Eric Heath, KeyBanc on the software research team doing security and data. The pleasure to have Kip from Check Point with us today. So Kip, I'll let you do the safe harbor. Thank you. During the course of this lovely presentation, there will be forward-looking statements probably made that are covered under the, Securities and Exchange Acts of the early 1900s. As with any forward-looking statements, there's lots of risks and uncertainties, and if you'd like a pretty comprehensive view, but not exhaustive, check out our latest earnings release or our Annual Report 20-F filed with the SEC. As with all forward-looking statements, we only have a duty to update where required by law. And with that, I will throw it back to Eric, for this, expansive questioning. All right. We're gonna. I'm not gonna take it easy on you, Kip. Ah, let's do it. So, so I mean, 2Q, look, I mean, it's challenging out there, and, and Check Point had strong numbers. So, billings accelerated, large deal activity was good, the commentary on product was better. So a lot of things seem to be clicking at once. So maybe just recap or maybe help us give a little insight into maybe what's, what's improving on the Check Point front. So I think Q2 obviously, I think was a really nice quarter. I think a lot of what you're seeing is a result of the adoption of Infinity. We've seen Infinity go from 2021, where it was really low single digits, to where in the second quarter now it makes up approximately 15% of our revenues. Mm-hmm. And so I think you're seeing a layering effect. On the product side, I think what you saw is, people taking their allocation of hardware that have Infinity came in the second quarter. Surprised us a little. We expected to still be negative, and it popped up to 1% positive, and I think that bodes well for the second half of the year. You know, we've anticipated better pipeline into the second half of the year. You also have layers of Infinity, where people have bought Infinity, and they still have to take their allocation of hardware. Remember, anybody who enters into an Infinity contract has four quarters in which to take their allocation of hardware in every one-year increment of their annuity. So they can take it in the first, they can take it in the fourth, or they can take it in the second and third. So when you look at the layers that started probably back third quarter last year, where Infinity started to take off, you would imagine that a good portion has to be taken by the third, a good portion has to be taken up fourth. So you can see the layering effect that takes place. It also doesn't hurt that we delivered our new Quantum appliances. We made the enterprise appliances available early in Q4, and I think that gave us a taste of the excitement around the boxes. What we saw in Q1 and Q2, I think, has just followed through. Mm-hmm. We had a little more on the mid-market than the enterprise boxes in Q2. That's why you saw gross margin come down a little, but I think we're in a really good position for the second half of the year and really excited. Yeah. Just on, on color on Q2 being a little bit better than you expected, any reason for that, or just a little bit coincidental, just a couple things- I think there was a- hit at once. I think, depending on the timing of when we, you know, give our earnings, you only get a little piece of the pipe, right? Mm-hmm. So eight days or 10 days can be a big difference in what you see in the pipe. I think also people misunderstood Gil's body language. Q2. You know, they actually believed body language. The guy was tired. He just flew in the night before, so- You're talking about two quarters ago, right? Yeah. One, Q1. In Q1. Yeah. I circumvented that in Q2. I told him, "You got to do some calisthenics, some push-ups, run around the room a little, you know, get that up," because you never know who's, you know, trying to pay attention to how you feel as opposed to what the numbers were. So I think some people talked about, you know, his commentary around competitive. Taking your question before you ask it. The real truth is, the question was asked, you know: Has anything changed competitively? And he said, "No," but he didn't follow through and say, "Hey, look, it's the same competitiveness that we've seen for the last two, three years, and it goes for this quarter, too." Nothing's changed. It's still competitive. Some quarters can be a little more competitive than others, but it's not changed. I mean, guys are giving away stuff free when they want to. Some, it's even their strategy, right? I mean, People didn't believe us that they were giving it away free for multiple years, and then they came out and validated it by saying, "Hey, it's our strategy." We don't, we don't have that type of strategy. Ours is delivering value to our customers, and that means delivering the, the highest levels of security, of protection and prevention with the best value. And that's what we're able to do with the Infinity platform. Yeah. I mean, is the pendulum even swinging away to share gains from Check Point? 