Check Point Software Technologies Q2 2025 Earnings Report

Check Point Software Technologies EPS Results

• Actual EPS: $2.37
• Consensus EPS: $2.36
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $2.17

Check Point Software Technologies Revenue Results

• Actual Revenue: $665.20 million
• Expected Revenue: $663.10 million
• Beat/Miss: Beat by +$2.10 million
• YoY Revenue Growth: +6.00%

Check Point Software Technologies Announcement Details

• Quarter: Q2 2025
• Date: 7/30/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, July 30, 2025
• Conference Call Time: 8:30AM ET

Check Point Software Technologies (NASDAQ:CHKP) develops, markets, and supports a range of products and services for IT security worldwide. The company offers a multilevel security architecture, cloud, network, mobile devices, endpoints information, and IOT solutions. It provides Check Point Infinity Architecture, a cyber security architecture that protects against fifth generation cyber-attacks across various networks, endpoint, cloud, workloads, Internet of Things, and mobile. In addition, the company offers security gateways and software platforms that support small and medium sized business. Further, it provides cloud network security, cloud native application protection, security and posture management, cloud identity and entitlement, cloud workload protection, cloud detection and response, and cloud web application protection for web applications and APIs; and Check Point Harmony that delivers endpoint and secure connectivity for remote user access. Additionally, the company offers technical customer support programs and plans; professional services in implementing, upgrading, and optimizing Check Point products comprising design planning and security implementation; and certification and educational training services on Check Point products. It sells its products through distributors, resellers, system integrators, original equipment manufacturers, and managed security service providers. Check Point Software Technologies Ltd. was incorporated in 1993 and is headquartered in Tel Aviv, Israel.

Check Point Software Technologies Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Checkpoint reported $665 million in Q2 revenue (6% YoY growth), beating the midpoint by $3 million, and delivered $2.37 non-GAAP EPS, up 9% year over year.
• Positive Sentiment: Management reiterated full-year 2025 guidance, noted a strong start to Q3 with slip deals from Q2 already closed, and highlighted a healthy pipeline for the remainder of the year.
• Positive Sentiment: QuantumForce AI-powered firewalls grew 12% YoY, while SASE R&D headcount doubled in India, driving inclusion in the 2025 Gartner Magic Quadrant for SASE and recognition as a leader in the Forrester Zero Trust Wave.
• Negative Sentiment: Currency headwinds from a weaker US dollar versus the Israeli shekel created a ~50 bp margin drag in Q2, with an expected 0.5–1 pt headwind in H2 and potential $50–60 million higher operating expenses in 2026 if rates hold.
• Neutral Sentiment: Subscription revenue decelerated slightly and support revenue declined as customers bundled services with appliance refreshes at higher discounts, a trend management says will strengthen long-term renewals and upsell opportunities.

Presentation

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Relations and joining me today are chief executive officer, Nadav Zafir, and our Chief Financial Officer, Roy Ghulan. Before we begin, I'd like to remind everyone that this conference is being recorded and will be available for replay on our website at checkpoint.com. During the formal presentation, all participants are in a listen only mode that will be followed by a Q and A session. During this presentation, Check Point's representatives may make forward looking statements. Forward looking statements generally relate to future events or our future financial or operating performance.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

These statements involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward looking statements. Any forward looking statements made speak only as of the date hereof, and Check Point Software undertakes no obligation to update publicly any forward looking statements. In our press release, which has been posted on our website, we present GAAP and non GAAP results along with reconciliation of such results, as well as the reasons for our presentation of non GAAP information. If you have any questions after the call, please feel free to contact Investor Relations by email at kipcheckpoint dot com. Now I'd like to turn the call over to Nadav.

[Nadav Zafrir, CEO & Director at Check Point Software]

Hey, everyone. Good morning to you and thanks for joining us today. As you already know, our industry is undergoing a generational transformation. It's marked by unprecedented change and I think more importantly, the unprecedented pace of change. We're still in a very early innings of this revolution.

[Nadav Zafrir, CEO & Director at Check Point Software]

And I believe that at Checkpoint, you know, we're well positioned to lead it. And in today's call, I wanna take some time to talk a little bit about our guiding principles and our vision. Obviously, before elaborating, I'd like to share, we had a solid quarter, both revenue and EPS in line with our outlook. It was relatively back end loaded and resulted in several slip deals that have already closed in the last few weeks. And the third quarter is shaping up well with strong indicators so far in July.

[Nadav Zafrir, CEO & Director at Check Point Software]

Beyond that, we see a very healthy pipeline for the remainder of the year and so we're reiterating our 2025 guidance. And of course, Roy will elaborate about the financials and the outlook shortly. So if you bear with me for a few minutes, I'll try to be very brief. To lead the future, we are focused on four guiding principles. Number one, securing the connectivity fabric.

[Nadav Zafrir, CEO & Director at Check Point Software]

Number two, a prevention first ethos. Three, an open platform philosophy. And finally, an AI first security. The modern connectivity fabric is hybrid. It's hyper connected.

