Good morning, everyone. My name is Brian Essex. I'm J.P. Morgan's Security Software analyst, and with me today, I have Roei Golan, the CFO of Check Point Software, and Kip E. Meintzer Global Head of Investor Relations. Maybe, Kip, I think you have some prepared.
Oh, yes, the Safe Harbor.
Remarks for us before we get started with some Q&A.
Thank you, Brian. During the course of the presentation, there may be forward-looking statements made by the participants here. As with all forward-looking statements, they're covered by the Securities and Exchange Acts of the early 1900s, about when Rob Flores was born.
As with any forward-looking statement, there are risks and uncertainties that are associated with these remarks, and if you would like a full list of the risks and uncertainties, please check out our latest earnings release or our 20-F filed with the SEC. And as with all forward-looking statements, there's only a duty to update were required by law. And with that, I'll throw it back to Brian, and we can proceed.
Great, thanks, Kip. Roei, maybe to start, could you offer maybe just a quick recap of the first quarter? You know, what were the key takeaways you'd like people to know, and we can kick it off from there.
Yeah, sure. So I think Q1, what we've seen in Q1, I think it was a continuation of the, I would say, nice demand that we've seen, that we started to see in the end of 2023. I think we did see some kind after a very challenging beginning for 2023. We started to see a change in the environment in the second half of the year, mainly in Q4. And Q1 continued this momentum, and we did see a very nice demand for our products. I think we mainly saw. First of all, I think the appliances, the appliances, we announced new appliances in during Q1, so we did see very nice demand for that.
Although our revenues were down, actually our booking were up. I mean, the appliances booking were up year over year in Q1, double-digit, year over year bookings. So you don't see it yet in the revenues, because significant part of it is Infinity, so it takes time to. So it takes- I mean, there is some kind of a lag between the bookings and the revenues in Infinity deals. And also for the other products, I mean, the Harmony Email continued to see very strong, we continue to see very strong demand, in the Harmony Email.
But that's, that's, something that we've seen since we acquired Avanan back then in 2021. This momentum is continuing, and it's even getting bigger and bigger. And Infinity, our Infinity, our consolidated platform, I think that's our main advantage today in the market, and that's what we see the feedback that we are getting from our customers, from the partners. They really like that. And I think that's what drove the good result that we had in Q1, and hopefully we'll see it also in the next few quarters in this year.
Got it. And then before I go any further, I'll leave some time at the end for questions from the audience, in case anyone has any. So maybe to touch on one of those points, you talked about s trength and appliances, how do you think about the, I guess, the overall deceleration that others are seeing in the market after some pretty heavy spending over the past few years and through the pandemic? Do you see any kind of, like, pressure in your space or maybe even a benefit? B ecause of some of those, like, global appliance spend deceleration trends?
So what I can see based on what we've seen in what we see from our from our field and based on my discussion with the field based on what we've seen from partners and customers we do see some kind of a change. Maybe it's also driven by by our newer appliances. I think what happened in 2023 we did see a lot of. It actually started already in Q4 2022 and we saw it in the majority of 2023. We did see a lot of delays in refresh projects.
So some of these delays, and then it's existing customer that renew their business with us. So they just postponed their refresh projects due to budget constraints, and we are, we're starting to see, we started to see in Q4 and mainly in Q1, hopefully in the remaining of the year, we started to see this project being executed. So I think that's something that hopefully will help us also in 2024. So again, based on what we've seen in the last two quarter, we do see a change in our, in the demand for appliances.
And hopefully, it's something that will I mean, again, also the pipeline that will, that we're seeing for the remaining of the year seems, looks good for the appliances, but again, pipeline is only pipeline. Until it's been converted to business, it's w e need to be cautious here, but again, based on what we've seen so far, it looks, the environment looks better in the last two quarters than what we've seen in the beginning of 2023.
Excellent. And how are we now that we're, you know, we're kind of halfway through the quarter? Budgets and spending still consistent with Q1, and, is there any, I guess, change by region or by vertical that are worth calling out?
So I think, first of all, I remind you that more than 50% of our business and almost in every quarter has been closed in the last two weeks of the quarter. So it's again, the quarter starts well. I mean, the Q2 starts well, I mean. b ut it's only we're only half of the quarter then. And again, as I mentioned, most of the business is being closed in the end of the quarter. The pipeline looks good, but again, it's pipeline. And in terms of regions, I think that we see a very nice demand, very strong demand in EMEA, mainly in Central Europe.
