CHKP

CrowdStrike Holdings CRWD is scheduled to report its second-quarter fiscal 2027 results on Aug. 26, 2026. CrowdStrike anticipates revenues between $1.43 billion and $1.44 billion for the second quarter of fiscal 2027. The Zacks Consensus Estimate for CrowdStrike’s fiscal second-quarter revenues is pegged at $1.44 billion, indicating year-over-year growth of 23.2%. For the fiscal second quarter, the company expects non-GAAP earnings of 29 cents per share. The Zacks Consensus Estimate for CrowdStrike’s fiscal second-quarter earnings is pegged at 29 cents per share, implying a year-over-year increase of 26.1%. The consensus mark for earnings has remained unchanged over the past 30 days. Image Source: Zacks Investment Research CrowdStrike’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.7%. CrowdStrike price-eps-surprise | CrowdStrike Quote Our proven model does not conclusively predict an earnings beat for CrowdStrike this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. CrowdStrike has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here. CrowdStrike’s second-quarter fiscal 2027 results are likely to benefit from the robust demand for its cybersecurity products, given the increasing number of threat incidents across the globe. As a rising number of employees log into the enterprise's network, the vulnerabilities of cyber breaches lead to a greater need for security. These factors are likely to have spurred the demand for CrowdStrike’s products in the fiscal second quarter. CrowdStrike’s Falcon Flex subscription model is expected to have remained a major growth driver.  In the first quarter of fiscal 2027, CrowdStrike added more than 300 Flex customers and ended the first quarter with over 1,900 customers who have adopted Falcon Flex. Accounts using Falcon Flex now represent nearly $2 billion in ending annual recurring revenues (ARR), up 99% from the year-ago quarter, showing strong adoption across enterprise customers. Falcon Flex helps customers adopt new modules without long contract steps, which leads to faster platform usage. The model is helping CrowdStrike benefit from platform consolidation. Customers are using Flex to adopt additional offerings such as Next-Gen SIEM, Identity Protection, Cloud Security and AI Detection and Response without negotiating separate contracts. On the back of strong platform adoption, Falcon Flex should remain one of CrowdStrike’s most important growth drivers in the to-be-reported quarter. In the first quarter of fiscal 2027, CrowdStrike's Next-Gen SIEM surpassed $600 million in ending ARR. During the first quarter, a major fuel retailer selected CrowdStrike to replace a legacy SIEM platform with a next-generation endpoint detection and response solution and software from a network security vendor. This 8-figure new logo win demonstrates how CrowdStrike is using Next-Gen SIEM to consolidate multiple security products onto a single platform. This momentum is likely to have continued in the to-be-reported quarter. CrowdStrike is expanding its identity security business as more companies deploy AI across their operations. CrowdStrike is addressing this opportunity through Falcon Shield, Falcon Next-Gen Identity and SGNL, which it acquired in the first quarter of fiscal 2027. Falcon Shield’s ending ARR grew nearly four times year over year during the first quarter. During the fiscal first quarter, a large U.S. healthcare company expanded its deployment by purchasing Falcon Next-Gen Identity and SGNL in a seven-figure deal. With more companies deploying AI across their businesses, the need to secure AI identities should continue to increase. Strong momentum in identity security is likely to have boded well for CrowdStrike's prospects in the fiscal second quarter. CrowdStrike is seeing strong demand for its AI Detection and Response (AIDR) solution. CRWD's AIDR solution is designed to help companies monitor and secure AI applications, AI agents and AI workloads as AI adoption increases across enterprises. Management highlighted AIDR as one of the company's fastest-growing products during the first quarter of fiscal 2027. During the first quarter, an automotive financial services company deployed AIDR across more than 30,000 hosts in a seven-figure deal. As organizations add identity, cloud security, SIEM and AI security to their existing Falcon deployments, CRWD can increase customer spending without relying only on new customer additions. These factors are likely to have boded well for the company's prospects in the to-be-reported quarter. Over the past year, shares of CrowdStrike have surged 83.3%, outperforming the Zacks Security industry and its peers, including Qualys Inc. QLYS, Okta Inc. OKTA and Check Point Software CHKP. The Zacks Security industry has appreciated 71.3% over the past year. Shares of Okta and Qualys have jumped 47.9% and 37.3%, respectively, while Check Point Software shares have plunged 30.5%. Image Source: Zacks Investment Research Now, let’s look at the value CrowdStrike offers investors at the current levels. CrowdStrike is trading at a premium with a forward 12-month P/S of 29.36X compared with the industry’s 17.23X, reflecting a stretched valuation. The Zacks Value Score of F also suggests that CRWD stock is overvalued. Image Source: Zacks Investment Research CrowdStrike stock also trades at a higher P/S multiple compared with other industry peers, including Qualys, Okta and Checkpoint Software. At present, Qualys, Okta and Checkpoint Software have P/S multiples of 8.16X, 6.98X and 4.58X, respectively. A significant driver of new customer addition is the Falcon Flex subscription model, which simplifies security adoption by offering modular, scalable cybersecurity solutions. CrowdStrike secured major deals in the last reported quarter, including an eight-figure Next-Gen SIEM deal with a major fuel retailer and a seven-figure AIDR deal with an automotive financial services company, showing strong enterprise demand. This shows CrowdStrike’s ability to attract high-value customers, encourages long-term commitments, steady revenue growth and deep customer integration. However, CrowdStrike’s rising costs are a cause of concern. Over the last seven fiscal years, CrowdStrike’s Research & Development (R&D) expenses have increased 12-fold, while Sales & Marketing (S&M) expenses have flared up more than 10-fold to $1.83 billion in fiscal 2026 from $173 million in fiscal 2019. Compared with fiscal 2025, S&M and R&D expenses soared 20% and 29%, respectively. Though the firm foresees these investments generating benefits over the long run, higher expenses might weigh on the company’s bottom-line results. As businesses continue prioritizing AI-driven cybersecurity solutions, CrowdStrike’s leadership in threat prevention, response and recovery will only strengthen. CrowdStrike’s subscription-based model and recurring revenue streams, along with its strong partner base, should provide stability and gradual growth, even amid ongoing macroeconomic challenges and geopolitical issues. However, rising costs and premium valuation warrant a cautious approach to the stock. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CrowdStrike (CRWD) : Free Stock Analysis Report Check Point Software Technologies Ltd. (CHKP) : Free Stock Analysis Report Qualys, Inc. (QLYS) : Free Stock Analysis Report Okta, Inc. (OKTA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, July 30, 2026 at 8:30 a.m. ET Global Head of Investor Relations - Kip Meintzer Chief Executive Officer - Nadav Zafrir Chief Financial Officer - Roei Golan Kip Meintzer: Greetings, and welcome to the Check Point Software's 2026 Second Quarter Financial Results Video Conference. I'm Kip E. Meintzer, Global Head of Investor Relations. And joining me today are Chief Executive Officer, Nadav Zafrir; and our Chief Financial Officer, Roei Golan. Before we begin, I'd like to remind everyone that this conference is being recorded and will be available for replay on our website at checkpoint.com. [Operator Instructions] During the presentation, Check Point's representatives may make forward-looking statements. Forward-looking statements can relate to future events or future financial and/or operating performance. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Any forward-looking statements made only as of the date hereof, Check Point Software undertakes no obligation to update publicly any forward-looking statements except where required by law. In our press release, which has been posted on our website, we present GAAP and non-GAAP results, along with the reconciliation of such results, as well as the reasons for our presentation of non-GAAP information. If you have any questions after the call, please feel free to contact Investor Relations by e-mail at [email protected]. Now I'd like to turn the call over to Nadav Zafrir. Nadav Zafrir: Okay. Thank you all for joining us today. Our Q2 results were in line with our expectations, and we continued to make tangible progress strengthening our go-to-market organization. We're actually encouraged by improving execution and a growing sales pipeline. We expect Q3 to mark the trough, followed by a stronger Q4 that supports second half performance, and we are maintaining our 2026 guidance. As a next step, we are significantly expanding our sales capacity by hiring hundreds of additional salespeople. We've launched a focused hiring campaign, reflecting our confidence in the long-term growth opportunity. Over the past few weeks, I met with more than 1,000 security leaders at Check Point Engage events in Chicago, Paris, and Singapore. Their message is consistent and unmistakable. Our industry is at an inflection point. AI and particularly the latest frontier model, is driving a collapse in scarcity of adversarial capabilities. This is democratizing and industrializing sophisticated cyber attacks and challenging many of the assumptions that have guided cybersecurity for decades. We cannot stop AI adoption, and we must prepare to defend against sophisticated attacks at unprecedented scale. This is the time for decisive action. At Check Point, securing our customers' AI transformation means executing the fundamentals better than ever, while building the next generation of cybersecurity, and we must do it in parallel. The fundamentals start with prevention, powered by our Threat Cloud AI intelligence, more than 100 AI agents, and telemetry from millions of enforcement points. Prevention first security is in our DNA. But fundamentals alone are no longer enough. We must build security that operates at machine speed, learns continuously, and evolves as AI evolves. And so today, I'm excited