[Audio Gap] Financial results video conference. I'm Kip E Meintzer, Global Head of Investor Relations. And joining me today are Founder and CEO, Gil Shwed; and our Chief Financial Officer, Roei Golan. Before we begin, I'd like to remind everyone that this conference call is being recorded and will be available for replay on our website at checkpoint.com. [Operator Instructions] During the formal presentation, all participants are in listen. During this presentation, Checkpoint representatives may make forward-looking statements within the meaning of the Securities Act of the early 1900s. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to those discussed in Check Point Software's latest filings with the Securities and Exchange Commission. Any forward-looking statements may be only as of the date hereof, and Check Point Software undertakes no obligation to update publicly any forward-looking statements. In our press release, which has been posted on our website, we present GAAP and non-GAAP results, along with a reconciliation of such results as well as the reasons for our presentation of non-GAAP information. If you have any questions after the call, please feel free to contact Investor Relations by e-mail at kip@checkpoint.com. Now I'd like to turn the call over to Roei Golan.

Thank you, Kip, and great to see you here with us. One moment, I'll show my screen. Let me know if you can see that. Can you see my screen?

We can.

Okay. Great. So thank you, Kit. I'm excited to be here with you. Actually, we started very strong. We finished the quarter Q1 with EPS of $2.04, a 13% increase year-over-year and net income of $235 million, which represents 8% increase year-over-year. Also, our revenues were above the midpoint of our projections. They actually grew by 6% to $599 million, $6 million above the midpoint of our projection, while the EPS, as mentioned, grew by 13% and was $0.04 above the midpoint of our projections. So let's move to the revenues and deferred revenues and billings. So as indicated on the revenue side, we grew by 6%. The deferred revenues grew by 2% to $1.826 billion while our current deferred revenue, short-term deferred revenues grew by 2% also to $1.347 billion. Our calculated billing reached $570 million, which represents 7% growth year-over-year while our short-term calculated billing reached $532 million, a 3% growth year-over-year. Our remaining performance obligation reached almost $2.2 billion with 6% growth year-over-year. And that growth was driven by strong demand for our product this quarter -- in the first quarter with double-digit growth in total new business annualized bookings, and we'll show you also in the next few slides, the reflection. So the revenues growth of the 6% was driven mainly by subscription revenues, another strong quarter for the subscription revenue that grew by 15% to $263 million, that is mainly driven by strong performance of our Infinity, Infinity consolidated platform and the Harmony Email. Both of them contributed significantly to this growth. In terms of, as mentioned, the new business acceleration, the annualized new business booking growth, that's something that we showed you last quarter also, we did see the turnaround in Q4. We show -- we presented to it that we grew double digit in Q1. We -- so we saw the new business book annualized booking grew double digits again in an accelerated way and higher growth than in Q4. So I think that's -- again, that's because of healthy and strong demand to our product during the quarter. In terms of Infinity, Infinity revenues grew by double-digit revenue growth and becoming more and more significant to our business -- from a revenue perspective, it's already exceeded 13% of our revenues. And in terms of annual booking, it's even higher -- so we expect that the revenues -- that this portion from the revenues will go -- will be bigger in the next few quarters. As we move to the global revenue distribution, so we can see here that the EMEA, 46% of our revenues came from EMEA, 42% of the revenues came from Americas, while the remaining 12% came from APAC. Important to note that the revenues grew in all geographies. We did see an increase in all geographies and also in the new business growth that I mentioned in the previous slide, we did see this growth in all geographies with Important to note that it was led by EMEA with very strong new business growth in EMEA. Now let's move to the P&L this quarter. So our gross profit grew by 7% to $536 million, represent 90% gross margin compared to 89% gross margin last year. Our total operating expenses increased by 8% to $284 million. This was mainly as a result of our continued investment in our workforce. I remind you that we did 3 acquisitions last year. So that's -- we have the full 3 acquisitions here in the operating expenses. We keep investing in the cloud infrastructure, and of course, the sales and marketing -- so all of that drove the 8% growth increase in the operating expenses. And we finished with operating income of $252 million, a 6% growth, which represents 42% operating margin similar to last year. Now let's move to the net income. So our net income grew by 8% to $235 million. We can see here that the financial income, we did see an increase in the financial income. It's a sort of higher interest rate in the market and similar tax expenses and tax rates. And we finished with EPS of $2.04, 13% growth year-over-year. Moving to our cash flow and cash position. So we finished the quarter with more than $3 billion in cash, marketable security and short-term deposits. We purchased during the quarter $325 million of shares in an average price of $159 per share. Our operating cash flow was strong with $361 million. To summarize our financials. So revenues and EPS reached the top end of our projections we did see acceleration in our quarterly revenues mainly came from the subscription that came from Infinity and Harmony Email performance. We do see strong acceleration in our new business annualized booking, another quarter with double-digit annualized new business bookings and with strong profitability, maintaining strong profitability, 6% operating income growth, 8% net income growth and double-digit growth in EPS, 13% growth. And now I'll turn the call over to Gil.

