Edgar Filing: CHECK POINT SOFTWARE TECHNOLOGIES LTD

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

For the month of October 2016

Commission File Number 0-28584

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

(Translation of registrant's name into English)

5 Ha’solelim Street, Tel Aviv, Israel

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether the registrant by furnishing the information contained in this Form, is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐ No ☒

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________

INVESTOR CONTACT:

Kip E. Meintzer

+1.650.628.2040

ir@checkpoint.com

MEDIA CONTACT:

Ali Donzanti

Check Point Software Technologies

+1.650.628.2030

press@checkpoint.com

CHECK POINT SOFTWARE TECHNLOGIES REPORTS 2016 THIRD QUARTER FINANCIAL RESULTS

SAN CARLOS, CA – October 31, 2016 — Check Point® Software Technologies Ltd. (NASDAQ: CHKP), today announced its financial results for the third quarter ended September 30, 2016.

Third Quarter 2016:

Total Revenue: $428 million, a 6 percent increase year over year

Software Blades Subscriptions Revenues: $99 million, a 24 percent increase year over year

GAAP Operating Income: $206 million, representing 48 percent of revenues

Non-GAAP Operating Income: $231 million, representing 54 percent of revenues

GAAP EPS: $0.99, a 7 percent increase year over year

Non-GAAP EPS: $1.13, a 9 percent increase year over year

Deferred Revenues: $889 million, a 15 percent increase year over year

“Third quarter financial results were very good with revenues coming in toward the upper end of our projections and earnings per share that exceeded our projections. Customers continue to leverage the Check Point security platform and increase their adoption of our advanced security capabilities which is resulting in higher subscription revenues,” said Gil Shwed, founder and chief executive officer, “We continued to see strong sales of our SandBlast, Zero Day Protection solutions, resulting in triple-digit growth as customers focus on prevention.”

Financial Highlights for the Third Quarter of 2016:

·	Total Revenue: $428 million compared to $404 million in the third quarter of 2015.

·	GAAP Operating Income: $206 million compared to $205 million in the third quarter of 2015.

·	Non-GAAP Operating Income: $231 million compared to $228 million in the third quarter of 2015.

·	GAAP Net Income and Earnings per Diluted Share: GAAP net income was $170 million compared to $168 million in the third quarter of 2015. GAAP earnings per diluted share were $0.99 compared to $0.92 in the third quarter of 2015.

·	Non-GAAP Net Income: Non-GAAP net income was $194 million compared to $188 million in the third quarter of 2015.

·	Non-GAAP Earnings per Diluted Share: $1.13 compared to $1.04 in the third quarter of 2015.

·	Deferred Revenues: As of September 30, 2016, deferred revenues were $889 million compared to $772 million as of September 30, 2015.

·	Cash Flow: Cash flow from operations of $214 million compared to $228 million in the third quarter of 2015.

·	Share Repurchase Program: During the third quarter of 2016, the company repurchased 3.2 million shares at a total cost of $247 million.

·	Cash Balances, Marketable Securities and Short Term Deposits: $3,708 million as of September 30, 2016, compared to $3,612 million as of September 30, 2015.

For information regarding the non-GAAP financial measures discussed in this release, as well as a reconciliation of such non-GAAP financial measures to the most directly comparable GAAP financial measures, please see “Use of Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Information.”

Business Highlights:
Check Point Defines Security Leadership in New Era of Cloud IT- Check Point’s advanced threat prevention works across cloud platforms, integrating with the most popular SDN/cloud technologies such as VMware NSX, Cisco ACI, OpenStack, Microsoft Azure and Amazon Web Services (AWS). Fueled by the company’s vSEC cloud security with R80 Security Management, Check Point is enabling businesses to secure physical networks and cloud environments with the same industry-leading solutions and policies – all from a single management console.

SandBlast Agent for Browsers - As the newest member of its industry-leading SandBlast family of solutions, SandBlast Agent for Browsers is designed to protect users from evolving threats by seamlessly incorporating key components of the SandBlast security model into the browser. It provides real-time protection, all while reducing the resources required to prevent today’s advanced attacks.

Industry Accolades:

Achieved NSS Labs Recommended Rating Three Times in 2016 – Check Point received a ‘Recommended’ rating three times in the 2016 NSS Labs testing including:

Next-Generation Intrusion Prevention System (NGIPS) Test with 99.95% exploit catch rate, the highest of all participates and the leading TCO rating

NSS Labs Breach Detection Systems (BDS) group test

Next Generation Firewall (NGFW)

Check Point has achieved ‘Recommended’ rating from NSS Labs for all thirteen tests the company has participated in since 2011.