to introduce the industry's first AI Network Firewall. We believe AI has created a new class of network traffic and it deserves a new class of firewall. The AI Network Firewall gives customers visibility, control, and security for prompts, agent actions, and model interactions. The AI Network Firewall is a part of our AI Defense plane. It's a full stack AI security platform continuously trained on our threat research and intelligence and built to protect applications, users, and agents from AI-based attacks. With the release of the AI Network Firewall, we're embedding the AI Defense planes across networks, private, and public cloud, and SASE, giving network security teams control they can put in place today. Beyond AI demand across our emerging technologies portfolio remains healthy. Subscription revenue grew 12% year-over-year in Q2, and we continue to integrate the capabilities from our recent acquisitions across the platform, strengthening our competitive position and expanding the value we deliver to customers. We're building momentum by expanding our go-to-market capacity and strengthening our product portfolio. The launch of our AI Network Firewall, combined with our AI Defense plane, reinforce Check Point's mission of securing our customers' AI transformation. We remain focused on disciplined execution, accelerating growth, and delivering long-term value for our customers, our partners, employees, and shareholders. And with that, I'll turn over the call to Roei to review the financials. Roei Golan: Thank you, Nadav. One moment. Great. So thank you, Nadav, and thank you, everyone, for joining the call. As Nadav mentioned, the second quarter was as planned with 1% growth in revenues, driven by 12% growth in subscription revenues. Our total revenues reached $674 million, and we're $1 million below the midpoint of our projection as a result of lower product revenues, as a lower demand for firewall appliances. When we're looking on our subscription revenues, it reached $333 million, and we're at the midpoint of our projections. Our adjusted free cash flow reached $161 million, $1 million above the midpoint of our projection, and represents 24% of our revenues. Our non-GAAP EPS was $2.55 per diluted share and exceeded our guidance and grew by 8% year-over-year. As mentioned, we had 1% growth in revenues, while our deferred revenues grew by 7% to $2.025 billion. Our calculated billing totaled to $639 million and was similar to last year, while our current calculated billing grew by 2% to $641 million. Our Remaining Performance Obligation grew by 7% and reached $2.55 billion. Our current RPO reached $1.6 billion and representing 4% increase compared to last year. As we indicated in the call back in May, we had -- we expected lower product revenues, mainly as a result of our disruption affected by the changes were made in the go-to-market organization. Our product revenues declined by 14% in the second quarter. As we are looking on the second half of the year, we do expect to see similar trends in the third quarter with our firewall appliances, while we do see significant improvement in our pipeline, in the opportunities, in the qualified opportunities in Q4, and we do expect to see back to growth in product revenues in the fourth quarter. When we are looking on the subscription revenues, it continued to accelerate to 12% growth this quarter, driven by the strong demand for our emerging technologies, as email security and CTEM continue to have strong demand. When we are looking on the third quarter, we do expect slight deacceleration in our subscription revenues as a result of large appliances deals that were pushed from Q3 to Q4 and have also an impact on our subscription line item. As indicated, our total subscription business continued to be strong as we continue to experience strong demand for our emerging product portfolio, which remains the primary driver for our revenues growth. In the second quarter, if we're looking on the e-mail security, CTEM, and AI security, accumulated they exceeded 40% growth in ARR year-over-year, while the calculated billing from these products grew by 35% year-over-year. Looking on our revenues by geographies. So our revenues from EMEA and America were 44% each, for the second quarter, while the remaining 12% came from Asia Pacific, similar to what we had last year. When we are reviewing, we are looking on our P&L for this quarter. So our gross profit increased from $585 million to $588 million, representing a gross margin of 87%. The slight decrease in the gross margin was explained due to higher memory costs. Our operating expenses, excluding R&D grants, increased by 13%, while on a constant currency basis, our operating expenses increased by 11%. Our Q2 results include approximately $28 million of benefit from R&D grants to be received from the Israeli government. When we are looking on our operating expenses, net of R&D grants, they were -- the expenses were $328 million and increased by 5% year-over-year. The increase -- the net increase is primarily as a result of increase in our workforce and as a result in continuing investment in AI security and investment in our sales and marketing programs. When looking on the operating income, it continues to be strong at $260 million or 39% operating margin. Our non-GAAP net income increased by 1% and reached $264 million, while our GAAP net income reached $194 million and decreased by 4% year-over-year. Our non-GAAP EPS grew by 8% and reached $2.55, 8%, as I said, growth year-over-year, while our GAAP EPS was $1.87, a 2% increase year-over-year. Our number of fully diluted outstanding shares for Q2 was 103.5 million shares. And while we continue to do our buyback, we expect the number of shares for the next quarter to decrease by approximately 1.5 million shares. Moving into our cash flow and cash position. So our cash balances as of the end of the quarter was $4.2 billion cash and marketable securities and deposits. Our adjusted free cash flow reached $161 million, as planned and in line with our projections. We also continue to do our buyback program and purchased approximately 2.5 million shares for $325 million this quarter at an average price of $131 per share. During the quarter, the company announced also a $2 billion expansion of the company share repurchase program. So we're going to continue to do this buyback. To summarize, so from one end, definitely strong demand -- continued strong demand for emerging technology led by e-mail security and CTEM, that's becoming more and more significant to our total business. On the other end, we did see, as expected, lower demand for firewall appliances this quarter. As I mentioned, we do expect similar trend to continue also in Q3. But definitely, we do see significant improvement on the appliances business in Q4, and we do expect to be back to growth in Q4 in the product revenues. We're going to move to the guidance to the business outlook. So first, regarding the full year, we are not touching the full year guidance. We are maintaining the same guidance as we gave you back in May, in the last call. Looking on the Q3 outlook. So the total revenue range is between $665 million to $685 million, subscription revenue between $332 million to $343 million, non-GAAP EPS between $2.43 to $2.53, while our adjusted -- and the GAAP EPS is $0.70 less. And our adjusted free cash flow is expected to be between $235 million to $265 million. It is important to note, as I mentioned in the call earlier that we do see significant DAF opportunities and deals that are being pushed from Q3 to -- that are expecting to be pushed from Q3 to Q4, and therefore, that has an effect -- have a negative impact mainly on our appliances revenues. And as I said, we -- if I'm comparing to what we've seen in the pipeline for Q4 in May and now, definitely we do see even stronger pipeline for Q4. Definitely, it's a more back-ended loaded deal. It's also is a reflection of what -- of the go-to-market disrupting that we've done. But definitely, we do see a positive sign. first, of course, with the emerging products that continue to have a strong demand. And also with the appliances and the firewall, we see positive signs that we are seeing the end in Q3 in terms of the decline and going back to growth in Q4. Thank you, and we are moving to Q&A. Kip, the floor is yours. Kip Meintzer: [Operator Instructions] Today, to begin, we're going to have Joseph Gallo from Jefferies, followed by Patrick Colville from Scotiabank. Joseph Gallo: It was great to hear about the investment in sales capacity. Can you just remind us what the normal cadence of sales ramp to productivity is? I'm just trying to understand better the confidence in a 4Q rebound when hiring today would be more indicative of 2027's benefit. Nadav Zafrir: The latter, right? So -- the impact to sales is expected in Q1 and Q2 of 2027. So the guidance and what we're expecting for Q3 and Q4 does not take into consideration the ramp-up. The ramp-up obviously has its momentum, but it's going to take some time. However, it is very significant. For us, hiring hundreds of new frontline sellers is a major move. I don't know if you've seen it. I hope you have. We have started an aggressive campaign. So it's not just the number, it's also the people that we're hiring and the invigorating of our sales force across the globe. It's really meaningful and it's a company-wide effort. So the guidance that we gave today does not take that into consideration. That is sort of preparing for a stronger 2027. Kip Meintzer: All right. Next up is Patrick Colville, followed by John DiFucci. Patrick Edwin Colville: I guess I wanted to ask about kind of Mythos preparedness and advanced AI preparedness. There's all excitement in the market around what advanced AI means for cybersecurity. You kind of touched on this in your prepared remarks a little bit. But just vis-a-vis Check Point specifically, are you seeing changes in buying patterns as a result of enterprises kind of concerned about the risks brought on by advanced AI models? And then, I guess, specifically, like where is that hitting the financial model? Is it the firewall layer for Check Point? Is it the non-attach subs? And any changes to sales cycles? Nadav Zafrir: So if you zoom out, really the phenomena that we're seeing is very interesting. It's -- when you think about it from the attacker's perspective, you want to think about it from an ROI perspective. So the way we see it is the attackers now have access to resources that they didn't have before. That's what we call the collapse of scarcity. They literally have access to what used to be very scarce