Check Point Software’s Earnings Call Highlights Growth and Challenges

Check Point Software ((CHKP)) has held its Q2 earnings call. Read on for the main highlights of the call.

The recent earnings call for Check Point Software Technologies painted a picture of robust growth and strategic advancements, tempered by some challenges. The sentiment was largely positive, with significant achievements in AI-powered firewalls and recognition in the SASE market, alongside strong financial performance. However, there were noted challenges such as a slight decline in support revenues, foreign exchange impacts, and timing issues with deal closures.

Strong Quantum Force AI-Powered Firewall Growth

Check Point Software’s Quantum Force AI-powered firewalls experienced a strong quarter, showcasing a 12% year-over-year growth. This impressive performance was driven by a momentum in product refresh and an increased demand for AI-powered inspection, highlighting the company’s strategic focus on AI innovations.

Inclusion in Gartner Magic Quadrant for SASE

The company made significant strides in the SASE market, as evidenced by its inclusion in the 2025 Gartner Magic Quadrant for SASE. Additionally, Check Point was recognized as a leader in the Forrester Wave for Zero Trust Platforms, underscoring its growing influence and strategic positioning in the cybersecurity landscape.

Healthy Revenue and EPS Growth

Check Point exceeded revenue projections by $3 million, achieving a total of $665 million. The non-GAAP EPS stood at $2.37, marking a 9% growth year-over-year. This financial performance reflects the company’s robust operational strategies and market demand.

Strong Operating Cash Flow

The company reported a strong operating cash flow of $262 million, representing a 31% growth year-over-year. This substantial increase underscores Check Point’s effective cash management and operational efficiency.

Strong Performance in APAC Region

The APAC region demonstrated impressive performance with a 15% year-over-year growth this quarter. This double-digit growth highlights the region’s strategic importance and the effectiveness of Check Point’s market strategies.

Slight Decline in Support Revenues

Despite the overall positive performance, there was a slight decline in support revenues. This was attributed to higher discount levels in bundled deals, which led to a deceleration in subscription revenues, indicating a need for strategic adjustments in pricing models.

Impact of Foreign Exchange Rates

Currency movements posed a challenge, resulting in a 0.5 point headwind to margins this quarter. This impact on margins may influence future operating expenses, necessitating careful financial planning and risk management.

Back-End Loaded Quarter with Slip Deals

The quarter experienced a back-end loading with several deals slipping from the last few days of the quarter to the first two weeks of July. This affected billing by approximately 3 points, highlighting timing challenges in deal closures.

Forward-Looking Guidance

Looking ahead, Check Point Software Technologies provided guidance for the third quarter of 2025, maintaining their full-year outlook. They anticipate a revenue range of $657 million to $687 million for Q3, with a midpoint of $672 million. The expected non-GAAP EPS is between $2.40 and $2.50. Despite challenges like deal slippage, the company remains confident in reaching the high end of their 2025 guidance, supported by strong indicators in July and a healthy pipeline. Continued investment in AI and product innovations, including a new R&D center in India, are key components of their growth strategy.

In summary, Check Point Software Technologies’ earnings call reflected a positive sentiment with strong growth in AI-powered firewalls and strategic market recognitions. While challenges such as a decline in support revenues and foreign exchange impacts were noted, the company’s forward-looking guidance remains optimistic, supported by strategic investments and a robust market presence.