Greetings. My name is Kipp Emeinser, Global Head of Investor Relations for Check Point Software. I'd like to welcome everyone to the Q1 2021 Financial Results Video Conference. It's an only mode during the formal presentation, which will be followed by a question and answer session. Joining me remotely today on the call are Gil Schwed, Founder and CEO along with our CFO and COO, Tal Payne.
As a reminder, the video conference call is live on our website and recorded for replay. To access the live conference and replay information, please visit the company's website at checkpoint.com. For your convenience, the replay will be available on our website. If you'd like to Before we begin with management's presentation, I'd like to highlight the following. During the course of this presentation, Check Point's representatives may make certain forward looking statements.
These forward looking statements Within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934 include, but are not limited to, statements related to Check Point's expectations regarding business, financial performance and customers the introduction of new products, programs and success of those products and programs, the environment for security threats and trends in the market, our strategy focus areas demand for our solutions, the impact of COVID-nineteen on our business, including our product development, sales, marketing efforts and our financial condition and results of operation, the impact of COVID-nineteen on our customers, suppliers, business partners and macroeconomic environment as a whole and our business and financial outlook, including our guidance for Q2 2021. Because these statements pertain to future events, they are subject to risks and uncertainties. Actual results could differ materially from Check Point's current expectations and beliefs. Factors that could cause or contribute to such differences are contained in Check Point's earnings press release issued on April 26, 2021, which is available on our websites and other factors and risks, including those discussed in Check Point's latest annual report on Form 20 F, which is on file with the SEC.
Check Point assumes no obligation to update information concerning its expectations or belief except as required by law. In our press release, which has been posted on our website, we present GAAP and non GAAP results, along with a reconciliation of such results as well as a presentation of non GAAP information. Now I'd like to turn the call over to Tal Payne for a review of our financial results.
Great. Thank you, Keith. Good morning, good afternoon to everyone joining us on the call today. I'm pleased to begin the review of our Q1 results. Revenues for the quarter increased by 4% to $508,000,000 and our non GAAP EPS grew by 9% to $1.54 Both revenues and EPS are in the upper part of our guidance.
Before I proceed further into the numbers, let me remind you that our GAAP financial results including Stock based compensation charges, amortization of acquired intangible assets and acquisition related expenses as well as the related tax effect. Keep in mind that as applicable non GAAP information is presented excluding these items. Now let's take a look at the financial highlights. Revenues for the quarter reached $508,000,000 $8,000,000 above the midpoint of our guidance. Products and security Subscription revenues were $287,000,000 a 7% increase year over year.
Our security subscription revenues Continue to be the driver of the growth with strong 12% increase year over year, up from 10% before, reaching $177,000,000 Our software update and maintenance revenue increased to $221,000,000 representing 2%, up from 1%. In January, we announced 3 main pillars: Quantum, the most complete network security solution Harmony, driving highest level of security for the remote workforce and CloudGuard family, which drives cloud native security to prevent threats and manage posture across all cloud workloads In a multi cloud environment. Our CloudGuard family continues to show great results with a high digit growth High double digit growth. As customers move to more holistic solution with subscription based pricing like Infinity, CloudGuard and Harmony, More of the business is allocated to subscription and support and less to the product portion. Deferred revenues as of March 31, 2021, reached $1,458,000,000 a growth of $109,000,000 or 8% over March 31, 2020 this quarter.
For all of you that calculate the implied booking, implied booking was 8%. Revenue distribution by geography for the quarter was as follows: 44% of revenues came from Americas 43% of revenues came from Europe, Middle East and Africa region and 13% came from Asia Pacific Middle East AC Pacific, sorry. Our non GAAP operating margin was healthy at 49%. The margin was higher as a result of a higher level of revenues on the one hand And as some expenses remain low due to COVID continued effect worldwide on the other hand. Our financial income for the quarter was $13,000,000 reflecting the reduction in the portfolio yield as a result of the interest rate drop in the U.
S. Last year as we guided. Effective non tax rate for this quarter was 18%, in line with our expectation, which was 17%, 18%. We had some indexation effect this quarter versus the quarter last year. GAAP net income for the quarter was $183,000,000 or $1.33 per diluted share.
Non GAAP net income was $211,000,000 or $1.54 per diluted share, an increase of 9% year over year and towards the high end of our guidance. The accelerated growth is related to the growth in the revenues and the continued reduction in our diluted outstanding share. Moving to our cash flow. Our cash balance for the quarter increased our cash balance increased to 4,000,000,000 And $100,000,000 $4,100,000 Operating cash flow for the quarter increased by 4% to 3.7 $5,000,000 with a strong collection from customers. During the quarter, we continued our buyback program and purchased 2,700,000 shares for $325,000,000 at an average price of $120 per share.
Now let's turn the call over for Gil.
Thank you, Tal, and hello, everyone. I'm pleased to have you. This time, we're going to have a slightly different format As usual, we're moving along to the 21st century. So instead of just talking about our recent comments, I I want to share with you a presentation. And the focus this time won't be just general comment about the quarter, but to Share a little bit more about our strategy, the Infinity 2021, the Check Point is carrying.