resources. And that's sort of what leads into the democratization and industrialization. So we're going to see more sophisticated attacks at a much higher cadence. That is happening already, but we think it's going to accelerate within the next couple of years. So when you think about the security paradigm that -- or the assumptions that we have around security, we're seeing signs that some of these assumptions and the current paradigm does not necessarily withstand the change that's coming from the attackers. And that leads us to like an Kuhnian way, to really a world between true paradigms. And so that's what I mean when I say, number one, going back to fundamentals. This is the proactive prevention first. That's our DNA. That's where we shine. That's what our customers expect from us. And we have to do everything that we have learned just much better, much faster, much more diligently. At the same time, in parallel, we have to look into the future. We have to imagine different possible futures, give them different probabilities and start simulating how the attackers are going to change. So for example, I believe -- we believe that detection and response are going to be much less relevant because we're going to have to go to automatic remediation at machine speed. And so we're making massive investments. Last year, we spoke about hiring hundreds of new individuals to build the next generation. Today, we announced the launch of the first AI Network Firewall integrated into our AI Defense plane. And there's a whole strategy around that. Now to your question about the buyer's perspective, I think that they realize that on the one hand, back to basics, and at the same time, they're looking to what's next. So I'll give you a couple of examples. I think the continuous threat exposure management, based on 3 acquisitions that we made that is growing. Last quarter, we spoke about that growing at almost 100% is a part of that. Why? Because it gives you the ability to understand what's coming at you, but also creating a real pathway to understand what the real threats mean, and automatically remediating that in an open platform approach. And that's why CTEM, for example, is having such success. At the same time, the reason I'm so excited about the AI Network Firewall is that it's also happening at the network level. And so customers that already have our firewall can now also take advantage of the network to understand what their employees are doing, what agents are running and control that. So I really think to summarize, it's sort of a tale of two cities. On the one hand, everything that we've learned, we must do better than we've ever done before. At the same time, we're creating the new technology, the new products, the new -- and I think within the next couple of years, you'll see a new paradigm emerging. So that's sort of the story of where we are right now. I think that in some way, some of the frontier models may be hyped, but the phenomena is the phenomena cannot be overhyped. So we're seeing it in a very tactical level in the amount of vulnerabilities that are out there, and how fast we need to patch them. And so that's what we're doing today. But as we move forward, we need to change that paradigm, and we're working on this in different buckets. The last one is actually running these models on our own software to make sure that we can simulate, imagine, and get ahead of the curve before attackers do it. Kip Meintzer: Next up is John DiFucci, followed by Brian Essex. John DiFucci: Nadav, I sort of have a high-level question, I think. I mean, Check Point has always been a respected technology company and a thought leader in its field. Long before the term platformization came out, I remember your predecessor talking about the Infinity platform. And I know it became products too, but it was a platform. It was the first time we had heard about one company working to secure an enterprise from top to bottom. Even today, partners in the field acknowledge the strength of the technology at Check Point, but there seems to be a customer perception of the sort of dreaded word legacy, even though your installed base is really loyal and pretty much Check Point diehards. I guess, what is it, other than hiring a lot of new go-to-market people, that you think has to be done to change that perception? Because that's really important. That's hard. And is the issue really just not enough feet on the street? Nadav Zafrir: No, I think it goes beyond that. Not enough feet on the street is one thing, and that's why we started this campaign. Now that -- and this is a second phase of the go-to-market changes that we announced last time. So now that we've stabilized, we're ready to add hundreds of new people based on the new model in the organization that -- or the reorg that we announced. I think second, it's marketing, right? So we need to be louder. I really believe that when it comes to this world that we're walking into, this world where, on the one hand, security -- real security, proactive prevention has never been more important. I think that's our DNA. And I think we can provide real security based on the current paradigm. And at the same time, the announcement of the first AI network firewall. It's a big announcement. It's taking the firewall and preparing it for the AI era, but not as a stand-alone to your point, but as a platform play. And this is where integrating the AI network firewall into the AI defense plan. And having the ability to look at different choke points within the network, not just for observability, but also for enforcement is a huge advancement. And we are seeing the demand for our AI capabilities grow very, very fast. In fact, some of the hiring that we're doing across the globe is because we just can't get to enough customers fast enough with the high demand that we have because this is a specialized field where you need people on the specialists that can come in and do all the more technical stuff for our customers. And when you bring all these things together, it makes us very optimistic about the future. One thing that I'll say about the platform, yes, consolidation is important. But I think it needs to be an open platform. right? And so -- and an open platform means that we acknowledge the fact that, #1, from the approach should not be a monolithic approach, especially at the enterprise level, that's not going to lead to resilience. #2, whether we like it or not, a lot of our customers are going to be multi-vendor, and we need to appreciate that and have their security front and center in our policy. And so with our unified management, which I think is one of the strongest features that Check Point has, within the next few months, we're going to offer our customers the ability to manage different products and different firewalls, even if they are our fiercest competitors because at the end of the day, especially in the Mythos era, we just don't have the time to take care of things one by one with an SLA of half of days and weeks. We need to be able to see what's coming. We need to be able to understand what the real impact may be. We're using AI to do that to actually simulate the paths to the vulnerabilities that we're seeing. And then we're moving into an automatic remediation capability, whether it's patching or virtual patching or segmenting or segregation within the network so that at the end of the day, we can have this real proactive prevention first mentality and at the same time, starts with the new paradigm of autonomous remediation. John DiFucci: By the way, that makes a ton of sense, and it's truly unique, that open platform to work with others, and it's in the customer's best interest. I think you got to have Roei loosen up that marketing budget a little more and go out there really loud. Had Kip run the marketing because he's pretty loud. Nadav Zafrir: Yes, I agree. I totally agree, and it's -- some of it is already happening. Some of it is work in progress. And I think we're starting to see the impact. We're starting to see that turn into the funnel. And as Roei said, we're already seeing a very strong Q4 ahead of us. Operator: Next up is Brian Essex with JPMorgan. Brian Essex: I want to follow up on some of that commentary, particularly with regard to platform and your AI firewall. I think it's great to see the innovation of the platform. I think that's another thing that we've heard customers are really focused on is the rate of innovation to kind of build that platform. Would love to know what is your vision in terms of how you see the AI firewall technology stacking up against what seems to be an emerging AI gateway market. Are you targeting platforms that span -- I mean, I guess, are you thinking about expanding the platform to span across broader observability, tracing, performance optimization, cost control features, which is one thing that I think sales are very focused on? Or do you intend to like stick towards more security and governance? It seems like maybe some of your peers are looking at things more of a consolidated broader observability and security platform, but would love to know what your focus is going forward? Nadav Zafrir: Yes. So I want to start by saying that we need some, I would say, humility as we try to understand where this is going. There are different possible futures in where this is going. And I think we must look at it from different perspectives. One perspective, which I spoke about at length is the attackers perspective. The second perspective is different industries and how they are adopting AI. So again, a lot of hype, but it's a process. And there's a lot of trial and error within this process of adoption of AI, whether it's sort of the bread and butter that all of us have already, it's the MOE usage of AI, moving into independent agents that in the beginning, take over some of the human more redundant mundane day-to-day tasks, but over time, becoming more and more independent and autonomous. And that's where the game changes not only from the attackers perspective, but also from the attack surface. Having said all that, our mission remains the secure -- securing the AI adoption journey. And the way we approach this is with our customers. And so we have a design partner program with different industries, with different verticals because health is different than finance. And finance is different than energy and energy is different than production and logistics. For each one of them, we have to sit down with our customers, understand where they're going in the next couple of years, simulate what kind of new threats emerge from that and coming up with the right