Check Point Software Technologies Ltd. and Commvault Systems Inc. both saw significant price movements today, but in opposite directions, after reporting results for the quarter ended September 30.

Shares of Check Point, one of the world’s largest cybersecurity companies, fell more than 13%. Commvault, which primarily 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.

Disappointing growth

Check Point creates software that businesses use to protect their cloud environments, on-premises servers, and other assets from cyberattacks. It also offers 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 September 30 with revenue of $635 million, an increase of 7% from the same period a year ago. However, this was not enough to meet the consensus estimate. Analysts surveyed by Zacks had expected the company must report $635.4 million.

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

The company ended the quarter with net income of $274 million. This translates to adjusted earnings of $2.25 per share, an increase of 9% from the same period last year, matching the consensus estimate.

For the current quarter, Check Point expects adjusted earnings of $2.60 to $2.70 per share on revenue of $675 million to $715 million.

A quarter at the top of expectations

Commvault owes the rise in its stock price during today’s trading session to the fact that its revenues and profits exceeded expectations last quarter. It sells software that businesses use to back up and restore their files. It also provides tools for related tasks, such as verifying the reliability of an organization’s data recovery procedures.

The company generated $233 million in revenue in the second quarter, an increase of 16.1% from last year. This sum is also 5.5% higher than the $221.05 million projected by the Zacks Consensus Estimate.

Much of Commvault’s growth has been driven by its subscription business, which includes its Software-as-a-Service data protection tools and certain other products. The company’s revenue jumped 37% to $134.04 million, beating the $123 million forecast by analysts. Commvault says its subscription offerings now have 10,500 customers, up from 8,300 a year earlier.

The company also provided an update on its SaaS products, which represent a significant portion of its subscription revenue. Commvault says annualized recurring revenue from these products jumped 64% year over year, to $215 million. The SaaS segment’s net retention rate, a metric that tracks how existing customers increase their spending over time, stands at 127%.

Commvault’s profits also exceeded analysts’ expectations. The company generated net income of $37.6 million, or 83 cents per share on an adjusted basis. The market was expecting 75 cents per share.

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

Photo: Wikimedia