We did see a very nice demand in Q1, we actually grew, I think, was the best quarter of EMEA in the last few years in Q1. And Q2, the pipeline looks good also for Q2. And so EMEA is, I think, the strongest region what we've seen so far. In terms of, that's in general. I mean, America looks good, but still not, I think that EMEA is the main area where we see the growth.
Okay. Maybe can we switch to some of the growth initiatives that you have and, you know, particularly with regard to Infinity, CloudGuard, Harmony, how are you investing in those platforms and where are you seeing traction with those segments?
So we invest in all. I mean, we expanded significantly. I mean, we expanded significantly our budget, our R&D budget in the last few years, mainly focusing on this product. I mean, the Harmony and the Cloud, Infinity is the platform, is the old platform.
Right.
But we did a lot of investment in the last few years. If it's organically or inorganically for investment, for acquisition or such as Perimeter 81, to make sure that we have the best platform in the market, the consolidated platform in the market.
So I think, again, we keep investing there. I think we have well positioned much better today with our Infinity Infinity offering, with the Harmony SASE that we, that we have today after the acquisition of Perimeter 81. And the cloud business, which is also invested a lot there. Again, I think we can grow faster there, but again, in terms of, in terms of the product, I think that we have today much better product than what we used to have few years ago.
Yeah, I'd definitely say on the cloud side, it's more on our execution. The product is phenomenal, and we've actually done some retooling on the management side of the cloud, so hopefully we're going to see some benefits from that going forward.
Great. You know, I thought you guys did a really good job at CPX, by the way. It was great access to senior management. And I had a chance to catch up with Francisco, you know, particularly after, you know, we had you organize meetings. And he was talking about a few different programs that you guys are focused on with the channel. You know, specifically, you know, bonus program for logo displacement and improved rebate program.
Those kind of things seem to be resonating with partners we spoke with on the floor. Also a streamlined effort to help partners understand how they make money. I know you've historically had a heavy in the channel sales motion, but what are you seeing on the partner side of the business? Are you starting to see that pay off, and, and what do you look at to kind of basically understand how those efforts are being recognized by channel partners?
As you mentioned, I think we did a lot of changes since Francisco joined us, I think, a year ago. I think Francisco did a lot of research, and he did a lot of changes to make sure that we'll be much more competitive in the market on the partner side. So I think we also announced a new partner program in, I think, in Q1. A new partner program that's mainly focusing on simplification. We want that our partners will have, will be for them, easy to register for a deal, to do business with us, to make sure they understand exactly what they are getting, what's the margin that they are getting.
So I think the simplification was our focus, and second, of course, all the incentives that you mentioned. I think bringing new logos, rebates for selling new businesses. So I think we're doing a lot of... We invest a lot there. It's still too early to say if it's. I mean, based on my discussion, what we, based on our survey, based on our discussion with the field, the partners are much more like this part, this new program and the new incentives.
But it's too early to say the effect of that because we just launched it in Q1. So I don't want to say that it's successful or because it's, we're gonna need few more quarters before I'm gonna tell you if it was a successful launch or not.
If I can expand on that just a little bit.
Yeah.
I think it also helps that the partners see what it's like to have a real platform, right? It's not a marketecture. It's something that actually works, provides protection and prevention in the marketplace. So as they're going out there and they're meeting with executives and stuff and trying to sell to their customers, they actually have something that's real, that works. Whether it be AI from the standpoint of having a single copilot or actually having the AI incorporated into the platform, and that's what allows us to have the success or success rates we have from a protection and prevention standpoint.
And as we talked about earlier, you've seen what it's like when people don't pay attention to building out their product. They have CVEs that are pretty ridiculous. So you don't find that at Check Point. I think the partners are starting to recognize what it's like to have a quality product rather than just plain Marketecture.
Got it. And then maybe keeping on the sales side. When we caught up with Gil in Las Vegas, he noted lower levels of sales attrition and better sales productivity. Are these trend, are these trends still intact? And what, what are some of the efforts that you might be doing to maintain healthy level of sales force retention and, you know, lower turnover rates?
So first of all, I think it's still true today. I mean, we see low attrition. We see that our productivity of our sales people, I would say, around or not specifically in certain region, we see better productivity because I think, again, we added a lot of people in the end of 2022, beginning of 2023. Usually, it takes time, between nine even 12 months to be productive in our business, in our market. So I think we do see improvement in the productivity. It's full engagement, more engagement.
