Gil Shwed: Cyber attacks on Israeli companies demanding ransom doubled during war

"Since the beginning of the war, we have seen an 18% increase in cyberattacks on Israel," Gil Shwed, founder and CEO of Check Point, said today with the publication of the company's financial statements for the third quarter of 2023. "They are mainly aimed at government agencies and there you see a jump of 52% on government websites."

Shwed said that "most of the attacks are not very sophisticated, but we did see an increase in ransom demand attacks. One out of 19 organizations in Israel was attacked with a ransom demand in the last three weeks, double the rate than in the corresponding period and these are slightly more sophisticated attacks. We are also seeing that for a long time now the Iranians are trying to produce more sophisticated attacks."

Shwed added that "there were hospitals that proactively disconnected themselves from the Internet to prevent attacks and there were also entities that we advised to disconnect.

"We monitor close to a hundred Iranian, Russian and other groups that attack at the same time.. Most of them simply try to flood the websites and not allow service, many media outlets are also attacked."

Shwed also said that "despite the tragic events in Israel in the last three weeks, our global operations continued to work as usual thanks to the commitment and dedication of Check Point employees."

"During this period we received incredible support from the company's employees, customers, partners and the financial community," Shwed said. Today, Check Point employs 6,000 people, of which about 2,500 are in Israel.

Shwed pointed out that two Check Point workers were killed on the first day of the war and that today about 5% of the global workforce, that is about 300 workers, have been called up to the IDF reserves.

"Most of the employees have returned to hybrid working and the management has already returned to the offices," added Shwed, "meanwhile the high-tech economy continues to function and that's good, but I don't know if we can how to expect more from that.”

The share of the Israeli cyber company decreased by only about 4% since the outbreak of the war in Israel and it is traded today with a value of $15 billion dollars. In this, it does not deviate from the behavior of American technology stocks.

As far as performance is concerned, Check Point ends the third quarter with revenues of 596 million dollars, which remains unchanged is like standing in place. However, the bottom line continues to improve with a 19% jump in net income to $1.75 per share. The results correspond to the upper range of the forecasts provided by the company three months ago.

On the good news side, we can point out the 15% increase in software subscription revenue to $248 million. This means that close to half of the revenue comes from SAAS and not from an outdated format of selling a software license.

The operating profit makes up about 40% of Check Point's revenues and it will be interesting to follow this specific figure, in view of a large purchase made by the company in the third quarter. Check Point agreed to pay half a billion dollars for Israeli company Perimeter 81 which is far from profitable.

In recent weeks, Check Point completed the acquisition of Perimeter 81, and the employees of the acquired company moved to Check Point's offices. Check Point decided to donate Perimeter 81’s to be used as the headquarters for those working for the return of the Israeli hostages in Gaza Prior to, they were operating from a law office in the museum tower in Tel Aviv.

Checkpoint’s newly acquired offices once served as the home of the kibbutz movement - a six-story building on Leonardo da Vinci Street in central Tel Aviv that has a large auditorium and showers. They are now being used to work towards the return of the hostages, most of whom are members of southern Kibbutzim attacked on October 7th.