'Cause I was it two of the three largest deals or all three large deals where you took share in those accounts from some competitors? Look, I would say this, we're gonna do our best. I think to say that we're a share gainer, I'm sure in any given quarter, we're getting deals that, Mm-hmm ... are new, and I know that, I know our net new is doing very well. Mm-hmm. But look, we're not growing double digits, so it's not like we're really smoking the world, so there's no real sense in talking about it in that way. Yeah. We're doing our best, and we think we're executing well, and I think it's showing up in the numbers. And look, in the future, I think there's some areas that you'll be able to point to where we're probably taking share. Yeah. But, hopefully it'll be next year when we deliver SASE. I mean, that's- Yeah, we're looking for that. That's a big part of our strategy to sustain double-digit growth. Yeah. So before we get there, just the one bigger question that we're all been wrestling for a couple of years is the cycle. Some vendors had really big highs and now very low lows in terms of that cycle. But in terms of your numbers getting better, is it a sign that the broader macro firewall refresh is doing better, or is it some of the micro things specific to Check Point that are doing better, whether it's Quantum Force, Infinity, just go-to-market execution, X's and O's? I think the problems of our competitors are very different- Mm-hmm ... from the positives that are working for us. Mm. One, we made a lot of investments from 2012, 2013 on, building out a very integrated, tightly integrated, single management, I mean, single pane of glass management platform, and we delivered that in 2018, and nobody cared. Everybody from both sides of Wall Street, everything said, "Nobody wants a platform. We only want best in breed. you guys don't understand. Customers only want best in breed point solutions." Lo and behold, you know, you see everybody get raped, pillaged, and plundered in 2020 by SolarWinds, the Exchange Acts, Log4j, you name it. SEC starts to get involved. Now we have a rule that you have to report material disclosures. Lo and behold, Infinity started growing in 2021, and people still said, "Nobody wants a platform. Nobody wants a platform." Now, it's 15% of our revenues. All our competitors claim they have platforms. I don't know what they have. They have, you know, one moment, they're gonna do the same thing as us. Next minute, they're making up words called platformization. Reality is, you know, they don't have what we have. They got more revenues, that's fine. We'll get there someday, hopefully. But we have the best product in the marketplace, we believe. Yeah. We deliver protection and prevention while everybody else is playing Whac-A-Mole. Yeah. So, we think that really differentiates us on the hardware side also, because when you look to consolidate, your primary part of that platform is the hardware. Mm-hmm. That's the, that's the foundation of what you're trying to, adopt, and I think that puts us in a unique position. I think our competitors also, oversold their products because they, they had a lot of delay, during the supply chain aspect. Yeah. They also lived off of selling the future. You know, and when you have a high interest rate environment, you know, it's a falling knife on billings, and we don't have that issue. We never sold the future. When customers wanted to give us money up front, we took it. Mm-hmm. But it wasn't part of our overall game plan, you know, to sell the future, discount a year, what have you. That's just not the approach we always took. Yeah. So to talk about the next chapter of Quantum, which will be Quantum SASE. So- No, it's not Quantum SASE. It's Harmony SASE. It's Harmony. It's gonna be part of the endpoint. All right. I thought it was Quantum SASE, but I guess I was wrong. The original one was Quantum SASE. Okay. Now, it'll be part of Harmony SASE. Harmony. Yes. Kinda the per user product SKU anyways, right? Harmony- Excuse me? Harmony is a per user kind of product- It's per user. - product. It's per user, but it's- Which makes sense. ... but it's also pure subscription. Yep. So- So, just the update on the timing of the product. You guys are selling it now 'cause you guys didn't shut down the product, but- Yeah ... when you're opening it up to the broader base. We sell the up to 1,500-seat version- Yeah ... which is for the lower end of the market. Right. The new, fully integrated, SASE will hopefully be delivered in the fourth quarter. I mean- Mm-hmm ... it's software. That's the plan. Mm-hmm. I haven't heard anything to say it's gonna change, and then, obviously, you'll get that ramped up in the next year, and hopefully it'll start delivering. Are there any customers in public or private preview, public preview, and beta version