I apologize I muted myself. Sorry. So good morning, everyone, and thank you, Roei, for the presentation. And now that I'm unmuted, I hope you see the presentation. Ready to go for the business update. I'll start with a quick recap of what Roei already shared with you. I think we had a pretty good quarter in the first quarter. Great results, revenue, EPS top of the projection, double-digit subscription growth continues to be recurring revenue, which I think is an important factor because I think we are moving more and more of our business to be an annuity model. represents now 83% of total revenues. So again, another good indicator. Overall, I think we are putting a huge focus on what we call new business activity. And new business activity include everything from signing up new logos and new customers, to new refresh cycles, expansion, upsell, everything for the existing customers. And we had double-digit new business growth, which I think is very, very important that our customers are growing with us, are refreshing with us, are becoming up to date and are getting the best security. Part of that is the overall Infinity platform, new customers, some major public sector wins. And I think Infinity just to be through the rest of the presentation, we use the terminology for several things. It's our overall architecture, our overall platform which I think is very important, but it's also a specific kind of what we call Infinity deals or Infinity contracts, and these are deals that customers are usually doing for long term, but including big parts of the platform and not just one product. So all of these are growing and growing very, very nicely. And last and least, one of the key drivers of our business remains our security gateways, the network in the center of everything. And this quarter, we did the major refresh of our entire product line, the Quantum Force, that's the new name of the new line of appliances. I'll talk more about that, but what should be important and significant for the Check Point customers and gaining more value from what we do. So just -- if we look at customers that have been with us, you can -- sorry, let's switch too quickly. So you see many new customers on our platform, all geographies, Europe, Asia, U.S. And a very important area is the public sector. We booked 19 new government agencies in 40 countries, just in the first quarter and that is also a very nice -- some are very small, some are huge, some are multimillion dollar deals for many years. So again, all industries; manufacturing, telcos, infrastructure, energy, so on, very, very important. In the first quarter, we also held our CPX conference. I think some of you attended to that with the first sell side analyst track that we had in Las Vegas. And that's important because that's where we gather together our field employees, our partners, our customers and share all our renewals for the year. So we did all our product launches. These are free conferences; one in Asia, one in Europe and the last one was in Las Vegas in the U.S. We had overall over 18,000 participants, both physical and virtual, almost half and half. So that was great. For the first time, we returned to full force, physical conference, tons of energy. I think everything was very, very well received. And I think you see it here, we get the highest scores ever on this conference. We measure the performance of the conference on every aspect. And this year, we got the highest score in Check Point history. So we're very happy about that. And I think it indicates something also for the enthusiasm of the customers and partners for the new launches and the relevancy, and the importance of the value that Check Point provides to their security. And one of the key messages was our Infinity platform or Check Point as a platform company. Now I know that many people in the industry speak today about the platform. Everybody speaks today as the platform, and it looks like it's part of the wave. But I think it's very important to understand. We launched the Infinity architecture, the Infinity platform in 2018, 6 years ago or 5 and some years ago. And since then, we're building it. We're building it to be a very, very unique platform, a platform that's now AI powered more than 50 security engines that are delivered from the cloud and contain AI technology. That's part of overall of over 80 different security engine that analyze and prevent all types of attacks. And one of the major values here is our 3Cs being a consolidated platform where you can manage everything together, a comprehensive one, addressing all the key attack vectors and the one which we are putting a lot of emphasis this year being the strongest in the real platform, not the architecture but a true architecture, a collaborative platform. And that's where I put a lot of our focus in 2024 making sure that all the technologies and products work together to elevate the level of security. So this is not just information sharing between different aspects of the security infrastructure. This is also a proactive action. So if we see somebody poking around our network, scanning it, we can take that attacker and block it all over on the network, on the cloud and on many other places. If we identified an infected endpoint, we can quarantine that endpoint through the network and make sure we stop the damage, contain them, contain the risk and stop the attack. And that's the only platform where I think we truly do that and do it in a very, very effective manner. So this is, again, a true platform when all the elements are orchestrated, work together in a collaborative manner. And I think the value of collaboration is going to pay off with the highest level of security. So that's a big focus that we put in the conference. Another important element is, as I mentioned, our new product launches, and these are the 3 key products that we launched. The AI copilot that likes to manage security with natural language, again simplifying many management tasks and once again elevate the level of security because things which people didn't do before because they took too much time because they were too complicated, they can do now in a matter of seconds with AI technology. A new technology for securing cloud applications, SaaS. Don't confuse that with SASE, that's the technology for remote access that we went into the market with -- in the acquisition we did in Q3 but SaaS is a different one also based on some acquired technology from last year and new technologies and the products that will come later in the year that actually protect your SaaS applications on the cloud. Again, part of the platform side of everything. And last and not least, and I mentioned that, is our Quantum Force gateways. This is very, very important because that drives a big part of our business. So if we see that the previous generation of Quantum appliances, and you can see here the new line of appliances, amazing line. You can see the performance ranges here between 2x and 3x performance optimized for AI. I mentioned the over 50 AI engines and with the highest threat prevention ratio in the industry, 99.8% based on the Miercom results. So we are very proud of that, and I think that will -- should give us a lot of power to go to the market, win new customers, to upgrade and refresh the existing customers. And again, it starts, it takes time for a customer to evaluate the new hardware and the new software, but I think it's a very big promise for the rest of the year. Last but not least, I mentioned the Infinity AI copilot and you can see a simple demo here. We are trying to get a simple managerial task. Emily can't access the SAP server. Why can't you do that? Again, in the past, it was a long process, analyzing [ globes ], analyzing things. Here, it's super simple. You asked the question. It tells you Emily actually attempted to do that but there was a rule with blocking here. I asked you, "Do you want to add there and change the rule base so she can actually access that server. You say, yes, policy being installed, boom, it's done. These tasks, when you do them with our product, if you're an expert, I mean, it takes you a few minutes. If you're not expert, it can take you much longer. If you're doing it with a competitive product, it can take you many, many even hours to analyze the situation, to find the right place, especially for large enterprises that have hundreds of thousands of rules, and they need to diagnose the situation and so on. And again, our AI copilot is not limited just for the managerial tasks. It can do everything from asking, are we protecting against the latest threat? And again, it will go and pull the latest threat from the right databases, check the configuration of all the security installation and will tell you, yes, you're protected or no. Click here to get updated. I believe, by the away, AI will play a major role in the world in general, but in our industry, it can make some big revolution. And what we're doing now is just the first step. We will see much more. So just before we finish speaking of AI, a major partnership we announced in the AI space is about securing the AI cloud infrastructure. So I'm sure you all know and you all follow some of the biggest investments in our world today are building AI server farms in the cloud that delivers all this wonderful value of AI. These are based primarily on NVIDIA chipsets. And what we announced last month was the first AI infrastructure firewall, which means that we can now embed the Check Point firewall to protect the AI servers in the cloud on the AI chipsets from NVIDIA. We launched this partnership based on work that we are doing for many years -- several years with NVIDIA even before the AI generation. But based on that, we have a lot of our software that can run on the NVIDIA chipsets. Later in the year, we will make it available. And I hope that this will present a very interesting market opportunity and very, very important because right now, much of the AI infrastructure that's up there in the cloud remains exposed to the open Internet and its level of protection is far from being sufficient from where we want to be. So I think this represents another business opportunity and there is many, many more around the transformation to AI. So to summarize my presentation on Q1, we had a strong start to 2024. The Infinity platform investments are delivering returns. We have different products with e-mail growing with many other products growing, with the sales of the Infinity agreements for sophisticated comprehensive security architecture for customers growing quite fast, which is a great potential for the future, but already generating 13% of our business. Revenues, EPS at the top of our projection, subscription growth, new business growth -- so both on the quantitative and the qualitative measures, I think we've done pretty well to start the year, and we are looking forward for the next few quarters and hope that we keep good start for the year. And before I finish and open it for your questions, maybe speak a little bit about our projections for the second quarter. Sorry, the projection disappeared. No, we didn't disappear. They will be right here. So projections are generally in line with what we've talked in the first quarter and the beginning of the year. Revenues are going to be between $607 million to $637 million. Earnings per share is expected to be between $2.10 to $2.20. GAAP EPS approximately $0.44 less than that. I think this is kind of where we've been very consistent with where we started, and I hope that we will go in to have a good reminder for the year. So thank you very much, and I'll be very happy to open the call for your questions.

