Head of Investor Relations. Joining me today are Founder and CEO, Gil Shwed, and our Chief Financial Officer, Roei Golan. Before we begin, I want to remind everyone that this conference is being recorded and will be available for replay on our website. During the formal presentation, all participants will be in listen-only mode, followed by a Q&A session. During the presentation, Check Point’s representatives may make forward-looking statements that involve risks and uncertainties which could cause actual results to differ materially from those projected. Factors that could lead to such differences include, but are not limited to, those discussed in Check Point Software's latest filings with the Securities and Exchange Commission. Any forward-looking statements may only speak as of today, and Check Point Software does not undertake any obligation to update these statements publicly, except as required by law. In our press release, available on our website, we provide both GAAP and non-GAAP results, along with a reconciliation of these results and the reasons for presenting non-GAAP information. If you have any questions after the call, please contact Investor Relations by email. Now, I will turn the call over to Gil Shwed. You are on mute, Gil.

Hi, everyone. I am very excited to be here today with both very good results that we have and some exciting news. Before I hand over to Roei to share a little bit about the financial results, let me speak a little bit about the exciting news that we have today, which is the appointment of Nadav to our CEO, effective December. We've concluded a very thorough search, looked at candidates around the world, met a lot of very good people, very experienced individuals, and I think we have found the perfect candidate. I am really excited about it because Check Point, for me, is like a child, and passing that responsibility to somebody else means I need to find the right person, and I truly believe we have done so. For those who may not know Nadav, he has spent the last 10 years establishing himself as a key leader in cyberspace and is well-known among CISOs worldwide, having built a huge community of CISOs that consult with him. He has a lot of vision and experience in cyber, having established over 17 cyber companies. Again, I've known Nadav for many years and I've spent many, many hours with him in the past few months. There is no better choice. I am honored that he decided to join Check Point, and I believe he can lead Check Point to the next phase of success and growth. With that, we can switch to Roei to go through the financials, which are also pretty good. I'll provide another business update afterward, highlighting some very exciting news today.

Thank you, Gil. Yes, thanks everyone for joining the call. As Gil mentioned, we had a very good quarter. Starting with the revenues: revenues grew by 7% to $627 million, which is $5 million above the midpoint of our projection. Our EPS grew by 8% to $2.17, and non-GAAP EPS was $0.02 above the midpoint of our projection. Moving forward to deferred revenues and billing: deferred revenues grew by 2% to $1.880 billion, while our short-term deferred revenues grew by 3% to $1.342 billion. Our calculated billing grew by 10% to $620 million, while our current calculated billing grew by 7% to $622 million. This quarter, we saw strong billing driven first by robust performance in our business and second by the growth in our Infinity business. In terms of product and subscription revenues, we achieved 10% growth, exceeding what we've seen in recent years. We hope to maintain this level of consistent double-digit growth in the upcoming quarters. Regarding the success of Infinity, we recorded strong double-digit growth in both bookings and revenues. We also had significant eight-figure deals within Infinity. Geographically, all regions showed double-digit growth in new business annualized bookings, though this generally translates into revenues a few quarters later. In terms of our P&L, we had a gross profit of $557 million, with an operating margin of 89%. Operating expenses increased by 11% primarily due to the Perimeter 81 acquisition. The net income grew by 4% to $246 million, with an EPS growth of 8% to $2.17. We announced the expansion of our buyback program to $2 billion, increasing it to $325 million per quarter, reflecting our positive outlook. In terms of cash flow, our operating cash flow grew by 5% to $200 million, and our cash balances amounted to approximately $3.1 billion. To sum up, we delivered strong results above our projections, with notable growth across key business areas.

Thank you, Roei. Let me reiterate some highlights that Roei shared. We achieved great results, with revenues and EPS in the upper end of our projections, alongside double-digit growth in products and subscription revenues and Infinity, which is showing strength with large eight-figure deals. The new Quantum Force set of gateways, part of our core business, is gaining traction. Notably, we've had very large deals this quarter, three of which total $130 million in bookings. These multi-year deals reflect a long-term commitment from significant customers. In the public sector, we had 92 government agencies in 32 countries engaging with the Check Point platform. Our focus on AI is crucial as we aim to enhance security and simplicity, starting with innovations like AI Infinity Copilot and Gen AI Protect. We are optimistic about the second half of the year; projections remain healthy. We expect revenues of $615 million to $650 million and EPS of $2.19 to $2.29. Full-year projections remain unchanged, and we anticipate continued growth fueled by our partnerships and product innovations.

Congrats on finding a new CEO and the next guardian of your child. Can you talk us through why Nadav is the right man for the job? What aspects do you expect to remain the same, and where might the biggest changes occur, particularly regarding go-to-market strategy?

