Check Point Software Technologies Ltd. (NASDAQ:CHKP) Q4 2023 Earnings Call Transcript

And you can see a number of leaderships mentions that we got every year, 2019, ’20, ’21, ’22, ’23. And you can see that it’s increasing very drastic manner every single year, which means that our products are getting better, our marketing is getting better, our security is getting better. Customers, analysts all recognize that, and you can see the different spaces to the left, endpoint firewall, cloud network security, e-mail security, workload protection, cloud posture management, SaaS secure access service edge, XDR. I think it’s a very good testimony to the Check Point product team to be able to get into a leadership — into a leadership position in so many categories. So we’re very proud of that, and I think it shows. I think for 2024, our focus is what we call the platform company.

The Infinity platform that we have, we’ve talked about it in the past, but it’s getting more and more important and more and more focused. And there’s two main attributes that I want to emphasize when we speak about the Infinity platform and then we’ll be the third one. One, its cloud delivered, so many services that are delivered assisted from the Check Point Cloud. And second, that it’s AI-powered, and we talked about the beginning of 2023 that — it’s going to be the year of AI. I’m going to demonstrate to you a little bit about the fact that it was a year of AI. And now we have AI very, very embedded into every aspect of our products. And I think we are pioneering and leading in that aspect of AI — in cybersecurity and AI on the kind of products that we produce.

Last but not least, we talked about the 3 Cs, comprehensive, consolidated and collative for cybersecurity, and I’m going to touch on that and especially focusing on one element of that, and that’s the collaborative nature of the platform. But let’s start a little bit with ThreatCloud. ThreatCloud today has more than 90 security engines and I know how to identify block every type — or many types of attacks. Over 50 of those engines are already AI-powered. It was 40 last year. It was 80 engines and 40 AI-powered last year. You see both the number and the percentage grew that year, which means that every month, we introduced approximately one more — one new engine to the Infinity platform, and that’s a huge strength. And what makes it a platform is that these engines can be used by many different delivery vehicles.

Delivery vehicle can be the network security gateway, it can be the e-mail security, it can be the cloud security. And every engine we’ve — our internal audit, almost every engine here is used by multiple delivery methods. That’s the strength of the Check Point platform. We make an investment in advanced security. These investments can then be used by the customer in multiple places, in multiple vectors. And the result is that we blocked three billion yearly attacks. We prevented three billion attacks just last year. That’s a huge number, think about that. I’ve talked about the AI-powered. So what you’ve seen in the previous slide is how it’s AI-powered in the backend on the ThreatCloud, but that’s the big renovation for this year for the beginning of 2024.

We make AI also go to the front, and we take full advantage of generative AI. So what you can see in this demo, I won’t do it, but it’s generated a lot of excitement when I showed on stage last week on our CPX conference, something that would have taken an analyst anything from few minutes to few hours to analyze to understand why Emily Jones cannot access the SAP server in America. And as you can see, with one sentence to our generative AI, the Infinity copilot, it analyzes the situation. It explains why she wasn’t able to access. It suggests a solution either to a certain group. It asks the user whether you want to implement this change and whether they want to install the new policy, and boom, in a matter of 1 or 2 minutes, everything is done.

Now it’s not as simple as it sounds because, I mean, we are all experiencing with generative AI, and we know how powerful it is. But to connect it to that system, we’re not uploading all the user data to the AI cloud, we are not — which is a huge amount of data. It’s not real time. It’s actually the opposite. We taught the AI tools about all our interfaces, all our different systems around the world. Some are cloud-based and some will be even on-site. We connect it all, and we let the generative AI tool, create the right calls and use to the full advantage, the Check Point architecture, the Check Point platform to make very smart moves on behalf of the users. It can be used for troubleshooting. It can be used for policy management. It can be used to analyze security events, and it will give you advice in a second.

And this is not the future. This is not what will happen in 2025. This is happening now. Customers can work with it. Customers can use it. We just opened it last week to customers. And in our CPX in Bangkok, we had huge lines of customers that wanted to experiment that in our expo. And many users have started registering to use that on their instance on Infinity — on our Infinity portal. So I think that shows you some of the things we are doing. As far as I know, we are pioneering in the industry in that, and we are way ahead of everybody in the industry in showing the use compared to our companies similar to us in that aspect. I’ve talked about the cloud-delivered aspect of the platform, and I’ve showed you the Infinity architecture in the cloud in the middle, just to understand how much this part is really in our platform.

80%-plus of our security gateways, which is the big part of our network, already use the ThreatCloud. They already used few services from the ThreatCloud. And whenever they get the connection or whenever they get the relevant connection, they call the ThreatCloud, they consult and they ask for advice. And this is — and ThreatCloud gives them real-time advice about how to handle a certain type of threat. And 100% of our e-mail, endpoint, mobile and cloud workloads work with the Infinity ThreatCloud. So almost all of our customers and installations are already part in the ThreatCloud, and there is so much room for growth in that because, again, not only that we can go to 100%, but we also use more and more cloud services by each and every customer.