I think Gil mentioned it in one of the earnings call, I think, in the beginning of the year, that we are focusing on more engagement with our existing customers, with the prospect. We see a significant improvement in that. It usually takes time between the engagement until it being converted to opportunities and to business, but we see a significant improvement there. And so I think the productivity is much better. In terms of attrition. We're doing a lot. Again, we have our incentive plans for our salespeople.
We are doing. We are working together closely with them, with sales, with the salespeople, to, I mean, with the sales leader, to make sure we have a attractive compensation plans. So I think in order to, first of all, to maintain the good ones, not I mean, not all. In the end, we want to maintain the best, the top performers.
So I think again, and right now, the attrition is still low. I think it's not only because, I mean, we need to be honest with ourselves. It's not only us, it's also the market. I mean, the market is, I think right now it's still, we still see, I think, the effect of the market, and therefore, we see still, I think, in general, in the market, low attrition rate. So i t's combined. Yeah.
How are hiring trends right now? Are you hiring to a certain growth rate, or how are you managing, like, you know, particularly on the sales side, you know, hiring talent?
Hiring, I think we are more hiring in specific areas where we need to have more coverage. For example, EMEA. We mentioned that EMEA, we do see very nice demand there in the last few quarters, very nice growth. So we're hiring in specific areas where we do see more demand there, that we need more coverage, that we have more potential. On the Harmony Email, for example, we expanded significantly our salespeople there.
Our the team that's supporting the field of the, on the email, because the demand is growing and the business is growing, and we need more people to make sure that we can that we can, we'll be able to to serve and to sell more of Harmony Email. So I think we are hiring specifically in certain areas. It's not like we like we did two years ago, that we said we're gonna expand 25% of frontline sellers. We did it, by the way, in the last two years, but now it's more focused on specific areas where we believe there is more potential to grow faster.
Got it. And then maybe back on the product side of the business, you know, you announced, what? Like 10 new Quantum engines at CPX. So we have a new product cycle there, and I think even in Vegas, you guys announced that, you know, you were seeing some good early traction. Is that still the case, and what is the timeline? I know you, when you launch a new product, there's testing that has to occur on the customer side of the business. When can we start to see any evidence of a Quantum-driven, you know, refresh cycle in the marketplace, in your view?
So I think, first of all, we launched it in Q1, although we did some, I would say, quiet launch for the high-end product in the end of Q4. So we do see very nice demand for the new appliances. I think the price performance is much more attractive than what we, I mean, first of all, in the market and what we had in with the previous family of products. So I think the customer really likes that, and it's also we bought some new logos through this selling of new products, new appliances. So I think, again, it's much more competitive today in the market.
I think, I would say, the significant effect will come probably in the second half of the year, because usually it takes mainly for enterprise to do some of these enterprises in certain areas, needs to do their certain internal certification. They need to test the product before they can use it in the, they can use it in the environment. So that usually takes, it can take between a month to even three months or four months.
So I believe because we launched it just in February, I think January, February 2020, I think the main effect we'll start to see. It's not that we are not selling it today, but I think the main effect will be in the second half of the year.
Got it. And then, you know, one of your peers is, there have been a number of different opinions on what the normalized growth rate of that primarily firewall industry will be once things stabilize. I think one of your peers talking about 0%-5% on an annual basis. Do you agree with this number? You know, what is your view in terms of normalized growth and also how Check Point might be able to grow faster than an overall industry normalized rate?
I would say it's tough to me to say. I mean, I think that we can go faster than that. Again, it really depends on gaining market share. I mean, I think we need to gain more market share. I mean, that's something. If we're gonna gain market, more market share, so it's in the firewall market, I mean, the network security market, in the firewall, so we can grow faster than the five percent that our competitor mentioned. So we need to, I mean, we need to aim to grow, to bring more new logos, to grow, to grow faster.
And if we want to achieve this double-digit growth that we discussed it many times before, when we, we, first, we want to be there, so we need to grow faster than 5% in the, on the product side. We need to be more close to the, to the ten percent in order to grow double-digit growth.
I mean, we need to be the single digit to 10% or to the low teens to be able to grow the double-digit growth in our, in our revenues, in our total revenues. So, so I think with the new product that we have today, with the SASE, the new SASE product, I think the combination together can, w e are positioned much better to, to gain market share and, to grow faster.