All right. As always, please remember one question during your period. First up is going to be Joseph Gallo of Jefferies followed by Tal Liani of BofA.

Wanted to start high level, how would you characterize the business environment in 1Q? And then what's embedded in guidance? I'm not sure if I saw a calendar '24 guidance -- and then given your combos with customers, how are they viewing their cyber budgets? What areas are being prioritized? Any sense of fatigue seen by others? I know you called out strength in EMEA. Is the U.S. budget lagging relatively?

So that was a very comprehensive question. I'll try to answer it. First, we had a good quarter. So I think I've already conveyed that. In terms of the environment around us, it was kind of mixed, I'm not as positive as I've seen from our results. On one hand, the security marketplace remains healthy. So I don't have any -- I mean, I think that's going to be good and going for several years. But I don't think that customers started opening big budgets like we've been before. They are keeping relatively tight on some of their budget, especially for some of the areas that we are in. Our industry remains very competitive and I think that, again, while we haven't seen much of it in the first quarter, I do anticipate we'll see more competitive pressure moving forward. So I think overall, it's a good market, but it's not -- we haven't -- we have definitely returned from the down market that we've been into a year ago into a more stable, healthy market, but we're still not at the market I like it to be. And from the geography standpoint, our strength that we've seen was very strong in Europe. U.S. was good, new business grew, but a little bit more tight.

