Check Point Software Technologies Ltd. and Commvault Systems Inc. both logged significant price moves in trading today, but in opposite directions, after reporting earnings for the three months ended Sept. 30.

Shares of Check Point, one of the world’s largest cybersecurity companies, dropped more than 13%. Commvault, which mainly sells data protection software, is up 24%. There is some overlap between the companies’ feature sets: Both provide tools that help customers detect malicious files.

Underwhelming growth

Check Point makes software that enterprises use to protect their cloud environments, on-premises servers and other assets from cyberattacks. It also provides a line of firewall appliances called the Quantum series. Its products are used by more than 100,000 customers worldwide.

The company closed the third quarter ended Sept. 30 with sales of $635 million, a 7% increase from the same time a year earlier. However, that wasn’t quite enough to meet the consensus estimate. Analysts polled by Zacks had expected the company to post $635.4 million.

Check Point’s Harmony Email tool, which helps protect workers’ inboxes from phishing campaigns and other threats, outpaced the company as a whole with a “double-digit” year-over-year revenue increase. The product exceeded $100 million in annualized recurring revenue for the first time during the third quarter. Check Point also reported double-digit growth in its Infinity Global Services unit, which provides cybersecurity-related professional services such as breach remediation.

The company ended the quarter with a net income of $274 million. This breaks down to adjusted earnings of $2.25 per share, a 9% increase from the same time a year ago that aligns with the consensus estimate.

For the current quarter, Check Point is forecasting adjusted earnings of $2.60 to $2.70 per share on between $675 million and $715 million in revenue.

Expectation-topping quarter

Commvault owes its share price gains in today’s trading session to the fact that both its revenue and earnings topped expectations last quarter. It sells software that enterprises use to back up and restore their files. It also provides tools for related tasks, such as checking the reliability of an organization’s data recovery procedures. 

The company generated $233 million in revenue during the second quarter, a 16.1% increase from last year. That sum is also 5.5% higher than the $221.05 million projected by the Zacks consensus estimate.

Much of Commvault’s growth was driven by its subscription business, which includes its software-as-a-service data protection tools and certain other products. The business’ revenue jumped 37%, to $134.04 million, topping the $123 million forecasted by analysts. Commvault says that its subscription offerings now have 10,500 customers, up from 8,300 a year earlier.

The company also provided an update about its SaaS products, which account for a sizable portion of its subscription revenue. Commvault says those products’ annualized recurring revenue surged 64% year-over-year, to $215 million. The SaaS segment’s net dollar retention rate, a metric that tracks how existing customers increase their spending over time, amounted to 127%.

Commvault’s earnings likewise topped analyst expectations. The company generated a net income of $37.6 million, which amounts to 83 cents per share on an adjusted basis. The market expected 75 cents per share.

The company estimates that it will close the current quarter with sales of $243 million to $247 million, which would represent a 13% year-over-year increase at the midpoint. Full-year revenue is expected to range between $952 million and $957 million. 

Photo: Wikimedia