Key Highlights

  • CHKP reported third quarter 2026 Revenue of $670 million, down 1% year over year, in line with the midpoint of its guidance.
  • Subscription revenue grew 11% to $339 million, or 51% of total revenue.
  • Non-GAAP EPS was $2.49 per diluted share, while GAAP EPS was $1.82.
  • Adjusted free Cash Flow was $258 million, and the company bought back 2.5 million shares for $325 million.
  • Fourth quarter revenue is guided to $720 million to $770 million, with full-year revenue of $2.732 billion to $2.782 billion.

Lower Firewall Refresh Pulls Revenue Down 1% While Subscriptions Climb 11%

Check Point Software Technologies (NASDAQ:CHKP) reported results for the third quarter ended Sep 30, 2026 on Nov 2, 2026. Total revenue was $670 million, down 1% from a year earlier and at the midpoint of its projections, as fewer firewall appliance refresh projects weighed on product, support and services revenue.

Subscription revenue rose 11% to $339 million, $1 million above the midpoint of guidance. Management said email security, exposure management and AI security together grew annual Recurring Revenue by more than 38%, with calculated billings up more than 47%. Email security annual recurring revenue passed $200 million.

The Cybersecurity company sells network security, email protection, exposure management and AI security products.

Gross Margin Slips to 87% on Memory Costs as Non-GAAP Operating Margin Holds at 37.4%

Gross profit fell to $585 million from $602 million, a gross margin of 87%, which management tied to higher memory costs. Operating expenses before R&D grants rose 12%, or 8% in constant currency, on hiring, AI security Investment and sales and marketing. Net of about $25 million of Israeli R&D grants, expenses were $334 million, up 4%.

Non-GAAP Operating Income was $251 million, a 37.4% margin. Non-GAAP Net Income reached $254 million, or $2.49 per diluted share, while GAAP net income was $185 million, or $1.82 per share.

Deferred revenue ended at $1.992 billion, up 6%, and remaining performance obligations grew 5% to $2.513 billion. Calculated billings fell 5% to $636 million against a tough comparison, as the prior-year quarter was lifted by roughly five points of slipped and early deals.

Cash Generation and Buybacks Continue While a Weaker Dollar Adds Cost Pressure

Adjusted free cash flow was $258 million, $8 million above the midpoint of guidance, and $1,179 million over the last 12 months. The company repurchased 2.5 million shares for $325 million at an average of $132 per share. Diluted shares were 101.9 million, and management expects about 2 million fewer next quarter.

A weaker U.S. dollar against the Israeli shekel has added roughly $30 million to operating costs this year, with a larger effect expected in the fourth quarter. At current rates, management estimates up to $50 million of additional operating cost in 2027.

Guidance Points to a Measured Fourth Quarter Recovery and a February Strategy Update

For the fourth quarter, the company guided revenue to $720 million to $770 million, flat year over year at the $745 million midpoint, with subscription revenue of $351 million to $362 million. Non-GAAP EPS is expected at $2.71 to $2.83, and adjusted free cash flow at $260 million to $290 million. Full-year revenue is guided to $2.732 billion to $2.782 billion, non-GAAP EPS to $10.25 to $10.37, and adjusted free cash flow to $1.136 billion to $1.166 billion.

Management said the recovery will be more gradual than first expected. A firewall price increase of 12% to 20% took effect Oct 4, and the company targets subscription revenue above $1.5 billion in 2027. A Capital Markets Day is set for Feb 10 in Las Vegas.