Sarah Friar - Goldman Sachs Jonathan Doros - UBS Mike Turits - Raymond James Shaul Eyal - CIBC World Markets Todd Raker – Deutsche Bank Sterling Auty – JP Morgan Walter Pritchard - Cowen & Company Phil Winslow - Credit Suisse Robert Breza - RBC Capital Markets Katherine Egbert - Jefferies & Company Daniel Ives - Friedman, Billings,Ramsey Brian Freed - Morgan Keegan IsraelHernandez - Lehman Brothers Ehud Eisenstein - Oscar Gruss

I would like to welcome everyone to the Check Point Software2007 third quarter earnings conference call. (Operator Instructions) It is nowmy pleasure to turn the floor over to your host, Kip Meintzer, Director ofInvestor Relations. Sir, you may begin your conference.

Good morning and afternoon to all of you joining us today.This is Kip Meintzer, Director of Investor Relations for Check Point Software. Onthe call with me today are Gil Shwed, Chairman and CEO, Jerry Ungerman, ViceChairman, and Eyal Desheh, Executive Vice President and Chief FinancialOfficer. We would like to thank all of you for joining us today to discussCheck Point's third quarter results. As a reminder, this call is being webcast live from our websiteand is being recorded for replay. To access the live webcast and replayinformation, please visit the company's web site at www.CheckPoint.com/ir. Foryour convenience, the third quarter results replay will be available throughNovember 5th. If you'd like to reach us after the call, please contact InvestorRelations at 1-650-628-2050. Now before we begin with management's presentation, I wouldlike to bring the following disclaimer to your attention. During the course ofthis call, Check Point representatives will make certain forward-lookingstatements. These forward-looking statements include statements regarding CheckPoint's expectations that the company's pipeline of data security business ishealthy for the fourth quarter and beyond; expectations that it continues toexecute on its strategic initiatives in the fourth quarter and beyond; beliefthat it will continue to focus on the execution and development of furtherproducts with a pure focus on security, and that it will introduce leading-edgeproducts which our customers will adopt; expectations for its financialperformance and growth for the fourth quarter of 2007 and full year results. Other statements which may be made in response to questionswhich refer to our beliefs, plans, expectations, or intentions are alsoforward-looking statements for purposes of the Safe Harbor provided by the PrivateSecurities Litigation Reform Act. Because these statements pertain to futureevents, they are subject to various risks and uncertainties and actual resultscould differ materially from Check Point's current expectations and beliefs. Factors that could cause or contribute to such differencesinclude, but are not limited to, the risks discussed in Check Point's annual reporton Form 20-F for the year ended December 31, 2006 which is on file with theSecurities and Exchange Commission. Check Point assumes no obligation to updateits forward-looking statements. Now I'd like to turn the call over to Eyal Desheh, ExecutiveVice President and Chief Financial Officer.

Thank you very much, Kip, and hello, everyone. I'm happy toopen the review of an excellent quarter and what so far seems like an excellentyear for Check Point. This was a record quarter from a revenue, non-GAAP netincome and non-GAAP earnings per share perspective. We also surpassed the highend of our projections as we continue to demonstrate solid annual andsequential growth across all of our revenue segments as customers continue torealize the value of our unified security architecture and pure focus on security.We believe the third quarter results continue to demonstrate the success of thestrategic initiatives we've implemented over the past 18 months and we are veryproud of this accomplishment and the contribution made by Check Point'semployees and our partners. Before I delve further into the numbers, let me remind youthat our third quarter GAAP financial results include the following:equity-based compensation expenses pursuant to SFAS 123-Restaurant; expensesrelated to the acquisition of Protect Data and NFR, which we include in our2007 results, but were not included in the previous years; as well as expensesrelated to the acquisition of Zone Labs, which were included in the past. Keepin mind that non-GAAP information is presented excluding these items. In our press release, which has been posted on our website,we present GAAP and non-GAAP results along with reconciliation tables whichhighlight this data as well as the reasons for our presentation of non-GAAPinformation. I would also like to draw your attention to a change weimplemented in the way we report results. We have updated our financialstatement reporting in accordance with the latest reporting standards. We nowcombined the software subscription line with the services line and it's nowcalled “software updates, maintenance, and services”. We also split the cost ofrevenue line in order to present separately cost of products and licenses; costof software updates, maintenance, and services;…

