Check Point Software Technologies Ltd.

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I'd like to welcome everyone to our fourth quarter and full year 2020 financial results video conference. At this time, all participants are in listen-only mode during the formal presentation, which will be followed by a question and answer session. Joining me remotely today on the call are Gil Shwed, founder and CEO, along with our CFO and COO, Tal Payne. As a reminder, the video conference is live on our website and recorded for replay. To access the live conference and replay information, please visit the company's website at checkpoint.com. For your convenience, the replay will be available on our website. If you'd like to reach us after the call, please contact investor relations by email at kip at checkpoint.com. Before we begin with management's presentation, I'd like to highlight the following during the course of this presentation. Checkpoints representatives may make certain forward-looking statements. These forward-looking statements within the meaning of Section 27A of the Securities and Exchange Act of 1933 and Section 21E of the Securities and Exchange Act of 1934 include but are not limited to statements related to Checkpoints expectations regarding business, financial performance, and customers, the introduction of new products, programs, success of those products and programs, the environment for security threats and trends in the market, our strategy-focused areas and demand for solutions, The impact of COVID-19 on our business, including our product development, sales, marketing efforts, and our financial conditions and results of operations. The impact of COVID-19 on our customers, suppliers, business partners, and the macroeconomic environment as a whole. Our business and financial outlook, including our guidance for Q1 and full year 2021. Because these statements pertain to future events, they are subject to risk and uncertainty. Actual results could differ materially from Check Point's current expectations, beliefs, factors that could cause or contribute to such differences are contained in Check Point's earnings release issued on February 3, 2021, which is available on our website, and other factors and risks, including those discussed in Check Point's latest annual report on Farm 20F filed with the SEC. 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 the 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 our financial results.

Great, Kip. Thank you. Good morning and good afternoon to everyone joining us on the call today. I'm pleased to begin the review of the fourth quarter and the full year. Revenues for the fourth quarter increased by 4% year-over-year, reaching $564 million, and our non-GAAP EPS grew by 7% through $2.17, both above the midpoint 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-GOP information is presented excluding these items. Now let's take a look at the financial highlights for the quarter. Revenues for the quarter reached $564 million, $14 million above the midpoint of our guidance. Product and security subscription revenues were $340 million, a 6% increase year-over-year. Our subscription revenues continue to be strong. with 10% growth year-over-year, reaching $180 million. Software updated maintenance revenues increased to $224 million. We've seen strength in our strategic areas. Our Cloud Guard family had great results with high double-digit growth. Infinity continued the momentum with significant transactions in different verticals and impressive growth in the business we do with these customers. During the year, We launched the vast majority of our quantum appliances series. The family was well received in the market and we finished the year with over 90% transition. Deferred revenues reached $1,482,000,000, a growth of $95,000,000, 7% growth year-over-year. Short-term deferred revenues increased by 10%. Revenue distribution by geography for the quarter was as follows. 43% of revenues came from America, 45% of revenues came from Europe, Middle East and Africa, and the remaining 12% came from Asia Pacific. We delivered strong gross profit of 89% and non-GAAP operating margin of 51%, similar to last year. Our financial income for the quarter was $14 million. As a reminder, interest rates in the US sharply dropped earlier this year, hence the reduction in the financial income versus last year. Naturally, this reduction is also part of the cash flow. Effective non-GAAP tax rates for the quarter was 0%, as we expected. This quarter, similar to last year, our tax expenses include tax benefits from lapse of statute of limitation on certain provisions. GAAP net income was $271 million, $1.95 per diluted share. Non-GAAP net income was $301 million or $2.17 per diluted share, an increase of 7% from fourth quarter of 2019 and 8 cents above the mid of our guidance. The accelerated growth is related to the continued reduction in our diluted outstanding shares. Our cash balances as of December 31st reached $4 billion again. Operating cash flow for the quarter increased by 19% to $293 million with strong collection from customers. As a reminder, we hedge our balance sheet against currency fluctuation. The hedge affects our cash flow with a minimal effect on the P&L as intended. During the quarter, the dollar weakened against the Israeli shekel, resulting in a hedge income of $26 million in our cash flow compared to $2 million last year. In addition, during the fourth quarter of last year, we completed the acquisition of Protego and Simplify. Net of hedge and acquisition-related costs, our operating cash flow increased by 4% year over year. During the quarter, we continued the purchase of our shares. We purchased 2.7 million shares for $323 million at an average price of $119. Now let's take a look at the financial results for the full year. Our revenues for the year reached $2.65 billion, an increase of 4% year-over-year, $15 million above the midpoint of our original guidance in the beginning of the year. Subscription revenues continue to be the main growth drivers, with Infinity and CloudGuard solutions leading the growth. Infinity deals continue to gain momentum, crossing the $100 million booking bar. Annual contract value of Infinity customers shows significant growth of tenths or even hundredths of percentage as customers adopt the full Infinity threat protection solution. This is great news. CloudGuard solution already reached more than 3,000 customers. Both CloudGuard YAS and CloudGuard SAS are growing fast with a strong double digit. Non-gap operating margins for the year were a strong 50% as we had higher level of revenues on the one hand and about $40 million less expenses as a result of COVID-19 impact on the other hand. During the year, the dollar weakened against many currencies around the world. The effect on our results in 2020 was minimal as we recovered effectively by our hedge. The dollar continued to weaken after the year end as you could all see. Based on the current rates, the effect is expected to be an increase of our operating expenses for next year of about $25 million. Our financial income in 2020 reduced to $67 million from $81 million last year as a result of the reduction in the yield on our portfolio as we discussed. We expect again to see the continued drop of $1 to $2 million a quarter with the total financial income for next year or for this year, 2021, of $42 million. Effective non-GAAP tax rate for the year was 13% in line with our expectation. For 2021, assuming no regulatory changes, we expect the tax rate for the year to be similar, 12-13%. Quarterly tax rate for next year, from Q1 to Q3, 17%, same like this year, and around 0% around Q4. as a result of the lapse of statute of limitations that's also expected to happen in Q4 next year. GAP Net Income for the year was $847 million or $5.96 per diluted share. Non-GAP Net Income for the year was $963 million or $6.78 per diluted share. The EPS was 13 cents above the high end of the original guidance for the year and is reflecting an increase of 11%. Cash flow from operation increased by 4% to $1,152,000,000. During the year, the company repurchased approximately 11.4 million shares at a cost of $1.3 billion at an average price of $114. For 2021, based on the current buyback rates and the current share price, We expect our average diluted number of shares to be around 136 million shares for the year, starting at 138 million in Q1 and moving down to 134 million by Q4. Now I'll turn the call over to Gil for his comments.