mechanisms to govern, to control and to secure these new capabilities so that on the one hand, they can deploy it, but on the second -- but from a different perspective, they can do it with security in mind. Now, being very direct to your question, Brian, we are focusing on the security part. But security is becoming much broader than just observability. Observability in many ways, when you think about the next paradigm or the emerging paradigm, doesn't really matter because going to the SOC or to the CISO or to the VP of Engineering and giving them a list of things that may go wrong is not going to help them. We need to be able to autonomously remediate. And so we're building those capabilities. But at the end of the day, we're not looking to go beyond the security level. We think security is very broad, very deep. We're building very deep capabilities. But when you think about controlling this from a cost perspective, that's not necessarily where we're going. Of course, when you have the observability, you can add that to it. Operator: Next up is Todd Weller, followed by Adam Tindle. Todd Weller: Nadav, I would love to get your perspectives on potential AI tailwinds for the network security business. There's different kind of angles to this. There's AI application and infrastructure deployments related to that AI data centers. And then there's an angle around potentially increasing traffic volumes and spectrum requirements. So how do you think about framing those dimensions? How do you think about magnitude and timing of those opportunities? And then within your kind of core large enterprise base today, what are you seeing any of that? And where do you think we are? Nadav Zafrir: Yes. I think that to your point about the tailwinds for security, I would look at it from -- I think there are 2 different aspects that are relevant to look at. The first one is how the network is a part of the overall AI defense plan. And the overall AI defense plane is on the device. It's in the cloud. It's in workloads, it's in the DevOps. And the network is at the heart of that and needs to play within that. And that's why the introduction of the AI network firewall as a part of the overall AI defense plan is so important. And I think that's going to have a meaningful tailwind for the industry and for Check Point specifically. With thinking about that, it's not just about securing, it's also about managing. So our AI-driven unified management, which is becoming an open platform and allows us to manage different components and different vendors, different firewalls connected as a platform to the continuous threat exposure management, which gives us the ability to understand the intelligence from the outside in, the attackers path and combining that is one aspect. The second aspect is emerging new capabilities that enterprises are building. So for example, some enterprises are -- have already invested and some are thinking about investing in AI factories, right? So localized capabilities sort of going back on-prem, whether it's because of privacy issues or cost issues. We're also seeing a plethora of rising investments in different parts of the world regarding data sovereignty, which is another issue. And finally, very specific data centers that are going to be either for inference or for training, which require different capabilities. So if you remember, a few months ago, we announced that we're working with NVIDIA to embed our firewall capability within the GPU level because in those data centers, latency is so important and East West traffic is so much more imminent that we literally need to do it at the hardware level in order to remain very, very efficient. And so that's the second tailwind that we're seeing. However, to be transparent about [indiscernible] That is something that we're seeing in a little bit of a further future. So 2027, we need to start seeing that. Operator: Next up is Adam Tindle, followed by Shaul Eyal. Adam Tindle: Nadav, I wanted to ask on the business outlook. You're reiterating the fiscal year guidance this year. And if I back into the implied Q4, you're going to need to do about an $800 million revenue quarter at the midpoint of guidance. And I was going back through the model, I've never seen that. That would be a record quarter. You also mentioned earlier that guidance doesn't take the ramp into consideration. So I know it's more of a Rally question on guidance, but I wanted to hear from you, the debate oversetting that expectation today and what markers you're looking at for Q4. And Roei, any comments that you could give us on billings? I know we kind of lost track. We were thinking 6% to 7% for the year entering the year. We've got this very difficult comp in Q3 that I think some are struggling to model. So just correct us a little bit on the billings trajectory as well? Nadav Zafrir: Roei, do you want to start? Roei Golan: I'll start. Yes. So definitely, you are right in terms of your calculation for Q4, it's around 6.5% growth for Q4 in order to meet -- be in the midpoint. I mentioned during my script that we do expect to be back to positive growth in product revenues. I remind you the main headwind that we see today on our revenues, the decline in revenues is coming from the product revenues, which declined this quarter of 14%, expected to be similar levels in Q3. And in Q4, we are expecting to be back to green, to be positive in product. So that's one aspect that definitely -- and I remind you also that Q4 is a more product-driven quarter. The portion of product out of the total revenues is bigger than any other quarter in the year. So that's one aspect. And again, I think that when we are looking on the funnel for Q4, I know that it's much higher than what we guided for Q3, I mean this growth. But when we are looking on the funnel, on the qualified deals, I'm talking about qualified deal, I'm not talking about now potential stuff. We do see much better funnel, much better pipeline for Q4. And again, we went through with our sales leaders on all the large deals, everything -- and again, some of them are deals that have been pushed from Q3 to Q4 that again, is expected to be pushed because there might be some that will be placed in Q3, but Q3 is more tricky because of the summer. So we took a more conservative year approach that some of this significant deal will be pushed to Q4. So definitely, it's a high bar in terms of Q4. But when I'm looking on the internal metrics, there is the support for that. And you asked about the billing. So you're right, when we started -- I'm not giving any guidance for billing, but [indiscernible] I was asking about billing for the year. When we started the year, it was around mid -- mid-single digit, we talked about 5%, 6%. When we came back on May, we told -- again, because of the higher disruption that we did see, it resulted more back-end loaded year, and we do see it in the numbers for Q2. And when I'm looking on H2, I don't want to give any specific guidance, but definitely, I do see much better billings in Q4 in terms of growth. Q3, you are right that the comparables are tougher. So there might be -- so as we said, Q3 is going to be -- might be more challenging with billing. But Q4, definitely, we are expecting, again, if we are looking on the funnel on large deals and definitely, we expect to be a strong bidding quarter. Nadav Zafrir: Yes. Just to add to that, Adam, remember that when we spoke in our last earnings, we were very transparent about the reorg that we did in our go-to-market org. That's going according to plan. And so that's why we think Q3 is the trough. And when we look at what's happening in the future in Q4, like Roei said, we're seeing a much better outcome, and that's why we are maintaining the guidance. With regards to the hiring, the reason we're not taking that into consideration is the natural ramp-up. right? So it's the second phase. And in fact, when you think about it now because this is a company-wide effort and many of our folks beyond selling need to recruit and onboard. And so actually, we're not going to see the impact of the hiring in 2026. We're only going to see the impact of the hiring in 2027, right? So some of it in Q1 and hopefully more of it in Q2. But it's the prudent thing to do. And it's a part of the plan and a part of the strategy that we spoke about last time. And for us, hiring hundreds of new sellers is obviously a great investment, and we're investing in our future. So last year, we spoke about hiring about 500 new R&D folks to start doubling down on the future products for the AI era. Now we feel we're ready with some of the products. We've done the reorg and we're ready to ramp up. But as you said, that's only going to have an impact in 2027. Roei Golan: Just one more comment about billing, Adam. I think it's important to say it here. I understand that you are following billing if it's important for cash flow and stuff. But it's not only metric that we are here. We are looking on new business. We are looking on RPO, which is I mentioned it today, the bookings. I can give you an example this quarter, the billing was affected. I didn't mention in the script because I -- again, I thought it's not -- probably I would be happy about it. But again, the billing this quarter affected, for example, from large deals that was renewed -- it's not only renewal, it's renewal and new business that last year, we build annually and this year, we build quarterly. This alone -- alone have an effect of 2 points on our billings this quarter, just moving from annually to quarterly. And we are flexible with that. I mean it's a large deal, very large deal with new business. You don't see it in the billing because we are billing it quarterly. We approved -- I approved the quarterly billing on that aspect. But again, if you would bill it annually, probably our billing will look much better for this year, but it wouldn't change the fact that our RPO grew by 7%. So I totally understand the importance of billing and it gives you some kind of prediction of what's going on in the business. But definitely, it's not the only metric that we are following. Operator: Next up is a Shaul Eyal and that will be followed by Shrenik Kothari from Baird. Shaul Eyal: Maybe [indiscernible] still double-clicking on this headcount. When we're saying hundreds of new people, what is it 200, 300? And how do you think about it geographically from that perspective? Nadav Zafrir: Yes. So I'll start, Roei, you can chime in. When we say hundreds, yes, we're talking about by the end of the year, we need to hire approximately for our go-to-market, a headcount of about 300 more