[Nadav Zafrir, CEO & Director at Check Point Software]

And it's not only a critical infrastructure for every digital transaction, but it's also become a potential source of knowledge that can provide the ability to read between the nodes, revealing patterns, emerging threats. And I think that's an opportunity we must embrace. I can tell you that in q two, our QuantumForce AI powered firewalls posted another robust quarter, growing in 12% year over year. It was driven by the refreshed momentum and a growing demand altogether for AI powered inspection. We also continue to accelerate our investment in SASE.

[Nadav Zafrir, CEO & Director at Check Point Software]

We've opened a new r and d center in India that's coming up nicely. We doubled the size of our SASE r and d team, and we're already seeing the momentum that comes with that with sort of a steady growth across all regions. Recently, this progress is also acknowledged with our inclusion at the 2025 Gartner Magic Quadrant for SASE, and also the recognition as a leader in the Forrester Wave for zero zero plus platform for Zero Trust platforms. On the Workspace front, as I shared in our previous call, we continue to make progress under Gil Friedrich's leadership. The Workspace platform now brings together endpoint, email, and SaaS security, and ultimately helping our customers operations and improve protections.

[Nadav Zafrir, CEO & Director at Check Point Software]

And also under Gil, we're also expanding our MSP and pay as you go offerings just so that we can support onboarding and more flexible consumption models. And this is contributing to a steady customer growth, tens of thousands of new customers, and millions of users are joining annually through this program. And so to summarize the first principle, our vision is to securely connect and optimize security across devices, networks, users, and clouds. And to do that, we need to look at it as a holistic solution that ultimately, you know, delivers a consistent unifying security across what we call the hybrid met the modern hybrid mesh network. The second principle out of four is prevention first.

[Nadav Zafrir, CEO & Director at Check Point Software]

You know, it's it's been foundational for Checkpoint forever that we must strive to stop attacks before they cause damage. Now preventing attacks may not be glamorous. It's difficult to receive sort of acknowledgments for things that did not happen. At the end of the day, it's like a constant behind the scenes effort that requires discipline, smart design, and a proactive mindset. And, you know, true prevention is about acting in real time.

[Nadav Zafrir, CEO & Director at Check Point Software]

You you need to stop the zero day phishing site before user engages so that you can also block a Lock four j exploit before it runs. And the secret sauce is to be able to deliver this in real time so that you can get prevention without a negative impact on the user experience. And that's the hard part. And it takes intelligent engines that are working silently across data streams and are now driven by AI, that make those split second decisions without disruption. It may not be flashy, but it's foundational.

[Nadav Zafrir, CEO & Director at Check Point Software]

And in some ways, I'm seeing a renaissance of the importance of prevention, especially when you look at the AI driven threat threat landscape. You know, it's expanding really, really fast. Just last week, the SharePoint tool shell zero day vulnerability was exposed. It's a vulnerability that affects on premise Microsoft SharePoint servers. And it at the end of the day, it allows unauthenticated attackers to gain full access.

[Nadav Zafrir, CEO & Director at Check Point Software]

And our our customers at Checkpoint were protected. We also enhanced our prevention stack with the Verity acquisition, which we announced recently. And this now provides an automated threat intelligence and real time remediation. And think that this acquisition positions us at the forefront of preemptive prevention and threat exposure management, and it strengthens our our leadership in proactive cybersecurity. Moving on to our next principle.

[Nadav Zafrir, CEO & Director at Check Point Software]

It's it's it's all about an open platform. You know, there are different ways, that, we can approach a cybersecurity philosophy. We believe, that an open platform, is the right approach. And when we speak about an open platform, it's the ability to not to for us to create the core networking fabric, pulling everything together, but being able to collaborate and to create an extensible collaborative situation for our platform. Philosophically, I believe that an open platform is all also makes you more resilient.

[Nadav Zafrir, CEO & Director at Check Point Software]

And I believe that trying to go for an all in one catalog for of of option actually makes you more brittle and fragile. And, you know, again, the acquisition that we just made of Verity gives us another capability to put together 70 other vendors that work together with us, and that's the open platform strategy. And then finally, we are embracing AI, as a new tool. This means not only that we have cool LLMs that organizations are bringing together, But, actually, it's a shift in mindset. Because if if AI is going to make decisions for us, we're gonna have to trust AI to make those decisions, those predictions, going forward. And this is a major change, in our industry. At Checkpoint, we're now, we now have a a an AI engine that runs to allow our customers to use AI on the personal level or the all the all the popular AI capabilities that we see.

[Nadav Zafrir, CEO & Director at Check Point Software]

And, we're also embedding it in in each one of our products. And this takes us, I think, to the four front of embedding AI, using AI to simplify, and to provide to provide a unified management, that is actually making our customers' lives, easier. So long story short, we've spoken I've spoken to you about the four principles. They're important for our vision going forward, and I think we're well positioned, to lead the future of cybersecurity based on those four principles and our vision of the open platform. And with that, I'll turn over to Rui.

[Roei Golan, CFO at Check Point Software]

Thank you, Nadav. Let me just open the presentation. K. Okay. Okay.