That's a great segue. You know, I wanted to ask you about SASE, and you know, you recently, you know, as you mentioned, acquired Perimeter 81. I think the last time we spoke, you were still in the integration process. How is that progressing? And, you know, any expectations in terms of timing, when you'd be in the market with a full end-to-end SASE, including Perimeter 81?
Yeah. So actually, we just had a meeting before I came here. We had a meeting on the disintegration project, so I have some updates. So I think, again, in the end, still plan by the end of the year to close it. We are investing a lot there. We're expanding the R&D team, and in order to make sure that everything will be available. Again, I'm talking about the main feature. I mean, all the time you need to add feature, new features, but I'm talking about the main thing that we need in order to make sure that in order to sell this to our, the majority of our install base, which is large enterprise.
So I think in the plan is still by the end of 2024, to finish the integration, to complete the integration, to offer the SASE to all our install base, install base and of course, to the prospects. But we'll be able to offer it to any size of enterprise, not only to SMBs or mid-sized businesses. We want to, I mean, we'll be able to offer it to enterprise and large enterprise.
And what is the strategy behind SASE? I mean, there's a ton of competitors. That was one thing we took away from RSA, is the companies like focused on SASE, whether it's Palo, Fortinet, you know, Cisco, Netskope, Cato like, the list goes on. Even Zscaler, Security Service Edge, now they've got this little appliance. Like, what is your kind of differentiator in the market? And you're kind of late to that market. How are you gonna, you know, take share, as, you know, a number of different vendors are kind of like already focused on it?
So, you want to start?
Well, one thing.
Yeah.
So one thing, you know, late to a market, I think, is relative. So when you look at this market, I always look back to when FireEye got killed. FireEye had between eight and 10 thousand customers when it became extinct. When you look at this market today, there might be 15,000-20,000 installs of SASE out there, and that's all different forms of SASE, right? From SSE to a full-blown SD-WAN with the whole nine yards. So, that's just the early adopters. When you look out in the marketplace, we have well over 100,000 customers.
You have other competitors like, you know, Palo, who's got 80,000 Fortinet, that's got 300-some thousand. So when you look at somebody like a Zscaler or a Netskope and all these guys, they just got the early adopters. They got the very early start. So they're, t his is green shoots ahead, and it's much easier to sell into your install base, obviously.
So that's a big advantage, and that's the advantage we had when it comes to sandboxing. All of the primary platform guys did, because it's much easier to buy from your already existing vendor than it is to go out and take somebody else. So I'll let.
And I think our main advantage is that we have, in the end, we are one of the vendors that we have both the network security. I mean, the firewall plus the SASE. I mean, in the end, I don't think that the SASE will replace entirely the firewall today. There are some discussions about it, but in the end, customer will need mainly the branches. They will need the appliances, they will need the firewall, so I don't see it doesn't.
And I think that's our advantage. I mean, because in the end, most of these, the companies that use to have today, the SAS, I mean, the SASE install base is mainly, if they don't. I mean, they usually they have a separate vendor to what they have, the firewall vendor. So I think we can offer them one vendor to consolidate all this together, and I think that's our main advantage today. Yeah, I mean, when we're gonna have the SASE available for everyone.
You also have the ability, we already have a box in that branch office.
Yes.
You wanna deliver SASE, you turn on the SD-WAN that's on that box, and away you go. So there isn't a multi-step. You don't have to add a box. You don't have to, y ou just have to turn on software. And when it becomes that easy, and you already have our platform because you already have our management with our firewalls, turning on the rest is just a piece of cake.
And it's the path of least resistance, but you're also gonna have something that's integrated throughout the platform. Nobody else is gonna have that. You hear people talking about, "Oh, I'm single vendor SASE." That's great. When's it gonna be fully integrated into a platform? Probably never. In ours, it is, and that's what we're going for.
That's why it's taken us so long, and at the end of the year, you'll have something that's in one pane, single pane of glass, and you'll have consistent policy that runs from SASE all the way across. So that's our advantage, is you'll actually have something that's tied in and actually delivers real ZTNA.
How are your customers, o r do you have a good read on how your customers are thinking about it? We've seen a lot of focus from some of these vendors on the access network, the SSE part. You know, some are standardized on GCP, others are building out their own data center network and certain points of, you know, certain volume of points of presence. You know, how does Check Point kind of approach that segment of the market?
So we have POPs, most of them are colos. One of the big advantages we have is a lot of the encryption is done on the device and we have a mesh type of approach to our SASE. And so it's very differentiated in that way. So we don't have the big costs that are associated with the GCP or an AWS having a hyperscaler as your back end. And we don't have the large capital expenditures that somebody like, you know, a NetScaler, et cetera, that's building these huge POPs all around the world. So our points of presence lit up very quick, no matter where we are.