There's a lot of slide here that we shared with our customers and partners. So let me jump right in and go ahead with that. Hope it will work well for the first time on an investor call. So let's start with The forward looking statement you heard from Kipp, so we don't need to go through that. So I'll speak a little bit about 3, 4 slides about business highlights, and the main focus here will be About the Infinity strategy, the Check Point and the Check Point strategy around that.
So results, I think you've all heard from Tal. I'm actually quite pleased That we are continuing to execute on our plan, increase the EPS by 9%, increase revenue by 4% And Beedel, and you'll see it later in the presentation and achieved a lot in our strategic area. On the financial side, again, the numbers you heard from Tal, dollars 22 more,000,000 in revenues, dollars 0.12 more in EPS and $109,000,000 Increased in deferred revenues, so we did increase our installed base and our contract long term and short term. A little bit about news from Check Over the past few years, we did restarted the transformation in our sales force, reenergizing. I think we have amazing people, And we want to reenergize and move the sales force to a much more proactive and higher growth mode.
Around 2 years ago, we Started with APAC with Sharath, he's now with us for almost 2 years. And actually, the last few quarters, the results in APAC were amazing. This quarter specifically were very good. About 6 months ago, we had Forstem joining us to run Europe. I think it's too early To say how will it work, but the initial signs are very good.
And again, we had a very decent quarter in Europe. And just today, we have Jeff Joining us to run the Americas, will join whenever he wakes up in the West Coast, and that will be his 1st day today, and we're looking forward for Accelerated growth in America. I think we have plenty of potential in the Americas market. We also held in the Q1 our conferences. Every year, we start with employee and customers and partner conference.
This year was no exception even though we did hold all these conferences in a virtual way in a very different way. I won't share much about the employees and so on, but you can see here the results about the partners and customers. We've much more than doubled the Attendance of customers and partners and that's a great achievement. We got amazing reviews from all the participants about the content, about the ability to participate. So at least the virtual model here generated some positive results for us.
And moving forward, we'll have to find like everything else, the right balance The hybrid model between physical and virtual conferences. So this is a very good one. And by the way, the biggest increase was the customers From the U. S, which is, I think, as I mentioned, the highest potential for us moving forward. So that's a little bit about some of the highlights The Q1, but let me share more about our strategy for 2021.
Again, I won't do the full presentation that we shared with customers and partners that takes a little bit longer, so I'll jump right in without much background. But just to start, we started 20 20 with an amazing architecture, 2021 with the Infinity architecture. This is really, I think, the most Comprehensive set of security technologies that any company has with a unified architecture that combines all the elements Together, and if you look what it means, it's over 80 different products and technologies in all areas of the network, the cloud, the users and access. Our goal is to make that simpler, more accessible, more consolidated and elevate the level of security. So we decided to focus Infinity 2021 on an architecture and 3 pillars, which are far much simpler And we'll elevate the level of security.
So the 3 pillars, and I think Tal already shared, first is quantum, Our network security architecture and later in the presentation, I'll talk, I'll show 2 or 3 slides On every one of the pillars, Quantum to secure the network, CloudGuard to secure the cloud and the new one that we launched In the CPX in February, right after earning call for Q1 is Harmony, then that's something new that focuses about Securing users access, which is especially important in today's hybrid work model. These three pillars, Quantum, CloudGuard and Harmony are based on Are using the Infinity Vision shared management infrastructure with a lot of tools for SOC management, XDR And a lot of our advanced security tools and are all based on the threat cloud, the single infrastructure that collects, analyzes And makes security decision in real time and share them for real time threat prevention across all attack vectors And across all products and technologies, and I think that's the uniqueness of the Check Point architecture. So the architecture now looks much, much simpler. And let me dive right in and speak a little bit about the different elements and what's new in each one of them For 2021.
So Quantum, Quantum is our core business securing the network. It's far more than these appliance gateway Where is the SMB product family, where is the perimeter gateway, where is the data center gateway, where is I think what's unique to Check Point and winning a lot of mindshare During the marketplace and actually a lot of growth is the hyperscaling technology, the Maestro Technology. We have tons of IoT technologies that we've introduced over the last 2 years, and we're introducing more and more to Handle IoT devices and to make the network secure from the malware that they can catch, all of that powered by our unified management And all of that contains more than 60 threat prevention engines that provide the highest level of network security. So that's the overview of the Quantum family. What changed in Q1 in the Quantum family?
So first, we launched a new family called Quantum Spark with our SMB security family based on few existing products, But extending that actually higher to the broadest and the biggest market segment in terms of dollars on the branch office SMB, and again, that's a great place to be. And with models that deliver 2 gigabits per second, I think the highest in vector segment, Very easy to use, very intuitive, set up in a minute or a few minutes on the go management, including mobile app But can give anyone the alerts and the management capabilities. So Quantum Spark has been a great addition to our family. We are updating the management platform for the network Security, the Quantum Smart 1, new set of management appliances that can manage double the number of gateways, almost double the amount of log processing The latest version and last and last least, I talked about Maestro. Maestro actually takes a cluster of gateway Any size and make them behave like 1 virtual gateway actually bringing a lot of benefit.