[Roei Golan, CFO at Check Point Software]

One moment. One moment. I have some issue here. I would be with you in a moment. Okay. So can you see my screen? Great.

[Nadav Zafrir, CEO & Director at Check Point Software]

Yep.

[Roei Golan, CFO at Check Point Software]

Okay. Great.

[Roei Golan, CFO at Check Point Software]

Sorry for the delay. So as Nadav indicated, we had a great quarter. I think our revenues exceeded our midpoint of our projection by $3,000,000 and achieved $665,000,000 And our non GAAP EPS was $2.37 in the midpoint of our projections, presenting 9% growth year over year. So moving to the results. So as I mentioned, our revenues grew by 6%.

[Roei Golan, CFO at Check Point Software]

That was mainly driven by strong quarter another strong quarter for our product revenues that's driven by strong customer demand for new appliances and higher volume of product refreshes. I have to say that this refresh cycle reflect continuous investment in our platform and broader adoption of our latest technologies, our Quantum Force technology that we released a year ago. And as a result of these refreshes, a larger portion of our deals were bundled, including subscription and support, and we're offered at higher discount level compared to stand alone renewals. This dynamic is led to slight deceleration in our subscription revenues and decline in our support slight decline in our support revenues for the quarter. However, we view this as a positive trend for the long term as this is strengthening the customer relationship, expand our installed base and position us for increased renewal, installed revenues and upsell opportunities in the future.

[Roei Golan, CFO at Check Point Software]

As for the billings, so the calculated billing grew by 4% to $642,000,000 this quarter. Our RPO grew by 6% and reached 2,400,000,000 this quarter. This quarter, as Nadev indicated, was heavily back end loaded resulting as several deals that were pushed from the last few days to the July and we're already closed. These deals alone, we're talking about few seven digit deals affect our billing by approximately three points. So that will benefit us in the third quarter.

[Roei Golan, CFO at Check Point Software]

As a reminder, in the same quarter last year, we had a three multiyear deals totaling $130,000,000 which also had a significant impact on our RPO last year. Moving to our revenues by geographies. So we are looking that our America and EMEA grew by 5% this quarter, while APAC had a strong quarter with double digit growth and reached 15% growth year over year this quarter. Moving into our P and L. So our gross profit increased by from $557,000,000 to $585,000,000 representing a gross margin of 88%.

[Roei Golan, CFO at Check Point Software]

Our operating expenses increased by 7%. This increase is mainly as a result of our continued investment in our workforce organically and also the impact related to Cyberint and Verity acquisition that I remind you Cyberint we acquired during Q3 twenty twenty four and Verity we completed the acquisition during June. Our non GAAP operating income continues to be strong at $271,000,000 or 41% margin. I think it's important to discuss also the FX impact. As we all see, the U.

[Roei Golan, CFO at Check Point Software]

S. Dollar is weakening. This is most of the currencies especially against the Israeli shekels. Given that we are approximately 50% of our operating expenses are denominated in non USD currencies and mainly the shekel, and we are not adding 100% of these expenses, this currency movement resulting in estimated half a point headwind to our margin this quarter. If I'm looking on the second half of the year, if although we add significant portion of our foreign exchange exposure, We still going to have an impact because again, we are not adding 100% of our foreign currency and we do expect to see a headwind of approximately zero point point to one point if the U.

[Roei Golan, CFO at Check Point Software]

S. Dollar will stay in these levels. So that's important to say. And if we're looking into 2026, so if the FX rates will stay at these levels, so this could increase our operating expenses next year by approximately 50,000,000 to $60,000,000 Moving into our cash flow. So we had a strong operating cash flow this quarter, achieved $262,000,000 a 31% growth year over year.

[Roei Golan, CFO at Check Point Software]

I think it's important to mention here that it include the benefit for $50,000,000 from hedging transactions, offset by $6,000,000 related to our Verity acquisition. Our cash balance was $2,900,000,000 and now we continue to do our buyback and then purchase 1,500,000.0 shares at an average price of $220 Also, we acquired Verity during the quarter that was a net cash of around $90,000,000 and that's also part of the cash flow for this quarter. And two notes regarding the next quarter, regarding Q3 that will impact our cash flow. We have two items that first, we announced that we acquired the land for building our new Checkpoint campus in Tel Aviv in Israel. And we completed this purchase during July and paid a total of $160,000,000 for that land.

[Roei Golan, CFO at Check Point Software]

We do not expect any significant additional investments in CapEx in connection with this campus until the 2027. In addition, another item relevant for the third quarter for the cash flow as part of tax settlement recently signed recently signed last week actually for prior years, we're going to pay approximately $66,000,000 during the third quarter to settle this tax dispute for prior years. As we had higher provision in connection with this dispute, this settlement may also have a material positive impact on our third quarter P and L and EPS. We are still as this settlement was just signed a few days ago, we are still assessing the effects. And please note that this potential impact is not reflected in the guidance that I'm going to share with you in the next few slides.

