Check Point revenue rises as subscriptions drive growth

Check Point reported second-quarter revenue of USD $674 million, with higher subscription revenue and remaining performance obligations.

Revenue rose 1 per cent from a year earlier. Security subscriptions revenue increased 12 per cent to USD $333 million, while remaining performance obligation, which reflects contracted revenue yet to be recognised, reached USD $2.6 billion, up 7 per cent year on year.

GAAP operating income for the quarter was USD $185 million, or 27 per cent of revenue, while non-GAAP operating income was USD $260 million, or 39 per cent. GAAP earnings per share were USD $1.87, up 2 per cent, and non-GAAP earnings per share rose 8 per cent to USD $2.55.

Cash flow from operations fell to USD $170 million from USD $262 million in the same quarter last year. Adjusted free cash flow was USD $161 million, or 24 per cent of revenue.

Cash, marketable securities and short-term deposits totalled USD $4.203 billion at the end of the quarter, compared with USD $2.913 billion a year earlier. Check Point attributed the increase mainly to USD $1.8 billion in proceeds from a USD $2 billion convertible senior notes offering, net of issuance costs and purchased capped calls.

During the quarter, Check Point repurchased about 2.5 million shares for about USD $325 million. Its board also approved a USD $2 billion expansion of the ongoing share repurchase programme.

Tax incentive

Results were also affected by a research and development incentive in Israel. Check Point recognised a USD $28 million reduction in research and development expenses under a new tax incentive programme introduced as part of the country's budget framework.

The law allows eligible Israeli companies within multinational groups to receive tax credits for qualifying research and development spending. Those credits can be used to offset corporate taxes or minimum top-up tax, while unused credits may later be converted into cash grants.

Operating cash flow in the quarter included a USD $14 million benefit related to currency hedging transactions. In the comparable period a year earlier, it included a USD $50 million benefit from those transactions, while acquisition-related costs were USD $6 million.

Check Point described the quarter as in line with internal expectations as it continues to invest in its commercial organisation. Management also highlighted product development around artificial intelligence as part of its broader strategy.

"We delivered second quarter results in line with our expectations while strengthening our foundation for sustainable growth," said Nadav Zafrir, Chief Executive Officer, Check Point.

Zafrir also outlined the company's view of demand for AI-related security tools.

"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 Defence 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," said Zafrir.

Check Point serves more than 100,000 organisations worldwide. The group focuses on network security, workspace security, exposure management and AI security across hybrid networks, cloud environments and digital workplaces.

The latest quarterly figures suggest the company is still relying on subscriptions and contracted business to drive growth while headline revenue remains subdued. Its stronger cash position also reflects financing activity rather than operating performance alone, as share buy-backs continue alongside investment in sales and product development.