That means that They can all behave as one but provide resiliency, provide high reliability, provide elasticity. You need more bandwidth, you don't need to buy a new system. You just plug in on the go another one and you get more capacity. So in Maestro, we introduced a new model that pretty much doubled the capacity of the Maestro gateway to 3.2 terabits per second. The previous model High end was 1.5 terabit.
Now it's up to 3.2 terabits per second. I think it's probably the highest performance. And again, that Can scale any security operation to the hyperscaling that Maestro provides. So I think we've had Very nice addition just in the Q1 to Quantum. Remember that last year, last Q2, we introduced a whole new set Of Quantum Appliances that I think resulted in pretty good results so far and actually customers are pretty happy with them and see a lot of performance with them.
So I think we're pretty pleased about that. A few just reminder highlights about What is the Quantum family doing in the marketplace? We are 21 years in the leadership quadrant Of the Gartner Magic Quadrant for network firewalls, I think that's a big achievement keeping the leadership for so many years, and I think we're going. Over the years, more than 60% of the Global 2,000 have purchased Quantum appliances. So again, that's also, I think, On one hand, there's potential to the ones that didn't buy and there's plenty of potential for the ones who did buy to Spend and do more with them.
But I think it has a huge footprint and a huge impact on the world. And if you look at almost every sector, the majority, in some cases, 90 Percent of the leading companies are using the Check Point Quantum family of products. So that's for Quantum and that's our core business. Let's speak a little bit about the Harmony family and that's the newest one. Here that we're actually connecting to a need that emerged Now in the pandemic era, we are seeing that more and more employees are working from mobile devices, are working From the non corporate devices from PCs, personal computers, not the company provided computers.
And on the same time, people work for the office. And the access It's not to a single data center like it used to be in the past. Their access needs to occur to cloud application, to SaaS application, to web application, To the data center, even things that we didn't do before like remote desktop access because we now work On our development or trading or any other environment from home and so on. And we need to secure all this connection and that's a pretty big mess. If you look at the set of technologies that company needs, It's a lot of technologies, technologies for remote connectivity from old VPNs to new SaaS based connection, Technologies for device Pointer to verify that our home computers are working well.
Technologies, of course, The mobile and the endpoint devices from the next generation AV to the traditional one and so on and so forth. This is becoming quite complicated. And if you look at what the company needs to achieve that, it's a combination of a few dozen technologies They don't always work together. And that's the revolution that Harmony provides. 1 Family provides all of that to all users from everywhere to everywhere with the highest level of security.
One solution for the hybrid world. And if 2 years ago, you asked CSOs on their priority and end user security was quite low on the priority list, it did become The number one priority now with the pandemic that we've seen and likely to say that With the hybrid more that we will save and by the way, with the level of the sophistication of attacks that we are seeing in recent months. So that's Harmony combining at least 6 different categories of products. I don't think that anyone can deliver that because this is again dozens of different Technologies, but I think no one else has those technologies except for Check Point. We've built them.
We invested in them over 2 decades and we are now, I think, ready for prime time as the unified platform that will roll into the market gradually. With Harmony, you can see some of the market recognition Harmony is already receiving. AB Test top product in corporate endpoint security. IDC already put that in leader in mobile threat management. By the way, across our competitors, we are the only one that also has anything to do with mobile and we have the best Mobile Device Security Suite here.
And last but not least from last week, which is something we're very proud of, The Mitre in-depth security analysis, we came very, very high on the list with 100% detection. I think that we have the best prevention capabilities here, and I think that's something we should all be proud, way ahead of our Competitors, many of the new emerging one and almost all the traditional competitors in this category. Last but not least, let me run quickly. CloudGuard, CloudGuard is all about Securing the cloud and the cloud again is a pretty big creature. It includes the private cloud.
It includes Things like workloads and containers. It includes, of course, the Google Cloud, the Azure Cloud and, of course, the AWS Cloud. We have one platform that can secure all the cloud, provide highest level of security, connect at all the levels, doing everything from Fixing the cloud and ensuring that you don't make configuration error with cloud security posture management, which I think we have the best. Protecting workloads, for example, serverless, I think we are way ahead of everything else. Network threat prevention in the cloud, Everything that has to do with the cloud, I think we are evolving these platforms, but I think we already have the broadest platform for cloud security.
And this quarter, what we've added in the CloudGuard family is what we call the CloudGuard UpSec, which is Sort of, but again, very, very advanced next generation WAF or web application firewall. But this time, it's not just protecting the web servers, which are important by themselves, the interconnection between cloud application, the different APIs that work on the web and connect them. It's using a new, What we call contextual AI architecture, which means that customers can put it in prevent mode, again, sounds obvious, but Most of these technologies in the marketplace are not working in prevent mode. They're working in detection only, which as you know, our religion is everything needs to be prevention. Very quick deployment.