All right. Next up is Tal Liani.

Can you hear me?.

Followed by A Tindle.

I don't know why my video doesn't show up. I don't know if you can see me or not, but -- okay. Roei, I have a question -- the -- I look at the quarter and then I look at what could drive double-digit growth for next year. And if I work with your model and I assume that products are flat, maintenance is like plus 2% and subscription is up 15%, which is what we have seen this quarter. I'm getting 6%, 7% growth. I'm not getting 10%. And you talked in the past about the opportunity to grow total revenues by double digits, no time line, but to grow. So what are the assumptions or what needs to happen for revenues to grow double digit? Is it about product revenue growing again double digits? Or is it about subscription accelerating? What are the components that need to happen for you to grow double digits? And again, no time line on it. I just want to understand how growth accelerates from here?

So I think we have -- that's a good question. So I think there are several factors. First of all, of course, product revenue needs to grow I mean it doesn't need to grow, by the way, double digit, but it needs to grow at least high single digits. It's something that we need when we execute better. And I think we have a new product in the Quantum Force that we launched in Q1. And that definitely can drive refresh, more refresh and can drive growth in product revenues. In terms of what else, I think that the most -- the main driver for the growth should be the SaaS, Perimeter 81 acquisition that we just acquired two quarters ago. It's still not significant to our business. We just acquired them. We talked about the integration that it takes time. But I think that that's the potential. This together with the continued strong growth in the Harmony and the refresh, I think that can bring us hopefully to double digit again, without any time line, but I think that's the potential.

All right. Up next is Adam Tindle from Raymond James, followed by Shaul Eyal from TD Cowen.

All right. I just wanted to start with a competitive environment question and observing that you're posting nearly 7% billings growth here. We'll see actual results, but that probably outpaces both Fortinet and Palo Alto this quarter based on their guidance. Your new business is growing double digits. Just wonder if you could maybe touch on the rationale and sustainability of that trend where you're outperforming those competitors from a growth standpoint. And secondly, as we look forward, one of those competitors on their last earnings call announced and intend to pursue a very aggressive pricing strategy. I just wonder if you could maybe touch on your thoughts and expected response for that.

Thank you. So first, you are right. There is some pressure on the industry. I think we saw a big part of it last year. Our competitors seeing it a little bit of delay. I don't know how much of a delay is about financial issues that -- and how much of it is -- where is the market versus what is their financial results, but we've seen a huge pressure in the market a year ago. I think we're getting out of it. They seems to be, based on, again, the report you're talking, about a little bit behind us in that cycle. I think the fact that we are under pressure and seeing and pursuing aggressive strategies means that we will have a more competitive market. That's evident. I do think that customers need to buy the best security. And I think if you buy a second best security for free, it's not very good. And guys, I think it's not -- I hate to speak about other companies and bash about them. But if you open now the report, you'll see the superiority of the Check Point technology. not just in blocking in a higher prevention rate like we've seen with Miercom in almost perfect score but with product vulnerabilities and even failing to fix these products vulnerabilities on timely manners, in exposing big parts of our infrastructure based on some of our competitors' products. These are -- and by the way, these are not new trends. This is things you can see that you can track, some of it is published publicly, and you can see that we do commit to the best security, and I urge every customer and I think we definitely can do a better job in educating the market of that, not compromising on security, not even for free. So that I think should be our key message. Get, let's win with the best security.

All right. Our next person up is Shaul Eyal, followed by Gabriela Borges.

Gil, any word about the CEO search. And as we think about the new business or even the renewals that you've had. I think you've mentioned several multimillion dollar transactions, but did you guys have any 8-digit related transactions this quarter?

Yes. Okay. So I think I'll start with the CEO search. I think we talked about the intention last quarter. We since then started the process. It's going to be a good, structured, well thought of process. And we are within the beginning of the process. It will take time, I think, like we've said last time, and it's moving on. In terms of large deals, we have deals of all sizes. We have some new wins that are 8-digit deals. It's 8 digits for multiple years. So the impact on the first year is going to be -- again, Roei can -- is better than me on the numbers. But I think for the first year, it's only 7 digits, but we had a few large new customers with 8-digit contract. Roei?

Yes. Yes, I confirm we had several new logos with -- I mean, one new logo, I would say, with 8-digit contract, again multi-year and we had several -- it doesn't mean that the billing was 8-digit. I remind you because the billing can be flexible. But in terms of the bookings, yes, we had 8-digit deals. Thank you.

All right. Our next speaker up is Gabriela Borges, followed by Jonathan Ho.

