$CHKP · CHECK POINT SOFTWARE TECHNOLOGIES LTD
Check Point Software Technologies reported Q3 FY2026 results with total revenues of $669.8M, down 1% YoY. Security subscriptions grew 11% to $338.6M, while products and licenses fell 19% to $105.5M. Non-GAAP EPS was $2.49 versus $3.94 a year ago; excluding a one-time tax benefit in Q3 2025, EPS was flat. CEO Nadav Zafrir said revenues "reached a trough" in Q3 and expects gradual improvement starting Q4, but acknowledged the recovery is taking longer than anticipated.
- Total revenues of $669.8M declined 1% YoY from $677.5M, with products and licenses down 19% to $105.5M.
- Security subscriptions revenue grew 11% YoY to $338.6M; RPO rose 5% YoY to $2.5B.
- Non-GAAP EPS of $2.49 fell 37% YoY from $3.94, but excluding a one-time tax benefit in Q3 2025, EPS was flat (+1%).
- GAAP net income dropped 48% YoY to $185.2M from $358.7M, driven by the absence of a $130.9M tax benefit recorded in Q3 2025.
- The company repurchased 2.5M shares for $325M in Q3; cash and securities totaled $4.12B, boosted by $1.8B from a convertible notes offering.
CHKP down ~0.9% in regular trading at $152.11, a modest negative reaction consistent with a mixed quarter where subscription growth was offset by declining product revenue and a CEO warning that recovery is taking longer than expected.
A cybersecurity bellwether signals its product-to-subscription transition is stalling, with the CEO explicitly resetting recovery timelines — a caution flag for legacy security vendors.
Check Point's 11% security subscription growth contrasts with faster-growing cloud-native peers like CrowdStrike and Palo Alto Networks, while its legacy product-and-license segment continues to shrink, underscoring the ongoing transition challenge for incumbent cybersecurity vendors.
CEO Nadav Zafrir explicitly stated "the recovery is taking longer than anticipated," signaling that the product revenue decline (down 19% YoY) may persist longer than previously guided. The $1.8B convertible notes offering introduces potential dilution risk.