Check Point Software Technologies Ltd. Reports Record Financial Results for Fourth Quarter and Year-End 1998

REDWOOD CITY, Calif. – January 20, 1999 – Check Point Software Technologies Ltd. (Nasdaq: CHKPF) today announced record financial results for the fourth quarter and fiscal year ended December 31, 1998. Revenues for the quarter were $40,493,000, compared to $30,595,000 for the same period in 1997, an increase of 32%. Net income for the quarter was $18,612,000, or $0.47 per share compared to net income of $13,876,000, or $0.36 per share in the same quarter in 1997, an increase of 34% in net income and 31% in net income per share.

Check Point produced strong operating results in the fourth quarter, with 44% growth in operating income over the same period last year. The company produced $19 million in cash, despite lower financial income due to foreign exchange losses. Check Point also achieved solid EPS growth, even with a 5% increase in shares outstanding.

For the fiscal year ended December 31, 1998, revenues were $141,941,000 compared to $86,352,000 for 1997, an increase of 64%. Net income for the year was $69,877,000 or $1.81 per share, compared to net income of $39,518,000 or $1.04 per share in 1997, an increase of 77% in net income and 74% in net income per share over the prior year.

"The fourth quarter capped off a successful year for Check Point," said Gil Shwed, president and CEO of Check Point Software Technologies Ltd. "We continue to experience healthy growth and business conditions, particularly with our VPN-1 product line for Virtual Private Networks. In Q4, VPN functionality was included in 42% of gateways shipped. While we see strength and growth from all product lines, we see VPNs as the most rapid growing segment of the network security market."

Check Point achieved strong revenues around the globe, with solid revenue growth across all regions. In addition, revenues from Technical Services reached 14% in the fourth quarter and 12% for 1998. OEM revenues, including those from Sun Microsystems, Nokia Nortel/Bay Networks and IBM, represented 14% of revenues in the quarter and 15% for 1998. Sun represented 6% of revenues in the quarter and 9% for 1998.

Check Point's continued market leadership position was also confirmed in 1998, with IDC ranking Check Point as the market leader in the U.S., Europe and Asia Pacific regions, and the only major player to increase market share for 1997. "Check Point continued to extend its framework and architectural leadership to provide secure enterprise networking," said Gil Shwed. "Despite continued attempts by competitors to imitate our strategy, Check Point broadened its lead over the competition in all aspects of our business: market position, technology and industry partnerships."

Milestones for 1998 included reaching more than 67,000 combined installations and 13,000 virtual private network (VPN) installations. The company currently has relationships with some 600 channel partners, more than 170 OPSEC partners, and more than 20 major telcos/ISPs worldwide. 1998 also marked the acquisition of MetaInfo in April, adding IP address management technology to the company's existing product lines.

Key product introductions during the year included the VPN-1 product family and launch of version 4.0 of the Check Point™ FireWall-1 enterprise security suite. In the fourth quarter, the company introduced Provider-1, a new product specifically designed for the Managed Service Provider (MSP) market, and MetaIP 4.1, the latest enterprise IP address and name space management software. Additionally, the company launched its Worldwide Technical Services division this year to increase Check Point's ability to deliver security expertise, integration and enterprise implementation support and training.

FireWall-1 continued to receive top industry honors, including Network Computing's Editor's Choice Award and Well-Connected Award for the third consecutive year, Network Magazine's Product of the Year, Computer Reseller News' Editors' Choice Award and Network World's Blue Ribbon Award. Internationally, Check Point was also recognized for its product excellence. In France, Internet Professionnel named FireWall-1 Firewall of the Year, and in Sweden, Natverk & Kommunikation's named FireWall-1 Best in Test 98.

"Check Point has developed into a company which offers comprehensive product families for ensuring the security and performance of IP networks," said Deborah Triant Rieman, president and CEO of Check Point Software Technologies, Inc. "We are the only company that today delivers complete solutions, including enterprise security, traffic control, and IP address management, to manage the active networks of the future. We expect 1999 to be another year of strong growth, driven by expanding markets, contributions from new products and services, and increased enterprise architectural sales."

About Check Point Software Technologies Ltd.
Check Point Software Technologies Ltd. (Nasdaq: CHKPF) is the worldwide leader in secure enterprise networking solutions. The company's integrated architecture includes network security (FireWall-1,VPN-1, Provider-1 and Open Security Manager), traffic control (Flood Gate-1 and ConnectControl), and IP address management (Meta IP). Check Point solutions enable customers to implement centralized policy-based management with enterprise-wide distributed deployment. Via the OPSEC Alliance, Check Point's products seamlessly integrate with "best-of-breed" products from almost 200 leading industry partners. The company has U.S. headquarters in Redwood City, California and international headquarters in Ramat-Gan, Israel. For more information, please call (800) 429-4391 or (650) 628-2000 or visit http://www.checkpoint.com or http://www.opsec.com.

Forward Looking Statements
Statements contained in this press release that are not historical may constitute forward-looking statements. Because such statements deal with future events, they are subject to various risks and uncertainties and actual results could differ materially from the company's current expectations. The company assumes no obligation to update information concerning its expectations. Factors that could cause or contribute to such differences include, but are not limited to, the impact on revenues of economic weakness in Japan and other Asian countries, Y2K, difficulties in integrating the operations of MetaInfo, Inc., the inclusion of network security functionality in hardware or system software, changes in the competitive landscape including new competitors and/or the impact of competitive pricing and products, dependence upon a limited number of key resellers, potential competition from Sun, the risk that Sun's customers will not transition, dependence upon a limited number of product lines, timely availability and customer acceptance of new and existing products, the failure to manage growth, the benefit to the company of recent and potential acquisitions, and other factors and risks discussed in the company's Report on Form 20-F for the year ended December 31, 1997, which has been filed with the Securities and Exchange Commission.

1998 Check Point Software Technologies Ltd. All Rights Reserved.

Check Point, the Check Point logo, FireWall-1, FireWall-1 SecuRemote, FireWall-First!, OPSEC, INSPECT, UAP, FloodGate-1 and IQ Engine are trademarks or registered trademarks of Check Point Software Technologies Ltd. Meta IP and Meta DNS are trademarks of MetaInfo, Inc. All other product names mentioned herein are trademarks of their respective owners.

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¹ Reported financial results reflect the acquisition of MetaInfo, Inc., which was accounted for as a pooling-of-interest transaction, and all prior period amounts have been restated.

² Excludes similar investments with maturity over one year that appear under "Long term investments" above.