I would love to dig into the dynamics we're seeing around the refresh cycle, particularly as you see customers bring that product up for refresh, any observations on how they're thinking about their firewall footprint and their firewall budget versus their SASE budget? And then apples-to-apples, what do you see in terms of pricing as customers think about the box upgrade cycle?

So that's an excellent question. I think first, overall, these 2 markets or all these markets will converge. And what we'll see is kind of a mesh network, what it includes, the remote users, the branch offices, the data centers, the cloud, private and public cloud data centers; all of this needs to be interconnected. And I think that's one of the great benefits that Check Point can provide in the marketplace. There are today, if you look at the market, there are today stand-alone vendors, we're doing a decent job in the SASE market, some in branch offices, some on remote users, but not converged with the rest of the enterprise with the data centers and so on. There are companies that do more of the data center security. But again, don't have the SASE model. There are companies that have both, but we are not today integrated. We are working on a platform when everything is going to be integrated over the network. And in terms of budget, I expect a lot of it to come from the same budget. And by the way, the benefit is not just the mesh architecture. We call it also a hybrid architecture. It's also that customers can use the same policies, the same high level of security but get the most optimized deployment. And the most optimized deployment can be sometimes on-premise, can be sometimes on-device and can be sometimes in the cloud. Its' very important, by the way, when you think about it; when people deploy networking solutions, they invest tons of energy to get the faster speeds, to get the lowest latency. So for example, in all these cases, doing things on device or on-premise delivers 100x better results than doing it in the cloud. In some areas, shifting away through the cloud may also make sense, but that's what's important that you have the hybrid structure that delivers the optimal -- not just the best security, but also the optimal performance. And I think we will have both. In terms of the budgets, right now, we are seeing good traction on the SASE side, but it's still at least in our business, still in the small -- mainly small, medium customers. That's also the right now, the product offering that we acquired. We will integrate it this year to be this kind of overall architecture and platform that works together at any size. So that is important. On the refresh cycle of our data center, the core of our business, I see good and healthy activity, especially on the high end on the big data centers. But I don't see today that budgets are opened up. Budgets are still relatively tight there. So while I do expect and we do see some signs for improvement in the second half of the year and while I do think that our fourth product family, we will open some of that, it still hasn't happened and budgets are still tight for these spendings.

All right. Next up is Jonathan Ho followed by Joshua Tilton.

Can you maybe help us understand how your Infinity contracts that you already have in place have been growing and specifically, what type of uplift do you see from customers that maybe have had these contracts in place for a while now?

So firstmost, I don't want to give too specific data because it is kind of confidential. I don't want it to fall into the wrong ears. But generally speaking, we do see that Infinity customers are not just committing for a longer period of time and getting more comprehensive security but are committing to us to a much bigger budgets. And again, we've done that comparison because it's a simple trick, to convert the customer for simple products buying into a longer-term contract when we actually don't increase the value or sometimes even the opposite. So we did a very fair analysis of our Infinity agreement customers. And almost all the cases, there is a significant growth in the customer -- the amount of customer -- business that the customer does with us. Some of it also grows over time. And I think what I've seen generally, where you can comment, most of these contracts when they are being renewed, they are being renewed in a bigger way. I don't know what Roei consider?

Yes, yes. I mean we do see that most of the customers that are engaging with us in Infinity and also when they are [indiscernible] Infinity, -- it's usually with higher spending, higher annual spending. So that means they are taking more product of us, if it's e-mail or if it's a SASE. So I think, again, I think that we see that the positive side on the Infinity agreement.

Next up is Joshua Tilton followed by Rob Owens.

Can you hear me?

Yes.

All right. Just one for me. I guess, any way you could just help us understand what was the impact of the quarter from some of these newer appliances? I know they started shipping in the quarter. But was there any benefit or maybe even a negative as people kind of just waited to buy some of this newer stuff? And then maybe just how should we think about the pace of growth throughout the rest of the year as you see some of your customers look to adopt the newer hardware?

So I can start, Gil. Okay. So I think in terms of the transition, the allowance that we have with the Quantum Force, we did see positive traction, mainly on the high-end side of the Quantum Force appliances. But again, the transition some it takes time. It takes time because a significant part of our customer needs to do certification, internal certification in order to implement a new product. So that might -- that sometimes have a negative effect. In this quarter, I think we did see a healthy transition. We did see some nice deals also with the new product that we launched. And that's your question for the remaining of the year. So I think, again, we hope to see that mainly on the second half of the year, we're going to see more and more of our customers taking the new product, so hopefully it will drive growth to our product because, as I mentioned, it might take a quarter or 2 until the certification process is going on. And hopefully, it will help us to grow our product also in the second half of the year.

All right. Next up is Rob Owens followed by Brad Zelnick.