Thank you, Eyal andhello, everyone. Following Eyal's comments, I would like to provide you with alittle more color on our key business activities over the past quarter. Duringthe quarter, we continued to experience solid demand across our product lines,of which we had a particular standout that contributed to further growth in thethird quarter. Once again, the UTM-1 products continued to shine withdouble-digit percentage growth increases for the quarter. We also saw a continued trend of an increasing number oflarge transactions coming from some of the largest companies in the world, froma variety of different sectors, and across all geographies. Transactionsgreater than $50,000 accounted for 40% of total order value and 15 customers hadtransactions with a value greater than $1 million each. This group includedsome of the world's largest financial institutions, consumer goodsmanufacturers, telecommunication companies, and government agencies. Thesenetwork security and data security transactions represented a combination ofnew sales, further sales into our installed base, and the displacement ofcompetitors. We also continued to experience geographical revenuedistribution, consistent with the second quarter, with the Americasrepresenting 47% of revenue; Europe, Middle East, and Africa contributing 42%;and the Asia Pacific and Japan region contributing the remaining 11% ofrevenues for the quarter. Several items I would like to bring to your attention thatwere announced or occurred during the quarter, which we believe demonstratesCheck Point's industry leadership and commitment to a pure focus on security.These include Gartner's recognition of Check Point in the Leaders Quadrant ofthe 2007 Mobile Data Protection Magic Quadrant Report, which we believecontinues to validate our continuing success and commitment to securingsensitive information with our unified security architecture and pure focus onsecurity. Check Point was also awarded a new government certification for PointsecProtector in the cryptography module utilizing Pointsec PC and Pointsec Mobile.The FIPS 140-2 certification ranks among the most difficult to achieve and isrequired before any encryption products can be offered to government entities.Check Point's products meet and exceed the stringent requirements establishedby government standards, government approval process, and security industrytesting. During the quarter, we also hosted Check Point Experienceevents for partners and users in Asia Pacific, Europe, Middle East, and Africa. These events includedtechnical and business discussions, along with product demonstrations toimprove technical know-how and the expertise of attendees. We were pleased thatwe experienced growth in attendance of over 30% in the European event held in Germany. As you can imagine, we are pleased with our continuedsuccess and remain focused on executing our strategic initiatives in the fourthquarter and beyond. Now I would like to turn the call over to Gil.

Thank you, Jerry. Good morning and afternoon, everyone. Asyou have heard from Jerry and Eyal, our results in the first quarter were goodand represent the successful execution of initiatives in all of our businessareas. A few good examples that highlight these successes are the networksecurity initiatives such as our new UTM-1 appliances; the continued success ofour annuity program and focus on major accounts; our data security businessalso continued to deliver results; and together, they posted record results ina seasonally challenging quarter. The most important in all of these initiatives is the factthat it is all part of a single focus strategy: Check Point’s pure securitystrategy. I have been meeting personally with many of our customers and partnersat the recent Check Point Experience event, and the reoccurring theme whichkeeps coming across during my conversations is that our customers are beginningto realize the benefits of our unified security architecture, and that they arestrong supporters of our integrated security management platform. Both our unified security architecture and our integratedmanagement platform are unique in our industry. We believe this will be evenmore important as we incorporate more products into the platform and delivergreater value to our customers. Now I'd like to address the fourth quarter and the full yearprojections and guidance. In light of the good quarter that we had, we areraising our forecast for the quarter and for the year. We expect the fourthquarter results to be as follows: Revenues are expected to be in the range of $196 million to$208 million, GAAP EPS is expected to be in the range of $0.35 to $0.39;non-GAAP EPS for the fourth quarter, excluding the effect of stock-basedcompensation and acquisition-related charges, is expected to be $0.42 to $0.46. When we translate it to an annual forecast, what we see isrevenues in the range of $720 million to $732 million; GAAP EPS in the range of$1.20 to $1.24; and non-GAAP EPS in the range of $1.55 to $1.59. Overall, we are very pleased with what we've seen this yearso far and we are looking forward to excitement, a lot of execution, and a lotof hard work in the fourth quarter. With that, I would like to open the call for your questions.

Your first question comes from Sarah Friar - Goldman Sachs.

