Again, we saw this quarter in positive indicators. As I mentioned, the booking went up year-over-year. We see a very positive indicator for the pipeline for Q4. Again, we need to be cautious, it’s still on the pipeline and not converted into business, but we see many positive indicators. And it’s —
Brad Zelnick: Thanks for the color.
Kip Meintzer: All right. Next up is Tal Liani of BofA, followed by Joseph Gallo of Jefferies.
Q – Tal Liani: Hey. Good morning, guys. Two questions. Gil, at the end of the day you are only growing 3%, and we talked about it — like last year, you talked about Infinity and you talked about the year before about other products, but it’s very evident that it’s hard for the company to translate technology superiority into higher growth versus competition. And the question is, what other parts, do you need to invest in go to market, marketing, whatever it is, what other parts you need to go to and what are the challenges that you have in order to translate your technology into better growth here? The second question is kind of related, not related. Subscription, very nice growth, 15%, what are the trends in the non-subscription, it’s down about 4%. So what is their substitution or what are the other trends that we see in non-subscription? Thanks.
Gil Shwed: So first, you’re absolutely right, we need to do better, we should do better. I by the way believe that we were on the same — in market trajectory that we’ve been a year ago. I think our results today would have been double digit growth. I think we faced double digit decline in the core market of buying new gateway, delay in — what we call delay in refresh in a nice way. And I think we’ve shown it in our slides. And despite that, we’ve seen growth. And the growth comes from — both from customers sticking with us and doing the renewals, both from the fact that we’ve been able to transition big part of the business from product purchased to subscription. And also from some of the — some of it just comes from the Infinity deal with our multi architecture, both user cloud and other elements of the security elements.
And some of it comes from the new technology like email and few others that are gaining traction. But a relatively still small, but they are gaining traction. So that’s how we offset there. Again, if you just look to beat on the neutral basis of just selling gateways, it wouldn’t been — it wouldn’t even been 3%. Now, again, I’m not happy with that percent. I think we should do much, much higher. I think we’ve made investment last year, for example, we are at a lot of certainty, we can still hire more. I think this year, my focus internally was on customer engagement, making sure that our people actually go and meet with their customers and prosper — prospect. I think, I already mentioned that we have the great progress there, doubling the rate which is not trivial.
And much more activity by the field. Next step, by the way is two-fold, one is to elevate the level of quality, making sure that we reach the right people, that we go grow broader in the organization and so on. And second, I think we’re seeing the translation of that. Again you would go to the customer, doesn’t always come resolve, sure we’ll give you the next order, say, well, if we had the project, we would come to you, but what we’d like to happen is once this project comes and I would say, every enterprise will have a project within a year, then we will have a very much higher chance of winning that project because they are there, because we know that we’re projecting, unfortunately and again I would meet our shortcomings. That’s the feedback I get when I meet with CIO’s and CSO, they all tell me we know Check Point is a leader, Check Point is a very good brand for us.
We knew Check Point many years ago when we started our career and we love your story, that’s the main thing that they tell me, we love what you’re — the architecture and the vision. That’s the positive side, the negative side, depending on how come we didn’t hear for you for so many years. And that’s what I want to fix, because if we sell all these good things that we have good technology, very good brand recognition. That we have a good story today then what we need to fix is making sure that we know that, we know that is because we need to be in front of it. And I think, by the way, as I said, we have the people, we have the bandwidth, we just need to execute on that. And I think we’re making progress there. I truly hope that it will bear fruit.
Kip Meintzer: All right. Next up is Joseph Gallo from Jefferies, followed by Saket Kalia from Barclays.
Joseph Gall: Hey, guys. Thanks for the question. Congrats on another quarter of double digit EPS growth. You’ve started talked about top line drivers and product drivers as we think about putting 2024. How should we think about leverage in the face of these investments and the M&A integration and then what if any impact does FX has as we look out over the next 12 months? Thanks.
Gil Shwed: Roei, why don’t you start.
Gil Shwed: On their FX side. So I would say that on the next 12 months, of course, we’re going to benefit probably from the shekel. I knew that we usually hedge our currencies between three to four quarters ahead. So some of it already hedged for next year, but some of it will be hedged. I mean, in the second half of the year will be hedged — will be hedged in the next quarter or two. So there will be a benefit next year on the FX. Again, it’s still early to say to quantify that, but there will be a benefit. As for this quarter, we also — again, because this quarter was already hedged a year ago, three quarters ago. So we — so the benefit was less than the FX cost that you see today, which is approximately around — we benefited around 1.7 — between $5 million to $6 million of FX benefit this year compared to last year.