You can measure it in hours instead of months. And as you can see, I think we are Starting to see the results even though which is very, very new. Few highlights about our cloud, that's not just the CloudGuard, AppSec, but our CloudGuard family in general, this quarter we had a 50% increase in ARR compared to a year ago, And we had very, very good internal foundation for the CloudGuard family. I think we have one of the largest installed bases for the CloudGuard Family, over 4,000 customers protect their cloud with CloudGuard and 1 in 5 of the Global 2,000 is already a CloudGuard customer. So we're very proud of that achievement.
We have plenty of potential here to grow, but I think we have one of the most advanced and most Successful cloud security businesses today in the marketplace. So altogether, this creates the new Infinity Quantum CloudGuard, Infinity Vision, the foundation for advanced security analysis and management and the threat cloud In the middle. That's the Infinity 2021. We are big believers in that. But before I go to the summary and finish, I want to challenge myself And maybe the marketplace in terms of is there another way?
We need let's remember, we need to secure this new world when People are everywhere, data is everywhere, digital transformation to the cloud is there. We need to fight the cyber pandemic. And in the last few months, we've seen Emergency in what we call Gen 5 secondurity attacks. If you remember, we've been speaking about the 5th generation of cyber attacks for almost 2 years And it's now a reality, not a reality that happens once a year, a reality that happens every week and new Gen 5 sophisticated attacks that threatens our Fundamentals of the network. So what's the way to secure against that?
Is there another way beyond Infinity? So if you're a customer and you can try and build your own security stack, I will have a simplified version here, but this is how it will look like. You need to choose the different network vendors, network firewalls, advanced threat prevention, IoT and OT and several more categories, maybe even 2 platforms to manage that. Cloud security, plenty of alternatives, how to secure workloads, how to secure applications on the cloud, how to secure the cloud infrastructure, How to do the cloud posture management, and you'll need to select the right vendor. Then on the users and access, Endpoint security, mobile security, remote access and SASE security, and you need to take all these elements and start connecting them.
And guess what? It doesn't work. We don't connect well. It's not just the work of getting Pushing is very, very hard and the deployment is complicated, but they don't work together. And what you'll end up, if I'll compare it to my analogy here is, Which car should I buy?
You'll buy a lot of nice cool cars, but what you'll end up is a big, big traffic jam. They will all each one will go to a different direction and you won't necessarily achieve the level of security that you want. It won't fly. So this is the analogy of building your own stack, what it will be like to build it with the new Infinity 2021. I Think the analogy is much better.
Quantum, CloudGuard, Harmony, I believe it's like free supercars. Each one of them excels In this category, they all drive together, they all drive the highway and they will take us to the security of the future of what we need. This is the difference between Infinity and Building Your Own. So to summarize, I believe that we started the year with a strong Q1 with good financial results, revenues and EPS towards the high end of our range, Good momentum in Europe, excellent result in Asia and not less important, double digit growth, CloudGuard, Harmony and even more on the Total Infinity platform. On the same time, we're in the new world.
There are new opportunities, and I believe that we have the right platform to build the best security for the future of the marketplace and secure All your organization and every organization around the world is Harmony, CloudGuard and Quantum. So I think that There's plenty of potential ahead of us. There's plenty for us to do. And I think we will continue to lead with the highest level of security as being found in every Almost every industry benchmark that checks that. Thank you very much.
And Actually, I want to open it for your Q and A. But before I open to Q and A, it's actually also a good time to speak about our projection for the Q2. You know my regular caveats for let me stop the sharing. You know my regular caveats about projections and forecasts, Very challenging. There's always a high level of uncertainty.
Results can be better, results can be worse. But still we are doing our best to collect the information that we have around the market. And our forecast for the Q2, with that being said, Revenues are expected to be in the range of $510,000,000 to $535,000,000 and non GAAP EPS in the range of 1.50 $1.60 So again, dollars 5.10 to $5.35 million for the revenues and $1.50 to $1.60 for 2nd quarter EPS. GAAP EPS is expected to be approximately $0.22 lower than that. So with that in mind, I hope You've learned something from the presentation, and I hope you like our vision.
I know that it works. And I'd love to open the call for your Q and A for your questions. Thank you.
Thank you, Gil. Before we begin with the Q and A session, due to time constraints and the consideration of other participants, Please limit yourself to 1 question and one question only. If you have any difficulties, just type that question into the chat. Today, we're going to start with Matthew Hedberg from RBC, followed on by Greg Moskowitz of Mizuho. Go ahead, Matthew.
Mr. Hedberg, unmute yourself. All right. Let's move on to Greg Moskowitz from Mizuho.
Hey, thanks, Kipp. Hi, everybody. So Gil, you mentioned that 60% of the Global 2,000 have bought Quantum. But my question is, how significantly do you think that you can cross sell CloudGuard and or Harmony into your enterprise installed base? Because If you can do that, clearly, it can drive expansion rates quite a bit higher.