Eyal, could you give us a little bit more color on theexpense line? You obviously did a terrific job this quarter on your operatingmargins. As we look forward into '08, is this a good level to think about? Is therea reason why you would either invest more, or actually even see more leverage,as we think about the out year as Pointsec now gets fully integrated?

First of all, we are growing our business and we're addingsome more people all the time to support the growth; sales people, development,R&D people, so you could expect our expenses to continue to grow. It's notgoing to stay where it is right now. We're also adding selling more appliancesand appliances are adding some to our cost of revenue lines, as I'm sure youhave noticed. So I can see expenses continuing to grow. Hopefully, revenue willbe able to grow faster.

The margin that we're looking at, though, is a good marginlevel?

I guess so, but our focus is not on the margin, you knowthat. We've said it so many times before. We focus on top line and bottom line;growing both is our main priority.

Your next question comes from Jonathan Doros - UBS. Jonathan Doros – UBS: Of the $77 million in license, can you break that outbetween Pointsec and the core business? How much of the core business was onappliances?

We don't break out the product and licenses between thesetwo -- between the data security and the network security -- even though wesaid that the overall for data security was about $20 million. Jonathan Doros – UBS: Can you assume an 80/20?

Again, I don't want to assume. There is some portion ofboth, and I think we overall had a nice business in both of them. We don't havethe reporting to break those out in a detailed level. I don't remember theexact percentage of appliances off our network security business, but it isgrowing. I believe it represents something around 24% of overall product salesright now. Jonathan Doros – UBS:

We haven’t finished the 2008 plan yet. Let's finish 2007. Wedo expect to see the percentage of appliance increase as part of our networksecurity sales. At what level exactly it's going to be, that's a little tooearly in the game.

Your next question comes from Mike Turits - Raymond James.

On Pointsec, $21 million was roughly flat sequentially by mycalculations. It looks like it might have been down year over year. Any furthercommentary on that and are you still guiding to $95 million to $105 million forPointsec for the full year?

First, it wasn't down year over year. It is up, and it is alsoup quarter over quarter. I think what we've seen this quarter, first we had thevery good business in the Pointsec business which specifically sees very nicegrowth in the U.S.market. Some highlights with the U.S.government deal, which is all very positive and I think shows the right trend. Let's remember that right now the Pointsec business, a bigpart of it is still driven by large deals and large deals are not very commonin the third quarter. I think we are still targeting good contribution of thatin the range that we've set for the year. I'm not sure where exactly it willcome to, but I think we've said around $100 million and we think that we willbe around $100 million for the year.

You said there were some large government deals booked nearthe end; are some of those Pointsec and could some of those have been off thebalance sheet?

I don't know what “offthe balance sheet” means, but we had good deals for Pointsec with the U.S.government.

Your next questioncomes from Shaul Eyal - CIBC World Markets.

Eyal, deferred revenue, slightly down sequentially, is that seasonality?What's the thinking there?

Yes, our seasonality if you look back five or even moreyears, you see that in the third quarter our deferred revenues always go down andthen they go back up again in the fourth quarter and this year is no exception. It is mostly about renewal of services, support,maintenance, subscription. Most of this happened in Q1, Q4; to a lesser degreein Q2 and even lesser in Q3. That is a seasonal trend that we have beenfollowing for years and was very well within what we thought it would be.

Thank you for that. Jerry,with respect to ASPs, I know we spoke about it last quarter, what were thetrends this quarter? Is it still sequentially up?

Well, you saw the number of large deals we did, and thelarge deals continues to increase, which does has an impact on it. But we are very pleased with the pricing inthe marketplace and the value we are getting for our products. I think it allcontributes to the success we are seeing, both the number of orders, number oflarge orders, and the overall business level. So it has been very positive.

Even as it relates to the core product?

Yes.

Your next question comes from Todd Raker – Deutsche Bank. Todd Raker – DeutscheBank: I just want to follow up on Michael’s question on Pointsec. You have owned that business now for three quarters.Would you say it has lived up to expectations? How should we be thinking longer term in terms of what the growthtrajectory of the business can look like?

