“But again, we remain quite positive, and we have actually increased the range for revenue. So, you can see our third-quarter projection is actually better than our original plan and better than what many of you expect based on your current models.”

In context

“Gil Shwed (CEO): So, thank you, everyone, and glad to have you all join us. I will jump right in to give a little bit more color to the business and the environment and mainly about some customer wins, but before that I want to congratulate Kip for his birthday. You see that Kip picked the very special day for his birthday and the best group of people that you wanted to celebrate with. So, happy birthday, Kip. And now, let’s talk a little bit about the first landscape, which as you can see continues to intensify. We have continued – I mean, we are seeing it for a very long time and it’s actually quite rare that for so many years, we are seeing such a, I would say, tense market, but we are seeing a 32% increase in overall cyber attacks. We see per organization on a global basis and 59% are sophisticated attacks like ransomware. You can see the statistics from last quarter; 1 out of every 40 organizations was impacted by ransomware. Even more so, these attacks are now going beyond just small scale attacks or just hacking groups to a much bigger impact. We have seen country extortion. We have seen nation-state organizations using Generation 5 attack tools. And we have even seen a lot of geopolitical attacks happening in many parts of the world when one country is either spiking or actually even attacking and using cyber warfare as a way to disrupt life in another country. So, this is something that’s now part of our real life. With that, we anticipate and I think almost everyone around us anticipates that the strong demand for cybersecurity will continue with that continuous wave of fifth-generation cyber attacks. I believe and I think we are seeing that customers, of course, will need the best security, which is what we stand for and what we aim to provide. I am pretty sure that customers will understand and will prefer solutions that are focusing on prevention and not just on detection of cyber attacks. At the end, I think consolidation will also take a bigger pace both because it delivers better security and also because most organizations cannot manage the complexity of using tens or even more of different cyber solutions, which is happening in many cases. So, that’s kind of the big threat landscape. How do we address that? Just to remind you, we have in Check Point what we call the Infinity architecture. I think it’s by far the most integrated, the most comprehensive cybersecurity architecture in the market built on three pillars or three product families; Quantum, which covers most of our business network security; CloudGuard for the cloud; and Harmony to secure user access and now even email, it’s built upon a common management layer; and on ThreatCloud, which actually makes sure that all that information is being shared, integrated and proliferated in real time from one vector to another to achieve the highest level of security. How did we do on all these three pillars in the last quarter? The good news is that we have seen accelerated core growth in every product pillar. In Quantum, we have seen nice growth from the low end, from the branches and SMBs all the way to the large installations. You heard about the product numbers, the product double-digit growth, but even more so, the unit growth was also very good and again, all the way from the very small to the very large. CloudGuard, same thing continues double-digit growth and with Harmony that we have extended Harmony with a big investment in email security last year, we have seen over 50% growth in the email security part, which is great. I think you have already seen this slide from Tal. So, I will just repeat that shortly. We have seen 9% revenue growth, the highest growth in years, more than double than the rate that we have seen in the last couple of years. That’s really fueled by the double-digit growth in products and subscriptions. You see the green line here and you see the correlation between the lines when the green line takes up eventually the blue line, the total revenue growth. So, I mean, we are very happy about that trend. We have been investing in it for a long time. And in the last two to three quarters, we are glad that restraint has intensified. How does it go with the different pillars? So, I think the story here is kind of repetitive. In Quantum, we have seen strong product demand from SMB to large enterprises, double-digit growth from the gateways. Let’s look at a few wins. I will actually start from the small gateways here, both for branch offices and also for small businesses. Here are a few examples. A utility company in Europe secured over 6,500 ruggedized gateways for different power stations located all over the country. Another example is a European telco using our products to secure shops across the country, with zero-touch deployment, a very nice type of deployment. A little bit less usual in Europe, another humanitarian organization is using our gateways for a project in Fuji housing. It’s nice to see that our products are used for such purposes and it’s also nice to see that in 2022, one of the first things that refugees get is actually Internet access and even secure internet access. That’s so important. Last but not least, 2,500 gateways in APAC at a big telco using that to manage service for again 2,500 small businesses across the nation, which somewhat represents some of the wins we