Excellent. Welcome back, everybody. I'm Brad Zelnick with the software team at Deutsche Bank, hosting this session here at this year's tech conference in sunny Las Vegas, Nevada, with none other than Check Point Software Technologies. Check Point Software, I feel like you guys.
Check Point Software Technologies. Yeah.
Check Point Software Technologies.
Yeah.
Affectionately known as Check Point, even though I've been covering the stock for, I don't know, well over a decade.
Something like that.
It's good to keep that lined up. Really privileged to be joined by the company's Chief Commercial Officer, Rupal Hollenbeck.
That's it.
Thank you so much for joining us.
Thank you.
Global Head of Investor Relations, Mr. Kip Meintzer.
Thank you.
Before we kick off, the format of this is gonna be a fireside chat, and we're gonna hopefully get into it, learn a lot of interesting things about Rupal and her perspective on Check Point. But Kip, why don't you just for-
The safe harbor, you want me to do that?
I like the way you do it, Kip.
I appreciate that. During the course of this presentation, Check Point's representatives may make forward-looking statements that are covered by the safe harbor of the Securities and Exchange Acts of the early 1900s. As with all forward-looking statements, there are risks and uncertainties. If you'd really like an extensive list, check out our 20-F or our latest earnings release. With that, I'll toss it back to you, Brad.
Thank you. Kip, that was excellent. Really well.
Thank you.
Really well done. If I start asking you the wrong questions that I had prepared for the other company, that wouldn't be a-
I'll let you know.
That wouldn't be a good start.
I'll be sure to let you know, though.
Okay, cool. Rupal, congrats on your recent appointment at Check Point.
Thank you.
Can you just share with us your role and responsibilities and perhaps as well, you know, having spent time in key roles at leading companies like Intel and Oracle, and even the perspective that you bring from having served on the board of Check Point prior to stepping into this role, what's the opportunity that you see ahead?
Wonderful. Well, again, thanks for having me.
Sure.
You've just encapsulated my career beautifully. You know, I've been in tech for a number of years. The first 23 of those years were at Intel, two at Oracle. Spent a little bit of time at a small artificial intelligence startup, at about the same time that I joined the board of Check Point. I joined the board of Check Point because what I saw was a company that was well on its way to transforming. Certainly transformations are journeys. What I saw on the board is a company that was in the middle of significant technology expansion and was now in need of a commercial voice to sit on the board and help hold the management team accountable for the commercial transformation that follows a technology transformation to be able to accelerate growth.
After almost a year and a half on the board, what we decided, for a number of reasons, is that the company needed a commercial leader at the helm to bring together different elements of the customer journey. After almost a year and a half on the board, I decided to get on the inside, and so I sort of feel like I feel very fortunate because I've been able to craft a plan directionally with fellow board members on the commercial needs of the company moving forward. Then I sort of walked around to the other side of the table and received that direction, and now get to be involved in the implementation of it. I think that I'm really fortunate for that reason, having been a part of crafting that plan.
That's actually a unique fact pattern, and I'm really looking forward to seeing how this all kind of proceeds and just having been a student at Check Point for so long. It represents a really auspicious start, which is awesome. Maybe just to reflect on the investor perception of Check Point, you know, as a company, I think it's generally viewed as a company that's ultra-conservative, maybe even a little too set in its ways, if I'm being honest. I guess I would just ask you, from your perspective, why is that unfair? Maybe why has that changed or why might that change going forward?
Yeah. Well, first I wanna unpack the term ultra-conservative.
Okay.
Do I think the term ultra-conservative is unfair? It depends on what you're talking about. By and large, yes, I think it is a bit unfair. Let me tell you, let me give that a little bit more perspective. Do I believe that our company is conservative? Yes, I do. If conservative amounts to fiscally responsible and extremely well-tuned to shareholder value and to our employees. We are accountable to our employees and we're accountable to shareholders. We take that responsibility very seriously, and we operate in a fiscally conservative manner. Having said that, to say that we're an ultra-conservative company, I think misses the boat in a lot of areas. The first area is in the very significant transformation we've made as a technology provider.