[Roei Golan, CFO at Check Point Software]

So to summarize our second quarter revenues and EPS in line with our projection, accelerated quantum force appliances demand second quarter in a row of double digit, continuous strong demand for email, SASE and I think very important is we do see strong continued strong demand in there and another strong profitability quarter with great operating margin and a strong operating cash flow. Before we move to the Q and A, I'll move to the guidance for the next quarter. So as Nadev indicated, we started July we started this quarter very strong. We see we are looking we have some indicators internal indicators and of course, together also with the deals that were pushed from the second quarter, but also with the funnel and the deal that already closed in July. And the funnel that we have for the remaining of the quarter, we feel very positive about the third quarter and the remaining of the year.

[Roei Golan, CFO at Check Point Software]

Our guidance for the third quarter is between $657,000,000 to $687,000,000 midpoint sits at $672,000,000 Our non GAAP EPS is between $2.4 to $2.5 while the GAAP EPS is expected to be approximately $0.68 less. As for the full year, we are not changing the guidance. The guidance stays the same, same range that we gave you in the beginning of the year. We feel positive that we'll be able to finish in the high end of the guidance, but still the range is the same and same for the EPS and revenues. And the GAAP EPS is expected to be $2.30 less. Thank you. Keith?

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Now we'll move to the q and a. And, first up today will be Adam Tindle, followed by Taliani of BofA.

[Adam Tindle, Managing Director at Raymond James Financial]

Alright. Thanks, Skip. Good good morning, Nadav. I just wanted to maybe start with the elephant in the room here with the announcement that Palo Alto is acquiring CyberArk in a $25,000,000,000 deal. And as it relates to your comments specifically to Checkpoint, you're talking about how an open platform is the right approach.

[Adam Tindle, Managing Director at Raymond James Financial]

So I'm wondering if you could maybe just expand on that areas where you're thinking it makes more sense to partner versus maybe own or acquire and certainly any comments that you can make, on the identity space given that large transaction this morning. Thank you.

[Nadav Zafrir, CEO & Director at Check Point Software]

Yeah. Thanks, Adam. Yeah. Well, so sure. Very interesting announcement.

[Nadav Zafrir, CEO & Director at Check Point Software]

Impact on us is, I think, minimal, as we're not a player, in the identity space. And as I said, our vision is to focus on, where what we think we can do best. In my opinion, it's the breadth of the connectivity fabric, and that has the hybrid mesh on one side, worse first workspace on the other side, and creating a unified platform for everything connectivity fabric. And on top of that, winning with AI. Having said that, our philosophy is to focus on an open platform.

[Nadav Zafrir, CEO & Director at Check Point Software]

To focus on an open platform for a couple of reasons. Number one, you know, when I I I spend my time speaking to dozens of CSOs a month. At least when you go to the enterprise and up, I think that between this, idea of best of breed and best of suite dilemma, an open platform is the right approach. It's, it's unified layers, deeply integrated, allowing it to be extensible, collaborative. That's from the CISO perspective.

[Nadav Zafrir, CEO & Director at Check Point Software]

And also they don't wanna be in a vendor lock. I can tell you as someone that's been in the industry on on all of its side for many, many years, I also think an open platform, makes more sense from, from a security perspective if you think about the attackers. You don't wanna have a monolithic approach. You don't wanna come from a one shop with the same philosophy, same software, same people, same intelligence. You want to have an open approach to it that allows you, to have sort of a guard an open guard and and and approach that allows you to import and to use different platforms working together.

[Nadav Zafrir, CEO & Director at Check Point Software]

And and I think that this it's not a technical framework, but it's a real differentiator and our vision and approach to the market.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Thanks. Up next is Taliani of b a BofA, followed by Joseph Gallo from Jefferies.

[Tal Liani, Technology Analyst at Bank of America]

Hey, Nadav. Good morning. Question, I look at your growth 6%, your billing growth. Even if I add the the delay, the, the the deal that slipped, we're not seeing acceleration. And the question I asked you the same question last quarter.

[Tal Liani, Technology Analyst at Bank of America]

I asked what I wanna focus on is to understand what are the challenges that you see in accelerating growth. Meaning, I understand what you're doing, but it does take time. It looks like it takes time from the numbers perspective. So what are the challenges when you talk about operational challenges, culture challenges, product challenges, go to market challenges? Can you just discuss what prevents the company today from accelerating growth, and what would take for the growth to accelerate in the future?

[Nadav Zafrir, CEO & Director at Check Point Software]

Yeah. Well, great question, Tal. And and you're right. It's not an overnight shift. It's it's a vision.

[Nadav Zafrir, CEO & Director at Check Point Software]

You have to have the principles and you have to make the investment. That's number one. Number two, as, you know, as I said, and this is something that is already coming around. It's building the right go to market approach and the sense of urgency culture. And we're doing all of that.

[Nadav Zafrir, CEO & Director at Check Point Software]

But like you said, it it's nothing that's gonna happen overnight. Having said that, I don't think that there is a specific challenge. I think we have the right products. I think we're in the right market. I think we have the vision.

[Nadav Zafrir, CEO & Director at Check Point Software]

We need to focus on what we do best on executing it and up our game and go to market, and that's the plan.

