Hey everyone. Thank you for joining. Joe Gallo, cover cybersecurity at Jefferies. Delighted to have Kip E. Meintzer from Check Point Software Technologies. He does have a disclosure to read, before that, you're almost 20 years at Check Point and- Almost We confirmed yesterday you don't know how to golf, so you're going to probably have to work another 20 years. God, my back feels like I really don't know how to golf. Yeah, let's do the safe harbor first. During the course of this lovely back and forth fireside presentation, there could be some forward-looking statements, and as with all forward-looking statements, there are lots of risks and uncertainties. If you want to get some good sleep, and you can try to read our 20-F and get a comprehensive view of all of the risks and uncertainties that are located in there. Other than that, there's no duty for the company to update any of those risks and uncertainties or any of the forward-looking statements except for where required by law. How's that? That was perfect. Okay. I might give it a read tonight. I almost went to sleep during it. Go ahead. Maybe to start off, Kip, just talk about your strategy at Check Point, how it's evolved, and how you're positioning yourself for sustainable growth going forward. Oh, that's just a little bit, huh? That was nice. Hey, Joe, it's nice question you created there. Well, let's begin with, we got a new CEO last year. We've had an ongoing goal of double-digit sustainable growth. I think what you've seen take place over the last year and a quarter is us trying to align the company with those goals. I think what you've seen is, during that period of time, we've had AI pop up a little more prominent than it was a year ago. Our strategy is aligned perfectly with transforming corporate strategy to utilizing more AI. Securing that AI transformation. We have our pillars of Quantum, which is all of our networking, Workspace, which is our user base technologies. Our CTEM, which is Continuous Threat Exposure Management, which is dealing with risks around agentic and also, reputational, et cetera. Our AI pillar, which is more or less self-explanatory, LLMs, agents, et cetera. We've aligned all of that as far as a strategy, but what we had to do is align our go- to- market to make that successful, and that's the part we were missing. That leads to the second question, which is just maybe unpack that. I think you guys built a lot of momentum over the last four to five quarters, and I think some people were caught a little bit off guard with, because it wasn't apparent that there was go to market issues when you looked at the numbers last year. Maybe just talk about, one, why now? And then two, what the exact changes were made and when you think you'll start to see the benefits from those. I think you're right. It wasn't evident from the numbers from last year, but they were evidenced from the numbers the year before because our growth rate just wasn't there. We were growing 1% more effectively year-over-year, and that's just not going to cut it for where we want to be and where we need to be as a company. We have the technology. What we identified as the issue was obviously the go to market. We had talked about it in the fourth quarter a little bit. We didn't think it would be as disruptive as it was. Effectively, what we did is we took our sales force and focused them on the enterprise, brought the mid-market down to the inside sales and channel level, so it's 100% done at that level. All of our sales reps are at assigned accounts, so instead of being much greater than what it is today, which is somewhere between, say, three and five, you have more concentration for upselling, cross-selling and expansion. We also threw in hunters, which is something we've never really had at this degree. We usually asked our existing account managers to do hunting, go after new logos, et cetera. It was part of their compensation. Gesundheit. What we've chosen to do now is have those account managers focus purely on the cross-selling, upselling, taking care of those clients. We have dedicated hunters that are now going after new logos and trying to expand our footprint out there. That's really the place where we needed to grow, was getting the new logo, the big expansion out. So much of go to market success also relies on the person at the top. I'm just curious, you've changed out North American head of sales recently. What is giving Nadav confidence that these are the right people in place? I think North American head of sales, the person that was there, Avi, he's transitioned into a role that is more appropriate. I think he was a logical choice until we found the right person, and we found the right person in Rachel Roberts. She's now heading up North America. As far as the kingpin, the CRO, I think he demonstrated his capabilities during the process of evaluation of how we were going to make the changes, and I think that's really what was the defining factor. He really led the charge around this, I think that really garnered Nadav's attention and also his confidence in what could be done, and he's a pretty phenomenal person. He commands the presence of the room, and I think that's what you need in a leader, especially a sales leader. I think we've got those locked down. We've also brought on a couple other folks. We brought in a Global Channel Head from CyberArk. We've got some other folks we've also filled out on the sales side. We've got some real prominent people from the industry. What we're doing now is we're backfilling in areas. Sometimes it's to replace somebody, sometimes it's a whole new position, but generally industry-seasoned people. No more give people a chance that have just a little bit of experience or from a tangential area like enterprise software. Really what we're doing, and we're able to attract those people now, whereas I would say three years, five years ago, we couldn't attract them at this level. I think investors appreciate the speed at which you moved and cut once and then hopefully outperform from there. Measure twice, cut once. When you think about you've made a lot of go-to-market changes, what gives Nadav and team the confidence that it wasn't something product or competitive? Maybe just talk about why you knew it was the go-to-market that needed to be addressed. We were winning on product, but not at the level we needed to win. We have customers standardizing on our products. Firewall, for instance. We've got Takealot, one of the largest retailers out