at all? Enterprise customers, I mean. I know there's people that are playing with it. Yeah. I don't know where they are. The EA, I'm not sure if we're fully out with the EA yet. Yeah. But we have a very long list of customers that'll be as part of the EA. Yeah. And how's Check Point gonna be differentiated, and what's gonna be a more noisy, competitive SASE space? Well, I think the biggest issue out there is people think this space is already done and the winners are chosen. You only have less than 20,000 installs of SASE out there, and that's not much. Your one largest single vendor has about 8,000 customers. We have over 100,000 customers that we can sell it into. So I think it's early on with it. Yeah. But I think our biggest differentiation is it's a fully integrated solution. So right now we're rated tops in Zero Trust Network Access. I think this is gonna put us even beyond reach of the other folks, 'cause everybody else either has a point solution or they have what they call single vendor SASE, meaning you get it with all the rest of their parts from one vendor. While that's attractive to some customers, I'm sure, I think the more attractive aspect will be having a fully integrated solution that delivers real protection and prevention. ... Right. Just on that one, one more piece of it, I mean, it will be kind of sold as part of the Infinity platform, correct? Well, you'll be able to buy it. Yeah. And so the way Infinity works is you have to take at least two pillars. Yeah. Then that gives you the per seat pricing. Mm-hmm. And so you'll be able to buy it individually if you want. Yeah. I think what you see the trends in the marketplace is people wanna have something that's- Mm ... providing them more of efficacy and efficiency in deploying their resources. And these are all mature technologies now. And so there's no reason why you shouldn't be adopting a platform with all these mature technologies. And that frees up not only budget, but also manpower to deal with new and upcoming technologies- Mm ... to solve your latest problem. We all know that there are startups every day that are offering new technologies, new ones coming out of stealth, and all of these companies are offering ancillary products that are gonna solve different problems. Mm. You can't have 100 or 150 or 200 different solutions from 200 different separate vendors. It makes no sense. Yeah. You have to have, you have to have some way to make sense of all that chaos, and so that only leads to one thing. You're gonna take your... The natural evolution of the platform is to take all the mature technologies and adopt them. Mm. And that's what we've done in the integration of our platform, but we continue to add new and upcoming technologies as they become available. Yeah. No, you guys have done a great job. I mean, just one example to point to is like Dome9, you guys were buying cloud security before, I don't have any acronyms to talk about. Yeah, look, CNAPP now, you know, it's really a... When you look out at CNAPP and the rest of the whole platform there on the cloud side- Yeah ... the only thing that's held us back is not our product. Our product's rated tops in the marketplace, right along with Wiz. Mm. The challenge we've had is we had poor execution. Mm. We think we've rectified that. We retooled everything on the management side at the beginning of this year. The latest quarter, if it's any indication, we saw some double-digit growth, both in revenues and bookings, but it's, you know, coming off of a soft year last year. Mm. Hopefully, that trend continues, and we're able to outperform on that side. 'Cause Harmony is killing it with the Harmony Email. Yeah. And, when we hopefully deliver the Harmony SASE and the integration, that part will take off too. So we have, we have some nice drivers for next year's growth, hopefully- Mm ... both the CloudGuard and also on the Harmony side- Yeah -with SASE. Yeah. So the CloudGuard, you guys had a little bit of challenges last year, but it's been rectified this year, and- We- You have new leadership in place. I think it had some challenges over the last 18 months prior to- Yeah ... the start of this year. Mm-hmm. We haven't, you know, by no means am I saying it's cured. It just- Right. We think we've done the right things- You made changes. Yeah ... on the manpower side, and obviously the channel is a big part of that. Yeah. I think our channel program that we instituted at the beginning of this year is starting to pay dividends. Mm. And I think it's, hopefully, it's a precursor to things coming. Yeah. Just to come back to SASE one more time quickly, but you guys are... Data center is kind of your bread and butter, right? In terms of Check Point firewalls and, and the Quantum deployments. I think. Do you think- Go on. I mean, SASE is kind of like a displacement for, like, small branches, right? And if Check Point- I think you'd be surprised. ... is a little less present there. I think