Great. Gil, in your prepared remarks, you talked about an AI infrastructure firewall. And I was hoping you can maybe build on those comments because that feels like a net new opportunity potentially for the space?

So you're absolutely right. That's a net new opportunity where hundreds of thousands of AI servers now deployed around the world, mainly with a few hundred service -- cloud AI service providers that are building that infrastructure -- they are buying pretty complicated systems that are based on the NVIDIA designs and the NVIDIA chipsets. I've looked on these designs. They are pretty complicated, very different, by the way. I'm sure that you follow the AI industry. But when looking into architecture design, these are very different than traditional servers. In traditional server, there is mainly 1 CPU, here it is like 3 or 4 different types of processors, each one incharge of different activities. And we are where we are -- and these are, as you probably know, these costs close to $200,000 per server. And there is usually in a typical installation there's thousands of these that are being installed. These are pretty big infrastructures. First, in terms of the security challenge, most of these remain open to the Internet because they utilize high-speed links. Because we are installed on the cloud environment, we are relatively open to don the Internet, which means that if people heck through that and get through the network linked through the Internet, they can do all kinds of bad stuff to the infrastructure; from poisoning the learning process of the AI model, and if that happens, you need to retrain it. You can't even fix the error. You need to do the training again to hacking into the box and taking over it. And these are pretty big damages today because of the cost of the time on that infrastructure. Where we are sitting, if I'm going back to the design, that design has different types of processors, we are actually installing our software on the network processor of these boxes. So we don't impact the performance of the entire AI, but we -- but we will be sitting on the network processor, we can control the flow or make it a true firewall for the traffic between the Internet and the cloud or the AI server itself, the way I call it at least and make sure that, that communication remains clean with few more things -- few more features or interesting technological approaches like monitoring more security on this entire device that we will be able to implement to based on the current architecture. As I said, this is not -- this is a new product, brand-new market, which I have a hard time estimating it because we've just started talking to these vendors last month. Though I think in terms of technology, it is in the near midterm timeframe. And the reason for that is it's not just an idea. We are running on these chipsets from NVIDIA for quite a long time. Some of this architecture has been part of our light-speed product that's like 2 years old. So the technology -- we didn't start the development of technology today. We're making it a little bit differently based on the specifics of the implementation, but that means that we expect a relatively short development cycle, and we are starting the business development cycle in terms of understanding the structure of the kind of the supply chain and the distribution chain here to get to these customers. And this can be pretty big, absolutely.

All right. Next up is Brad Zelnick, followed by Patrick Colville.

Great. Can you guys see me? -- hear me?

We can hear you but don't see you.

Great to see you guys. I've got one for Gil and one for Roei. Roei, cash flow, I know, is always going to be lumpy from quarter-to-quarter. But as we think about the full year -- is there anything to consider maybe timing or duration wise that would keep directionally at least cash flow growth somewhat in line with net income growth. And then just for you, Gil, M&A, Check Point has always been very responsible in capital allocation and M&A, in particular, a very disciplined buying some of the most innovative technology out there. But we're now at a moment where it seems like there's dislocation in the private market. I think we've all seen some shocking headlines suggesting serious valuation compression. Why is this not a time to finally get aggressive to accelerate consolidation in the market through M&A?

Okay. So I'll start with the cash flow. So first of all, regarding the cash flow for Q1. So Q1, we've seen our cash flow. You need to remember that Q1 cash flow was mainly -- it's been affected by the billing in Q4 because most of the collection is coming from the billing in Q4 because most of it is in December. Same thing in Q1 that most of the bidding is coming in March. So although you did see 7% growth. In billing, most of it we didn't collect in Q1 and in Q4, our billing was down by 1%. So that's affected the cash flow in Q1. So you can expect the cash flow in Q2. I think if we are looking on for the full year, so it depends on the execution and the billing. I think that we do see stability in the duration. We did see it, I mentioned it also in Q4, I saw that the duration is pretty stable since Q3 last year. So I think, again, it's already low. So I think that the comparables are already -- so I don't think that there will be a duration effect on the billing. And hopefully, if the billing will grow same as in Q1 and even higher, that will affect also of course, our cash flow.

In terms of M&A, first, you're absolutely right. There should be opportunities in the marketplace. We are aggressively looking and I'm seeing probably every week or two, some interesting opportunity that we are evaluating. And the valuations are still not there in terms of being more rational. What you see, if you look at the latest acquisition, you see companies with $10 million, $20 million in revenue, some even less that are being sold for hundreds of millions of dollars. So that -- again, it doesn't mean that we can't do it. We did several deals like that. We did 3 M&A deals last year. And we did some deals like that last year. But it's hard to find really quality companies. Opportunities when companies that have more significant revenue stream, I haven't seen some really interesting ones. There are a few in distressed situations when -- they are -- but we are losing hundreds of millions of dollars. And again, our hope here is not to get -- is to get something that has -- and they don't have the growth momentum usually. They have the growth momentum when valuation is not very rational. So we are looking at the ones that either have super-interesting technology that we can tuck into our platform, and I think that would create an opportunity even if the valuation is hard to justify in the short term at least or opportunities that will be more sizable, but then at least the way I look at it, we will need some rationale for the valuations. And I think it's still not there. I think it will get there in the future.

