Company Performance - Check Point Software Technologies reported third quarter earnings that exceeded Wall Street estimates, with earnings rising 75% to $3.94 per share on an adjusted basis [1] - Revenue for the September quarter climbed 7% to $678 million, surpassing analyst expectations of $673 million [1][2] - Billings, a key sales growth metric, increased by 20% to $672 million, compared to the consensus estimate of $608 million [2] Future Outlook - For the current December quarter, analysts forecast earnings per share (EPS) of $2.88 on revenue of $741 million [2] - Check Point typically provides guidance during its earnings calls, which will be closely monitored by investors [2] Stock Market Reaction - Following the earnings report, Check Point stock surged 10% to near $211 in early trading [3] - Prior to the earnings announcement, Check Point stock had already increased by 4% in 2025 [3] Competitive Landscape - Check Point competes in the firewall network security market against companies like Palo Alto Networks and Fortinet [3] - The company is focusing on the Secure Access Service Edge (SASE) market, which is seen as a new growth opportunity [4] Technical Ratings - Check Point stock holds a Composite Rating of 64 out of a best-possible 99, indicating moderate performance [5] - The Accumulation/Distribution Rating for Check Point stock is C-plus, suggesting neutral institutional buying activity [5] Industry Context - The Computer Software-Security group ranks No. 90 out of 197 industry groups tracked, with some cybersecurity stocks like CrowdStrike and Zscaler outperforming the software sector in 2025 [6]

Core Insights - Check Point Software Technologies Ltd. and Lakera have announced the release of the backbone breaker benchmark (b3), an open-source security evaluation specifically designed for assessing the security of large language models (LLMs) within AI agents [1] Company Overview - Check Point Software Technologies Ltd. is recognized as a pioneer and global leader in cyber security solutions [1] - Lakera is identified as a world-leading AI-native security platform focused on Agentic AI applications [1] Industry Context - The collaboration between Check Point and Lakera, along with researchers from The UK AI Security Institute, highlights the growing importance of security evaluations in the rapidly evolving field of AI [1] - The b3 benchmark aims to address security concerns related to LLMs, which are increasingly integrated into various AI applications [1]

Financial Performance - Check Point reported calculated billings of $672 million, a 20% increase year over year[14] - Total revenues reached $678 million, reflecting a 7% increase compared to the same quarter in 2024[14] - Security subscriptions revenues were $305 million, marking a 10% year-over-year growth[14] - Non-GAAP EPS for Q3 2025 was $3.94, a 75% increase from $2.25 in Q3 2024[14] - GAAP EPS increased to $3.28, representing a 79% rise from $1.83 in the same quarter last year[14] - Operating income for Q3 2025 was $199 million, representing 29% of total revenues[14] - GAAP operating income for Q3 2025 was $199.1 million, a decrease of 8.5% from $218.5 million in Q3 2024[27] - Non-GAAP net income increased to $431.4 million in Q3 2025, up 68.8% from $255.4 million in Q3 2024[27] - Diluted Non-GAAP Earnings per share rose to $3.94 in Q3 2025, compared to $2.25 in Q3 2024, reflecting a 75.6% increase[27] Cash Flow and Assets - Cash flow from operations was $241 million, with a 23% increase when excluding a one-time tax payment[11] - Cash balances and marketable securities totaled $2,817 million as of September 30, 2025, down from $2,873 million a year earlier[10] - Total current assets decreased to $2,031.1 million as of September 30, 2025, down from $2,193.4 million at the end of 2024[29] - Cash and cash equivalents increased to $619.9 million in Q3 2025, up from $506.2 million in Q4 2024[29] - Total cash and cash equivalents, marketable securities, and short-term deposits at the end of Q3 2025 was $2,817.2 million, slightly up from $2,783.8 million at the end of 2024[31] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $923.8 million, an increase from $809.8 million in the same period of 2024[33] Liabilities and Deferred Revenues - Total liabilities decreased to $2,619.8 million as of September 30, 2025, compared to $2,965.1 million at the end of 2024[31] - The company reported a decrease in deferred revenues to $1,317.3 million in Q3 2025, down from $1,471.3 million in Q4 2024[31] Investments and Acquisitions - The company executed a share repurchase program, buying back approximately 1.6 million shares for about $325 million[10] - Check Point completed the acquisition of Lakera on October 22, 2025, enhancing its AI security capabilities[12] - Investment in property and equipment for the nine months ended September 30, 2025, was $19.4 million, compared to $17.7 million in the same period of 2024[33]