I think there's opportunities on both sides. And yes, I think we can leverage it. We've actually, by the way, divided now some our installed base into 3 categories, what we think are developed accounts, which are buying their fair share, but Almost all of them can buy some of the new technologies, the Harmony and the CloudGuard and what we call development accounts, that accounts that Purchased Check Point product and are good customers, but there's plenty of potential on all three pillars and what we call prospects and these are accounts that are Either very small ones or non accounts at this moment, then we can develop them. I think the potential is there. I think we need to invest a lot in getting higher in the organization and get I think the CISOs loves to hear our story.
In my experience, almost every CISO Likes Check Point and likes to hear about our story. We need to develop a lot of our own cut on discipline in going to that and not being Doing a good job with the people that we already work with at the network level and not expanding. So the potential is there. And by the way, we're seeing more and more in that. We've actually seen very good growth in the Infinity platform when we sell customer not just individual product, But the entire platform.
And generally speaking, the Infinity customers are showing high level of satisfaction. They like the fact that they can buy more than pillars and we're building more we're building more and more Infinity program to address them and let customers expand.
Okay. That's helpful. Thank you.
Our next question is with Patrick Coldwell. Patrick?
Hey, thank you so much for taking the time to answer my question. So the one I have here is around, I guess, the go to market. You got these 3 new pillars Quantum, Harmony and CloudGuard. Is so how are the sales Team incentivized to sell these products. I mean, is there a change versus the kind of previous motion of selling them individually?
Just kind of any color there would be I'm very grateful.
The fact that we've consolidated them around with pre pillars give us a lot of ability to manage it better. Each one of them, I mean, The Harmony and the CloudGuard, what we call an overlay sales force that supports the sales team, that provides the technical expertise. So getting into new technologies becomes a little bit easier for the sales force. The existing sales force has very clear measurements about what's their target in each pillar and what we need to do. And I think the main issue is really be our own education and our own openness about Being out there and being assert it's not aggressive, it's being assertive enough and expanding our presence With existing customers and with new customers.
And I think it's there and we are seeing now in some areas and Some sales people have already cracked the code and they're doing great and many, many others have the potential to learn how to do that.
And Patrick, to your question, of course, What Gil said is the important part, but of course also the commission plan is aligned with these incentives to sell more than new dollars, the new customers, the new cloud and So it's aligned also with the compensation plan around it.
So just clarification, did you say there's an overlay sales team for You said that, was that correct?
Yes. For CloudGuard and for Harmony. And again, now that we've combined a lot of technologies makes things very, very focused. It's Not now an overlay for specific technology or an expert, but the overlays are organized according to these pillars.
Thanks, Patrick. Our next question is with Jonathan Ho followed by Fatima Boolani and Keith Weiss. Go, John.
Hi. Good morning. I just wanted to get a sense of what you think maybe Jeff can bring to the Americas Market, that could reaccelerate the growth there. And what changes did Thorsten make in Europe that maybe had a similar impact in EMEA in the past couple of quarters. Thank you.
First, I would like to share all our tactics and secrets inside, so I'll Right, briefly touch on that. I think Jeff brings I mean Jeff is a very good fit because he's more than just leading sales forces. He dealt With many, many other professions and I would say more a little bit more sophisticated than the typical sales leads because we come from different backgrounds. You came from VMware where we built the cloud overlay and the cloud business. So I think if we look to focus on the cloud, It definitely brings the expertise and the understanding about penetrating new markets, understanding the cloud and having all the contacts and the relationship, Whether it's the cloud customers or the cloud partners.
So I think that has a huge value to the scheme. And a little bit about Torten. As I said, I think we are very enthusiastic about what we see in Europe, but I think 1.5 quarters is still too early To judge, so I don't want to be carried away. But I think Torsten gave us a lot of good insight for somebody that comes from the outside. A lot of it is the focus that our people should pay to focus on new business.
A lot of times, big huge part of our business is the renewal business, Renewal of support contract, renewal of this advanced security subscription contract. And the sales people are doing a great job serving their customers, which is obviously very, very Thorsten? I think Thorsten brought a lot of the thought that it's really, really important to, of course, keep your customers happy, But focus about what's new business. And now the way we look at that in many cases for the sales guys, How many it's not just what's your total pipeline and your total bill size, what's the how many new opportunities do you have? New, by the way, with existing And we view customers equally, but still new is not just renewing the old contracts or expanding it by a little bit, but about Providing more security and doing more for the customer and winning new projects.
And I think that's the big focus that we have right now. And I think when people start to focus on that and internalize that, they'll focus on the right thing. If we take good care of the customers, the renewals will happen. It's not the focus should be on how do we expand.
Thank you, Jonathan. Our next question is from Fatima Boolani followed by Keith Weiss and Saket Kalia.
Good morning. Thank you for taking the questions. Tal, this one is for you. I want to focus on the deferred revenue specifically. And just A 2 part question.