[Tal Liani, Technology Analyst at Bank of America]

Got it. Then would you would you say that if you have to kind of rank in order the things you're dealing with, would you say that most of the focus is on go to market or most of the focus is on improving the portfolio? Where where is the focus of the company that would drive growth acceleration?

[Nadav Zafrir, CEO & Director at Check Point Software]

I think for the short run, definitely go to market. Right? For the short run, definitely go to market. Having said that, I do think we are in a pivotal time in the industry. I really believe that AI is going to change the way we live, operate, do digital infrastructure.

[Nadav Zafrir, CEO & Director at Check Point Software]

And so we need to make a hefty investment here, and lead the way. So if you ask me what are the three areas, one is go to market. We've been speaking about that. It doesn't happen overnight, but we're making the changes. The second is in heavily investing in AI.

[Nadav Zafrir, CEO & Director at Check Point Software]

I think we're already leading with embedding AI in our own products. And number three is a is a culture of execution and sense of urgency. Now it all happens in parallel. Some will have impact in the short term, some will have impact in the medium term, and some in the long term.

[Tal Liani, Technology Analyst at Bank of America]

Right. Thank you.

[Nadav Zafrir, CEO & Director at Check Point Software]

Thank you, Tal.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Next up is Joseph Gallo followed by Jinade Sidhuque.

[Joseph Gallo, SVP at Jefferies & Company Inc]

Hey, guys. Thanks for the question. I understand the impact of the discounting, but can you just talk through some of the confidence and why that's a positive long term? Is it upsell to SASE, or where should we see some of that goodness over time? And then just any quantitative metrics regarding the performance on the new logo side of the business? Thanks.

[Nadav Zafrir, CEO & Director at Check Point Software]

Yeah. Sure. Go ahead.

[Roei Golan, CFO at Check Point Software]

You want to add another I I'll start.

[Roei Golan, CFO at Check Point Software]

Yeah. Okay. So I think when I'm looking on on we have our internal indicators. When we were looking on the on the customers that are doing refresh, the we are seeing that over time, the AR from this I mean, I'm not talking about the appliances. I'm talking only about the AR associated with these customers is increasing increasing nicely.

[Roei Golan, CFO at Check Point Software]

And we see that on the long term, maybe not on the first quarter, on the second quarter, but on the long term, the AI is increasing. So we have we have this internal indicator that we feel confident that because we see very strong demand for these appliances from our existing customers, sometime it's coming also with cross selling SASE or email or But even without that, we see that even with the firewall, we see that the ARR is increasing over time when they are buying from us the appliances. So therefore, we feel confident. It's not only this quarter we feel it. We see these indicators over deals.

[Roei Golan, CFO at Check Point Software]

And, Nadev, you want to add around the you want to add something?

[Nadav Zafrir, CEO & Director at Check Point Software]

Yes. To your question on on where we're the growth, I would say two two main areas. Number one is the the new product lines. Right? So if you look at email, CRM, Sassy, those are growing above 40% year over year.

[Nadav Zafrir, CEO & Director at Check Point Software]

Right? So a very healthy growth. And as I said, we just you know, we doubled the size of our Sassy team, and we're making a huge effort to to grow it as fast as we can. The other place is the what we call the infinity platform that at the end of the day, I think we have a real, you know, differentiation with our roadmap to create this unified platform that allows you to have all of your connectivity fabric, in one. In my opinion, this is not long term.

[Nadav Zafrir, CEO & Director at Check Point Software]

This is midterm. With what we're seeing coming from the attackers perspective with the, the, you know, becoming AI ready enterprise, having that holistic view into your network fabric and being able to read between the notes and go from a a static reactive to a predictive proactive approach, I think that's going to, have a huge impact. And when you couple that with, the fact that we are going to be making more investments in our marketing, I think that over time, you will see the impact, and the growth coming. At the same time, this investment, and we've been talking about this for a long time, will also call for, you know, probably having to, give up a few margins, a few points on the margin so we can grow faster.

[Joseph Gallo, SVP at Jefferies & Company Inc]

Makes sense. Thank you.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Jinade Sitiqi is up, followed by Rob Owens.

[Junaid Siddiqui, Investment Analyst - Software at Truist Securities]

Great. Thanks for taking my question. Nadav, you've talked about, SASE being, one of the key focus areas for you. Could you just give us an update on the Premier AD One acquisition and, you know, where you are from a go to market and from a a technology integration perspective? And and, you know, overall, what's the vision that you're trying to articulate to customers that's a bit differentiated from the many vendors that are, providing SASE solutions to customers? Yeah.

[Nadav Zafrir, CEO & Director at Check Point Software]

Thanks. So since the acquisition, we first, in terms of numbers, we are we're seeing a solid 40% ish growth. So solid. What we're doing is moving it up to the a large enterprise level. So we're now at a position where we have a full the fully deployed capabilities in up to 10 k.