you'd be surprised how much we have there. Yeah. But you're right, it's an opportunity. Yeah. It's an opportunity twofold, to sell our boxes there- Yeah ... and also sell SASE there. Yeah. I think the compelling factor is that it's all integrated. You get to carry the same policies. You're not having to go from a completely disparate product. You're actually dealing with one platform- Yeah ... and nobody else offers that. I don't see anybody in the not-too-distant future being able to offer it. Mm-hmm ... either. Yeah. So I think we have some ground to run. It really comes back to, you know, do you want a point solution or do you want a platform? Mm. I'm sure there'll be organizations that stay with a, you know, point solution. Mm. There always has been. Mm. But I think your large part of what's available out there- Yeah ... the reason why they've been waiting is they want somebody to make it simple for them. Yeah. So to come back to Infinity, obviously, it's been a strong, strong area recently. I mean, it has been for a while, but it seems to be extra strong recently. Is it product-oriented? Like, do you have the right products in place? Like, now that Harmony's kind of been around for a little while, you guys rolled out some services, like, I think last year with MDR and more, I don't know, incident response like services. Is it a product, or just execution? Is it the platform, is it a simpler platform? I'll be honest with you, I'll be honest with you, I'd be... If I didn't say it's just everything- All clicking ... in a, in a- Yeah ... consortium, because you, you have everybody trying to solve this problem, right? Mm. Nobody wants to be the next breach that puts out a 6-K or an 8-K that says, "We had a material breach. Yeah. You have boards, and you have management teams involved in this now, and so there's no more of the funny business. You know, "I'm picking this 'cause it's my buddy," right? Yeah. Now, there's actually, you know, you're going through a bake-off and everything else out there. I think another important aspect of it is that you have people trying to solve their security problem that are moving to that next level of moving into more advanced technologies. Mm. This makes it easy for them. Mm. It's simple. It's checking the box, and here's the, to me, I still don't believe this even exists today, but we are the only platform provider out there that offers email security. I mean, email security, the number one vector - Yeah. Yeah. - that any attack takes place within an organization, and we're the only one doing it, right? Everybody else is a point solution, either housed at a PE firm, or actually, they're all housed at PE firms, except for one's a private company that has a pretty good product out there, but - Yeah. Yeah. I mean, I love it. I hope it continues that way because it allows us to differentiate ourselves even that much greater. Yeah. And so hopefully, SASE is gonna be that next tool that we - Yeah... we can grow off of. Yeah. Then how should we think about big picture, the impact on the model? I know we talked about kind of the impact of product revenue. It kind of shifts some dollars when you're doing Infinity deal from product subscription and whatnot. So how do we think about just the broader, bigger picture impact? You know, you're seeing it, you're seeing the trends, right? Yeah. So obviously, it's resulting in a better billings performance over time. Mm-hmm. Excuse me, probably more predictable, because you get the layers and layers right, coming in. But I don't think any real model change other than growth. Yeah. That's what we hope for. But product revenue does shift out of into subscription, right, for firewall business? No, it's timing. It's just timing. It's just timing of when they take it. Mm-hmm. Your subscription is still your subscription. What's happening today is more people are taking more of the pillars. See, prior, the reason why we were predominantly a firewall company is because we didn't have something that was a tool to leverage people into taking these other technologies. Yeah. And now that people are moving towards a platform, they see the value-added benefits of these different pillars, and especially when we offer Infinity. So the difference of what you're seeing is people taking more of the pillars, and therefore, the deals are being distributed. They're bigger, and you have more showing up in subscription. Yeah. You still have the same amount showing up in hardware. Yeah. It's just the timing of when they take it is different. Yeah. And so whereas before it always used to be upfront, you know, it was the hardware deal gets done, and we still have a lot of that, right? In any given quarter— Yeah, where people are just buying hardware. Yeah. But the Infinity can come any, any of those four quarters from when they bought the actual— Right. Yeah, platform. Yeah, platform. Better visibility is good, yeah. Yeah. It's all beneficial. Yeah. So