Can you talk to us about some of the drivers and factors behind the acceleration in the long term mix This quarter and to the extent there was anything unique or one time in nature? And also maybe Bigger picture in terms of the deferred revenue mix, especially as you see the Infinity business build very quickly. Can you The mix of the deferred revenue today between subscription revenue or blade revenue versus traditional maintenance, that detail would be very helpful. Thank you.
Well, the first one is easy. If long term increases because we get more long term contract that you can invoice. So it really depends And that's why I always when people ask me why we don't provide billing, I said because of that. You can't really predict that. So it really depends many times on customer budgets.
Sometimes they want to Pay the whole 3 years in advance if they make a long term contract, so you invoice for it and then you will see it in deferred revenues. And sometimes it's 3 year contract, but paid annually. So you will see only the 1st year in the short term, which means that this quarter specifically you had some that Also wanted to pay in advance and therefore you see it in the long term because we have to invoice. So you see it in the long It doesn't mean that the total is different. So I think when you look at the big picture, it's still reflecting, it's in line with what you expect.
So some quarters, it can be affected By a large deal, there wasn't a huge deal here. It was a few deals that were healthy and good and also been invoiced. That's all. Your second question about the mix, so actually in the annual report, we provide the split between the product support and subscription, the deferred revenues. So in general, I would say I don't expect a major change this quarter.
It's very similar. On the bigger picture, I would say we see subscription growing, of course, faster. Product is quite small because typically majority of it is recognized in the same quarter except for things that depend on other items and therefore you wait, But majority of it is the subscription. And the support is typically in line with what you see in the revenues. So the acceleration that you see is typically in the subscription.
Very helpful. Thank you, Hal.
Thanks Fatima. Our next call our next question is coming from Keith Weiss followed by Saket Kalia and Rob Owens.
Excellent. Thank you guys for taking the question. I want to talk about sort of the breadth of the product portfolio. You guys have a really Nice breadth of solutions. And some of the numbers being presented at that CloudGuard 50% plus ARR growth is very striking.
Any chance we could get a kind of breakout of the relative sizing of these businesses of Quantum, Harmony versus CloudGuard of kind of how they fit within the overall Portfolio, number 1. And number 2, maybe you could talk a little bit about the upsell potential into the base. How far into the base have we gotten with Some of the newer stuff like CloudGuard and Harmony. And what's the opportunity on a go forward basis to get existing customers to take on more of this portfolio? Thank you.
So I'll start from the second part and Tal maybe will expand a little bit more on the financial side. I think the potential is definitely there, and I think customers love that and there's a lot of value. It's not just the value Of being a customer of 1 company is the fact that things connect. And I think that's what we have to sometimes educate the customers about the fact that Having different silos in cybersecurity usually means systems that are not just more complicated, but systems that don't Provide the high enough level of security because it's now if I got the system that analyzes that, that you got an infected file, The job of security now is just not just to block that file. By the way, pretty much all of our competitors, if you receive an infected And file by email, which is the number one vector, you will receive the file and later on, you will file that you've been infected.
Our job is blocking what we do, which is unique And then make sure that this file doesn't go and doesn't exist on any of the other vectors. So you can download it through the web. If it exists on any endpoint, we recognize that because we found it wise and we can deal with it everywhere. So yes, the potential is there to sell it to more customers. We do have several,000, I've quoted over 4,000 customers, for example, for CloudGuard, and most of these have been Quantum customers before.
There's few with Teben. So I mean the entrance sometimes is also from the other direction, but we get new customers with CloudGuard or Harmony and then they adopt our Quantum family, but most of it is our installed base that's being opened up to learn more about the Check Point vision here. Numbers, Tal, do you want to give some color on that?
I think I'll say first, I want to refer to your dress code. I think there's a change from you working Okay. That's all good for you.
I have the Gilsuite T shirt on there. It's the official black T shirt
of Check Point conference call.
Yes, okay. I will say the following. The potential is huge because Gil I don't want to provide additional information to what Gil shows on Slide, but when Gil was referring to out of the Global 2,000 in the cloud, I think you said 1 out of 5. So it shows 1 out of 5 already purchased from us that solution. There's a huge potential because on the one hand, it's very early days, both in Harmony and the cloud.
I will even say in Quantum, if you look at the Sunblast, which is Advanced Threat Protection, even that didn't pass the 50%. So the potential to upsell is massive in all of these pillars, both in the Quantum in the cloud and in the Harmony, all of them need it. And Infinity gives them, I'll say, the best tool to do it. How quick it will happen? It's really up to us and Execution of the field.
So the potential is very large there.
Excellent. Thank you so much, guys.
Thank you, Grizzly Adam. Our next caller is Saket Kalia, followed by Rob Owens and Gray Powell.
Okay, great.
Can you hear me okay, Kipp?
Yes, we can.
Okay, excellent. All right. Thanks folks for taking my question here. I'll just keep it to one housekeeping question. Gil or Tal, thanks for the Q2 guide.
Apologies if I missed it, but did we mention anything about the full year guide? And are there any assumptions about the full year that have changed from the last time that you provided that?