I don’t know that I have the long-term projection, but rightnow it is tracking pretty much exactly in accordance to our plans, and that isgood. We still have a big quarter, the fourth quarter, ahead of us and there isa lot of potential. I don’t think we have fully unleashed the potential that wehave with Pointsec. Right now, we are just starting to see the benefits of ourchannel and we are just starting to see the deal growth by the extendeddistribution channel, the Check Point channel, coming in. So far what we have seen is a big portion ofthe pipeline that keeps building, that we have with Pointsec. So I think it is going to be an interesting market, butclearly we have not unleashed all of the potential that is in that business. Todd Raker – DeutscheBank: In that market, Gil, do you think that you guys are pickingup market share, stable market share or losing market share on a competitivebasis?

Our belief in what we are seeing is that we have a very goodmarket share and that we are winning many deals. I haven’t seen recent reportsand I don’t know that necessarily we addressed today all of the differentmarket segments that we can. But overall, I think that our leadership is justright and I haven’t seen any competitor becoming stronger in the past sixmonths.

Your next question comes from Sterling Auty – JP Morgan. Sterling Auty – JPMorgan : Thanks. What do you think has been the biggest positiveinfluence on the core business? You mentioned the initiatives that you put intoplace for the last 18 months, but what do you think is having the most benefitfor the core business to drive this reacceleration?

I don’t think it is one thing, I think it is a combinationin execution. I think on one hand, we have the UTM-1 appliances that arecontributing nicely. On the other hand,we have more and more focus on major accounts that also showed very niceresults. We have very good annuity programs that we keep expanding, and theyalso contribute. So I don’t think that there is a single silver bullet, butthe good thing that I can clearly see the influence of all the initiatives wehave executed. And by the way, just in terms of our people, execution and thesales leadership that we have, I think that the people we have today in thesales organization are doing a very good job and are executing very nicely onthat. Sterling Auty – JPMorgan : I want to circle back to the Pointsec item. You mentionedthat you are still targeting that 95 to 105. It would seem like it is an awfully big jump in the fourth quarter toget you back in that range. What is it that you are seeing in the pipeline orelsewhere that makes you think that you can even get to the low end of thatrange?

I think that we have a healthy pipeline. With Pointsec, itwas historically characterized by many large deals, a very nice pipeline ofthat. So I hope that we will be able to make something close to that range.

Your next question comes from Walter Pritchard - Cowen &Company. Walter Pritchard -Cowen & Company : I am wondering if you can just talk to us a little bit aboutthe annuity business, which continues to do pretty well year over year andsequentially. I know there are a variety of components there with the newsupport program part of it, the traditional software subscription as well asthe annuity stream from Pointsec. Maybe you can just help us breakdown what iscontributing more growth or less growth to that piece.

I think they are all growing equally in a balanced way. Thenew support program that we have implemented in Europeis contributing nicely, and it is 100% of the annuity business in Europe. In the U.S.,we have a combination of the older subscription program and the direct supportprogram, which is different. Again, both of them are tracking pretty well. Wedo have the Smart Defense program, and the Smart Defense is very importantbecause it is a new program – well not new, it is already several years – butit is another program that gives security updates and real-time security. TheSmart Defense program is actually tracking quite well and keeps contributingmore to revenues every single quarter. I think we are tracking somewherebetween $40 million and $50 million contribution of this program on ayear-on-year basis, on an annual basis and with very nice double-digit growth yearover year. So I think these are the big programs that keep contributing. On top of that, actually the other programs we have liketraining and professional services are all tracking well, but they arecompletely insignificant compared to this programs.

Maybe I should add one more component, which is right nowsmall but has a very nice potential to grow, our UTM-1 install base is stillsmall, but our UTM services that are being sold on top of the UTM-1 gateway,that number as the install base grows, it will continue to grow. It is a new dimension in our annuity-basedsales. Walter Pritchard -Cowen & Company : On the support program, I note you mention you had notchanged the program in the U.S.,you are still doing a direct support program. What is the likelihood going intonext year that you move to that type of program in the U.S.?As I note from ’07 results you had a pretty good acceleration in that businesswhen you made that change in Europe.

We haven’t made any changes to our model in the U.S. We are offering more services and we areseeing more business coming in. Before we make a change, we will communicate itto our customers and partners first, and not this way.

Your next question comes from Phil Winslow - Credit Suisse.