[Nadav Zafrir, CEO & Director at Check Point Software]

And the beginning of 2026, we're already gonna have the the ability to do that beyond that. So that's one part of the answer. And as I said, we're this is a critical aspect for us both on the r and d and on the go to market. Talking about go to market, the idea is that it's it's no longer just a small Salesforce of an overlay, but we are bringing up to speed the the mass field capability that we have that comes from more from the gateway side to, also, be able to, to go out there and showcase what we have in SASE. To your question on the differentiation, I think the differentiation has, two parts.

[Nadav Zafrir, CEO & Director at Check Point Software]

Number one, it's the whole connectivity fabric platform approach. On the one half we on the one hand, we have the hybrid mesh, which we've been talking about. On the other side, we have the workspace where we're unifying different capabilities so that we can look at personas and not different technologies. SASE is sort of something that is the glue that connects all that. Our architecture is different than others.

[Nadav Zafrir, CEO & Director at Check Point Software]

Most of the architectures out there of some of the incumbents are architectures that are cloud only. The fact that we have the hybrid capability, the fact that we're also on device means that we I believe we can do three things better and we're proving it in the market. Number one is better user experience, sometimes 10 x because we're able to, in every transaction, find the right way. We don't have to go, to the cloud every time we do it. That leads to a 10 x faster, capability on the user experience.

[Nadav Zafrir, CEO & Director at Check Point Software]

Number two, it's cloud cost. Fact that we have this hybrid approach allows us to, not, use the cloud in every transaction that controls cost. And number three, the fact that we have all of the capabilities on a small agent on the device in the AI era means that we can protect you where the, where the threat is coming. And I think that when you put all that together and with, what we've seen so far, I'm very optimistic about it.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Next up is Rob Owens followed by Brian Essex.

[Rob Owens, MD & Senior Research Analyst at Piper Sandler Companies]

Great. Thanks, Kippy, and, good afternoon, everybody. Hoping you could drill down a little bit just into the the slip deals that you mentioned. I know you quantified them, and appreciate that. But rhyme or reason for the slippage, geos that they slipped in, anything that you're seeing more broadly out there in the environment? Thanks.

[Roei Golan, CFO at Check Point Software]

So so based on what we've seen, especially especially this quarter, I think, again, I I still again, I think it's a combination of macro and a quick execution, but in the end, we did see more deals that will slip than usual. Mean, have every quarter slip deals. We have to be honest with everyone here, it's not that we don't have there is no quarter that you don't have any slip but this quarter we had more than usual. But I think why we feel confident that these most of these large deals, we're talking about seven digit deals, all of most I would say all of them were closed in the in the first three weeks of the quarter. So we feel confident that it's just an issue of timing.

[Roei Golan, CFO at Check Point Software]

Know, sometime we we mentioned that we did see much more back end loaded quarter than usual. I think that was the most back end loaded quarter that I ever seen since I'm in Checkpoint. And and therefore, there is a risk when you have bit more back end loaded, there is a risk that some of these will be more deals will be slipped. But we feel confident because we are look we closed them and we feel more confidence around it.

[Nadav Zafrir, CEO & Director at Check Point Software]

Yeah. Look, to to to add to that, I think, each one of them is sort of a snowflake. There's no one thing, you know. Good news is that it's already closed and we're seeing a great start to the to q three. July so far has been great, and we're optimistic about q three and the rest of the year.

[Rob Owens, MD & Senior Research Analyst at Piper Sandler Companies]

Were they equally split amongst the geos or were they predominantly in in one

[Nadav Zafrir, CEO & Director at Check Point Software]

Yeah. Pretty much. Pretty much. I I I yeah. Pretty much.

[Rob Owens, MD & Senior Research Analyst at Piper Sandler Companies]

Yeah.

[Nadav Zafrir, CEO & Director at Check Point Software]

There is no, a common denominator, to it. I really think it's back end loaded execution. And, again, all of them have been already been closed. So we're we're confident that, it doesn't have a meaningful impact.

[Rob Owens, MD & Senior Research Analyst at Piper Sandler Companies]

Thank you.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Up next is Brian Essex followed by Shaul Eyal.

[Brian Essex, Executive Director at JP Morgan]

Hi. Good morning, and thank you for taking the question. I was wondering if we could dig in on Quantum a little bit. So so, Nadav, what are you seeing in terms of, you know, the the quantum product cycle, refresh cycle? Like, how far through your installed base is the penetration there?

[Brian Essex, Executive Director at JP Morgan]

And what are you seeing architecturally? Are your customers kind of taking a step back and reassessing the network architecture and maybe throttling it, spending into other areas of their network security environment? Thank you.

[Nadav Zafrir, CEO & Director at Check Point Software]

Yeah. Thanks. On on the refresh cycle, I'll let Riy also, chime in. On the architecture part, though, again, this is sort of the work the the the principles that we're talking about. The first one is to look at the whole connectivity fabric.

[Nadav Zafrir, CEO & Director at Check Point Software]

A quantum gateway is one instance. It's a critical instance. We're seeing everything stay hybrid. So, the ability to do it on prem is important. But we also have our, CloudGuard, the ability to do the same thing to the cloud, and more importantly, bringing all that together as one connectivity fabric platform.

