Roei Golan: Thank you. So as for the first question regarding the new business, I think what we did see what drove this growth is, I think first of all, Gil mentioned the services. We do see more and more customers taking our Infinity global services. It’s something we did see a very nice growth there in terms of new business. So that’s one of the factors. Second, we did see — we mentioned we did see a very nice traction for the IM appliances. So that also drove our new business growth, together with the Harmony E-mail, which is consistently growing and increasing its ARR every quarter. That was the main driver for the new business that we’ve seen. As for the operating margin, so I remind you again, in terms of, first of all, this year, the operating margin is still I think, we guided between 42% to 43% for booking on the full year operating margin.
And that’s mainly because of, again, we’re keep investing and it’s mainly because of the acquisition that we’ve done last year that are part of our expenses this year, and we just acquired them in the end of Q3. So that had a dilutive effect on the short-term. Hopefully, we’ll be able to increase this operating margin in the long-term. If we — this acquisition together, as I mentioned, we — I got asked — I was asked about how we can reach double-digit growth in revenue. So I think the double-digit growth in revenue, if we’re going to drive it by the SASE and the e-mail and more product growth, I think that can drive us back to better to higher operating margin. Also, I think we’re also today in a very good operating margin. But I think the main driver is to drive higher growth on the top-line.
Kip Meintzer: All right. Next up is Joel Fishbein, followed by Ray McDonough.
Joel Fishbein: Thanks for taking my question. I guess, Gil, for you, a follow-up on Rob Owen’s question with regard to the partnership with NVIDIA. Could you just give us a little bit more color on how that would work from — will you be working through NVIDIA and getting paid through NVIDIA? Or will you have to work with the customer itself. Will Check Point be shipping with the chips? Just a little bit more color on that. It sounds like a very big opportunity. I know you’re trying to mute our expectations in the near-term. But just from a longer-term perspective, how will that work? Thank you.
Gil Shwed: First, that’s still work in progress that we’re doing. The partnership and the technology implementation is done through with NVIDIA. And I think they really are supportive of it. We launched it on their developer conference on stage. So this is big. In terms of the business model, it’s still work in progress. My guess is that a lot of it will come either through the companies that are building the boxes based on the NVIDIA chipset or will come directly with the customers and the customers being the — this cloud service provider. This is not a huge number of customers in the world. It’s a few hundred customers overall. So it’s a very direct approach or it’s very targeted approach through that. And I think we still need to find the right distribution model to get into the customers. The software might be already ready to use or available within the chipset. That’s the design that we’re doing with NVIDIA.
Kip Meintzer: All right. Next up is Ray McDonough, followed by Dan Ives.
Ray McDonough: Great. Thanks for taking the question. Roei, I just wanted to follow-up on both Brad and Fatima’s question, I mean we spoke a lot about the drivers of, potential drivers, I should say, of double-digit revenue growth, and we touched a little bit about how we get back to 50% operating margins or so over the long run. But when we think about the incremental pressures due to competitive dynamics and the OpEx investments you guys have made, and we think about what it might take from a channel perspective and go-to-market perspective in terms of investments in those channels to help drive some of the new boxes and refresh activity. How should we think about medium-term to long-term free cash flow growth and how that might relate to double-digit revenue growth if you get there?
I understand billings is going to be a big portion of that. But how much OpEx investments are going to be needed to drive that double-digit revenue growth over time, right? And then just a clarification question. Can you help us understand how much inorganic contribution there was to billings this quarter? And another clarification, just the full year revenue guide. I just want to make sure that’s unchanged.
Roei Golan: So I’ll start with the last one. The full year guidance is no change, same one. In terms of the second question regarding the inorganic, so I think the Perimeter 81, I think the other ones are not significant at all, but the Perimeter 81 acquisition that helped us, it had approximately $7 million of revenue, so $7 million of billings. So I mean that’s approximately one point, one and something point. So that’s in terms of that. So your question about the required investments, so again, I don’t want to take — to go into the numbers. I think that we invested a lot in the last few years, both in the go-to-market and in the product side. To have much better, much broader portfolio than what we used to have a few years ago.
I think, of course, you saw — we saw our margin went down from one side, but I think that this investment hopefully will drive our — and it’s not that we stop investing, we are keep investing. And hopefully, we’re going to continue to invest and with the much better portfolio that we have today, we’ll be able to drive double-digit growth. And of course, it will drive double-digit growth or going to affect also the billings and the cash flow. So I think all the questions are linked to the same thing that, again, I don’t see — I don’t think that we’re going to stop into interest. I don’t think that we’re going to — I don’t want to promise any specific margin, but I think we have a very good margin to the operating margin, hopefully will be even better in the next — in the mid-term or in the long-term future.
But again, it really depends on our execution. And hopefully, we’ll be able to drive higher growth and higher operating margin.
Gil Shwed: Maybe I’ll take it a little bit differently here, giving you a very long perspective. I’ve been asked about the — our operating margin since our IPO in 1996. And since I think back when we started with also relatively high margin and people say, can we sustain them? And my answer, by the way, hasn’t changed. My focus is not in growing the margin. My focus is in growing a healthy business. And I think we’ve done that over now for almost 31 years growing a healthy business. Now the number one priority that I have right now is not on the profitability, it actually on the growth. And I think we need to invest in growth. Over the last few years, we’ve invested a lot in building a cloud rocket. And we’ve invested a lot in building the Harmony E-mail, the e-mail offerings.
We’ve invested a lot in the — in other parts of the platform and in our research and in our — many, many of our capabilities in the go-to-market, we’ve built many different organizations to support that and to support a much better growth. And I think we still did that while preserving, I think, industry record, not just industry, very high operating margins. I think many of these things will come to fruition in the future, and then we will invest more. Now, one thing that did change between now to the 90s or between now to even 15 years ago, and I think that is important to take into account. But when you grow a new business and when you compete with a new business, if in the past, it was high investment, but decent margins today; almost our entire industry is at close.
I spoke last week in the conference, growth companies conference. I’ve talked about that when the industry needs to rationalize and grow into a profitable business model. I ask in the room, let’s say, we’re about 100 people. How many businesses here are profitable? Four people raised their hands, maybe three. And they were so proud because they said, if you asked that question two years ago, it was zero in the room. So we need to understand that. And when we combine businesses when we acquire businesses, and when we invest in new business models, we are not competing in the terms of, let’s build a profitable business and do that. We are struggling with businesses that needs to be brought into that healthy business model. I think we’re doing it very responsibly, but the focus is not the margin.
The focus is healthy growth. And I hope that this will remain that way also in the future.
Kip Meintzer: All right, folks. Thank you very much for participating. It looks like Dan Ives, had to go pick up a nice colorful outfit. So he’s not going to be able to answer ask his question. So with that, well, thank you all and we’ll see you during the quarter. Thank you. Bye-bye.
Gil Shwed: Thank you very much.
Roei Golan: Thank you.