Today, we're primarily in the U.S., but as we get to the end of the year, you'll see us popping up in many different countries or many different locales, most likely. That's where we'll start it off. And so.
Have you disclosed the number of POPs that you have, or?
I think it's on the website. You can actually.
It's about 40, about 40 POPs.
Yeah.
All right.
You can actually see our progress as it moves forward in the future.
Got it. And I wanted to touch on outlook, guidance for the year. I think one of the comments that we made, I don't recall if it was on the earnings call or on the call back, but that you'd need high single-digit product revenue growth to hit double-digit total revenue growth. Is that still the case, or you know, what needs to happen to get you to, like, double-digit levels of revenue growth?
So, I think first of all, in order to make it, to achieve the double-digit growth, we need to go. I think I mentioned it a few minutes ago. We need to go high single-digit or even low teens on the product side, to be on the double-digit overall. Because I think in the end, we are looking at our subscription line item.
Our subscription line item is growing consistently in the last three years, I think, between 12%-15%, very strong demand to our subscription business. It's going very nicely. It's becoming more and more significant to our revenues. I think it's already about 40% of our total revenues, so, and that's growing very nice, and we keep seeing the demand for our subscription.
If it's to, for our Harmony products, cloud products, or to our Quantum product, I mean, our Blade. So I think everything is. So we see very nice demand there. And so, and the support today, by the way, the line item in support includes also our Infinity Global Services.
Our professional services, and that's going very nicely. And I think we'll be, hopefully we'll be able also to grow faster there if the services will keep will be more significant, will keep growing. Still, still not significant to the total line item, but I think it's going very nicely, so we'll hopefully, it will drive the total line item to grow faster than the 2%, consistent 2% that we've seen in the last few years. So a nd that's together, again, as I mentioned, with the product re- product business, that's, that's for sure needs to grow, grow faster.
In order to grow to that, to be in the double digit. That's gonna put us in the double digits. So I think, again, hopefully, with, again, with not hopefully, but to get to with the positioning that we have today on the product side, on the new product launch. I think we are positioned much better. Again, I'm not talking about 2024. 2024, we gave you the guidance the range. You see the midpoint, you see the high end. Hopefully, we'll be above the midpoint, but I think long term, I think we will be able to be on the, I mean, that's our goal, to be on the double-digit goal.
Got it. I have one more question, then I'll open it up for others. Just maybe a quick update on the CEO search process, and.
That's for Kip.
Where Gil's head is at, and what's been accomplished so far, and what are the next steps?
So the board has a process they're going through. They have the team that's gonna be doing the search. They've hired the outside search, but this is something that's gonna be very methodical. It'd be great if we could find somebody sooner than later. But we wanna make sure we find the right person. So the process is, you know. He said it's gonna be probably a 1one to two -year process. I would say you probably see it somewhere between one and two years, not prior to one year. Doesn't mean it can't happen.
I'm just trying to set the expectations and put the likelihood. Still looking for somebody who's sales foot forward. Looking for that individual that's going to go out there and be the chief salesperson, as it would be, CEO.
Right.
You know what I'm saying.
Yeah.
That type of CEO. It's gonna allow Gil to spend more time on the things he enjoys, which is obviously looking at the industry, setting, you know, setting the sail to the right area. You know, you can see what we've done from a strategic standpoint, right? Everybody told us we were crazy about a platform in 2018 when we launched it.
Now, what's everybody saying? You gotta have, I've got a platform, I've got a platform, in all different kinds of flavors, making up words, et cetera. But for us, you know, we're a methodical organization, process-oriented. The same is gonna be true for the CEO search. So I'd expect it in, you know, due time, one to two years. But, definitely, we wanna do it once and then move on. And, so we're looking to take steps for further success in the company, and Gil thinks this is the right way to go.
Got it. Why don't we take a quick break there? Any, any questions from the audience? You're all asleep, is that it?
Too late last night.
It's the first session of the morning.
Yeah.
Maybe kind of back to guidance. Your fiscal 2024 guidance implies, you know, revenue growth recovering to mid-single-digit levels and operating margins contracting slightly. How do you think about a potential floor for margins? Could they dip into the 30s, or do you have a pretty hard level that you're kinda trying to manage to on the bottom, like, in terms of troughing out from a margin perspective?
