Nadav Zafrir to replace Gil Shwed as CEO of Check Point
Nadav Zafrir to replace Gil Shwed as CEO of Check Point
Zafrir will take up his post in December 2024 and will also be added to Check Point's board of directors. Shwed, who founded the company 30 years ago and has managed it since, will transition to the position of Executive Chairman.
Nadav Zafrir will replace Gil Shwed as CEO of Check Point. Zafrir, who founded the venture capital fund Team8 ten years ago, is considered an expert in the field of cyber and serves as chairman of 17 companies in the industry. Before that, he served 25 years in the IDF, including as the commander of Unit 8200 between 2009 and 2013.
Zafrir will take up his post in December 2024 and will also be added to Check Point's board of directors. Shwed, who founded the company thirty years ago and has managed it since, will transition to the position of Executive Chairman.
Shwed announced in February that he is stepping down from his role as Check Point CEO after 30 years. The 55-year-old Shwed co-founded the cybersecurity giant in 1993 alongside Shlomo Kramer and Marius Nacht, who left the company long ago. Despite being the youngest founder, Shwed has been at the helm of Check Point since its inception and is now the longest-tenured CEO on Nasdaq.
The announcement of Zafrir's appointment came at the same time Check Point released its financial results for the second quarter of 2024. The company reported revenues of $627 million, reflecting a 7% increase compared to the same quarter last year and falling within the middle of the forecast range. Earnings per share rose by 8% to $2.17. For the first time, revenue from software subscriptions exceeded $270 million, marking an increase of more than 10%. Operating expenses also grew by 10%, due to both new hiring and costs associated with the acquisition of Perimeter 81, completed a year ago for $500 million.
Cash balances currently stand at $3.1 billion, with cash flow rising slightly to $200 million in the second quarter. Ten days ago, Check Point significantly expanded its stock buyback program by $2 billion. In the past quarter, the company repurchased $325 million worth of shares. Since the buyback program began, Check Point has invested a total of $15 billion in purchasing 218 million shares, leading to a substantial reduction in the share count over the years. According to Check Point, investors favor this policy over dividend distribution, as it similarly benefits earnings per share.
"This is a very exciting day for me, with both strong results and extraordinary news—a new CEO for Check Point," said Shwed at a press conference marking the CEO appointment and the release of the financial results. "We conducted a very thorough and rigorous search process. We knew it wouldn’t be easy to find the perfect leader, but we did. He is a cyber expert with a global reputation, an exceptional entrepreneur and leader who has led many organizations. I’m pleased he agreed to take on this role. I see him as an excellent partner for shaping the company’s future and setting new records.
"Every CISO in the world today knows Nadav, and he also has management experience in a larger organization from his time with the IDF," continued Shwed. "It took me many years to learn how to run a huge organization, and Nadav has entered into a supportive assistant system where I will also stay to help and support. I have spent many hours with Nadav in the last few months, and this has made me a big supporter of his. It's not hard for me; I'm in a place where I couldn't be happier. We interviewed candidates from the USA, Europe, and Israel, and from the beginning, we defined that there would be a preference for Israelis.
Referring to the fact that there is no internal CEO at Check Point even though it is an old and large company, Shwed noted: "There are amazing leaders at Check Point, but maybe today they are not ready yet. In three years, maybe yes. Over the years, there were several internal candidates that I considered to replace me, but I ultimately decided that I wanted to stay. Every now and then, it's not bad to refresh the ranks."
Check Point is known as a company that prioritizes profitability, sometimes at the expense of aggressive growth, while Zafrir comes from a start-up culture that is characterized by the opposite approach. Against this background, Shwed was asked if he is not afraid that Zafrir would change the DNA of the company. "There are companies that continue to lose even when they grow. Nadav understands that he is joining a super successful company; our profitability is a tremendous strength because it gives the company's management and the CEO enormous power. It is not due to the mood of the investors. I never lacked resources; we always did what was right and succeeded. Moreover, bringing in more entrepreneurial spirit won't hurt us."
Shwed also referred to the cancellation of the negotiations between Google and Wiz for the sale of the Israeli cyber company for $23 billion: "The offer was fantastic; it also gives high confidence in what they did at Wiz. Now the founders need to understand that it will take many years, but they can do it. It is not certain that they will get there and reach the same value that was offered now, but it is possible. I was also in their shoes; I didn't sell and I don't regret the choice. But it's not a commitment for another year or two, but for decades."
Team8 Executive Chairman and serial entrepreneur, Yuval Shachar, said: "We are extremely proud of the outstanding management team at Team8, comprised of leaders at the forefront of Israeli innovation, trusted to lead some of the largest and strongest companies in their domains We wholeheartedly congratulate Nadav Zafrir for being named new CEO of global cybersecurity giant Check Point. This comes after he successfully built, founded, and invested in dozens of leading startups within the framework of Team8. We are confident that Nadav will continue being a prominent leader in cybersecurity, and look forward to seeing his future achievements.
"For over a decade, Team8 has successfully operated with a unique model of company creation and investment. This model has expanded into numerous fields: cyber, data infrastructure and AI, fintech, and digital health. Each of Team8's areas of activity is led by top-notch partners, industry leaders, and serial entrepreneurs with impressive track records. Together with over 80 employees and the amazing entrepreneurs partnering with us, we will continue to drive global innovation and reshape the industries we operate in."