Leader in the 2016 Gartner Magic Quadrant for Unified Threat Management – The new report evaluated the company’s completeness of vision and ability to execute in areas such as security management and threat prevention within the small and medium business market. Check Point has been positioned as a Leader in Unified Threat Management Magic Quadrant for six consecutive years. Check Point is the only vendor to be a leader in both Firewall Gartner Magic Quadrants: Enterprise and Unified Threat Management.

Number One in Worldwide Firewall Equipment Market Share – Check Point is the leader in worldwide market share in 2Q 2016 for Firewall Equipment, according to the Gartner Market Share: Enterprise Network Equipment by Market Segment, Worldwide reports.¹

Top Position in Worldwide Combined Firewall and UTM Appliance Market – Check Point continued to be the number one vendor in worldwide combined Firewall and UTM appliance revenue for 2Q 2016, according to the IDC Worldwide Quarterly Security Appliance Tracker.²

________________________

¹ Gartner, Inc., Market Share: Enterprise Network Equipment by Market Segment, Worldwide, 2Q16, Christian Canales, Petr Gorodetskiy, Naresh Singh, and Joe Skorupa, September 2016. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

² IDC Worldwide Quarterly Security Appliance Tracker 2Q2016, September 2016.

Security Research:

2016 Security Report- In the company’s fourth annual Security Report, Check Point researchers analyzed the activity of more than 31,000 Check Point gateways worldwide, revealing specific details on the challenges enterprises are encountering with unknown malware, attack trends, and the impact of having more mobile devices in the enterprise.

Cerber – Check Point researchers investigated one of the largest active ransomware campaigns to have unprecedented insight into its devious scheme. In a detailed report, researchers shine a light on the growing ransomware-as-a-service industry, but revealing a path now being used to help individuals and businesses gain access to their encrypted files – without paying the increasingly inflated ransoms of cyber criminals.

QuadRooter – The Check Point Mobile Research Team uncovered a set of four vulnerabilities in QualComm chipset drivers dubbed the name QuadRooter making at least 900 million Android smartphones and tablets vulnerable. If exploited, hackers could gain complete control of devices and unrestricted access to the sensitive personal and enterprise data on them. Access could also provide an attacker with capabilities such as keylogging, GPS tracking, and recording video and audio.

HummingBad – Cyber criminals utilized HummingBad malware to control over 10 million mobile devices globally, allowing them to manipulate the devices into downloading apps and clicking on advertisements to benefit the coalition of developers behind the malware. Check Point researchers discovered how this illegal network ran alongside a legitimate business of Android and iOS apps and analytics, and provided the details of their network operation.

“Cyberattacks are continuing to increase and the level of their sophistication keeps rising. Every organization should be concerned about achieving the highest level of defense against these attacks. The Check Point platform provides protection against the most advanced attacks and prevents them from entering the organization, while enabling each customer to manage their security on the network, mobile and the cloud through a single pane of glass management console,” Concluded Shwed.

Fourth Quarter 2016 Investor Conference Participation Schedule:

·	UBS Global Technology Conference Nov. 15, 2016 – San Francisco, CA

·	Credit Suisse Annual Technology Conference Nov. 29, 2016 – Scottsdale, AZ

·	Raymond James Supply Chain Conference* Dec. 6-7, 2016 – New York, NY

* Investor meetings only

Members of Check Point's management team are expected to present at these conferences and discuss the latest company strategies and initiatives. Check Point’s conference presentations are expected to be available via webcast on the company's web site. To view these presentations and access the most updated information please visit the company's web site at www.checkpoint.com/ir. The schedule is subject to change.

Conference Call and Webcast Information
Check Point will host a conference call with the investment community on October 31, 2016, at 8:30 AM ET/5:30 AM PT. To listen to the live webcast, please visit the website at: www.checkpoint.com/ir. A replay of the conference call will be available through November 6, 2016 on the company's website or by telephone at +1.201.612.7415, replay ID number 13647361.

About Check Point Software Technologies Ltd.

Check Point Software Technologies Ltd. (www.checkpoint.com) is the largest network cyber security vendor globally, providing industry-leading solutions and protecting customers from cyberattacks with an unmatched catch rate of malware and other types of threats. Check Point offers a complete security architecture defending enterprises – from networks to mobile devices – in addition to the most comprehensive and intuitive security management. Check Point protects over 100,000 organizations of all sizes.

Legal Notice Regarding Forward-Looking Statements

This press release contains 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. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this press release include, but are not limited to, statements related to our expectations regarding our products and solutions, the success of the new family of cybersecurity solutions that we have developed and our participation in investor conferences during the fourth quarter of 2016. 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 and purchase of our existing solutions and new solutions; the market for IT security continuing to develop; competition from other products and services; and general market, political, economic and business conditions. The forward-looking statements contained in this press release 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 20-F filed with the Securities and Exchange Commission on April 28, 2016. The forward-looking statements in this press release are based on information available to Check Point as of the date hereof, and Check Point disclaims any obligation to update any forward-looking statements, except as required by law.

Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Check Point uses non-GAAP measures of operating income, net income and earnings per diluted share, which are adjustments from results based on GAAP to exclude, as applicable, stock-based compensation charges, amortization of intangible assets and acquisition related expenses and the related tax affects. Check Point’s management believes the non-GAAP financial information provided in this release is useful to investors’ understanding and assessment of Check Point’s ongoing core operations and prospects for the future. Historically, Check Point has also publicly presented these supplemental non-GAAP financial measures in order to assist the investment community to see the Company “through the eyes of management,” and thereby enhance understanding of its operating performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in this press release. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such has determined that it is important to provide this information to investors.

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

CONSOLIDATED STATEMENT OF INCOME

(In thousands, except per share amounts)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenues:
Products and licenses	$	136,931	$	135,218	$	395,909	$	381,799
Software Blades subscriptions		98,575		79,622		279,403		230,598
Total revenues from products and software blades		235,506		214,840		675,312		612,397
Software updates and maintenance		192,068		189,016		579,282		559,369
Total revenues		427,574		403,856		1,254,594		1,171,766

Operating expenses:
Cost of products and licenses		25,244		24,400		73,408		69,333
Cost of software blades subscriptions		3,009		2,351		6,695		5,662
Total cost of products and software blades		28,253		26,751		80,103		74,995
Cost of Software updates and maintenance		21,371		20,107		61,536		58,080
Amortization of technology		546		546		1,638		1,262
Total cost of revenues		50,170		47,404		143,277		134,337

Research and development		44,443		37,495		130,631		109,249
Selling and marketing		104,386		90,463		303,702		258,605
General and administrative		22,087		23,860		66,124		68,848
Total operating expenses		221,086		199,222		643,734		571,039

Operating income		206,488		204,634		610,860		600,727
Financial income, net		12,145		8,285		33,908		24,905
Income before taxes on income		218,633		212,919		644,768		625,632
Taxes on income		48,981		45,176		141,875		134,370
Net income	$	169,652	$	167,743	$	502,893	$	491,262

Basic earnings per share	$	1.00	$	0.94	$	2.94	$	2.72
Number of shares used in computing basic earnings per share		169,113		177,519		171,140		180,335

Diluted earnings per share	$	0.99	$	0.92	$	2.88	$	2.66
Number of shares used in computing diluted earnings per share		171,882		181,804		174,549		184,846

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

RECONCILIATION OF GAAP TO NON GAAP FINANCIAL INFORMATION

(In thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	Sep 30,						Sep 30,
	2016			2015			2016			2015
	(unaudited)			(unaudited)			(unaudited)			(unaudited)

GAAP operating income	$	206,488		$	204,634		$	610,860		$	600,727
Stock-based compensation (1)		20,818			19,956			61,034			56,534
Amortization of intangible assets and acquisition related expenses (2)		3,282			3,309			9,858			7,912
Non-GAAP operating income	$	230,588		$	227,899		$	681,752		$	665,173

GAAP net income	$	169,652		$	167,743		$	502,893		$	491,262
Stock-based compensation (1)		20,818			19,956			61,034			56,534
Amortization of intangible assets and acquisition related expenses (2)		3,282			3,309			9,858			7,912
Taxes on the above items (3)		(244	)		(2,556	)		(2,740	)		(5,504	)
Non-GAAP net income	$	193,508		$	188,452		$	571,045		$	550,204

Diluted GAAP Earnings per share	$	0.99		$	0.92		$	2.88		$	2.66
Stock-based compensation (1)		0.12			0.11			0.35			0.31
Amortization of intangible assets and acquisition related expenses (2)		0.02			0.02			0.06			0.04
Taxes on the above items (3)		-			(0.01	)		(0.02	)		(0.03	)
Diluted Non-GAAP Earnings per share	$	1.13		$	1.04		$	3.27		$	2.98

Number of shares used in computing diluted Non-GAAP earnings per share		171,882			181,804			174,549			184,846

(1) Stock-based compensation:
Cost of products and licenses	$	16		$	17		$	50		$	47
Cost of software updates and maintenance		560			396			1,535			1,110
Research and development		2,993			3,295			9,291			8,536
Selling and marketing		5,508			4,193			13,311			12,112
General and administrative		11,741			12,055			36,847			34,729
	$	20,818			19,956		$	61,034			56,534