Financial Data and Key Metrics Changes - Revenue grew by 7% to $678 million, exceeding guidance by $6 million [12] - Non-GAAP EPS reached $3.94 per diluted share, including a one-time tax benefit of $1.47 [12][13] - Deferred revenues increased by 8% to $1.887 billion [13] - Calculated billings totaled $672 million, reflecting a robust 20% growth year over year [13] - Operating cash flow was strong at $241 million, with a 23% growth excluding a one-time tax payment [20] Business Line Data and Key Metrics Changes - Services calculated billing grew by 21% compared to 7% last year, driven by strong demand across the portfolio [14] - Emerging technology products, including Harmony SASE and Harmony Email, grew organically by over 40% in ARR year over year [15] - The remaining performance obligation grew by 9% to $2.4 billion [14] Market Data and Key Metrics Changes - The Americas saw a 10% revenue growth, representing 42% of total revenues [16] - EMEA grew by 3%, accounting for 45% of revenues, while APAC grew by 8%, representing 13% of total revenues [16] Company Strategy and Development Direction - The company’s strategy is anchored in four core principles, focusing on securing connectivity, a prevention-first approach, an open platform philosophy, and securing AI [1][2][3] - Recent acquisitions, including Verity and Lakira, are aimed at enhancing the company’s AI security capabilities [4][5][6] - The company is committed to leading the journey for organizations to adopt AI securely and is investing in R&D and strategic acquisitions [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory for Q4 and raised the midpoint for 2025 revenue guidance [1] - The operating environment is characterized by strong demand across the portfolio, with expectations for continued growth in subscription and recurring revenue [30] - Management acknowledged the challenges posed by a weaker U.S. dollar and its impact on margins [18][19] Other Important Information - The company achieved FedRAMP authorization for its Infinity platform, positioning it as a trusted partner for federal environments [7] - A new checkpoint campus is being built in Israel, with a significant investment of approximately $160 million for land [21] - Share buybacks totaled approximately $325 million at an average price of $198 [21] Q&A Session Summary Question: Guidance for subscription and recurring revenue in Q4 - Management expects double-digit growth in subscription revenue, with slight improvement from Q3 [30] Question: Sustainability of 20% billings growth - Management believes this is a new trajectory and anticipates continued growth into 2026, albeit prudently [34][36] Question: Impact of go-to-market leadership changes on strategy - New leadership will take effect in 2026, with a focus on upselling existing customers and acquiring new enterprise customers [41][42] Question: Timing for billing growth to translate to revenue growth - Billing growth in services will translate into revenue over the next four quarters, while product billing is recognized immediately [46] Question: Contribution from SASE and future investments - SASE is seeing over 40% ARR growth, and the company is making substantial investments in this area [55] Question: M&A strategy and future acquisitions - The company is actively looking for acquisition targets to enhance its AI security capabilities [66] Question: Competitive dynamics for Harmony Email - Management does not foresee a deceleration in growth for Harmony Email and expects acceleration due to advanced AI capabilities [72] Question: Impact of hardware refresh on business - The refresh cycle is significant, with opportunities for cross-selling and competitive replacements [128]

2025 Third Quarter Financial Results Roei Golan CFO October 28, 2025 Kip E. Meintzer Global Head of IR ©2025 Check Point Software Technologies Ltd. 1 Nadav Zafrir CEO Forward Looking Statement Q3-25 Revenues & EPS This presentation may contain certain forward-looking statements. These forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this report include, but are not limited to: Non-GAAP** Our expectations regarding ou ...

Core Viewpoint - Check Point Software reported strong quarterly earnings, significantly exceeding expectations, indicating robust performance in the data security sector [1][2]. Financial Performance - Earnings per share (EPS) for the quarter were $3.94, surpassing the Zacks Consensus Estimate of $2.45, and up from $2.25 a year ago, representing an earnings surprise of +60.82% [1]. - Revenues for the quarter reached $677.5 million, exceeding the Zacks Consensus Estimate by 0.48%, and up from $635.1 million year-over-year [2]. Market Performance - Check Point shares have increased approximately 2.7% since the beginning of the year, while the S&P 500 has gained 16.9%, indicating underperformance relative to the broader market [3]. Future Outlook - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $2.91 for the next quarter and $9.93 for the current fiscal year [7]. - The Zacks Rank for Check Point is currently 4 (Sell), suggesting expected underperformance in the near future due to unfavorable estimate revisions prior to the earnings release [6]. Industry Context - The security industry, to which Check Point belongs, is currently ranked in the bottom 20% of over 250 Zacks industries, which may negatively impact stock performance [8]. - Another company in the same industry, Fortinet, is expected to report earnings soon, with a consensus EPS estimate of $0.63, indicating no change from the previous year [9].