So I think it's a question that we are getting, I think almost, I mean, before my time, and I mean, even I think before Kip's time.
Yes.
Uh, again.
There was a time before Kip?
So again, I think we still are thinking our guidance today, talking about 42%-43% for 2024, operating margin, 42%-43%. You're talking about thirties. We don't. I mean, it's something we keep investing.
Mm-hmm.
I think that we don't have about something, but I don't think we'd need to be. I mean, we don't need to be on these levels, I mean, below 40s. Because in there, we invest a lot today, or we keep investing, and hopefully, our top line. I mean, and again, I think we've accelerated growth to that we from what we have today. I think that we'll be able. We don't need to be. I mean, we're gonna keep investing what we are going today. We're gonna keep investing and keep, and hopefully even grow our margin, being a better margin. I don't see us to be. I don't think that we should be in lower than 40s margin.
Again, it can change if we're gonna do a significant acquisition like Perimeter 81 that we've done or any other, you know, effect. But today, if I'm looking today on our plans for the next few years, we're gonna keep invest. We're gonna be still in a very healthy operating margin, and hopefully even in a better operating margin for accelerated growth in the top line. That's our goal.
Got it.
Yeah, we've front-loaded the investment through the past several years.
Yeah.
Acquisitions are the only things that are the wild card, as Roei stated, but from here on out, it's about how fast can we drive that revenue? You know, our hope is for sustainable double-digit revenue as we move forward. And that doesn't lead to lower margins, that actually leads to higher margins.
Got it. And then, you know, wanted to ask, you recently announced a partnership focused on securing AI cloud infrastructure with NVIDIA. You know, can you expand a little bit on that? And, you know, what can we expect in terms of maybe incremental investment in that area, and where your customers, are you hearing feedback from your customers on, you know, demand there?
I'm sorry. We had a question from, I was reading the question from the audience, but can you repeat that real quick, NVIDIA?
Yeah. It's about your NVIDIA partnership and securing AI with a partnership through NVIDIA. You know, maybe dig into that a little bit deeper, and what exactly does it entail, and are you hearing about demand?
So I would put it this way: right now, it's at the reference aspect. We are the one that's part of that, DPU, the architecture there. There's nobody else there right now. That's the in and out of the actual AI. So from that standpoint, I would say that's where we are. No pricing, no determination on actually who pays for it, whether NVIDIA is paying for it, the box manufacturers. This is early stages. Not gonna go out and throw the AI hype, like you, like you see so often out there. It's probably a year plus from seeing any revenue from this standpoint, but again, it's it just shows you our leadership, especially around AI.
AI has been part of our platform for many, many years. If you look at the ThreatC loud, that is how we deliver 99.8% protection and prevention. It's due in part to AI. And now that we have the copilot, it's gonna make our customers even more effective. But as far as this part of it, it's all future at this point and not something we can actually elicit any further.
All right. Webcast question.
Let me go for this question. Roei, what is the investment thesis, according to management? What are we gonna do with all that cash we got, and hopefully all that cash we'll have in the future?
So as you already well, we are. Today, we are doing, I would say, I think the highest. I think we are bringing back in terms of capital return from buyback. We are bringing the highest. I'm not thinking that any company is doing buyback in our, in the same ratio that we are doing today. We are buying, every year, $1.3 billion, and it's something that we are still continuing to, to do. Again, we are assessing it, every quarter, and it's something that, being discussed.
For the remaining of the cash, I mean, for the cash itself, of course, we are considering all the time M&As. I mean, M&As is we have a designated team that, looking all the time on, on, potential targets. We have the luxury, I would say, to have enough cash to do M&As and to do even large acquisitions. And I think today we do see more, I would say, fair valuations on the private market.
So I think the opportunity is there, but still, we're looking all the time. Nothing, again, whenever we're gonna see something serious, we're gonna announce or something, but again, it's something that we looking all the time and in the areas where we need.
Let me add the last part where somebody's gonna follow up and say something about a dividend. It's always something that's available to us. It's a board-level decision. It's something that they look at quite often. As an IR guy, I'd rather have a higher valuation when we, if when and if we ever do a dividend. But the point is, it is discussed, and it's not something that's beyond the pale, but just not something that they, you know, see as something that should be instituted as of this time, but that could change. That's again a board-level decision.
Great. With that, I think we're out of time. So Roei, Kip, thank you very much for joining us.
Thank you, Brian.
All right.
Bye-bye.