Check Point Software Technologies Ltd.

This meeting is being recorded. On the video conference call will be Gil Schwed, our CEO and founder, as well as Roy Gallon, our CFO. Before we begin, obviously, the good old forward-looking statement during this presentation, checkpoints representatives may make certain forward-looking statements. These forward-looking statements are 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 our expectations regarding our product solutions, expectations related to cybersecurity and other threats, our expectations and beliefs regarding these matters. may not materialize and actual results or events in the future are subject to risks and uncertainties that could cause actual results or events to differ materially from those projected. These risks include our ability to continue to develop platform capabilities and solutions, customer acceptance, purchase of our existing products and solutions, New products and solutions, the market for IT security, et cetera, political, economic, business, everything under the sun, including the impact of the COVID-19 pandemic. These forward-looking statements are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our annual report on Form 20F filed with the SEC on April 27, 2023. The forward-looking statements in this presentation are based on information available to Check Point As. of the date hereof, and checkpoint disclaims any obligation to update any forward-looking statements, except as required by law. In this presentation, 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. And guess what? This year is our 30th year in business. I hope you'll all join us in celebrating, toast to glass or what have you, of your favorite beverage. We've had an accumulation of $30 billion in revenue over these 30 years, and I hope you'll cheers us to the next 30. Actually, a week ago, we just, yeah. There you go. There you go. And with that, I will toss this over to Roy Gallon, our CFO. And a reminder again, please do not raise your hands.

Thanks. Thank you, Kip. Just let me to share my presentation. Can you see my screen? You need to go into presentation mode.

I know, I know, but can you see? Okay, great. We've got it. Great. Okay, thank you, Kip, and greetings to everyone joining the call today. Excited to be here with you and begin the review of the second quarter of 2023. We had a very strong profitable quarter, reaching the highest rate of growth for more than a decade. Our net income grew by 14% to $238 million. While our non-GAAP EPS was up by 22%, higher since 2009 to $2 per share. Our revenues reached $589 million, which is $1 million above the midpoint of our projections. And as I mentioned, our non-GAAP earnings per share reached $2, which is $0.05 above the top end of our projections. Very strong results. Now let's deep dive into the numbers. As I mentioned, revenues were up to $589 million, 3% growth year-over-year. Our deferred revenues went up to $1,774,000, 7% growth year-over-year, while our current deferred revenues short-term reached $1,307,000, 8% growth year-over-year. Our calculated billing reached $566 million, which is 1% decline year-over-year and 70% growth compared to Q1 2023. Our current calculated billing reached $581 million, up 4% year-over-year. Same as in previous quarter, we see that due to the high interest rates environment, we see fewer customers willing to pay upfront for multi-year deals, which resulted in shorter billing duration. In addition, as the result of Infinity becoming more and more significant, and you will see it in the upcoming slides, the flexibility in billing terms affecting, of course, the billing timing. The revenues growth driven by strong subscription revenues with 14% growth year-over-year to $239 million. That was driven mainly by our money email security, which continued to deliver great results with triple-digit growth year-over-year. With that, we saw a decline in our product revenues of 12% year-over-year, which was resulted by longer sales cycles and delay in refresh projects, but also to the fact that we saw this quarter much more customers buying our product for infinity agreements, and most of it is not translated into revenues immediately as they have the flexibility to utilize their allowance usually within 12 months. It is important to note that we did see a strong renewal business as our customers continue to benefit from our security services and support. As I mentioned, we keep seeing strong adoption of our Infinity strategy. We saw Infinity revenues exceeding 10% of our total revenue for the first time since we launched Infinity. We see more and more customers adopting our platform answering their needs under one umbrella of products and services. Now let's look at our revenues by GEOs. We had growth across all GEOs. 45% of our revenues came from EMEA. 43% came from the Americas, while the remaining 12% came from Asia Pacific. Now let's review our P&L. We had a significant improvement in our gross margin, which went up from 88% last year to 90%. This year, we saw a significant improvement in our supply chain, which resulted in lower costs. And I remind you that we had a very challenging supply chain last year, the drawback margin below 90%. We hope to see this positive trend continue in the remaining of 2023. Our operating expenses were increased by 5% and 7% on constant currency. The increase was mainly as a result of our continuing investments in our workforce, cloud infrastructure, marketing, and increasing in our travel costs. Our non-GAAP operating income continues to be strong at $263 million, a 45% margin, compared to a 44% margin in previous years. Our financial income this quarter reached $21 million as we invest more in higher interest rates over time. And we expect this trend to continue as our security matures and we invest in higher interest rates. Our non-GAAP tax rates for this quarter was around 16%, mainly due to indexation and updates in tax provision because of several tax assessments we have worldwide. Our non-GAAP net income reached $238 million, or $2 per share, which is $0.05 above our guidance, above the top end of our projections. Our GAAP net income was $202 million, or $1.70, 25% growth year-over-year. Now let's move to our cash flow and cash position. Our cash balances as of the end of the quarter was $3.5 billion. Our operating cash flow was $191 million this quarter. What affected our cash flow was very back and loaded quarter. We can see that our account receivables went up by 20% here. The balance that we have in this compared to the same period last year is up by 20%. We saw much more booking and billing coming in the last month than usual, and it's something that we continue to see. We will continue to see this trend since the beginning of the year or actually since Q4. During the quarter, we continue our buyback program and purchased 2.6 million shares for $325 million at an average price of $125 per share. In total, we purchased $1.3 billion in the past 12 months. Now let's summarize our results. We had this very strong subscription revenue with 40% growth year-over-year, which was driven by Harmony email and continuous stock adoption of our Infinity platform. While we saw the refresh project that experienced delay, we saw very strong and healthy renewal business. Also, we saw improving and strong operating margin that resulted in over 22% EPS growth, highest since 2009. Now I'll turn the call over to Gilles.