Check Point Software Technologies Ltd.

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For Check Point Software, I'd like to welcome everyone to our second quarter 2021 financial results video conference. At this time, all participants in our 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, Cal 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 out to 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's 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, and success of those products and programs, the environment for security threats and trends in the market, our strategy focus areas and demand for our solutions, the impact of COVID-19 on our business, including on our product development, sales, and marketing efforts, and our financial condition and results of operations. The impact of COVID-19 on our customers, suppliers, business partners, and the macroeconomic environment as a whole, and our business and financial outlook, including our guidance for Q3 2021. Because these statements pertain to future events that are subject to risk and uncertainty, actual results could differ materially from CheckPoint's current expectations and beliefs. Factors that could cause or contribute to such differences are contained in CheckPoint's earnings release issued on July 26, which is available on our website, and other factors and risks, including those discussed in Check Point's latest annual report on Form 20F, which is on file with the SEC. Check Point assumes no obligation to update information concerning its expectations or beliefs, except as were 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, I'd like to turn the call over to Tal Payne for a review of our financial results.

Thank you, Kip. Good morning and good afternoon to everyone joining us on the call today. I'm pleased to begin the review of the second quarter. Revenues for the quarter increased by 4% to $526 million, and $4 million involves the midpoint of our guidance. Our non-GAAP EPS increased by 2% to $1.61 per share, surpassing the top end of the guidance. Before I proceed further into the numbers, let me remind you that our GAAP financial results include top risk compensation charges, the multiplication of acquired intangible assets and acquisition-related expenses, as well as the related tax effects. Keep in mind that as applicable, non-GAAP information is presented excluding these items. Now let's take a look at the highlights of the quarter. Revenues for the quarter reached $526 million with 6% growth in product and security subscription revenues. Our subscription revenues continue to drive the growth with a strong 12% increase year-over-year, reaching $184 million. During the quarter, both CloudGuard and Harmony revenues continued to show great results with high double-digit growth. Also, Infinity Build gathers momentum as customers move to more holistic solutions with subscription-based pricing. We have double-digit unit growth in appliance sales, mainly in the lower-end appliances and the maestro orchestrator that enables the scalable solutions. At the same time, we continue to see the shift from product to the subscription revenues as larger portions of deals are allocated to subscriptions, both in appliance deals and Infinity deals. The Fed revenues as of June 30, 2021 reached $1,472,000,000, a growth of $134,000,000, or 10% growth over June 30, 2020, calculated billing of 9%, quite strong. Revenue distribution by geography for the quarter was as follows. 44% of revenues came from America, 44% of revenues the same, came from Europe, Middle East, and Africa region. And the remaining 12% came from Asia Pacific. So you can notice the strong strength in EMEA this quarter. And Gil will allude to that. Our non-GAAP operating margin was healthy at 49%. Year over year, we had the headwind from the weakening of the dollar, as we discussed, against different currencies around the world. The effect year-over-year was around $9 million, as planned in our budgeting and guidance. Our margin is higher than planned, as we are still ramping up on the recruiting effort. Travel costs, while increasing, are still not back to normal. Our financial income for the quarter was $10 million, reflecting the reduction in the portfolio yield. As the portfolio is rotating and new investments are are in slightly lower or significantly lower interest rates, around 0.4 versus 2.5 before. Financial income will continue to reduce by $1 to $1.5 million a quarter, as we indicated before. Effective non-GAAP tax rates for this quarter was around 19%. While tax rates remain unchanged, our provisions are linked to the index in different countries. Since the beginning of the year, we saw an increase in index in different countries mainly in Israel but also in the US, which led to slightly higher tax expenses. We expect similar tax rates next quarter. Gap net income for the quarter was $186 million or $1.38 per diluted share. Non-gap net income was $217 million or $1.61 per diluted share, an increase of 2% year-over-year and above the top of our range. Cash balances. As of June 30, it was $4 billion. Our operating cash flow continues to be very strong and increased by 4% to $264 million. Strength came mainly from our healthy collection from customers with BSO of 61 days. During the quarter, we continued our buyback program and purchased 2.7 million shares for $325 million at an average price of $118. So that sums it up for me. And now I'll turn the call to Gil for his presentation.