individuals. When you look at it from a percentage perspective, it's a meaningful percentage at our size. When you think about it geographically, honestly, it's pretty globally spread. So I wouldn't say that it's just one area, the America, Western Europe, a little bit more, but it's across the globe, APAC, et cetera. Some of it is at the frontline sellers, what we call the generalists, but also specialists. So for example, we spoke about AI. We're seeing the funnel growing very substantially. In some cases, we just don't have the people out there that can actually go out to customers and do the POCs. And so we have to ramp up that very, very fast. Obviously, getting -- just getting the heads is not enough. We need to get the right people on board that are also ready for this future generation of buyers and the new paradigm that's emerging. And so it's an opportunity, not just to get more headcount, but also to revitalize and get new blood into the system. And that's exactly what we're doing. It's a company-wide effort. Again, we are within -- we launched the campaign, and we hope to be able to get to the right people that want to join us for this ride. Operator: Next up is Shrenik, followed by Joshua Tilton. Shrenik Kothari: So totally, I understand the internal execution disruption around go-to-market. But just on your specific comments on firewall appliance demand softer than you expected, right? And some of the peers are seeing stronger firewall demand, AI infrastructure-driven product growth. So just Nadav and Roei, can you help unpack that a bit? Like what are your customers actually doing? Are they extending the useful life without pricing right now? Are they shifting focus towards more AI-centric enforcement, which is sort of elongating cycles? Just -- are these pushes primarily rep transition driven? Or are customers fundamentally reevaluating the scopes and the architecture in the AI era as well? Roei Golan: I'll start. So I think it's a combination, Shrenik. I think it's a combination of still facing internal disruption that's affecting our execution that -- again, we are -- our execution in Q2, I mean, you've seen the numbers was not there what we wanted when we started the year. But I would say it's a combination of internal disruption and definitely also behavior of customers that I think again, some of them, we are looking on the memory cost and it's something that I'm spending significant part of my time to find a way to make sure that we have the enough inventory to give -- by the way, it's not only for appliances, it's also for internal users. So again, probably it's a combination. I don't think it's a clear -- there is no clear answer for that. But definitely, when I'm looking -- and I think it's mainly -- when I'm looking on our business, I think it's mainly internally -- mainly internally because I'm looking on the funnel. I'm looking on deals, I'm looking at our go-to-market being stabilized. And I'm looking that we are now -- we have very interesting opportunities, qualified opportunities that located in the second half of the year, mainly in Q4 that makes us feel more positive that it's more internal and less external. Nadav Zafrir: Yes. I would say that the demand is there, right? We're seeing it and you're seeing it with our competition as well. That's why we're so excited about the announcement of the AI network firewall today. The unified management that we're coming out with and hopefully, the fruits of a lot of investment that we put into this in the last couple of years will start to show. And then the optimism comes from what we see already in Q4, and that's why we're doubling down also to get ready for a higher growth in 2027. Having said all that, from the customers' perspective, look, I think that top of mind for them right now is, like I said, first of all, go back to basics and fundamentals. This era calls for patching at an unprecedented pace. That's just one example. And so we're also building the capabilities to do that with them and for them, not just for our own products. But again, we have to have the total security in mind. They're also getting a lot of pressure from the executives and the Board to adopt AI, whether it's to allow employees to use it or new applications and agents that are now running within the -- so it is a transition time. What I believe is that it calls for us to continue doing what we've always done which is prevention first, but at the same time, we're really changing the industry. And that's both on the network level with the AI network firewall and the new unified management. But at the same time, combining that with our Workspace, our CTEM, our AI defense plane and going forward, probably more capabilities that we will need to add to this in order to build this open platform that our customers can rely on for their secure AI transformation. Operator: Next up is Joshua Tilton, followed by Junaid Siddiqui. Joshua Tilton: Maybe a quick clarification and then my actual question. On the clarification side, maybe this is for Roei, but I understand you're reiterating the full year outlook. And you guys are confident in what it implies for Q4. But I guess what I'm trying to understand is when you think about what is implied on a quarterly basis, is this how you expected it to play out when you first took guidance down 90 days ago? Or did something change between now and then that we're pointing to a much stronger Q4? And then maybe just a follow-up and my actual question for Nadav is what happens when we get past the disruption from this year, you ramp hundreds of salespeople, all these products are on fire. Everybody needs to replace their current firewall with an AI firewall. Like what is the durable growth profile that we should be expecting when we move past the disruption, sales ramps, and all the sexiness around some of these newer products starts to really come through the model? Roei Golan: So I'll start and then Nadav, you can take it. So regarding the guidance, so when we gave the guidance in May, so actually, we did expect slight improvement in the third quarter in terms of appliances. I mentioned during my -- in my presentation that we did see -- we do expect more deals that will be pushed from Q3 to Q4, mainly on appliances, that's affecting not just appliances revenues, but also support and subscription revenues because they have an attached -- it's bundling and they have an attached revenues of subscription and support to every client. So I would say that the expectation in the beginning -- back in May that Q3 will be slightly better, slightly better, not significantly better, slightly better in Q4. So that's -- but because of the deals being that we are expecting now to be pushed from Q3 to Q4, that's how we are projecting now. Nadav? Nadav Zafrir: Going forward, looking at 2027 and beyond, from a general industry perspective, I think the security demand will continue to grow. Because we are between true paradigms, I think that we will see meaningful changes over the next couple of years, and we need to get ready for that. Our vision of securing the AI transformation through an open platform means that we have a lot of integration to do, for example, between the network and the continuous threat exposure management. There's a lot of integration that we need to do between workspace and AI. So there's a long road map ahead of us. And at the same time, we also have to keep our eyes wide open to what's out there from the emerging start-up community that is doing some very exciting things, and we're looking at that. The combination of that vision and strategy that we're starting to see the fruits of with the stabilization of the go-to-market and the hiring of new people obviously makes us optimistic. And I think that the hit that we took will position us for a better outlook going forward. Obviously, I don't -- we're not giving guidance now for -- beyond that. It's not a short journey. This is a company that has been around for -- from the beginning of cybersecurity history. We need to build it for the next decades. It's a process. It's a journey. And I think that we're seeing it going according to plan right now. And hopefully, more good things to come. Operator: All right. Next up is Junaid, followed by Saket Kalia. Junaid Siddiqui: Nadav, you've previously indicated SASE still around 12 to 18 months away from supporting your largest enterprise customers at the scale that you envision. What milestones should we be watching over the next year? And how close are you to being able to compete for the same global deployments targeted by the market leaders? Nadav Zafrir: Yes. Thanks for that, Junaid. So yes, SASE is an integral part of our hybrid mesh proposition and part of the platform. We are now at a point where in terms of capacity, we're already ready for the enterprise level and integrating SASE into our unified management as we speak. I think we already have a proposition that in some aspects is best-in-class. So for example, we have the best latency with our hybrid device architecture. It's fast and easy to deploy and manage. And so I think we're ready to go bigger with our SASE, and this is the time to do it. So we're focused on it. We have a very strong and capable R&D team as a part of the -- and the hiring that we're doing is focused specifically on specialists that will go out and do this. And more important than anything is to put that as part of the platform. So connected to the firewall through our hybrid mesh management so that our customers can push their policy, both to the SASE remote access, Internet access within the firewall, integrate that into our AI defense plan. There is a lot of work to do there, but we've made a lot of progress, and we're ready to go bigger, as I indicated before. Operator: Next up is Saket Kalia, followed by Eric Heath, who will most likely be our last caller today. Saket Kalia: Great. Roei, maybe for you. I'd love to dig into the sales investment just from a financial perspective, right? I'm sure that we can all take a shot at the financial impact of hiring 300 additional resources. And just to be clear, that sounds like it's the right thing to do to invest for growth. Not necessarily looking here for guide for next year, but I want to make sure it's asked. Is there any way that you want us to think about the margin impact of that investment, understanding that it's short-term pain for long-term gain? Roei Golan: I would say that, first of all, the hiring impact will be less for this year because it's going to be mainly for next year, the hiring. But I would say for next year margin, I will wait with that for the next