have in the lower market segment. If you look at the upper end of the market, I picked here two examples. Both of them are new customers. Both of them are competitive replacements. You can see on the right, the healthcare provider in Asia, supporting high capacity to get to 20 sites. They liked our management. We replaced their Fortinet and won against Palo Alto. On the left side, a very similar story, slightly different product sets, super high performance with our Maestro scalable performance. They picked us not just for the performance, although we took Maestro, but because our solution was the only one that blocked the malicious files they were receiving. They were getting malicious files that all the average solutions they tested merely detected but let through. So, people could open the attachment and still be infected, even though the system, in some cases, could recognize them. With Check Point, we were the only solution that actually blocked the malicious files and didn’t let them through. That should be a winning factor to get such installations. This is for Quantum. Let’s look at one or two examples around CloudGuard. Again, here continued growth. In Europe, an important financial institution had a business acquisition. As a result, they were seeking a way to control their more sophisticated cloud environment that spans between AWS, Azure, and Google Cloud. They wanted better compliance, better visibility, and they actually replaced another solution and won this account. Another organization in Europe, a leading retailer, part of our cloud transformation. They wanted to achieve better manageability. They liked our roadmap of how we provide more security to the cloud and another winning factor was the fact that they can connect and control both their on-premise environment and our public cloud solution using the same unified experience and the same tools to connect them in a better way. Last but not least is the Harmony sector, which secures users. Again, we have augmented Harmony with email security towards the end of last year and you see the numbers really accelerated there. They were good before, but even better after the consolidation. Three quarters later, the numbers are still growing very, very nicely with over 50% growth. Here, you can see two examples in the U.S. One is a holding company. They were challenged similar to what we have seen with Quantum before, and that’s the nice thing about Check Point. We apply the same principles and the same technology to different attack vectors of different entrance vectors into organizations. With Harmony email, their old security solution didn’t stop the ransomware attempt. Harmony email identified over 2,800 attacks from their mailboxes and not only identified them but also blocked them. The highest effectiveness of email security packages they had come across. To the right, another major company in the U.S. in the safety and regulatory compliance industry, Harmony was the only solution that was able to deliver a unified experience across email, endpoint, and mobile. In both cases, these were new customers and competitive replacements, which is, in many cases, the best situation. As you can see, we have this winning streak across all product pillars, across all geographies, and across many customer segments. So to summarize the quarter, I think you see that the main theme here was the double-digit growth, the fact that we doubled the revenue growth, and the fact that we had double-digit growth in our products and subscriptions that drives the new business and promotes business growth. We achieved the upper end of our projection on both revenues and EPS – and we also continued to see healthy demand both from Quantum, from small-to-large businesses, and from Harmony and CloudGuard. Overall, I am very pleased with the results this quarter and I hope that we will keep seeing good momentum in the coming quarters. Now, before we open up for questions and answers, let me touch a little bit on the guidance and projections for the next quarter. Our projections for the third quarter, as you can see on the slide, revenues will range from $555 million to $585 million, non-GAAP earnings per share between $1.60 to $1.72, GAAP EPS is expected to be approximately $0.32 less. I always say this caveat: projecting the future is not something given to humankind. I mean, it can be better than what we anticipate or worse. I think overall, we are seeing, on one hand, good execution on the Check Point field side, good enthusiasm from us and our team, and the healthy demand in the marketplace. On the other hand, I think you all know that the economy is showing some signs of softness and there is a lot of uncertainties around that. Some things we see and we know will affect us, like the increase in costs, the fact that the supply chain remains challenging in our regional model. For example, we had predicted that supply chain issues will kind of get solved in the second half of this year and costs will return to normal. Right now, we don’t think it will happen in the next half of the year, and that has an impact on the expense side. The revenues and the business growth side, that’s even less in our control and ability to project. But again, we remain quite positive, and we have actually increased the range for revenue. So, you can see our third-quarter projection is actually better than our original plan and better than what many of you expect based on your current models. So, that’s for the forecast. Tal, do you want to add something on the projections before we open it for questions? You are on mute, Tal?”