As far as I'm concerned, no, it stays the same. If you remember when we talked in the beginning of the year about the margin that we said about the fact that We expect the world to come out of COVID. In Q1, it's still different. So it was slightly better as a result of that, but nothing dramatic because we already embedded in Plan proportionally. And when you think year over year from the next quarter, last year is fully under COVID.
Therefore, In the next quarter, we expect to be in line with the margin that we did indicate, which is we're returning to COVID to out of COVID over time, While the comparable have full effect of COVID saving in the expenses. So we're pretty much in line and you can see those in our guidance for next quarter.
Got it. Very helpful, Tal. Thanks.
Thanks, Saket. Our next caller is Rob Owens followed by Gray Powell and Ben Bollin.
Thanks, Kipp, and good afternoon, guys. In and around Infinity 2021, just wanted to get your thoughts around marketing spend And whether you would lean into this with incremental programs, MDF or anything of the like? And then Tal, you kind of answered it before, but relative to A reopening, how are you thinking about spend and timing?
So first, we are trying to be as aggressive as we In marketing, we're also trying to be smart because the most important thing is to touch customers And get their attention, not just to get there. Now there's a lot of nice achievements in terms of power marketing. For example, you've seen the reach of our virtual conferences. We had the great increase in participants and met again after, if you remember last Q2 or Q3, we were all locked at home. People didn't have I mean, the only way to connect to the world was participating in some conferences, that's passed.
Now that we get people to attend Conference, that means that we are really interested and it's important and we love the fact that more customers are now participating in our virtual CPXs, for example. There's a lot of other achievements that we have even we have continued to maintain C level forums, which is by the way, Again, it's a great way to create a community that we need to expand and it's going very well in getting to C level. We've really, really improved our which it's actually not just we improved. The level of interest that customers have in our technology, You go to Google. We are now on the first or even position 0 in many cases On most of the keywords that you search, search for cloud security or number 1 on the search.
Search for Cyber attacks, we are also, I think, I believe it's changing all the time position 0 on cyber attacks. 0 is even before the first search, its explanation of the term. So we are getting the mind share and again look at many of these cyber attack, Cloud security, network security, endpoint security, we're number 1 or number 0 in Google In almost all these Google searches, I think that drives more traffic to our site. So I think we're making a lot of progress on almost everything. The SEO part, I just say, by the way, we're very proud of because that means that the content we provide to the world is being recognized.
And maybe I will just add that I think the main remember, majority of our expenses are really in the headcount or in our people. There, we would like to see an accelerated growth in the headcount. We want more people, so we're working on that. So to your question, Rob, More people, more expenses. He's part of our plan and guide, but that's what we're aiming for.
That's the main one. More marketing, of course, if it's good, we would love to, but the main focus is headcount, headcount, headcount now. And also When you relate to the return to normal, T and E is very hard to know how it will return because I think many people realize that it can be very productive also without The flights. So how much will return in 20%, in 50% in 70%, it's a bit early to say. My intuition is this won't grow all the way back to 100%.
Will it be 50 or 60 or 70? I really don't know. We would need to go out like the rest of the world and see what is needed and what's best serve our customers and employees.
All right. Thank you.
Thanks, Rob. Our next call our next question is coming from Gray Powell followed by Ben Bollin and Brian Essex.
Hey, great. Thanks. Can you hear me okay?
Yes.
Yes.
Cool. Yes. So I guess how should we think about the mix of product revenue Description trends within the context of guidance this year. And then and I think you hit on this in the prepared remarks, but is there anything Going on like a shift towards Infinity or bundled offerings that could impact that mix and cause product revenue to be recognized More rapidly.
So I'll say it's really in line with what I said in the script. It's a great question. It's something that we're dealing with for the last few years As the rest of the world, when more and more people moving into subscription model, I think Infinity is full subscription, although it provides Product and support and subscription, and it is full subscription in terms of the pricing model, the same with Harmony, the same with Cloud. So if somebody buys just the appliance, then it's a product. So of course, the product line for the last few years is under pressure.
It's not surprising. It can have shifts. You can see some quarters it's better than the other. But in general, we always look at the total. As I keep saying, look at the total growth.
Subscription takes longer to get into the P and L, but it's over time you see it also in the profit and loss report. You see the subscription ticked up This quarter, which is nice to see, I think it was 10% moving up to 12%. We also had a pickup in support Coming from a lot from the professional service, which more customers also need as they implement more robust solutions. So my intuition, I can't guarantee, But I first recommend look at the total picture and not only on the product stand alone because product can be plus 2% or minus 3% or Anyway, it depends how bundled it is. The more bundled they went, the more pressure it will put on the product line.
Understood. Okay. Thank you very much.
Thanks, Gray. Our next call our next question is coming from Ben Bollin followed by Brian Essex and Sterling Audi, which will most likely be our last question for the day. Go ahead, Ben.
Good morning. Good afternoon. Thanks for taking the question. Fairly specific, but I'm interested, if you've seen or you're thinking about component availability concerns for your appliances, Did you have free availability throughout the quarter? Or are you anticipating any tightness as you look forward?