you probably, probably won't like the question, but gotta ask it 'cause now we have a, a, a new face at the top of the helm after 30-something years. I don't mind this question. Feel free. So what, what, what gets us excited about the change in leadership? Talk to us about, like, what we can expect from Check Point to be the same under this new regime, maybe what we should expect to be different. So I'll tell you, he starts in December. He'll be around before as we do our operating plan for next year. Yeah. I think the biggest key difference is you have now what I call a closer. You now have that C-level sales guy out there who knows everybody already. He's consulted with the largest organizations, CISOs, management teams worldwide. Mm-hmm. He's a real authority on security. Yeah. And I think that's a given. I think it remains to be seen. Obviously, you don't expect big changes at the beginning. Mm-hmm. A lot of this is gonna be Gil mentoring him on, you know, what Check Point and transitioning his role to the executive chairman. Mm-hmm. I would expect it to be evolutionary, not revolutionary. Yeah. Like, you know, day one isn't gonna be a shot across the bow or anything, but I think those big differentiators of having that executive presence out there doing those C-level sales is one of the biggest priorities Gil had when he was picking or selecting Nadav. Mm-hmm. I think he saw the value in bringing him on board and his ability to get out there and execute on that side. A place where Gil is, you know. Yeah, for all intents and purposes, he was there, he was assisting, but not at the level that today's platform sale requires. Yeah. And so I think that's gonna be one of the biggest differentiators. You know, people ask, are we gonna be more acquisitive and things along that line. As Gil, I'll use Gil's word in his last interview, "I hope so." It doesn't mean we're gonna be doing giant ones, you know. Yeah. If it makes sense, we would. But remember, the time to market is to integrate these small solutions that are very advanced into a platform. I think our approach to acquisitions is very different. It's not very investment bank friendly, where if you look at our competitors, right, they bought the biggest thing and not VC-friendly either. They would buy the biggest first mover, but I got news for you. The first movers, they got the backing of the VCs, all the cash, the marketing, and everything. That's how they get that big footprint. They don't necessarily have the best technology. The best technology usually comes later. Somebody who stands on their shoulders, figures out what they did wrong, how they can do it better, and they come out, and those are the guys we bought. We bought the small guys that came later, and we were able to tuck them in very quickly because they didn't have a large install base, right? We didn't have to convert them over or anything like that. Mm. I think this is part of the problems for our competitors, is they sold a lot of point solutions as a point solution for a long time. Problem is when it comes to trying to convert your customers, they've got to rip out all that old technology and put in the new technology, and that creates a critical moment for their customers, right? "Do I, do I just take your word for it, or do I do a bake off with everybody else- Yeah... and see is, is there a better, a better platform out there?" And we're hoping they find that answer as Check Point is that better platform. Yeah. Just last one on, on margins quickly. Best-in-class margins, but they have been just compressing a little bit over time the last few years. Mm-hmm. Is 2025 gonna be another go-to-market investment cycle? And, and it's, it's more of a growth-oriented mindset right now for Check Point. Again, don't know about next year, but I would say this: one, nobody pays us for margins, right? And if we grow double-digit, I'll never hear another word about margin again. So I would just say this, we don't usually do anything that is abrupt or without telegraphing it. I would expect that hopefully, if we grow faster. Yeah, you know, we're trying to invest to keep those margins where they are. Yeah. But you know, I'm not the CEO, and I'm not the new CEO, so I don't dictate those things in the future, but I generally would say don't expect, you know, real big changes because Check Point's not broke. I think, you know, we had a strategy where everybody else was tactical, and it's now starting to pay dividends. We don't have to invest 20 points to grow faster. We're already almost at double digits. So, maybe bringing in a new CEO that can, you know, run around there and execute at C-level sales is gonna benefit us even more. But I don't necessarily think that, you know, margins are gonna go away. In fact, we might fight to keep them down. So hopefully that's the case. All right. All right. Well, we're out of time. Appreciate it, Kip. My pleasure. Yeah, pleasure as always. Thank you, guys!