there, just displaced a competitor there. We're seeing AI Factory wins outside of America right now, but I'm sure we'll get into the Americas. We've got a hyperscaler. We've got all of these things. What we're missing is that next step, which is new logo at a constant pace and an expansion within customers at a higher rate. When we did the analysis last year, Sherif was key to it. They decided that these were the identifying factors, and we didn't have enough dedicated folks at the sales level taking care of these clients or going after new logos. When should we expect the benefit from all these moves? You're obviously putting a huge emphasis on new logos. You've got Avanan and other products that are also probably landing with a lot of accounts, helping drive new logos and an eventual cross-sell. When should investors expect an uptick in both new logos and just growth as a whole? I'd say the initial aspect is, remember, we didn't change anything on the subscription side, that part of the house stayed the same on the guidance for the year. What really detracted from the full year was just product, and that was a timing issue of it was disruption caused by us not getting people in place in quick enough time, not getting their compensation aligned correctly, et cetera. To get that momentum going, you're probably looking towards later this year for on the product side. The other side's doing fine. It's just building on the other side. What we see in the pipeline is very strong pipeline for third quarter, fourth quarter. It's even building for the second quarter too, but building and converting are two different things. As we look throughout the year, really you should start to see things come together in the fourth quarter in a solid way. You'll see signs of it, but really where you should start to see it come into its own is probably the fourth quarter and beyond. We look to have a very prosperous 2027, hopefully. You want to talk product or subscription next? It's up to you. Okay. Dealer's choice. We'll go subscription. Subscription was the bright spot of the quarter. 30% of the business is growing, 40% or so, the emerging bucket. Yep. How long can that continue to grow? If you do the math, that's effectively all of the growth in subscription. I think that's a huge driver of growth going forward. I would say that because you don't even see any growth out of AI in that, we are just building the pipe for AI. CTEM, I think we talked about it on the first quarter call that it grew 96% ARR year-over-year. With a number like that, I don't think it's anywhere close to running short of opportunity. In fact, I would say that one's got probably the brightest spot in the portfolio right now. It sells itself. Harmony continues to chug along with all the user-based technologies, and if you really start to look at how this all comes together, as people start to really realize how important protection and prevention really is and how detection and remediation is just admitting loss, that might have been fine in the pre-AI or pre-agentic world, but in an agentic world, that's just like taking your pockets and emptying them of cash in a crowded room and saying, "Have at it." It's not going to keep you in the lead for long. I think this puts us in a position where we're much more competitive from a product standpoint and a sales and marketing standpoint. To your point, every conversation we have is like, customers are afraid. AI is going to have massive implications, and we expect we'll probably start to see that benefit, pipelines and growth second half this year, maybe next year. How do you make sure that, I guess, one, what's the right to win AI from your perspective at Check Point? Two, given all the go-to-market changes, are you guys ready to catch this inflection? I think we made those changes to enable this to be successful. That was necessary. We originally weren't going to institute it until 2027, and then it was obvious that it needed to be done immediately. I think the most important thing is the ethos the company's had since day one, which is protection and prevention. It's time to remediation. Critical vulnerabilities, you just don't see them from us, not the severe ones. I think we've had two in 32 years, where it's almost common practice monthly, some vendors bi-weekly. That gets amplified like being at a rock concert in the AI world. You can't put earphones on to numb down the noise because you won't have a job. No matter how good the marketing is or the sales is of somebody who's selling you detection and remediation, those are just headphones to drown out the noise till you lose your job. I don't think people in these roles really want to lose their jobs. I remember years ago when somebody made some bad choices, even the CEO of the company got canned. I think if I remember right, that was a result of Mandiant or somebody like that notifying them that they were being attacked, and they ignored it. Going in thinking detection and remediation is going to actually help you in the new order of security, I think is pretty naive. Makes sense. Maybe flipping gears to SASE. One thing. Yeah. Remember, a lot of the chosen vendors of a lot of these companies, they've been done by reputation. It hasn't been done because of a bake-off, somebody saying, "Okay, we're going to put this product up against this product and see which one delivers the best results." It was never. If they were going to do that, they would pick the one that would obviously lose. They wouldn't pick us. When you start looking at it from that angle, people are now betting their jobs on these relationships that they've bought products from. I think that can change. I think that's especially true in the U.S. market. I guess, is there things you can do? I know you've been working with the channel more and incentivizing more. Maybe just talk through that, what you can do, because I agree, if you look back over time, the best technologies don't always win. Without a doubt. We've talked about the direct go-to market, but maybe talk about channels, partnerships, anything you're doing to try to get that brand reputation, especially in North America. I think really the biggest one is, they know the products the best. It's just they want to go where they can get paid. I think we've changed that last year, and we're changing it further this year. I think there's another aspect to it that's also more important is the ability to win. I think previously in Check Point, there was a lack of executive