. As a reminder, this call is webcast live on our website and is recorded for replay. To access the live webcast and replay information, please visit the company's website at CheckPoint.com. For your convenience, the conference call replay will be available through November 4th. If you'd like to reach us after the call, please contact Investor Relations by email at kip.checkpoint.com. Before we begin with management's presentation, I'd like to highlight the following. During the course of this presentation, Check Point representatives may make certain forward-looking statements. These forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 include but are not limited to statements related to CheckPoint's expectations regarding business financial performance and customers, the introduction of new products, programs, and pricing models, and the success of those products, programs, and pricing models, the environment for security threats and trends in the market, Our strategy and focus areas demand for our solutions, our business and financial outlook, including our guidance for Q4 2019. Because these statements pertain to future events, they are subject to various risks and uncertainties. Actual results could differ materially from Check Point's current expectations and beliefs. Factors that could cause or contribute to such differences are contained in Check Point's earnings press release issued on October 28, 2019 which is available on our website and other risk factors including those discussed in Check Point's annual report on Form 20F for the year ended December 31, 2018 which is on file with the Securities Exchange and Commission. Check Point assumes no obligation to update information concerning its expectations or beliefs except as required by law. In our press release which has been posted on our website, We present GAAP and non-GAAP results, along with a reconciliation of such results, as well as the reasons for our presentation of non-GAAP information. Now it's my pleasure to turn the call over to Tal Payne for a review of the financial results.

Great. Thank you, Kip. Good morning and good afternoon to everyone joining us on the call today. Revenues for the quarter increased by 4% year-over-year to $491 million. and our non-GAAP EPS reached $1.44. Our revenues were slightly above the midpoint of our guidance and the non-GAAP EPS was at the top end of our guidance. Before I proceed further into the numbers, let me remind you that our GAAP financial results include stock-based compensation charges, amortization of acquired intangible assets and acquisition-related expenses, as well as the related tax effects. Keep in mind, as applicable, non-GAAP information is presented excluding these items. Now let's take a look at the financial highlights for the quarter. Revenues for the quarter came $1 million above the midpoint of our guidance. Products and security subscription revenues were $272 million, a 6% increase year-over-year. Our subscription revenues continue to be strong with 13% growth, reaching $154 million. Our software update and maintenance revenues increased to $219 million, representing 3% growth year-over-year. The growth in our subscription revenues is driven by our advanced solutions, mainly Next Generation Threat Extraction Protection, Cloud Guard solutions, and Infinitus. Deferred revenues as of September 30, 2019 Revenue distribution by geography for the quarter was as follows. 46% of revenues came from America, 42% of the revenues came from Europe, Middle East and Africa region, and the remaining 12% came from Asia Pacific. Since the beginning of 2019, Middle East and Africa parts are part of Europe, Middle East and Africa region, while before it was part of Asia Pacific, Middle East and Africa region. The revenue distribution by geography for Q3 last year, for comparison purposes, after the reclassification, would have been 47% of revenues came from America, 41% of revenues came from Europe, Middle East and Africa region, and the remaining 12% came from Asia Pacific. We continue to invest in our sales force and marketing in order to execute our growth strategy. As a result, non-GAAP operating margins for the quarter were 50%, same as the previous quarter and in line with our plan. Effective non-GAAP tax rate for this quarter was 19%, similar to the last quarter. Please note that in the fourth quarter we expect the tax rate to be around zero. and the lapse of statute of limitation expected to occur by the year end. Our expected tax rate for the year remains around 40% as predicted in the beginning of the year. Gap net income for the quarter was $188 million or $1.25 per diluted share. Non-gap net income was $217 million or $1.44 per diluted share. Our cash balances as of September 30, 2019 were $4.55 billion compared to $4.72 billion last year. Operating cash flow was $244 million. Collections from customers continue to be strong. Our cash payments increased in line with our continued investment in sales and marketing. During the quarter, we utilized nearly the maximum quarterly buyback Authorized and purchased 2.9 million shares for $323 million at an average price of $112. Now let's turn the call over to Gio for his call.