If you've looked at our 29-year history, you'll see relatively conservative moves up until the last decade in technology advancement through acquisitions, M&A, partnerships. In the last decade, we've taken all of our organic growth and innovation, and we've added to it a pretty significant layer of M&A and go-to-market partnerships that have helped us forge a new roadmap that's really predicated on three very, very important pillars of cybersecurity. I think we've taken a conservative view towards our balance sheet, towards our earnings, and towards our responsibility to investors, and we've translated that in these times to some pretty significant acquisitions.
As a board member, I had the opportunity to be a part of some of those decisions and the four or five acquisitions that happened over the time that I was on the board. Those were really exciting acquisitions that have added significantly to our portfolio in new areas. I think the last of which was the acquisition of Avanan, which is now a part of our Harmony portfolio in the form of Harmony Email. Some wonderful go-to-market boosts and technology boosts that are now rounding out our portfolio nicely. The opportunity we have now is to have our commercial bold moves match our technology bold moves.
Got it. That makes a lot of sense. Maybe just to switch topics.
Yeah.
You're located here in the U.S.
I am.
I think there's also been a perception, maybe a reality that the locus of control, the axis of power. Check Point at the end of the day is an Israeli company, right? So having somebody at your level, at the C-level in the organization sitting here, I don't wanna say it's completely unprecedented, I'm sure I'll be wrong. But you know, it's definitely something to take note of. I think something that Gil and Tal have referenced as well in just great anticipation for what you're gonna be able to achieve here. Stakes are high. We're all count-
No pressure.
We're all counting on you. No pressure, exactly. Let's talk about the U.S.
Yeah.
The U.S. business has historically lagged versus the overall business. What is the key reason for this? Now that you're on board and based here, I'm hoping this should help change things. How do you plan on revitalizing the U.S. market for Check Point?
Okay. Two sides. Let me first respond to your comments about having a member of the executive team here in the US. We have had members of the executive team here in the US. It's been some time. For the last several years, our executive team has been based in Tel Aviv exclusively. That's changed now. I'm thrilled. I'm thrilled to be based in the US and a member of this important Israeli company. I think the spirit of innovation and what Israel brings to cybersecurity is just so significant it can't be ignored.
Having someone in my role based in the United States, I think is also very strategically significant because of the balance of our business and just how much of our business is centered in the Americas, and in Europe. That's exciting. Yes, I am based in San Carlos, our U.S. headquarters. I'm actually based on an airplane somewhere, in between here in Tel Aviv, or in parts in between. I think this is important for a reason. I think that one of the things I bring to the table is not the fact that I'm located in the U.S., but more my global experience. I actually spent 10 years living in Singapore, five years living in China. I've lived in Japan. I work and live in the United States now.
The thing that I really hope to bring and continue to bring every day to the conversation is a global perspective of the markets we serve. It's not to say that that doesn't exist in Tel Aviv, but having someone at sort of the outpost in California, as I call it, is actually a wonderful way to continue to bring that customer perspective and voice of the market on a daily basis back to Tel Aviv. It's been wonderful. We operate as a great collaborative global unit. Now, to your question on the United States. The Americas have been for the last decade or so, going through some ups and downs. My being here hasn't changed that as much as our fortification and commitment to the market.
What I will tell you is, while I was a member of the board, I had the opportunity to help interview and hire for a president of the Americas sales region. It was so important to us that the board of directors actually got involved. That is a testament to just how important the market is. We brought on board a great President of Americas Sales, Geoff Waters. He's been in the role now for a little bit over a year, and we are seeing the fruits of his labor, and we are seeing the fruits of his leadership. That coupled with our headquarters team's continued investment in the market has really been the magic. I would say it's a combination of leadership and investment.