(2) Amortization of intangible assets and acquisition related expenses:
Amortization of technology-cost of revenues	$	546			546		$	1,638			1,262
Research and development		1,897			1,897			5,691			4,249
Selling and marketing		839			866			2,529			2,401
	$	3,282			3,309		$	9,858			7,912

(3) Taxes on the above items	$	(244	)		(2,556	)	$	(2,740	)		(5,504	)

Total, net	$	23,856		$	20,709		$	68,152		$	58,942

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(In thousands)

ASSETS

	September 30,		December 31,
	2016		2015
	(unaudited)		(audited)
Current assets:
Cash and cash equivalents	$	224,327	$	192,312
Marketable securities and short-term deposits		1,005,902		1,091,915
Trade receivables, net		254,716		410,763
Prepaid expenses and other current assets		44,453		40,844
Total current assets		1,529,398		1,735,834

Long-term assets:
Marketable securities		2,477,626		2,331,187
Property and equipment, net		57,994		48,692
Severance pay fund		4,783		5,262
Deferred tax asset, net		62,030		65,711
Goodwill and other intangible assets, net		835,120		838,020
Other assets		36,307		45,174
Total long-term assets		3,473,860		3,334,046

Total assets	$	5,003,258	$	5,069,880

LIABILITIES AND

SHAREHOLDERS’ EQUITY

Current liabilities:
Deferred revenues	$	677,755		$	717,528
Trade payables and other accrued liabilities		323,617			339,325
Total current liabilities		1,001,372			1,056,853

Long-term liabilities:
Long-term deferred revenues		210,755			188,255
Income tax accrual		324,400			283,215
Deferred tax liability, net		-			240
Accrued severance pay		9,185			9,451
		544,340			481,161

Total liabilities		1,545,712			1,538,014

Shareholders’ equity:
Share capital		774			774
Additional paid-in capital		1,087,158			987,331
Treasury shares at cost		(4,734,366	)		(4,043,271	)
Accumulated other comprehensive gain (loss)		9,805			(4,250	)
Retained earnings		7,094,175			6,591,282
Total shareholders’ equity		3,457,546			3,531,866

Total liabilities and shareholders’ equity	$	5,003,258		$	5,069,880
Total cash and cash equivalents, marketable securities and short-term deposits	$	3,707,855		$	3,615,414

CHECK POINT SOFTWARE TECHNOLOGIES LTD.

SELECTED CONSOLIDATED CASH FLOW DATA

(In thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Cash flow from operating activities:
Net income	$	169,652		$	167,743		$	502,893		$	491,262
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		3,099			2,658			8,491			7,541
Amortization of intangible assets		963			990			2,901			2,622
Stock-based compensation		20,818			19,956			61,034			56,534
Realized loss (gain) on marketable securities		(1,743	)		176			(2,867	)		97
Decrease in trade and other receivables, net		20,317			28,973			161,534			124,176
Increase in deferred revenues, trade payables and other accrued liabilities		4,867			14,388			16,213			32,098
Excess tax benefit from stock-based compensation		(3,387	)		(3,772	)		(8,200	)		(6,073	)
Deferred income taxes, net		(662	)		(3,285	)		(1,876	)		(3,116	)
Net cash provided by operating activities		213,924			227,827			740,123			705,141

Cash flow from investing activities:

Cash paid in conjunction with acquisitions, net of acquired cash		-			-			-			(96,544	)
Investment in property and equipment		(7,143	)		(4,361	)		(17,793	)		(10,206	)
Net cash used in investing activities		(7,143	)		(4,361	)		(17,793	)		(106,750	)

Cash flow from financing activities:
Proceeds from issuance of shares upon exercise of options		46,310			20,074			79,839			54,089
Purchase of treasury shares		(247,000	)		(249,763	)		(739,937	)		(736,445	)
Excess tax benefit from stock-based compensation		3,387			3,772			8,200			6,073
Net cash used in financing activities		(197,303	)		(225,917	)		(651,898	)		(676,283	)

Unrealized gain (loss) on marketable securities, net		(9,609	)		4,150			22,009			7,261

Increase (decrease) in cash and cash equivalents, marketable securities and short term deposits		(131	)		1,699			92,441			(70,631	)

Cash and cash equivalents, marketable securities and short term deposits at the beginning of the period		3,707,986			3,610,603			3,615,414			3,682,933

Cash and cash equivalents, marketable securities and short term deposits at the end of the period	$	3,707,855		$	3,612,302		$	3,707,855		$	3,612,302

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CHECK POINT SOFTWARE TECHNOLOGIES LTD.

	By:	/s/ Tal Payne
		Tal Payne
		Chief Financial Officer & Chief Operating Officer

October 31, 2016