Next up is Patrick Colville, followed by Fatima Boolani.

Terrific. So my question is about, I guess, CPX versus now. So what was interesting to maybe at the CPX conference last month was -- there was a lot of interesting tailwinds. The launch of the Force firewalls, in my opinion, much improved messaging around the kind of platform and subscriptions. Leaner partner motion was announced. But in your remarks today, you're definitely kind of playing us down in terms of these factors. It seems like the messaging you want us to take away is the cycle is getting better and these things are coming later. I guess -- is that how we should interpret it? Or were there product, subscription or kind of partner changes that impacted this quarter?

I think the opportunity is there. I think we've done what we've done the right -- I mean I think we have super exciting new products in terms of the Quantum Force. In terms of budget increase and refresh and so on, the market is still not there and the industry is competitive. So -- and by the way, sometimes it takes time. Now again, what I'm saying is not -- is a very positive message. In Q4, we launched some of the super high-end appliances. We did a very silent launch. We're doing the public launch. We went for specific accounts, and we saw great acceptance of these new models, and this continued in the first quarter. In the first quarter, we did the more general release of the entire appliance line, 10 models from the low end to the high end. And this is less targeted and we see that it takes a little bit more time for the take-up. Now again, we had amazing numbers in Q1. Don't get me wrong. And I think we've talked about the double-digit growth in new business and so on. So all of these are amazing results. But you are right, I am trying to carve it out a little bit because I don't see that customers opening their pockets, at least not now. Maybe, I mean, the expectation is that more of that will happen in the second half of the year. And we'll do a more massive refresh. Now again, a more massive refresh requires the customers to free budget to do the certification, the testing, the implementation. And I think we are set up to do all of it. We have amazing price performance -- we have great value in terms of the best security. We have everything that we know and we need. We have the services. And by the way, our services business, the ones that help customers implement and design, is growing very, very fast. So that's a good sign because there is a huge shortage of skills in the entire cyberspace worldwide. And we've built an amazing arm, what we call it the Infinity Platform Services or the Infinity Global Services that can deliver amazing services to ease that planning and deployment, and this is growing very fast with our customers. So I think we're set up to take advantage of that. But at least for now, I do see some tightening in the market, yes.

All right. Next up is for Fatima Boolani, followed by Joel Fishbein.

Roei, this one's for you. I wasn't 100% clear as to what were the driving forces behind another double-digit new business bookings growth performance? And I was hoping you could break that down between the 4 pillars of your business. And just second early at a high level. For the last 8 quarters or so, you've consistently been sort of around the 45%-ish operating margin envelope. And for us, for a lot of us who've known the business for a very long time, where you used to -- you having maybe closer to 50% operating margin. So I'm curious, what's the path back to those levels from here? Is it you've been in almost a 2-year sustained investment cycle.

Thank you. So as for the first question regarding the new business, I think what we did see what drove this growth is, I think first of all, Gil mentioned the services. We do see more and more customers taking our Infinity global services. It's something we did see a very nice growth there in terms of new business. So that's one of the factors. Second, we did see -- we mentioned we did see a very nice traction for the high-end appliances. So that also drove our new business growth, together with the Harmony Email, which is consistently growing and increasing its ARR every quarter. That was the main driver for the new business that we've seen. As for the operating margin, so I remind you again, in terms of -- first of all, this year, the operating margin is still as being -- we guided between 42% to 43% for booking on the full year operating margin. And that's mainly because of -- again, we keep investing and it's mainly because of the acquisition that we've done last year that are part of our expenses this year, and we just acquired them in the end of Q3. So that had a dilutive effect on the short term. Hopefully, we'll be able to increase this operating margin in the long term. If we -- this acquisition together, as I mentioned, we -- I got asked -- I was asked about how we can reach double-digit growth in revenue. So I think the double-digit growth in revenue, if we're going to drive it by the SASE and the e-mail and more product growth; I think that can drive us back to better -- to higher operating margin. Also, I think we're also today in a very good operating margin. But I think the main driver is to drive higher growth on the top line.

All right. Next up is Joel Fishbein followed by Ray McDonough,.

I guess, Gil, for you, a follow-up on Rob Owens' question with regard to the partnership with NVIDIA. Could you just give us a little bit more color on how that would work from -- will you be working through NVIDIA and getting paid through NVIDIA? Or will you have to work with the customer itself. Will Check Point be shipping with the chips? Just a little bit more color on that. It sounds like a very big opportunity. I know you're trying to mute our expectations in the near term. But just from a longer-term perspective, how will that work?