sponsorship when it came to executing on deals, especially around the channel. They were probably a little bit hesitant to commit everything, knowing that they're not going to have the same level of commitment from the executive team. I think without a doubt, over the last year, that's changed significantly. In fact, you have a guy that you could argue is not a financial mercenary, but is actually a security mercenary. Someone who comes with a lot of credentials, a lot of gravitas, I think that can benefit you in the long run. I think as more and more of that becomes prominent, we should have more success. I think SASE is also part of the buying decision to some extent. I'm just curious, you bought Perimeter 81 a few years ago, it's a tremendous acquisition with great technology, but you've been working to scale it. Where are we in that scaling journey? What are the expectations for SASE as we move throughout 2026? We're 12-18 months from being at the level we feel we need to be able to serve our biggest clients, which is hundreds of thousands of users. Right now, we're sub-100, probably closer to 50 than 100. We can serve a great deal of our customer base, but where we want to get to is the larger. That's going to result in more infrastructure build, but also dynamic expansion of the architecture of the product itself. Those two things are going to drive us towards that in the next 12-18 months. Features get added all along the way. We like the progress, it always takes longer than you want it to. Maybe flipping back to product. How does Check Point think about the structural growth of product on an annual basis, right? On one hand, your guides were down 10 this year, and you're probably seeing another year or two of product refresh cycle benefit. On the other hand, I'm just curious how you think about the sustainable growth rate. Should we expect 5% for product growth, higher or less? I know where we'd like to be. We'd like to be at the market, and the market's obviously growing higher than 5%. I think mid to high single digits or even higher, I think is something we strive for. We have to see what we can support and what the market can support. I think there's some aspects of it that may change going forward. I'm not sure you're going to have the traditional sense where they want to have multiple network security guys, right? We have one firm out there that had three of us. Now they only have one of us, and that's us. I think there is some rationalization of the architecture. The idea that, oh, I got to have one of everything, I'm not sure it's going to be that way in the future. I think that provides more of an opportunity for AI to exploit you than not. I think there is great deal of potential since a lot of those large customers around the world, were one of the vendors they have in those cases for firewall, and we'd like to be the only one left standing. Time will tell. Maybe talk through memory prices. How are you thinking about price increases? I think you guys kind of passed through a token price increase. 5% at April 1st, yeah. 5% April 1st. Have you seen any change in the competitive environment? You've certainly seen competitors offer much higher price increases. Yeah. I'm not sure what the comparison is. We do have a premium on our product, so I'm not sure where that falls compared to theirs. Definitely, we pass through what's necessary, and that's what we thought the 5% covered. Doesn't mean that later in the year we couldn't have to do it again or do something differently, but no commitment to it yet because we don't see a need for it. We said there was going to be a 1% headwind to gross margin as a result of memory, et cetera. Going forward, it remains to be seen. Should we, I guess, just given where memory is today, and it's increased a lot year to date, is it natural to expect potentially more of a headwind in 2027? Or should we expect price increases to offset that? It's a good question. I think it also depends on what the memory requirements are. If there's more of a transition to DDR5 than DDR4, they're a little less scarcity. I think time will tell. We reserve the right, if we have to increase price. The issue is that if we're doing it, everybody else is doing it, too. It's not going to change the dynamic if we have to. When you think about your product guide for this year, were you factoring in customers sweating appliances more or any changes in buying behaviors? Have you seen anything so far? That's a good question. I think in all cases, it's just a degree to which customers are doing stuff, right? I don't know if they're sweating more this year or less. My thought is because we weren't there with the salespeople, there was probably some sweating going on. People weren't leaving us during the first quarter. There was probably some sweating going on because you weren't having a sales rep come in and tell you, "Hey, let's get these swapped out," or whatever, or managing the account. As a result, there was probably a little more than was necessary. We'll see if that can be rectified as we go through the year. You guys have always been a tremendously profitable company, right? Most companies don't know how to spell the word GAAP, and you guys have done that very well over the years. How should we think about investments, right? What is the updated Check Point view on growth versus profit? How much are you willing to invest? Do you need to hire more heads to grow faster? Where are the investment areas needed to get growth back to where you want it? I think where we are right now is we've done quite a bit of hiring. I think it was more about getting the right people than actually increasing the numbers per se. When we moved all those sales reps out of the mid-market up, some of those got rotated out for more seasoned heads, et cetera. I think that addresses it in a certain level that I don't think we have to make any abnormal investments. I think what we've done so far will keep incrementally adding. Especially opportunistically, as we find seasoned people that we'd really like to bring on board, and we've had a couple of those lately. I don't think there's anything out of the ordinary that we have to do right now. I think right now it's all about execution and getting these people into their accounts, getting the hunters out chasing after new logos. I don't think it's something that you'll see adversely affect operating margin at this time. Great to hear. Kip, always a pleasure. Thank you, Joe. Appreciate your time. Bye-bye.