I wanted to talk about the new product pipeline. Obviouslythe UTM appliance has been doing very well. Gil, should we think about any newproducts coming out over the next six to 18 months here? I believe at theanalyst day you talked about potentially looking at data loss prevention there.I was wondering if we could get an update on that.

We are not going to provide any specific updates on upcomingproducts, but we are going to have more products coming forward. We are goingto execute on our data security strategy. We are going to have more products inall areas. Network security, LAN port security and in the data security spaces.

Your acquisition of NFR Security for intrusion prevention, Iwas wondering if you could just give us an update on that as far as theintegration of that in with firewall 1 and VPN 1?

That is still a small part of the business, but it isactually tracking very well. Every quarter, we win more deals and we slightlyincrease the percent of revenue and the dollar amount that it contributes. Weare putting more and more into that technology in terms of incorporating bothmanagement and enforcement into our general gateways. I believe that sometimenext year we will see more of those benefits showing up. So far, this business is a relatively small part of thebusiness but tracking very well.

Your next question comes from Robert Breza - RBC CapitalMarkets.

Gil, I was wondering as you look at Pointsec, specificallythe integration effort that you have been working on the last three quarters,how far along do you think you are in terms of the integration throughout theworldwide geographies? Is it 100% across all geographies? Then could you talkabout your plans in terms of just moving that division forward? Thanks.

I think the integration is pretty much complete all over theworld. There are more benefits and more business which we can develop aroundit. As I said, right now we are still seeing a lot of business coming from thebig, named account business that Pointsec and we want to have even more of thatmoving forward, but we still have a long way to go to get the channel to selljust small and medium deals on an ongoing basis in big quantities. That istrue, probably worldwide. So these are the two big moving parts. But overall thesalesforce is well-integrated, they operate as one group, they are managedunder one umbrella and I believe that they are doing it quite well, especiallyin the U.S.when Pointsec has, in the past, the biggest success and it continues movingforward.

I think that the next value that will be realized from thistransaction is when the Check Point channel will generate deal flow on aregular basis. We have made progress in this area. We have seen traditionalCheck Point customers that buy both network security products and data securityproducts in their quarterly ordering. That part of the integration has thebiggest value. We are just at the beginning of seeing that.

Your next question comes from Katherine Egbert – Jefferies. Katherine Egbert –Jefferies: Outside of Pointsec, what else led to the strength in thelarge accounts? Did you change quotas or somehow encourage your VARs to startselling larger deals? What other products might have contributed there?

I think a lot of the efforts that we have done within thesalesforce have contributed to that business, and mainly focus. Now a big part of that focus is actually theCheck Point named account people, who do deal with our VARs and we fulfillthrough our VARs, but many transactions that we are doing right now were drivenby the Check Point named account people, and we have built that salesforcethrough several years. It shows more and more fruition in the way it is beingmanaged and the way we get the benefit. We did develop some programs that are targeting the namedaccounts in a very particular way. Support programs, system integrationprograms in which we give them more and more value and customize what we do.These programs are actually showing a lot of benefit, because they value thattype of close relationship that they have with us, and as a result of that,they buy not just more services, but they buy much more product in theirenvironment. These are generally the things that we have done, and so farit shows very good results.

Is there any risk that you disrupt that large account focus,particularly for Pointsec as you roll it out to the channel?

Well we hope we don’t; we already fulfill most of thePointsec business through the channel, so we did make most of the transition interms of fulfillment through the channel.

Over 80%.

Over 80% of the Pointsec business is already fulfilledthrough the channel, so we avoid most of the theoretical competition that mightappear with the channel. But I am differentiating here between fulfillment,involvement and really the channel bringing up the deals that they generatewith less involvement from Check Point. As to their model of business, we havethe entire spectrum. We have from zero Check Point involvement to 90% plusCheck Point involvement, depending on the deal, depending on the customer,depending on geography. Because we have no conflict with the channels, it works in avery nice and in very good harmony with the channel.

Your next question comes from Daniel Ives - Friedman, Billings,Ramsey.

Good quarter. Throughout the quarter, was there anydiscernible change with customers spending habits? Maybe specifically withinthe financial institutions, as that is a focus of some investors.

Not that we have seen. The financial sector kept as a big,good client. Some of our largest deals came from some of the world’s largestfinancial institutions. The financial institutions contributed somewhere in themid-teens, between 10% and 20% of our transactions.