calls because we have actually -- we have the -- next week, we have -- we are -- kick off our planning for next year -- for 2027. And I don't want now to give you anything because it's still very early stages. So I would say let's wait with that for the next call regarding margin for next year. Operator: Next up is Eric Heath. Eric Heath: Roei, Nadav, maybe just to come back one more time to the 3Q, 4Q seasonality. So can you just put a finer point of what changed since last quarter in terms of why you're expecting deals to push? Is this internal execution just giving you a little bit more prudence? Or is there something changing on the customer behavior side that maybe changed in the last 90 days? Roei Golan: I think it's less customer behavior. I think it's more -- again, we've done a very thorough analysis going through our pipeline for Q3 and Q4. I think we have, I would say, a bit more prudent approach about Q3. We are taking a more prudent approach in terms of deals that have been going to be pushed from Q3 to Q4. I'm taking it because Q3 is usually a tricky quarter because of the summer. People are in vacations, holidays and are back to work in September. So we are taking a more prudent approach. But definitely, I think we do see improvement and more stabilization in our go-to-market. And therefore, I think we are going to this hiring campaign that we feel confident with expanding our go-to-market now after it being stabilized after the disruption that we had in the first half of the year. Nadav, do you want to add something around it or... Nadav Zafrir: No. Again, H2 back-end-loaded, so a lot riding on Q4. It's about having a better execution and making sure that we have the right headcount and the right people as we go into 2027. And as Roei said, that's what we're starting to plan for now. Kip Meintzer: All right, everybody. That's going to conclude today. We thank you all for showing up and participating, and we'll be seeing you shortly hereafter in the analyst calls. And the rest of you that are following us today, we'll see you throughout the quarter. Thank you, and have a great day, guys. Bye-bye. Roei Golan: Bye-bye. Thank you. Before you buy stock in Check Point Software Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Check Point Software Technologies wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Check Point Software Technologies. The Motley Fool has a disclosure policy. Check Point (CHKP) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management characterizes the current cybersecurity landscape as an inflection point where AI is democratizing sophisticated adversarial capabilities, necessitating a shift toward machine-speed autonomous remediation. Q2 performance was impacted by internal go-to-market reorganization, leading to a 14% decline in product revenues as the sales force stabilized under a new organizational model. The company is launching a major expansion of its sales capacity, hiring approximately 300 additional frontline sellers to capitalize on long-term growth opportunities and revitalize global market presence. Strategic focus is shifting toward an 'open platform' approach, allowing customers to manage multi-vendor environments, including competitor firewalls, through Check Point's unified management system. Subscription revenue growth of 12% was driven by emerging technologies, specifically email security and Continuous Threat Exposure Management (CTEM), which management views as critical to the new security paradigm. The introduction of the industry's first AI Network Firewall and AI Defense Plane represents a strategic move to secure the entire AI transformation journey across networks, clouds, and agents. Management expects Q3 to be the performance trough due to seasonal vacation impacts and conservative deal-slippage assumptions, followed by a significantly stronger, back-end loaded Q4. Full-year 2026 guidance is maintained based on a qualified pipeline for Q4 that shows significant improvement in large appliance deals compared to previous months. The hiring of hundreds of new sales staff is not expected to impact 2026 results; productivity benefits and revenue contributions from this expansion are projected for Q1 and Q2 of 2027. Product revenues are expected to return to positive growth in Q4, supported by a more stable go-to-market organization and high demand for specialized AI security capabilities. Future R&D and product strategy will focus on 'autonomous remediation' to replace traditional detection and response, which management believes will become less relevant in the AI era. Q2 results included a $28 million benefit from Israeli government R&D grants, which partially offset a 13% increase in operating expenses driven by workforce expansion. Gross margins were slightly pressured by higher memory costs, a factor management is actively monitoring to ensure inventory availability for both appliances and internal use. The company announced a $2 billion expansion of its share repurchase program, signaling confidence in its cash flow generation despite current execution challenges. A shift in deal structuring from annual to quarterly billing for certain large contracts created a 2-percentage-point headwind for calculated billings this quarter. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that the aggressive hiring of 300 sellers is a 'second phase' of their reorganization and will not contribute to the 2026 guidance. The investment is intended to prepare for a stronger 2027, with the current Q4 rebound expectations based solely on existing staff and stabilized operations. Check Point is focusing strictly on security and autonomous remediation rather than broader observability or cost control features pursued by some peers. The strategy involves embedding security at the GPU level (via NVIDIA partnership) to handle the low-latency requirements of AI data centers. Management explicitly stated they will soon allow customers to manage competitors' firewalls through Check Point's unified management platform. This move acknowledges that enterprise resilience requires a multi-vendor approach rather than a monolithic vendor lock-in strategy. To meet full-year guidance, Q4 requires approximately 6.5% growth, which management admits is a 'high bar' but supported by qualified deals pushed from Q3. The confidence stems from a thorough analysis of the pipeline and the fact that Q4 is historically a more product-heavy quarter for the company.

Check Point Software Technologies CHKP reported second-quarter 2026 non-GAAP earnings of $2.55 per share, which beat the Zacks Consensus Estimate of $2.45 by 4.08%. The bottom line increased 8% year over year.Total revenues came in at $674 million, up 1% from the year-ago period but missing the consensus mark of $674.89 million by 0.19%. Check Point Software Technologies Ltd. price-consensus-eps-surprise-chart | Check Point Software Technologies Ltd. Quote CHKP continued to lean on recurring revenue streams in the quarter. Security subscription revenues climbed to $333 million, up 12% year over year, supporting the broader shift toward software-driven security consumption.Product demand remained under pressure. Products and licenses revenues decreased to $113 million, down 14% year over year, reflecting continued lower demand for firewall appliances.Software updates and maintenance revenues decreased 3% to $228 million on a year-over-year basis. Management noted that go-to-market execution is improving and that sales capacity is being expanded to capture growing demand for AI security offerings, even as the appliance business continues to face headwinds. Check Point ended the quarter with total deferred revenues of $2.03 billion, up 7% year over year, pointing to a larger revenue base already under contract.Operational indicators were mixed but constructive. Calculated billings were $639 million, essentially flat compared with the prior year period.Current calculated billings increased 2% year over year to $641 million. Remaining Performance Obligation (RPO) increased 7% year over year to $2.55 billion, indicating an expanding backlog that can underpin future revenue recognition. Emerging technologies, which include AI Security, Email Security and CTEM, delivered over 40% growth in Annualized Recurring Revenue and over 35% growth in calculated billings year over year. On a non-GAAP basis, profitability was mixed. Non-GAAP operating income for the second quarter of 2026 totaled $260 million, down 4% year over year. The non-GAAP operating margin contracted roughly 220 basis points from the year-ago quarter to 39%.Non-GAAP net income increased to $264 million, up roughly 1% year over year. Non-GAAP EPS rose 18 cents from $2.37 in the year-ago quarter to $2.55. The largest reconciling items included $56 million of stock-based compensation, $19 million of amortization of intangible assets and acquisition-related expenses, and $1 million of amortization of the debt discount.GAAP operating income was $185 million, representing 27% of total revenues and down 9% year over year. GAAP net income was $194 million, down 4% year over year, while GAAP EPS rose 3 cents year over year to $1.87.Results also benefited from a $28 million reduction in research and development expenses tied to Israel's new R&D tax incentive program, enacted as part of the 2026 budget. Check Point generated lower cash flow in the second quarter compared with the year-ago period. Net cash provided by operating activities was $170 million, down 35% year over year. Free cash flow was $161 million, down 37% year over year, and adjusted free cash flow was $161 million, down 39% year over year, representing 24% of total revenues.Liquidity remained strong on a sequential basis. As of June 30, 2026, total cash and cash equivalents, marketable securities and short-term deposits stood at $4.2 billion, down 4% from $4.38 billion as of March 31, 2026. During the second quarter of 2026, the company repurchased approximately 2.5 million shares for roughly $325 million. On May 11, 2026, the board authorized a $2 billion expansion of the ongoing share repurchase program. The increase in overall cash balances year over year to $4.2 billion from $2.9 billion was primarily driven by $1.8 billion in net proceeds from the company's $2 billion convertible senior notes offering. CHKP currently carries a Zacks Rank #4 (Sell).Some better-ranked stocks in the broader Zacks Computer and Technology sector are AppFolio APPF, Amkor Technology AMKR and Amphenol APH, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Shares of AppFolio have declined 19.6% year to date. The Zacks Consensus Estimate for APPF’s 