[Nadav Zafrir, CEO & Director at Check Point Software]

That's where I think, we're going. And so with that, where are we investing? We're we're investing on creating a a one unified management that could push all the policies at the same time, whether it's on the cloud, multi cloud, on prem, branch, data center, etcetera. It's connecting that to the SASE. So each one of the nodes in this very complex environment can get the same capabilities that a data center can get.

[Nadav Zafrir, CEO & Director at Check Point Software]

And all of them together are giving you sort of that sense of what a network is really about. And number three, embedding AI in this to simplify and automate. And again, think we're in the very early innings. It's gonna take it's gonna take not just engineering, it's gonna take not just bringing AI in, but also a change in sentiment. Because at some point at which we're already seeing, we need to trust that AI to make real decisions in split seconds because the attackers are not gonna give us any more time.

[Nadav Zafrir, CEO & Director at Check Point Software]

So for me, when you think about quantum, I think about the whole connectivity fabric and that what that brings to our customers. And again, I believe that's not the whole, cyber estate market, but it's a core. And I believe that it can be the core platform and being an open platform, open up to other best of breed platform just like we did with Wiz and we're gonna do with others.

[Roei Golan, CFO at Check Point Software]

Yeah. And and for the refresh cycle, I think we're in the middle of that. I think we're now looking on the potential for the the potential is huge. We are looking on the funnel for this set for the second half of deal. And when I'm looking even on the funnel for the first half of twenty twenty six, the potential is there.

[Roei Golan, CFO at Check Point Software]

I mean, we still have a significant install bit that's up to refresh. And the potential is also to have competitive replacement, and we did see some of them during the first half of deal. We need to have more of them. But definitely, there is a huge potential on on that front.

[Brian Essex, Executive Director at JP Morgan]

Any sense of the duration in the back half of the year or into next year? Like, is it an acceleration that you might expect or how how meaningful can that be?

[Roei Golan, CFO at Check Point Software]

Just based on my this is my when I'm looking on the final discussion, it should last at least until the 2026. Tough to me to say it will be but, again, this trend continue to I mean, expected to continue in the in the next twelve months.

[Brian Essex, Executive Director at JP Morgan]

Helpful. Thank you so much.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Up next, we have Shaul Eyal followed by Keith Bachman.

[Shaul Eyal, MD - Equity Research at Cowen]

Thank you. Hey. Good afternoon, guys. Roy or or Nadav, on Harmony email, is it still growing at similar rates like we've seen in prior quarters? And maybe on on those slipped deals, are they, like, geographic based or across the board pretty much?

[Roei Golan, CFO at Check Point Software]

So I think yeah. Go ahead, Adam. I think the slipped is your answer, but you go ahead.

[Nadav Zafrir, CEO & Director at Check Point Software]

Yeah. No. I mean, just to reiterate on the slip deals, it's there's no common thread. It's it's it's not many, but it's a few big ones, and it's not geographically based. We have it both in The Americas, EMEA, etcetera.

[Nadav Zafrir, CEO & Director at Check Point Software]

And and again, it's deals that have already closed in the last few weeks, getting us a a really good head start for the next quarter. On email, the answer is absolutely yes. It's continuing to grow at a very healthy rate. Not only it's continuing to grow on a very healthy rate, but also around that, around the, you know, the leadership and the capabilities, we're baking together a few different solutions. So instead of looking at, you know, different product different devices or different locations, we wanna look at the modern workforce.

[Nadav Zafrir, CEO & Director at Check Point Software]

This is the new workspace division under Friedrich, where we're bringing together email endpoint, SaaS security, browser security, and putting together, a holistic capability. So at the end of the day, we can look at personas and what they do, their security, their efficiency, their effectiveness as personas that are moving around the world. And hopefully, that can lift the whole workspace solution, not just email.

[Shaul Eyal, MD - Equity Research at Cowen]

Thank you.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Next up is Keith Bachman followed by Andrew Nowinski.

[Keith Bachman, Senior Research Analyst at BMO Capital Markets]

Hi. Thanks, guys. I wanted to go back to, subscriptions and discounting and a couple different threads to pull on. I I think you said the impact was was 50 basis points this quarter on subscription, but I just wanna make sure I heard that clearly. And we did hear from the channel that Checkpoint was was more flexible in the pricing this quarter.

[Keith Bachman, Senior Research Analyst at BMO Capital Markets]

But but my my question is that that's not a onetime event. Right? So we should be assuming that that discounting impacts presumably the next four quarters growth on that subscription line item, but I just want to hear, you know, any thoughts you might wanna offer, excuse me, on how we should construct our subscription line. Candidly, the number looks disappointing. And so even if we layer in 50 basis points, what investors wanna see is that line not holding steady but increasing.

[Keith Bachman, Senior Research Analyst at BMO Capital Markets]

And, you know, there's not a lot of conviction that firewalls over the next three years, the product revenue will be a a durable source of growth. Is that sort of the line item that that investors really view as important? So maybe just help us think about the ongoing headwind associated with the next couple quarters if there is this discounting that's gonna be involved.

