Check Point Software Technologies reported slightly lower sales for the quarter ended 30 September and said it believes revenue has now hit bottom. The Check Point third-quarter results, released on 2 November, showed revenue of $670 million, down 1% from a year earlier. Shares of the Israeli cybersecurity company fell in premarket trading, by roughly 8% according to a morning market briefing.
What the Check Point Third-Quarter Results Show
The headline numbers were mixed. Total revenue was $669.8 million against $677.5 million a year earlier. Within that, the company’s growth engine kept running. Security subscriptions revenue rose 11% to $338.6 million.
Other parts of the business shrank:
Products and licences: $105.5 million, down from $130.4 million.
Software updates, maintenance and services: $225.7 million, down from $241.7 million.
Remaining performance obligation, a measure of contracted revenue still to be recognised, grew 5% to $2.5 billion. For the first nine months of 2026, revenue was $2.012 billion, up about 1.6% from $1.98 billion in the same period last year.
Key Details: Earnings and Cash Flow
Profitability stayed strong on an operating basis. GAAP operating income was $177 million, or 26% of revenue. Non-GAAP operating income was $251 million, or 37%.
Earnings per share fell sharply year on year. Non-GAAP EPS was $2.49, compared with $3.94 a year earlier. GAAP EPS was $1.82 against $3.28. The company explained that the prior-year quarter included a one-time tax benefit of about $1.47 per share. Excluding that benefit, both measures rose about 1%.
Cash generation was healthy. Operating cash flow was $264 million, or 39% of revenue. Adjusted free cash flow was $258 million, a 38% margin.
The balance sheet changed as well. Cash, marketable securities and short-term deposits reached $4.123 billion, up from $2.817 billion a year earlier. The increase mainly reflects roughly $1.8 billion in net proceeds from a $2 billion convertible senior notes offering. In the quarter, Check Point also repurchased about 2.5 million shares for roughly $325 million.
Why It Matters: A Trough Call From the CEO
Chief executive Nadav Zafrir said third-quarter results were in line with expectations. He pointed to strong demand for email security, continuous threat exposure management and AI security. He said the company believes revenue reached a trough in the third quarter and expects gradual improvement from the fourth quarter.
He also acknowledged that the recovery is taking longer than anticipated. He said leading indicators are improving.
That candour matters because investors have been waiting for a turn. In July, Check Point guided to third-quarter revenue of $655 million to $685 million, which was below the $696.5 million analysts had expected at the time. The actual result landed near the middle of that range. The stock fell about 8% after the July report.
Broader Context: Cybersecurity Spending and the AI Pivot
Check Point is repositioning around what it calls securing enterprises’ AI transformation. Its strategy centres on four pillars: hybrid mesh network security, workspace security, exposure management and AI security. The growth in subscriptions suggests customers are shifting toward recurring software subscriptions, which Check Point says are supported by demand for email, exposure management and AI security.
At the same time, sales of traditional hardware and licences are falling. That mix shift can slow reported revenue growth in the short term, even if it improves predictability over time.
The quarter also included a $25 million reduction in research and development expense. It came from Israel’s new research and development tax incentive programme, enacted on 30 March 2026. Over nine months, the company recognised an $80 million reduction from the programme. Eligible Israeli companies within multinational groups can receive tax credits that may later be converted to cash grants.
What Happens Next
Management hosted its investor call at 8:30 a.m. Eastern on Monday. The earnings release does not set out a fourth-quarter forecast in its headline section, so investors will look to management commentary and analyst notes for detail.
Check Point has several investor events lined up in the weeks ahead, including the BMO Technology Conference on 12 November and the RBC Global TIMT Conference on 17 November. The UBS Global Technology Conference follows from 30 November to 3 December.
The key test is simple. Investors want to see sequential revenue growth in the fourth quarter and evidence that subscription gains can outweigh weakness in older product lines. They will also look at whether the company keeps returning cash through buybacks while holding a larger cash pile after its convertible notes offering. The stock’s reaction on Monday shows how closely the market is watching for proof that the trough call holds. Any improvement in product and licence sales, which fell more than 19% year on year in the quarter, would be an early sign that the recovery is broadening.