2026 earnings is pegged at $6.9 per share, up by 2.2% over the past seven days, indicating an increase of 30.4% year over year.Shares of Amkor Technology have jumped 8.2% year to date. The Zacks Consensus Estimate for AMKR’s 2026 earnings is pegged at $2.08 per share, unchanged over the past 30 days, indicating a rise of 38.7% year over year.Amphenol shares have surged 11.3% year to date. The Zacks Consensus Estimate for APH’s 2026 earnings is pegged at $4.87 per share, up by 7 cents over the past 30 days, indicating an increase of 45.8% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Check Point Software Technologies Ltd. (CHKP) : Free Stock Analysis Report Amphenol Corporation (APH) : Free Stock Analysis Report Amkor Technology, Inc. (AMKR) : Free Stock Analysis Report AppFolio, Inc. (APPF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Check Point Software (CHKP) came out with quarterly earnings of $2.55 per share, beating the Zacks Consensus Estimate of $2.45 per share. This compares to earnings of $2.37 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +4.08%. A quarter ago, it was expected that this data security company would post earnings of $2.42 per share when it actually produced earnings of $2.5, delivering a surprise of +3.31%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Check Point, which belongs to the Zacks Security industry, posted revenues of $673.6 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.19%. This compares to year-ago revenues of $665.2 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Check Point shares have lost about 24.7% since the beginning of the year versus the S&P 500's gain of 6.9%. While Check Point has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Check Point was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.58 on $698.66 million in revenues for the coming quarter and $10.44 on $2.82 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Security is currently in the bottom 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Okta (OKTA), has yet to report results for the quarter ended July 2026. This cloud identity management company is expected to post quarterly earnings of $0.96 per share in its upcoming report, which represents a year-over-year change of +5.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Okta's revenues are expected to be $792.14 million, up 8.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Check Point Software Technologies Ltd. (CHKP) : Free Stock Analysis Report Okta, Inc. (OKTA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Check Point Software Technologies Ltd.? Here are five stocks we like better. Q2 results were broadly in line with expectations: Revenue rose 1% year over year to $674 million, while subscription revenue grew 12% to $333 million and offset a 14% decline in product revenue tied to weaker firewall-appliance demand. Non-GAAP EPS increased 8% to $2.55, exceeding guidance. Check Point launched an AI Network Firewall as part of its AI Defense Plane, designed to monitor and control prompts, agent actions and model interactions across network, cloud and SASE environments. Management maintained its full-year 2026 outlook despite a back-end-loaded second half, citing a stronger fourth-quarter pipeline. The company plans to hire about 300 go-to-market employees to support growth in 2027 and expanded its share-repurchase authorization by $2 billion. Time to Buy These Up-and-Coming Software Firms? Check Point Software Technologies (NASDAQ:CHKP) said its second-quarter results met expectations as subscription revenue growth offset weaker demand for firewall appliances, while management maintained its full-year 2026 outlook and pointed to a stronger fourth-quarter pipeline. Total revenue rose 1% year over year to $674 million, landing $1 million below the midpoint of the company’s forecast, CFO Roei Golan said. Subscription revenue increased 12% to $333 million, reaching the midpoint of guidance. Product revenue declined 14%, which Golan attributed primarily to lower firewall-appliance demand following disruption associated with changes to the company’s go-to-market organization. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Is CoStar Group Stock a Buy Before Earnings? Analysts Think So Non-GAAP earnings per diluted share increased 8% from a year earlier to $2.55, exceeding the company’s guidance. GAAP earnings per share were $1.87, up 2%. Adjusted free cash flow totaled $161 million, or 24% of revenue, and was $1 million above the midpoint of Check Point’s forecast. Golan said the company’s emerging technology portfolio continued to drive growth. Email security, continuous threat exposure management, or CTEM, and AI security collectively generated more than 40% annual recurring revenue growth year over year, while calculated billings from those products rose 35%. → 3 Value ETFs to Consider as Growth Stocks Lag Behind Sentinel One Stock Is the Growth Story Goldman Sachs Is Buying Deferred revenue increased 7% to $2.025 billion, while remaining performance obligation rose 7% to $2.55 billion. Current RPO grew 4% to $1.6 billion. Calculated billings were $639 million, roughly unchanged from a year earlier, and current calculated billings rose 2% to $641 million. Management said billings can be affected by customer billing preferences. Golan cited a large renewal and new-business deal that was billed annually in the prior year but quarterly this year, which he said reduced quarterly billings growth by roughly two percentage points without changing the company’s RPO growth. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Revenue from the Americas and Europe, Middle East and Africa each represented 44% of the quarterly total, with Asia-Pacific accounting for the remaining 12%. Gross profit rose to $588 million from $585 million, producing an 87% gross margin. Golan said the slight margin decline reflected higher memory costs. Operating expenses, excluding research-and-development grants, rose 13%, or 11% on a constant-currency basis. The quarter included about $28 million in R&D grants expected from the Israeli government. Operating income was $260 million, representing a 39% operating margin. Chief Executive Officer Nadav Zafrir used the call to announce what he described as the industry’s first AI Network Firewall. The offering is part of Check Point’s AI Defense Plane, a security platform intended to protect applications, users and agents from AI-based attacks. Zafrir said the firewall is designed to give customers visibility and control over prompts, agent actions and model interactions. The company plans to embed the AI Defense Plane across network, private and public cloud, and secure access service edge, or SASE, environments. “AI has created a new class of network traffic,” Zafrir said. “It deserves a new class of firewall.” He said increasingly capable AI models are reducing the scarcity of tools available to cyber attackers, potentially enabling more sophisticated attacks at a higher pace. Check Point’s strategy, he said, combines its prevention-focused security model with investments in automated remediation and security capabilities that operate at machine speed. Zafrir also said Check Point is developing its unified management platform into a more open platform. In coming months, he said, customers will be able to manage third-party firewalls, including those from competitors, through the company’s management capabilities. Check Point is launching a hiring campaign to add approximately 300 go-to-market employees by year-end, with hiring spread globally and somewhat weighted toward the Americas and Western Europe. The additions will include frontline sellers and specialists, including personnel focused on AI-related customer engagements. However, Zafrir said the hiring initiative is not included in expectations for the remainder of 2026. He expects the new sales capacity to begin contributing during the first and second quarters of 2027. “The guidance that we gave today does not take that into consideration,” Zafrir said, describing the initiative as preparation for a stronger 2027. Management characterized the first half’s commercial weakness as primarily an internal execution issue rather than a broad demand problem. Golan said the company is seeing a stronger funnel of qualified opportunities for the fourth quarter as the go-to-market organization stabilizes. For the third quarter, Check Point forecast total revenue of $655 million to $685 million, subscription revenue of $332 million to $343 million, and non-GAAP earnings per share of $2.43 to $2.53. The company expects adjusted free cash flow of $235 million to $265 million. Golan said subscription growth could slow modestly in the third quarter because certain large appliance deals are expected to move from the third quarter into the fourth quarter. Those deals also carry associated support and subscription revenue. Management expects product revenue to remain weak in the third quarter before returning to growth in the fourth quarter. Golan said the fourth quarter is typically more product-heavy and that the company sees a stronger qualified-deal pipeline than it had previously expected. Check Point maintained the full-year guidance it issued in May. The company ended the quarter with $4.2 billion in cash, marketable securities and deposits. It repurchased about 2.5 million shares for $325 million during the quarter, at an average price of $131 per share, and announced a $2 billion expansion of its share-repurchase program. Check Point Software Technologies Ltd. is an Israeli-founded cybersecurity company that develops, markets and supports a broad portfolio of network, cloud and endpoint security products. Founded in 1993, the company was an early pioneer of stateful inspection firewall technology and later developed a modular “software blade” approach that allowed customers to combine protection capabilities. Check Point's product set spans physical and virtual security appliances, software and cloud-native services designed to prevent cyberattacks, protect data and simplify security management for enterprises and service providers. Key product families include Quantum Security Gateways (on-premises and hybrid appliances), CloudGuard (cloud security posture and workload protection), Harmony (endpoint, remote access and unified endpoint security), and SandBlast (advanced threat prevention and sandboxing). This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Check Point Software Technologies Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

