- Non-GAAP EPS: $0.43 - 12% growth year over year

Check Point® Software Technologies Ltd. (NASDAQ:CHKP), the worldwide leader in securing the Internet, today announced its financial results for the second quarter ended June 30, 2008.

“Check Point’s success during the quarter is a direct result of effectively executing our Total Security strategy,” said Gil Shwed, chairman and chief executive officer at Check Point. “We have continued to experience strength across our business which is reflected in the double-digit year over year growth in revenue, earnings per share and deferred revenue.”

Financial Highlights for the Second Quarter of 2008:
Total Revenues: $199.6 million, an increase of 13 percent, compared to $176.2 million in the second quarter of 2007. Product and license revenue was $85.0 million, an increase of 16 percent, compared to $73.3 million in the second quarter of 2007.
Net Income – GAAP: $79.2 million, an increase of 14 percent, compared to $69.5 million in the second quarter of 2007. Net income in the second quarter of 2008 includes acquisition-related charges of $8.9 million and equity-based compensation expenses of $8.4 million. Net of taxes, these charges totaled $13.5 million. Net income in the second quarter of 2007 included acquisition-related charges of $10.3 million and equity-based compensation expenses of $8.6 million. Net of taxes these charges totaled $16.2 million.
Net Income – Non-GAAP:1 $92.7 million, an increase of 8 percent, compared to $85.7 million in the second quarter of 2007. Non-GAAP net income excludes equity-based compensation expenses and acquisition-related charges.2
Earnings per Diluted Share – GAAP: $0.36, an increase of 18 percent, compared to $0.31 in the second quarter of 2007. GAAP earnings per diluted share for the second quarter of 2008 included equity-based compensation expenses of $0.04 and acquisition-related charges of $0.05. Net of taxes, these charges totaled $0.07. GAAP earnings per diluted share for the second quarter of 2007 included acquisition-related charges of $0.05 and equity-based compensation expenses of $0.03. Net of taxes these charges totaled $0.07.
Earnings per Diluted Share – Non-GAAP: $0.43, an increase of 12 percent, compared to $0.38 in the second quarter of 2007. Non-GAAP earnings per diluted share exclude equity-based compensation expenses and acquisition-related charges.
Deferred Revenues: As of June 30, 2008, we had deferred revenue of $279.2 million, a $43 million or 18% increase compared to deferred revenues as of June 30, 2007.
Cash Flow: $82.6 million in cash flow from operations and we had $1.34 billion in cash and investments as of June 30, 2008.
Share Repurchase Program: During the second quarter of 2008, Check Point repurchased 2.1 million shares at an approximate cost of $50.0 million.

Business Highlights for the Second Quarter of 2008:

Since April we have expanded and continued to improve the performance of our unified line of security gateways. We introduced the Power-1 appliances, a new line of high-performance security gateways delivering excellent performance of up to 14 Gbps and record price performance at less than $4 per Mbps. In addition, we added five new UTM-1 Total Security appliances, expanded the range of solutions from a sub-five thousand dollar model and up to 4.5 Gbps performance providing our customers with more choices when selecting network security appliances. The new appliances further compliment our Open Choice program which allows customers to choose from a variety of gateway security platforms, including Check Point Power-1 and UTM-1 branded appliances, software on open servers and Check Point software integrated on partner appliances.

We continued to address the growing security needs of our customers utilizing Apple’s Mac OS X and iPhone with the release of Check Point Full Disk Encryption (FDE) for the Mac and VPN-1 support for the iPhone. Our FDE for Mac is the only enterprise full-disk encryption solution with pre-boot authentication available in the market today.

During the second quarter we also received awards from third-party industry organizations including: “Best Enterprise Firewall” from SC Magazine for Check Point VPN-1 Power, “Endpoint Security Product of the Year” from Techworld for Check Point Endpoint Security, “VB100 Award” from Virus Bulletin for ZoneAlarm Internet Security and “Ten Best Web Support Sites” for 2008 from Association of Support Professionals

Mr. Shwed concluded, “I am pleased with our results for the quarter as we have now exceeded our plans for the sixth quarter in a row. During that time we have also expanded and executed our strategy of delivering a comprehensive integrated security solution that includes a unified line of security gateways, a single-agent for endpoint security and a single security management console.”

Conference Call and Webcast Information

Check Point will host a conference call with the investment community on July 22, 2008 at 8:30 AM ET/5:30 AM PT. To listen to the live webcast, please visit Check Point’s website at http://www.checkpoint.com/ir. A replay of the conference call will be available through August 5, 2008 at the company’s website http://www.checkpoint.com/ir or by telephone at +1.800.642.1687 passcode # 54900277.

1 See “Use of Non-GAAP Financial Information” and “Reconciliation of Supplemental Financial Information” below for more information regarding Check Point’s use of non-GAAP measures.

2 “Equity-based compensation expenses” refer to the amortized fair value of all equity based awards granted to employees. “Acquisition-related charges” refer to the impact of the amortization of intangibles.

About Check Point Software Technologies Ltd.

Check Point Software Technologies Ltd. (www.checkpoint.com) is the leader in securing the Internet. Check Point offers total security solutions featuring a unified gateway, single endpoint agent and single management architecture, customized to fit customers’ dynamic business needs. This combination is unique and is a result of our leadership and innovation in the enterprise firewall, personal firewall/endpoint, data security and VPN markets.

Check Point’s award-winning ZoneAlarm solutions protect millions of consumer PCs from hackers, spyware and identity theft. Check Point solutions are sold, integrated and serviced by a network of Check Point partners around the world and its customers include 100 percent of Fortune 100 companies and tens of thousands of businesses and organizations of all sizes.

©2003–2008 Check Point Software Technologies Ltd. All rights reserved.