Check Point Software Technologies Ltd. (NASDAQ:CHKP) Q4 2022 Earnings Call Transcript

As for the future, again, it’s also depends on — again, on our billings next quarter and next year. In order to quantify, I mean, again, it seems again as long as this macro environment will continue, we probably will see the same. But again, we never know. It’s not something that we can project.

Kip Meintzer : All right. Thank you. Next up is Gray Powell from BTIG followed by Brad Zelnick from Deutsche Bank.

Gray Powell : Okay. Great. Thanks for taking my question. Yes. So, one for Gil. Just looking back over the last few years, demand across the firewall space has been pretty strong. You all sound fairly cautious about 2023. To me, it kind of like 2023 is going to be more of like a digestion type year or a consolidation kind of year. Feels fairly similar to what we saw in 2016, I think that was like the last cycle. Does my read seem correct you? Does it feel like 2016? And if so, like on a relative basis, like how do you feel today versus sort of the last consolidation period within network security?

Gil Shwed: First, I think we have there is a lot of demand and there is a lot of need to continue with what we’ve done on network security. What I see now is a little bit different. It’s not just digestion because I don’t think that we finished all the refresh cycles and all the upgrade cycles. I think it’s more of a huge change in the economy. Again, I mentioned it several times. What I’ve seen is three good quarters in 2022 that we have in one way, and then the fourth quarter was different. Now again, whether this difference will continue, I mean, I’ve heard some companies saying that we reached the bottom in December. I don’t know if it will be that way or it will continue. I hope it won’t. I think from — when I speak to customers, and as I mentioned, I did a very nice tour in the last few weeks around the world and met with many, many customers and partners.

They see the need, they want to invest. They see the value in more security and the Check Point Infinity architecture. But I can do without the bad about the economy. And right now, I think it’s nothing to do with network security or anything like that. It’s clearly the more of the macro economy that’s behaves a little bit different in the last quarter.

Gray Powell : Okay. Thank you very much.

Kip Meintzer: All right. Next up is Brad Zelnick from Deutsche Bank followed by Fatima Boolani from Citi.

Brad Zelnick: Thanks very much. Gil, just wanted to ask you about the buyback. It’s good to see the continued discipline on the share repurchases. But why cap the quarterly amount at $325 million? And is there a scenario where opportunistically, perhaps you’d look to buy back more stock? And related, is this a time to maybe get aggressive with M&A.? I mean, it’s — we all know there’s a ton of great technologies out there, in some cases, companies that are having trouble raising funding maybe to do something even transformative? Thanks.