That investment has been to the tune of approximately a 25% increase in our sales force, the size of our sales force in the Americas. That's not just a U.S. comment, it's actually a global comment, and we are realizing that in the Americas. Our workforce is stronger than ever. We've got some wonderful talent that's coming from different places, not only from the network security game, but from the cloud game, from the remote access and IoT game, and it's giving us a really nice diversity of talent. Geoff's leadership and what he's been able to accomplish in the last year.
What I hope to do now, and it's been about six months for me, but as I join forces with Geoff and the Americas team, I hope to be able to spend a lot of time with customers in this part of the world. I've been doing just that.
Thank you for that. That's a great lead into my next question.
Okay.
In my observation over the years, to the extent that Check Point might have underperformed peers, in my own perspective, and I think shared by others, it was never about the technology. I think, again, one person's opinion.
Yeah
is that the company was outmarketed and outsold. I don't know if you would agree or disagree with that or maybe to some extent, but I would love to hear your perspective in your role as chief commercial officer that, you know, if we're gonna isolate go-to-market, what really do you see as. It's never gonna be any one thing, but, like, from the top down, what are your impressions and what's on your agenda to help make that change.
Yeah
Just to ensure that this great technology, this great product, this great company is being properly represented through the channel and in the face of customers.
I love the way you ask that question, because that's exactly it. We are a company that is just. It is built on and, yeah, I'm a little biased, but built on some amazing technology. The wonderful bits of our legacy are going to propel us into the future and our, as are our investments, the combination of organic and inorganic, innovation. When you have amazing technology, when you're, when the biggest challenges you have are in go-to-market, there's just nothing but opportunity in front of you, right? First I wanna. So what am I gonna be focused on? What's my mandate? Well, if you think about what my role is, which I didn't mention earlier, it's pre-sales and sales, the entire sales cycle.
It is marketing, all aspects of marketing from corporate fields to product marketing, product positioning, and telling the corporate story. It's also customer success, and how we are invested in the success of our customers from the beginning to the very end, and in the expansion into new technologies. What we've done in this organization is we've actually strung together every organization that is responsible for an aspect of the customer's journey. That in and of itself, I think, is a very powerful tool towards enabling accelerated growth. What are the things that I'm focused on? There are four that I think about every day. The first is intimacy at our enterprise customers. We're not, and I say this often, we're not sort of your dad's firewall company.
We are the cybersecurity partner for the enterprise in the future. To be that full service cybersecurity partner for the enterprise, you have to establish a level of trusted advisorship at folks inside the enterprise who we haven't historically had a relationship with, right? As we expand our portfolio from network security, we fortify and continue to innovate there. We build our CloudGuard portfolio to secure the internet, secure the cloud. We build our Harmony portfolio to be able to secure the end user and access. We take those three, and that involves a much greater level of intimacy at the enterprise to the extent that we have all the tools at our disposal to now be seen as a trusted advisor to the CISO.
That is a very important mandate for me, specifically, as I think about how to enable that and continue that enterprise intimacy at a much broader level. Second area I think about is our partners. We are 100% channel go-to-market. Our model, we don't go around or undermine our channel partners. 100% of our business is through channel partners. As such, it's important for us to constantly reset and constantly think about what is gonna bring value to our partners, so together we win in the marketplace. How do we address new types of partners? Because business models are evolving.
The second area that I'm focused on is kind of the reset, recalibration, and focus on our channel partners and what channel partners mean for our future, because they mean something different for our future than they have in our past. The third area that I think about is the combination of sales and marketing, the integration of sales and marketing. We have had. We've done storytelling at the brand level, and then we've had a sales organization that's driving our business and our revenue. By the integration of the two, we can actually not just collaborate and connect, but we can optimize our investments for our customers and our partners much better than we've been able to in the past.