First, that's still work in progress that we're doing. The partnership and the technology implementation is done through -- with NVIDIA. And I think they really are supportive of it. We launched it on their developer conference on stage. So this is big. In terms of the business model, it's still work-in-progress. My guess is that a lot of it will come either through the companies that are building the boxes based on the NVIDIA chipset or will come directly with the customers and the customers being the -- this cloud service provider, which is not a huge number of customers in the world. It's a few hundred customers overall. So it's a very direct approach or it's very targeted approach through that. And I think we still need to find the right distribution model to get into the customers. The software might be already ready-to-use or available within the chipset. That's the design that we're doing with NVIDIA.

All right. Next up is Ray McDonough followed by Dan Ives.

Great. Roei, I just wanted to follow up on both Brad and Fatima's question, I mean we spoke a lot about the drivers of -- potential drivers, I should say, of double-digit revenue growth, and we touched a little bit about how we get back to 50% operating margins or so over the long run. But when we think about the incremental pressures due to competitive dynamics and the OpEx investments you guys have made, and we think about what it might take from a channel perspective and go-to-market perspective in terms of investments in those channels to help drive some of the new boxes and fresh activity. How should we think about medium-term to long-term free cash flow growth and how that might relate to double-digit revenue growth if you get there? I understand billings is going to be a big portion of that. But how much OpEx investments are going to be needed to drive that double-digit revenue growth over time, right? And then just a clarification question. Can you help us understand how much inorganic contribution there was to billings this quarter? And another clarification, just the full year revenue guide. I just want to make sure that's unchanged.

So I'll start with the last one. The full year guidance is no change. Same one. In terms of the second question regarding the inorganic. So I think we did the Perimeter 81. I think the other ones are not significant at all, but the Perimeter 81 acquisition that helped us -- it had approximately $7 million of revenue. So you get $7 million of billings. So I mean that's approximately 1 point 1 and something point. So that's in terms of that. So your question about the required investments. So again, I don't want to take -- to go into the numbers. I think that we invested a lot in the last few years, both in the go-to-market and entirely in the product side. to have much better, much broader portfolio than what we used to have a few years ago. I think, of course, you saw -- we saw our margin went down from one side, but I think that this investment hopefully will drive our -- and it's not that we have stop investing, we are keeping investing. And hopefully, we're going to continue to invest and with the much better portfolio that we have today, we'll be able to drive double-digit growth. And of course, it will drive double-digit growth or going to affect also the billings and the cash flow. So I think all the questions are linked to the same thing that, again, I don't think that we're going to stopping to invest. I don't think that we're going to -- I don't want to promise any specific margin, but I think we have a very good margin today, the operating margin, hopefully will be even better in the next -- in the midterm or in the long-term future. But again, it really depends on our execution. And hopefully, we'll be able to drive higher growth and higher operating margin.

Maybe I'll take it a little bit differently here, giving you a very long perspective. I've been asked about our operating margin since our IPO in 1996. And since -- I think when we started with also relatively high margin and people say, can we sustain them? And my answer, by the way, hasn't changed. My focus is not in growing the margin. My focus is in growing a healthy business. And I think we've done that over now for almost 31 years, growing a healthy business. Now the #1 priority that I have right now is not on the profitability, it is actually on the growth. And I think we need to invest in growth. Over the last few years, we've invested a lot in building a cloud rocket. And we've invested a lot in building the Harmony E-mail, the e-mail offerings. We've invested a lot in the -- in other parts of the platform and in our research and in our -- many, many of our capabilities. In the go-to-market, we've built many different organizations to support that and to support a much better growth. And I think we still did that while preserving, I think, industry record, not just industry, very high operating margins. I think many of these things will come to fruition in the future, and then we will invest more. Now one thing that did change between now to the 90s or between now to even 15 years ago, and I think that is important to take into account. But when you grow a new business and when you compete with a new business, if in the past, it was high investment, but decent margins today, almost our entire industry is at loss. I spoke last week in the conference, growth companies conference. I've talked about that when the industry needs to rationalize and grow into a profitable business model. I asked in the room, let's say, where were about 100 people, "How many businesses here are profitable? 4 people raised their hands, maybe 3. And they were so proud because they said, if you asked that question 2 years ago, it was 0 in the room. So we need to understand that when we combine businesses when we acquire businesses, and when we invest in new business models, we are not competing in the terms of, let's build a profitable business and do that. We are struggling with businesses that needs to be brought into that healthy business mode. I think we're doing it very responsibly, but the focus is not the margin. The focus is healthy growth. And I hope that this will remain that way also in the future.

All right, folks. Thank you very much for participating. It looks like Dan Ives had to go pick up a nice colorful outfit. So he's not going to be able to answer -- ask his question. So with that, well, thank you all, and we'll see you during the quarter.

Thank you. Bye bye.

Thank you.