Core Insights - Check Point Software Technologies reported strong financial results for Q3 2025, driven by increased demand for its security portfolio and the strategic acquisition of Lakera to enhance its AI capabilities [3][4][7]. Financial Highlights - Earnings per diluted share (EPS) for Q3 2025 were $3.94 (Non-GAAP) and $3.28 (GAAP), compared to $2.25 and $1.83 in Q3 2024, reflecting a significant year-over-year increase of 75% and 79% respectively [4][11]. - Total revenues reached $678 million, marking a 7% increase year-over-year, while calculated billings were $672 million, a 20% increase [11]. - Security subscriptions revenues were $305 million, a 10% increase year-over-year [11]. Cash Flow and Financial Position - Cash flow from operations in Q3 2025 was $241 million, which included a one-time tax payment of approximately $66 million; excluding this payment, cash flow increased by 23% compared to Q3 2024 [6]. - As of September 30, 2025, cash balances, marketable securities, and short-term deposits totaled $2,817 million, slightly down from $2,873 million a year earlier [5][23]. Strategic Developments - The acquisition of Lakera, completed on October 22, 2025, positions Check Point to deliver a comprehensive AI-powered security platform, enhancing its capabilities in next-generation cyber defense [3][7]. - The company executed a share repurchase program, buying back approximately 1.6 million shares for about $325 million during Q3 2025 [5]. Operational Metrics - GAAP operating income was $199 million, representing 29% of total revenues, while Non-GAAP operating income was $282 million, or 42% of total revenues [11]. - The company reported a net income of $358.7 million for Q3 2025, compared to $206.9 million in Q3 2024 [18].

Core Insights - Check Point Software Technologies Ltd. has announced a multi-year partnership with Harris Blitzer Sports & Entertainment (HBSE) and the Washington Commanders to enhance cybersecurity for major sports properties, including the Philadelphia 76ers and New Jersey Devils [1][2][3] - The partnership will involve Check Point becoming the presenting partner of the Prudential Center's VIP West Entrance and the Check Point Bar & Grill, enhancing the visibility of Check Point's brand [1] - This collaboration aims to fortify HBSE's infrastructure and improve cybersecurity defenses across its digital platforms, reflecting the increasing reliance of sports organizations on digital solutions [2][3] Company Overview - Check Point is recognized as a leader in cybersecurity solutions, utilizing AI-powered technologies to protect over 100,000 organizations globally [5] - The company's Infinity Platform integrates management across on-premises, cloud, and workspace environments, providing flexibility and scalability for enterprises [5] Industry Context - The partnership highlights the growing importance of cybersecurity in the sports and entertainment sector, as organizations increasingly depend on data and digital connectivity to enhance fan experiences [3] - HBSE's diverse portfolio includes prominent franchises across various sports leagues, indicating a significant market presence and potential for brand activation through partnerships [6]

Core Insights - Check Point Software Technologies Ltd. has been recognized in Newsweek and Statista's ranking of America's Most Reliable Companies 2026, highlighting its trustworthiness and client satisfaction in the B2B sector [1][2] - The ranking is based on over 80,000 evaluations from more than 2,400 decision-makers, assessing companies on metrics such as likelihood of recommendation and reputation for dependability [2] - Check Point has a strong reputation for delivering reliable cyber security solutions, blocking 99.9% of malware and 99.7% of phishing attacks, with only 1 reported vulnerability compared to 10X - 23X more from other leading vendors [3] Company Achievements - In addition to the recent recognition, Check Point has also been featured in Fast Company's Next Big Things in Tech 2025 and named one of the World's Best Companies of 2025 by TIME and Statista [4] - The company utilizes AI-powered cyber security solutions to protect over 100,000 organizations globally, employing a prevention-first approach through its Infinity Platform [5]

Core Viewpoint - Check Point Software Technologies (NASDAQ: CHKP) is set to report its Q3 2025 earnings on October 28, 2025, before the market opens, with analysts showing mixed expectations regarding earnings per share (EPS) revisions [1] Summary by Category Earnings Expectations - Analysts have made 18 upward revisions and 14 downward revisions to EPS in the last 90 days, indicating a divided outlook on the company's performance [1] Analyst Background - Michael Del Monte, a buy-side equity analyst with over 5 years of experience, emphasizes that investment recommendations should consider the entire investment ecosystem rather than evaluating a company in isolation [1]