The third thing that I think about is that integration of sales and marketing so that we can tell one succinct and integrated story to the marketplace. The last thing that I think about is this area of customer success. Customer success for us is a complicated proposition. Why? Because we have a wonderful portfolio that's predicated on hardware. We have a growing portfolio in the area of software and services. Customer success is a complex endeavor. When you think about hardware, support, services, and then you think about the cloud, and you think about IoT and remote access, bringing that all together to give customers an amazing experience is a much more complicated endeavor than, say, it was 10 years ago for us.
The last thing that I'm focused on in those sort of four focus areas, the last of the four is really around this notion of one customer journey. How we serve our customers to deliver an amazing experience to multiple security constituents inside of an enterprise to deliver end-to-end value.
Helpful.
No, no pressure, but those are kind of the four areas where I'm really focused. When I, you know, when I'm making decisions and when I'm building the team, I really think about how it's gonna help us against those four focus areas.
Very clear. I wanna double-click on one of those.
Yeah.
'Cause we've been hearing that Check Point's doing a much better job engaging the channel, and you've had a recent rebranding. It's really starting to resonate. Could you just talk to any key go-to-market initiatives in the works over the next 12 months? Maybe, you know, how do you expect to gain mind share in the channel?
Yeah.
Which is tough 'cause you got a lot of.
Yeah.
You got a lot of competitors that are spending and spiffing and MDF-ing their way to gain mind share and incentivizing in all sorts of ways. Are you prioritizing partners in certain regions and, or in certain verticals or with certain expertise? How do you think about the channel and getting it right?
Oh, yeah. That was like eight questions in one.
That's what I
I'll take.
That's what I get paid to do.
Oh, thank you.
Get paid by the question.
Is that what you're known for? It's a really important question. The bottom line is how do we expect to gain mind share, win the hearts and minds of our partners? You know, one partner at a time. I really believe in the partner relationship first and foremost. I have spent an extraordinary amount of time with partners, and I continue to do so because, as I mentioned, 100% channel. For me to be successful, I need my channel partners to be wildly successful too. I'm not confused on that. I think I don't mean that sort of flippantly, quite literally, one partner at a time, one channel at a time.
What I've learned over the course of the last, you know, couple decades is that channel partners have unique personalities, and their value propositions, the value proposition is not homogeneous. What they deliver to their customers is not homogeneous. I mean that inside of a particular kind of channel as well as across different kinds of channels. I believe that we need to be terribly specific and focused with different channel partners, whether those are system integrators that serve the government, whether that's global system integrators that serve a broad commercial audience, whether that's a traditional VAR, whether that's a managed service provider. I think we need to think about the uniqueness of each one of our channel partners first and foremost.
I'm very focused on those relationships. The second is, you mentioned something very interesting. You said there are companies out there who kind of spiff their way to success. Our success will always, as a company, be predicated on our amazing technology. Always. We will start with the technology. You won't see us spiff our way to success. What you will see us do is focus on our technology and give our partners something they can sink their teeth into. We wanna give them something that is as easy and as straightforward to sell as possible. We wanna give them clear value propositions. We wanna give them clear tools, so that they can be successful. Are incentives involved in that?
Of course, that's the way, you know, we've been in technology for a long time. We understand that. However, our relationships with our channel partners are never predicated on that. Our relationships with our channel partners are always predicated on helping them be successful with their customers and giving them the tools and the technology to do that. Then the rest, you know, the rest sort of comes. At the scale level, of course, there are gonna be partner programs. Of course, there are gonna be things that in general help incentivize our channels to go faster and further with us. Our focus is absolutely in fortifying the foundation and really focusing our investment with our partners and the community at large on those new business areas.
Awesome. Makes perfect sense to me. I wanna talk about just capacity in the field.
Yeah.
At RSA, I actually ran into one of your mid-level sales leaders who was very clear, "Hey, we're hiring." I believe you're still growing headcount at a fairly healthy clip on track to increase quota-carrying heads by 25% this year. Just wanna make sure that that's still the case, and also where are the headcount additions focused and why?