About 16%.

About 16% is coming from financial institutions, and that isa good number. I think this is healthy and we have long roadmaps to come.

Another question, which was asked before, a few quartersago, even last year the core business was struggling and then you boughtPointsec and all of the excitement. Now Pointsec is doing well, on target, butthe core business has really just started to take off. Is there any specific thing, or did it all just click at thesame time, relative to a year ago? Hasit surprised you on the positive, or this is in line with where you thought thebusiness would be a year ago when things weren’t that good?

I think we are tracking according to plan this year. I don’tknow if surprised – I mean, I am personally a strong believer in our businessand I think I say it every time, that long term I believe that our corebusiness in network security is a very important area and should show goodresults. Now by the way, just remember, every single quarter we showgood results, the question is how much will we grow and how much growth theywill show? I think this year, generally speaking, we are tracking in the corenetwork security business at plan or slightly ahead of plan, in terms of myinternal expectations. So this is very good and very positive. You've asked, what initiatives have we done? We've done manyinitiatives. I will repeat what I've already said a few times. We had the UTM-1appliances, we had a strong focus on major accounts, we had the annuity programthat changed and expanded last year, we had the Smart Defense, which is part ofthe annuity program, and we have overall sales management and execution andproduct strategy. The good thing about that is I believe that all these thingscontributed and they all worked quite well. So it's no single silver bullet,but the combination of execution across the entire product.

If you look back at the analyst day presentation from thebeginning of the year, it was all there. I think the rest was good execution, hard work and also a reasonablemarket, which always never hurts. I think that we have really learned to execute, and executefast, and take our ideas and great technology and innovation to market andconvince our customers. It starts from the large one and goes all the way downthe value chain that putting their security with Check Point is the right thingto do strategically for them, as well as it is for us, and I think it allshows. It's a long-term thing. As Gil said before, it is no single silverbullet here, and there is no magic here. It's a lot of hard work and many newideas and initiatives.

Your next question comes from Brian Freed - Morgan Keegan.

Hey, guys. Goodquarter. It sounds like you guys are pretty much wrapped up with theintegration of Pointsec. Do you see additional acquisition opportunities, areaswhere you could strengthen your portfolio to drive additional growth goingforward? What's your general acquisition strategy at this point?

As we said before,we're looking to expand our presence in the data security market. We're lookingat additional areas that could be complementary to what we sell and we'll do itwhen the time is right and we'll communicate when the time is right, as we havealways done.

Your next question comes from Israel Hernandez - LehmanBrothers.

I know you are optimistic on Q4 data security and thecontribution that you're expecting, but if Pointsec is unable to achieve thelow end of your annual guidance, is Q4 at risk? Do you think you have enough inthe pipeline in the core business, which seems to be doing very well tocompensate for that?

I think we've just uppedour guidance for Q4 and we've upped it from what we had at the beginning of theyear and what we said a quarter ago. That says what we expect about the fourthquarter. We've just raised all our expectation in terms of revenue,earnings, earnings per share, so that means that we think -- again, it's alwaysa risk, but at least the data that we have in our hands right now points to ahealthy Q4.

Your next question comes from Ehud Eisenstein - Oscar Gruss.

Can you comment on the headcount at the end of the Septemberquarter? How do you expect to exit '07?

We have approximately 1,900 employees all over the worldwith some modest growth from Q2 to Q3. We'll probably continue to add a fewtenths towards the end of the year. That's the run rate right now. We're notjumping up and down; we're increasing consistently to support the increase inbusiness.

With the strength during the quarter, what was the forex effectin the September quarter?

A weak dollar, just to remind you, the dollar was also weakcompared to the European currency and we have about 300 people in Europe.A weak dollar doesn't help. We sell in dollars and we expense in many othercurrencies. The impact was not big. You've seen the numbers. I think they speakfor themselves. We are thankful that we don't need the currency excuse. We hada good quarter and the impact was not huge.

At this time I would like to turn the floor back over tomanagement for any closing comments.

Once again, I would like to thank you all for yourparticipation in our conference call today. If you would like to speak tomanagement or to Investor Relations following this call, please call ourInvestor Relations department, 650.628.2050. Thank you very much and talk toyou next time.