That's it.
So actually, since COVID started, you have that, meaning every quarter is something else that has an allocation issues. We dealt with all of them very well. Also the recent one, we're dealing very well. I hope it won't develop to be bigger, but we are so far in line with our planning and expectation. By the way, there can be some increase in pricing, but nothing that will be very apparent to you.
So but some components prices are moving up as a result of allocation. It's all around the market.
All right. Thanks, Ben. Our next call our next question is coming from Brian Essex. Hey, Brian.
Hey, Kipp. Thank you. Gil, just a first question for you and then I have a follow-up. You mentioned that you wanted to move your sales Force into a more proactive high growth mode. I mean, if you take a step back, what are your expectations For high growth mode, so to speak.
And what might that translate to for revenue growth as you consider where Some of the core maintenance and potential appliance revenue may track over the next few years versus Some of the newer initiatives that you have driving subscription growth. What like if you had to set a range like, I would like Check Point to be like this level of growth, That's my goal. How would you frame that?
So first, the market will change over the next few years, and we want to grow at least with the industry and maybe faster. But this year, I'll share with you some internal. I hope Tal wasn't mad at me, but we have a very clear goal for salespeople. They need to grow the new business That we generate by 20%. That's the overall overarching target.
Again, it may be a few variances depending on the salesperson, but that's the overall goal Every salesperson. Now again, it depends on the mix. And over the years, if the new business is growing by 20%, It will follow the rest the subscription will eventually follow that. And the new business, by the way, is everything. It includes the new subscription, new support, New products, new everything.
So but the focus, grow the new business by 20% for the entire sales force. And I think I don't know what will be the target for 2022 or 2023, that depends on market, but at least this year, that's the target.
Great. That's super helpful. And maybe just a follow-up. You obviously have some fantastic domain expertise around threat intelligence and research. And we're seeing some of your peers kind of work towards maybe establishing a practice around that, monetizing that.
How do you think about potentially Enhancing the monetization of that threat intelligence and domain expertise in the future.
First, it's an excellent set point, and I think we've started Thinking about it long ago, we've actually, by the way, did few projects or are doing few projects on that level which are kind of more Boutique projects of let's say, I'll give you an example, looking at the company up So when we have applications and analyzing all these applications with our dedicated tools. So it's actually several Projects that we are doing in the domain, I can't reveal to whom. We have a very good incident response team That exists for many, many years and again has a lot of work these days with all the new supply chain attacks and I think they have amazing tools to provide that. Still most of our research today is around finding the things that are common with the world. You see we have almost 100 publications from our incident response team over the last Here, we found some unbelievable vulnerabilities like last summer, there was I mean, we found even many more, but One that got like 10 out of 10 score would be Microsoft Exchange or not Exchange, sorry, The Active Directory one that showed how you can get into the DNS server, the Win DNS server and get into Active Directory.
So I mean, this is an interesting area for us. But I think keeping that not just as for hire, but keeping the research, the openness is also very important Aspect which we intend to keep.
Helpful. Thank you.
Thanks, Brian. Our last question is going to come from Sterling Auty from JPMorgan. Hey, Sterling.
Hey, guys. Thanks. Appreciate it. So the changes that are taking place here in North America, you mentioned Mr. Waters' first day, But I think there may have been 1 or 2 other changes as well.
I'm just wondering how much disruption did that cause to the quarter looking at the results in the Americas? And How do you anticipate trying to minimize any disruption as you go through kind of this sales transition in North America?
I think we have first, I think overall, if I'll just say again, I don't want to provide too much Inside the data, but I think in general what we've seen is that the level of attrition in Check Point in general is Quite stable. There was a decline in attrition 2nd and third quarter last year due to the corona, but the market pretty much Got back to the old mode and the usual mode. I think we have some people that we don't like to lose that are excellent people. Remember, our industry is very hot. Companies are raising tons of money and many people are looking for the opportunity, whether it's in another large company.
And In many cases, in some hot startup when they have a dream about being part of the next unicorn, Some of it is unwanted, the undesired. And some of it is desired because there are people that we again, we have a lot of very, very good people. So I don't easily let go of anyone. But some people, it is time to refresh and take a new look, a New view of the world, even for people that contributed very well to Check Point. So I think overall, we have a good level of change.
I think initially, we will I will expect more change because we need that change. But long term, we definitely want to keep our good people, and I think We do bring some good new leadership that will bring new ways of managing and thinking and so on. Thank you.
Thank you, guys. Thank you for all of you joining us today. Later, we'll have the presentation posted on the website for any of you that like to download it and review it further. Other than that, we look forward to seeing you during the quarter at the conferences and look forward to next quarter's earnings call. Thank you, guys.
Yes. And I'll appreciate if you have any feedbacks on the presentation. We will appreciate to get it and get better.
On the format on the call, we'd love to hear your feedback as well. Thank you. Thank you.
Bye bye.
Have a nice day.