Yeah. Not only is it the case, but anyone who knows someone please send a resume in, checkpoint.com.
All right.
In all seriousness, absolutely. We know that the best way to sell is to have feet on the streets that are knocking on doors, that are calling on our customers, that are serving the customers we have to expand our business inside of those enterprises. We're absolutely committed to grow. As Gil has said, and our management team has said repeatedly that we're growing our frontline sales force to the tune of 25%. Absolutely. I focus on it on an almost weekly basis, or more, where I am looking at the hiring. We're doing extraordinarily well, and I'm excited about it. We continue to hire.
We have openings all over the world, and that this is true, by the way, the growth in our sales force in the Americas, across the EMEA region, as well as across Asia Pacific. In mature markets, in emerging markets, across the board, you're seeing us invest in the enterprise. You're seeing us invest as well in the public sector, both in federal capacities as well as in state, local municipalities as well as in education. Those are big focus areas for us as well on top of the key verticals that we serve today. We continue to invest in headcounts to serve our channel partners. Across the board, we're hiring both in commercial selling and in technical selling.
Well, if you're gonna win in the channel, one partner at a time, you certainly need the capacity to be out there covering them as well.
Absolutely. Absolutely.
Awesome. I'd be curious, when you're out speaking to customers.
Yeah
Everybody seems to think that security is among the more protected, insulated categories of spend within IT. At the same time, the environment is pretty uncertain out there. I think we heard that.
Yeah
You know, from Gil and Tal as it relates to the back half guidance and, you know, some of the things that I think every company is experiencing right now. What are you hearing, you know, on the front lines from CISOs, from the intent that they have and what their priorities are over the next six-12 months?
Yeah. I'll answer your question in two ways. One as a board member and one now at Check Point. What I can tell you increasingly from what I hear in speaking to colleagues in my network who are on boards and having served on a public board, there are two technology conversations that are repeatedly coming into the boardroom today. Those are investments in artificial intelligence and cybersecurity. Those investments, those value propositions, and those dashboards are regularly coming into board conversations. Specific to cybersecurity, those dashboards are now increasingly a part of subcommittee mandates. CISOs are being invited into the boardroom and expected to share complete threat assessments and have a plan against those threat assessments. We know that for a fact.
These conversations are very important. While these investments are scrutinized, they're absolutely two of the top priorities on boards right now. Now, having been at the company now for six months, having much deeper conversations around cyber and the importance of cyber at companies, almost every CEO who I speak to says, "There are two places where I am still, if I can use the term, writing checks, and those really are AI and cyber." Not AI and cyber because, "Hey, I've got AI as part of my IT shop and cyber as part of my IT shop." Not in that way.
They're actually saying, "I'm not looking at." You know, there's a saying that, you know, every company is a technology company, and if every company doesn't think of itself as a technology company, it's sort of doomed to flatline. I firmly believe that. What I think is happening at the C-suite right now is companies are looking at artificial intelligence and cybersecurity in the same way. They're looking at them as potential strategic competitive advantages and not necessary departments in the enterprise. When we start thinking, you know, the more that the C-suite begins to think about cybersecurity as that opportunity for a strategic competitive advantage in their operations, the better off they're gonna be. I hear it more and more.
Helpful. Very good to hear. You said earlier, Rupal, that, you know, think of Check Point as not your father's firewall company.
Yeah.
Clearly, Check Point is way more than a firewall company today. Firewall is still a very important platform.
Without a doubt.
I'd be curious to hear your perspective, especially through and coming out of COVID, now, you know, into recession or whatever environment we're in, what your perspective is on the health of next-gen firewall market. In particular, as we see cloud migrations accelerating, you know, what is the future of that platform, of the firewall as a platform look like in that environment?
