Check Point Software: The Market Misunderstands Subscription Growth
Summary
CEO and co-founder Gil Schwed, who also owns 17.2% of the shares, managed the company extremely well as revenues almost tripled over the past 12 years, while operating margins expanded by 595 bps. For example, well-known SaaS players like Adobe (ADBE) and Autodesk (ADSK) underwent the same transition, which was first not applauded by the market as it took 10-11 quarters before revenue started to grow after this change. Yes, it could be partially competition driven, but I believe that a big chunk of it is related to the increase in Infinity customers who need to be convinced to buy and keep the new subscription package. Moreover, Check Point is a long term security leader and it would be really surprising if they wouldnt be able to maintain this leadership given the experience and amazing track record of CEO Schwed and the new products introduced. Although Check Point is increasingly investing in these high growth markets, and for example launched products such as CloudGuard, it is possible that as a big company it will be harder for them to adapt quickly to new, innovative customer needs.
Classifications
AskAI Classifications
LabelsLinked Companies
