Financial Data and Key Metrics Changes - The company reported revenues of $665 million, exceeding the midpoint of projections by $3 million, representing a 6% year-over-year growth [20][21] - Non-GAAP EPS was $2.37, reflecting a 9% growth year-over-year [20] - Calculated billings grew by 4% to $642 million, while remaining performance obligations (RPO) increased by 6% to $2.4 billion [22] - Gross profit rose from $557 million to $585 million, resulting in a gross margin of 88% [23] - Operating cash flow reached $262 million, marking a 31% year-over-year growth [26] Business Line Data and Key Metrics Changes - Product revenues experienced strong growth driven by customer demand for new appliances and higher volumes of product refreshes [21] - Subscription revenues saw a slight deceleration, while support revenues experienced a slight decline due to bundling deals [21] - The QuantumForce AI-powered firewalls grew by 12% year-over-year, indicating strong demand for AI-powered inspection [7] Market Data and Key Metrics Changes - The Americas and EMEA regions grew by 5%, while APAC experienced a robust 15% growth year-over-year [23] - The company noted a healthy pipeline for the remainder of the year, with strong indicators for Q3 [4][30] Company Strategy and Development Direction - The company is focused on four guiding principles: securing the connectivity fabric, a prevention-first ethos, an open platform philosophy, and AI-first security [5][6] - The company is investing in SASE and has opened a new R&D center in India, doubling the size of its SASE R&D team [8] - The acquisition of Verity enhances the company's capabilities in automated threat intelligence and real-time remediation [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong start to Q3, with several deals closed in July that were pushed from Q2 [22][72] - The company is optimistic about the third quarter and the remainder of the year, citing a healthy demand for its products [30][72] - Management acknowledged the impact of foreign exchange rates on operating expenses, projecting a potential headwind of $50 million to $60 million in 2026 if current rates persist [25] Other Important Information - The company completed the acquisition of Verity for approximately $90 million and purchased land for a new campus in Tel Aviv for $160 million [27][28] - The company is willing to sacrifice some margin points to achieve faster growth and is actively assessing acquisition opportunities [121][122] Q&A Session Summary Question: Impact of Palo Alto's acquisition of CyberArk - Management indicated that the impact on Check Point is minimal as it does not operate in the identity space and will focus on its strengths in connectivity fabric and AI [33][36] Question: Challenges in accelerating growth - Management acknowledged that growth acceleration takes time and emphasized the need for a strong go-to-market approach and investment in AI [41][44] Question: Confidence in long-term growth despite discounting - Management expressed confidence in long-term growth driven by strong demand for appliances and the increasing annual recurring revenue (ARR) from existing customers [51][55] Question: Update on SASE acquisition and differentiation - Management reported solid growth in SASE and emphasized the unique hybrid architecture that enhances user experience and controls costs [62][66] Question: Insights on slipped deals - Management noted that slipped deals were more prevalent this quarter but were all closed in the first few weeks of Q3, indicating confidence in future performance [69][72] Question: Quantum product cycle and customer spending - Management highlighted ongoing investments in the Quantum product line and the potential for significant growth in the refresh cycle [76][84] Question: Growth in Harmony email and slipped deals - Management confirmed that Harmony email continues to grow at a healthy rate and that slipped deals were not geographically concentrated [88][90] Question: Subscription line growth and discounting impact - Management acknowledged the headwind from discounting but expects growth in subscription revenues driven by email and SASE products [95][100] Question: Importance of identity security in SASE - Management stated that identity security is part of the overall strategy but does not significantly impact the SASE solution [103][106] Question: Monetization of AI-powered prevention - Management outlined plans for monetizing AI capabilities through standalone products and integration into existing offerings [110][116] Question: Margin sacrifice for growth - Management reiterated that sacrificing some margin points is part of the strategy to achieve sustainable growth through investments and acquisitions [119][122] Question: Go-to-market changes and their impact - Management discussed leadership changes and cultural shifts aimed at enhancing the go-to-market strategy [126][129]