Yeah. Well, unfortunately, because of the world stage and, you know, what is happening in the world today, in the world of cyberattacks, that segment is secure in terms of the size of that market today and its growth opportunity in the future. You can just look at our threat intelligence reports that come out on a monthly basis, and you can see. We see it in our own service that we have, we call the ThreatCloud, and we can see network attacks all over the world every minute of every day. What I can tell you is, unfortunately, it's not slowing down. Fortunately, we have, like, the innovation, the organic innovation to be able to protect the enterprise in the best way possible.
When I say the future of firewalls is secure, I mean the future of the physical firewall added with the virtual firewall in the cloud is a stable and growing market. Necessary but insufficient to be a full cybersecurity partner and innovator.
That makes a lot of sense. Maybe beyond the firewall.
Yeah
You got a much broader portfolio. Where are you seeing the greatest interest, excitement, growth? Like, or even, you know, as it relates to firewall and some of the subscription attached that goes with that, like where's the action? What are you most excited about?
Where's the action? Well, the action's everywhere, to be really honest with you, Brad. I think to get really specific for a moment, while we do see the network security business growing at a really healthy rate. In a place where we feel really good about our organic innovation, there are some areas of growth that get me particularly excited. In our CloudGuard portfolio, you know, we began small and mighty years ago. We have really fortified that brand family, starting with CSPM posture management, but not just posture management, getting into the areas of API security and other areas.
What I see across the board in CloudGuard is a portfolio that's filling out, and we've got some exciting new things happening in the fall that actually fortify it even more. Where I see wonderful opportunities with the enterprise and attach is as they begin looking at their, you know, most definitely multi-cloud and hybrid cloud strategy, we can be with them in the hybrid capacity where they need us. When you take our Quantum portfolio and you couple it with our CloudGuard portfolio, it's a really powerful combination, and being able to have that hybrid cloud, multi-cloud conversation with customers, whether they're in their private cloud or whether they're at AWS or Azure or Oracle Cloud. I'm really excited about how that portfolio's filling out.
We've had some wonderful acquisitions in that space as well, one of which is Spectral, and it's provided us with a wonderful opportunity to begin conversations in that cloud space. The other area that's really exciting is the things that we've been able to do both in IoT and in email. We have our third portfolio, which is our third family, brand family, called Harmony. Harmony is all about securing the user and securing access. We've done some wonderful acquisitions here. I mentioned Avanan about a year ago, Harmony, now called Harmony Email, which has just really been exciting for us. Just to use one illustrative example, we're a company that believes that detection and mitigation is table stakes. Absolutely necessary, but insufficient. The action is really at prevention.
When you take a wonderful foundation of detection and mitigation, and you add to that prevention, you have a really powerful combination. In that Harmony portfolio with Harmony Email, a really big differentiator for us is we're not gonna wait for that threat to get to your inbox or at the door of your inbox before we detect it. We're actually gonna prevent it, and we have measures inside of Harmony Email to be able to do that. That really differentiates us. When you're talking about not your dad's firewall company, the next generation, we wanna be the cybersecurity provider, not just for us sitting in this virtual room, but for our children and their children. That's a generation that's increasingly in the cloud and increasingly in a whole set of diversified devices.
Now you talk about the Harmony portfolio that is securing your phone, it's securing distributed IoT devices for the enterprise, which is increasingly how people are engaging with the cloud. Contactless connectivity. There's a whole host of solutions inside the Harmony portfolio. When you take Quantum, you add CloudGuard, you add Harmony, you now have elements that actually bring full service protection to any enterprise, large or small. The other, you know, the last thing I'll say is that the wonderful thing about this is we have a solution for the largest enterprises out there, and we have wonderful solutions in the small medium business space as well. Our solutions scale up and down to be able to meet CISOs where they are.
Rupal, with that, we are just out of time. Really, really grateful that you were able to join us for this year's conference.
Of course.
to have you present at this session. Thank you. Thank you, Kip. My pleasure, Brad. This was great. Yes.
Thanks very much.
Take care. Thank you.