TEL AVIV, Israel, July 30, 2026 /PRNewswire/ -- Check Point® Software Technologies Ltd. (NASDAQ: CHKP), today announced its financial results for the quarter ended June 30th, 2026. Second Quarter 2026 Financial Highlights: Total Revenues: $674 million, a 1 percent increase year over year Security Subscriptions Revenues: $333 million, a 12 percent increase year over year Remaining Performance Obligation (RPO)*: $2.6 billion, a 7 percent increase year over year. GAAP Operating Income: $185 million, representing 27 percent of total revenues Non-GAAP Operating Income: $260 million, representing 39 percent of total revenues GAAP EPS: $1.87, a 2 percent increase year over year Non-GAAP EPS: $2.55, an 8 percent increase year over year Cash Flow from Operations: $170 million, representing 25 percent of total revenues Adjusted Free Cash Flow**: $161 million, representing 24 percent of total revenues "We delivered second quarter results in line with our expectations while strengthening our foundation for sustainable growth," said Nadav Zafrir, Chief Executive Officer of Check Point Software. "Our go-to-market execution is improving, and we are significantly expanding sales capacity to capture a growing market opportunity. With the industry's first Network AI Firewall and our AI Defense plane, we are giving enterprises the visibility, control, and protection they need to adopt AI safely across users, applications, and agents, while defending against a new generation of AI-driven threats. This reinforces our mission to secure our customers AI transformation." Financial Highlights Commentary: Cash Balances, Marketable Securities & Short-Term Deposits: $4,203 million as of June 30, 2026, compared to $2,913 million as of June 30, 2025. The increase in cash is primarily a result of the $1.8 billion proceeds from our $2 billion convertible senior notes offering net of issuance costs and net of purchased capped calls.Cash Flow: Cash flow from operations in the second quarter of 2026 was $170 million, which included $14 million in benefit related to our currency hedging transactions, while acquisition-related costs were insignificant. This compares to $262 million in the second quarter of 2025, which included $50 million in benefit related to our currency hedging transactions, while acquisition-related costs were $6 million.Share Repurchase Program: During the second quarter of 2026, the company re-purchased approximately 2.5 million shares at a total cost of approximately $325 million. On May 11, 2026, the company announced that the board of directors authorized a $2 billion expansion of the company's on-going share repurchase program.R&D Grants: During the second quarter of 2026, the company recognized a $28 million reduction in research and development expenses under Israel's new R&D tax incentive program. The new Israeli law enacted on March 30, 2026, as part of the 2026 budget, provides tax incentives for research and development activities carried out in Israel. Eligible Israeli companies within multinational groups can receive tax credits for qualifying R&D expenses, which may be used to offset corporate taxes or minimum top-up tax, and unused credits may be converted into cash grants after a defined period. For information regarding the non-GAAP financial measures discussed in this release, as well as a reconciliation of such non-GAAP financial measures to the most directly comparable GAAP financial measures, please see "Use of Non-GAAP Financial Information" and "Reconciliation of GAAP to Non-GAAP Financial Information." * Remaining Performance Obligation (RPO) is a measure that represents the total value of non-cancellable contracted products and/or services that are yet to be recognized as Revenue as of June 30, 2026.** Adjusted Free Cash Flow is a non-GAAP financial measure that we define as Net Cash provided by operating activities, less purchases of property, equipment, Capitalization costs, and other assets, net of Acquisition related costs. Conference Call and Webcast Information:Check Point will host a conference call with the investment community on July 30, 2026, at 8:30 AM ET/5:30 AM PT. To listen to the live video cast or replay, please visit the website: www.checkpoint.com/ir. Third Quarter Investor Conference Participation Schedule: KBCM Technology Leadership ForumAugust 10-11, 2026, Park City, UT – Fireside & 1x1's Oppenheimer 29th Annual Virtual Technology, Internet & Communications ConferenceAugust 13, 2026 – Virtual 1x1's NASDAQ 6th Annual Asia Virtual ConferenceAugust 17, 2026 – Virtual 1x1's Deutsche Bank 2026 Technology ConferenceAugust 26 - 27, 2026, Dana Point, CA – 1x1's Goldman Sachs 2026 Communicopia + Technology ConferenceSeptember 8-9, 2026, San Francisco, CA – Fireside Chat &1x1's Wolfe Research TMT ConferenceSeptember 10, 2026, San Francisco, CA – 1x1's Piper Sandler 2026 Growth Frontiers ConferenceSeptember 14-16, 2026, Nashville, TN – 1x1's Members of Check Point's management team are expected to present at these conferences and discuss the latest company strategies and initiatives. Check Point's conference presentations are expected to be available via webcast on the company's web site. To hear these presentations and access the most updated information please visit the company's web site at www.checkpoint.com/ir. The schedule is subject to change. Follow Check Point via:Twitter: http://www.twitter.com/checkpointswFacebook: https://www.facebook.com/checkpointsoftwareBlog: http://blog.checkpoint.comYouTube: http://www.youtube.com/user/CPGlobalLinkedIn: https://www.linkedin.com/company/check-point-software-technologies About Check Point Software Technologies Ltd. Check Point Software Technologies Ltd. (www.checkpoint.com) is a global cyber security leader protecting more than 100,000 organizations worldwide. Its mission is to secure enterprises' AI transformation. With a prevention-first approach and an open ecosystem architecture, Check Point helps organizations block advanced threats, prioritize exposures, and automate security operations across complex digital environments. The unified architecture simplifies protection across hybrid networks, multi-cloud environments, digital workspaces, and AI systems. Structured around four strategic pillars, Hybrid Mesh Network Security, Workspace Security, Exposure Management, and AI Security, Check Point delivers consistent protection and visibility across multivendor environments, enabling organizations to reduce risk, improve efficiency, and accelerate innovation without increasing complexity. Legal Notice Regarding Forward-Looking StatementsThis press release contains forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this press release include, but are not limited to, expectations regarding our products and solutions and customer demands, our ability to capture growth opportunities and drive sustainable growth in the future, and our participation in investor conferences and other events during the third quarter of 2026. Our expectations and beliefs regarding these matters may not materialize, and actual results or events in the future are subject to risks and uncertainties that could cause actual results or events to differ materially from those projected. These risks include our ability to continue to develop platform capabilities and solutions; customer acceptance and purchase of our existing solutions and new solutions; the market for IT security continuing to develop; competition from other products and services; and general market, political, economic, and business conditions, including acts of terrorism or war. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 31, 2026. The forward-looking statements in this press release are based on information available to Check Point as of the date hereof, and Check Point disclaims any obligation to update any forward-looking statements, except as required by law. Use of Non-GAAP Financial Information In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Check Point uses non-GAAP measures of operating income, net income, earnings per diluted share and adjusted free cash flow, which are adjustments from results based on GAAP to exclude, as applicable, stock-based compensation expenses, amortization of intangible assets and acquisition related expenses, amortization of debt discount and the related tax affects. Check Point's management believes the non-GAAP financial information provided in this release is useful to investors' understanding and assessment of Check Point's ongoing core operations and prospects for the future. Historically, Check Point has also publicly presented these supplemental non-GAAP financial measures to assist the investment community to see the company "through the eyes of management," and thereby enhance understanding of its operating performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in this press release. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such has determined that it is important to provide this information to investors. View original content to download multimedia:https://www.prnewswire.com/news-releases/check-point-software-reports-2026-second-quarter-financial-results-302838767.html

For the quarter ended June 2026, Check Point Software (CHKP) reported revenue of $673.6 million, up 1.3% over the same period last year. EPS came in at $2.55, compared to $2.37 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $674.89 million, representing a surprise of -0.19%. The company delivered an EPS surprise of +4.08%, with the consensus EPS estimate being $2.45. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Check Point performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Revenues- Total revenues from products and security subscriptions: $446 million compared to the $443.11 million average estimate based on 10 analysts. The reported number represents a change of +3.8% year over year. Revenues- Software updates and maintenance: $227.6 million compared to the $235.03 million average estimate based on 10 analysts. The reported number represents a change of -3.3% year over year. Revenues- Products and licenses: $113.4 million versus $110.92 million estimated by nine analysts on average. Compared to the year-ago quarter, this number represents a -14% change. Revenues- Security Subscriptions: $332.6 million versus $332.62 million estimated by nine analysts on average. Compared to the year-ago quarter, this number represents a +11.7% change. View all Key Company Metrics for Check Point here>>> Shares of Check Point have returned +4% over the past month versus the Zacks S&P 500 composite's -1.5% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Check Point Software Technologies Ltd. (CHKP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research