First, Nadav and I are quite different in our personalities. He is much more outbound with incredible charisma, making him an amazing leader. I believe he will complement what I can bring and work with Roei, taking Check Point where it needs to go. Every CISO I meet knows Nadav, which speaks to his influence in the industry. He can effectively communicate with our target audience and motivate our internal team. I sought someone to complement and augment Check Point’s existing skills, and I believe I found that in Nadav.

Congrats on the results. Gil, product revenue came in better than expected. Are you regaining share in the network security arena, or is the improvement coming from different market categories? Regarding those three eight-figure wins, are these displacements or renewals?

It's early to say we're gaining significant market share, but in recent quarters, our growth has outperformed some competitors who faced declines. For the large deals, they are not displacements; they come from existing customers who are shifting from dual-vendor scenarios to us. These engagements reflect long-term commitments and expansions rather than simple renewals, indicating significant growth potential in our core market.

Congrats on your results. I wanted your reflections on recent industry events concerning CrowdStrike and if you foresee any impact on industry spending and sentiment going into your guidance.

The need for security remains immense despite any specific event. Cybersecurity threats continue to escalate. The CrowdStrike incident relates more to automatic updates than actual cyber vulnerabilities, highlighting a need for effective automatic updates balanced with security. The industry is learning to manage these critical updates better.

You mentioned the opportunity for new bookings to support revenue acceleration. Can you update us on your outlook based on first-half trends?

We observed strong new business bookings this quarter, maintaining double-digit growth as seen in the prior quarters. This turnaround has been promising, and if sustained, can translate into higher revenue growth moving forward.

I am optimistic about the second half, with stronger engagement and a healthy pipeline. The macro-level indicators also suggest a positive trend going forward.

On the macro level, you mentioned pressures but also significant company-specific positivity. Could this indicate a stronger budget flush into the second half?

Predicting budget behaviors is uncertain, but I hope for a robust second half. Cybersecurity remains a high investment area irrespective of tighter IT budgets.

What about Perimeter 81's impact on revenue and competitive positioning?

Perimeter 81 is crucial to our future, focusing on integrating it into our platform. The integration efforts are ongoing and are key to delivering a tightly integrated security approach.

The combination of your new CEO and recent growth seems promising. Is Check Point thinking towards a significant transformation or continuing with the existing strategy?

It's too early to determine the direction. We are committed to building on our strong foundation while exploring new opportunities for innovation and growth in various aspects.

How should we view your position in the go-to-market investment cycle and any changes in your channel strategies?

We are continuing to invest in our sales team for positive results and have observed significant productivity improvements recently. We're also focusing more on marketing to ensure sustained growth.

Can you provide insights into the SASE market's current state and your expectations for future contributions?

SASE is gaining interest, and we are working towards delivering a unified platform. We aim to sell SASE as part of an integrated solution that offers tremendous value across all operational areas.

Can you discuss the billing generation from Infinity and how it impacted your recent performance?

Infinity is growing and contributing significantly to our revenue streams, though fluctuation exists based on customer needs and billing terms. We saw strong demand reflected in our recent numbers.

Are the recent AI initiatives also driving incremental revenue, or purely enhancing competitive positioning?

Right now, they serve primarily as competitive differentiation, with future revenue potential as these advancements gain traction in the market.

Is the market ready for a significant shift towards Infinity? Do you see this as an inflection point?

We are more prepared than ever for this shift, as clients increasingly seek consolidated solutions to enhance efficiency and security in their operations. The demand for more unified architectures is on the rise.

What is your perspective on new logo momentum and the impact of your partner incentives?

We had a solid quarter for new logos, especially in the government sector. Our channel incentives are designed to bring in new logos, and there’s positive momentum in this area.

While you had many positive improvements, can you address EBIT and free cash flow growth expectations?

Our EBIT and free cash flow are tracking well, with free cash flow's performance largely dependent on our billing growth. We aim to maintain our operating margin while ramping up investment for future growth.

Should we expect significant investments in the sales force under Nadav, possibly influencing M&A strategies?

While Nadav will determine the future strategy, I believe strongly in sales and marketing investments yielding good ROI. We aim to grow Check Point while ensuring improvements across all fronts.

What prompted the increased utilization of Infinity allowances this quarter?

Some allowances were expiring, but overall usage was driven by customer needs. Infinity continues to gain traction, contributing positively to our billing this quarter.

It's positive that customers are purchasing based on real needs rather than excess budgets, reflecting the quality of our offerings.

Can you discuss the growth and outlook for the firewall business?

The firewall business saw steady growth, particularly from Quantum Force. While revenue growth was modest, the demand for our appliances is showing positive movement.

The pricing environment remains stable, and we haven't observed significant pressure on pricing or discounts lately.

Thank you all for joining us today. We appreciate your participation and look forward to connecting during the quarter. We will meet again in a little over three months. Have a great day.

Thank you.

Thank you very much.