[Roei Golan, CFO at Check Point Software]

Yes. So so first of all, you're right. I mentioned the half a point, the fact the headwind that we had there from from IO discounting related to the subscription, which is part of the refresh, the bundle with the refresh. So that's you're you're right around that. I do expect that as long I mean, I'm talking about the refresh from existing customer.

[Roei Golan, CFO at Check Point Software]

We do expect to see the refresh. We're gonna see this refresh, and we see the in the final that the refresh is is gonna be strong, hopefully, in the next, four quarters at least. So that will have a headwind effect on the subscription. But both on the other end, we have tailwinds. I mean, we see that the email is getting bigger and bigger out of the total subscription revenues and that have higher portion should should drive because that email is growing much higher than the 10% subscription.

[Roei Golan, CFO at Check Point Software]

And also SASE and also All of them are growing farther north of 40% year over year. So all these item are getting bigger in the subscription line items. And of course, we also expect to have more competitive replacement in the quantum on the firewall. So that's together that should drive us should drive the accelerated growth on the subscription. And I we do expect to see if we see the trends, we do expect to see slight acceleration in the next few quarters pushed by by these specific emerging technologies that I just mentioned.

[Keith Bachman, Senior Research Analyst at BMO Capital Markets]

Okay. Perfect. Alright. Many thanks.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Next up is Andrew Nowinski followed by Sherenik.

[Andrew Nowinski, Senior Research Analyst at Wells Fargo]

Thanks, Kip. Good afternoon. So, Nadav, at the analyst day, you you talked about the need to win the SASE market, you know, to drive subscription growth. But it seems like identity is the foundation for that zero trust SASE market. I mean, you have to verify the user is who they say they are before connecting them to an application.

[Andrew Nowinski, Senior Research Analyst at Wells Fargo]

So I'm I'm trying to understand how critical is identity security to your SASE solution and to the future adoption of SASE as you push more into that large enterprise space? Thank you.

[Nadav Zafrir, CEO & Director at Check Point Software]

Hey. Look. Secret managements and identity are are part of the of the whole estate. Creating zero trust with the capabilities that we already have is actually, I believe, very doable. And we are leaving it we're we're and, you know, the customer needs to chew to choose actually what provider they wanna use, as an identity broker.

[Nadav Zafrir, CEO & Director at Check Point Software]

Again, that goes back to the open platform approach. So I don't see this as a big impact, and I definitely don't think that this is a a big impact on the SASE solution that we have.

[Andrew Nowinski, Senior Research Analyst at Wells Fargo]

Okay. Thank you.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Next up is Shrenik followed by Patrick Colville.

[Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co]

Yeah. Sorry. I yeah. Thanks, Kip. Nidal, you have articulated a strong vision around AI powered prevention, talked about, of course, one, of course, to unified management real time detection.

[Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co]

Just curious, like, how are you thinking about monetizing these structurally? Also, get a little bit into timing, like, net new SKUs, pricing uplift, or broader adoption. And just on that note, since you've said in the past over being brutally honest and takes a village and parity being integrated for real time prevention, just on m and a front, given your cash position and the cash generation, how you're prioritizing AI focused m and a and and also internal r and d in your just your philosophy there.

[Nadav Zafrir, CEO & Director at Check Point Software]

Yeah. So to start with the second question, this is this is one of the four guiding principle in AI for security. In order to get to AI for security, we're doing mainly three things. Number one is hiring the right talent to lead this future. To this end, we announced last quarter that we're gonna have we're gonna be hiring about 500 new individuals that can lead us to that future both on SASE and AI.

[Nadav Zafrir, CEO & Director at Check Point Software]

We're already halfway through this program. Number two, as you said, there's always the opportunity to make acquisitions. And so we we have a strong position and we're looking all the time to the right people, the right IP, the right market access. And we're doing this as we speak, and, I believe that we will make moves there, as well. And it's the balance between these two, the acquisitions and the talent that we already have, the talent that we're onboarding together to lead this future.

[Nadav Zafrir, CEO & Director at Check Point Software]

So that's on the investment that we're making generally speaking. On on the monetization front, I think that there are three things that you need to look at. Number one is a standalone product. We already have that. So in fact, we're already selling the capability to allow users to have access based on policy and governance so that organizations and enterprises can embrace these technologies safely and not block them.

[Nadav Zafrir, CEO & Director at Check Point Software]

And that's a that could be a standalone product. There's we're also looking at this as a new as a new platform because when you think about cyber AI cybersecurity or security for AI, you're looking at observability. You're looking at users' capabilities. You're you're looking at governance. You're looking at runtime, and you're looking at CICD.

[Nadav Zafrir, CEO & Director at Check Point Software]

So we're looking at the whole gamut. It's an it's an evolving space making our first moves. The the next, which is more about optimizing and being more competitive with our, with our capabilities that we already have, usually mostly on the management side. So we've launched almost twelve months ago PlayBlocks and AIOps, and we're seeing that play a major part. So as you can see, it's a it's a very wide range.

[Nadav Zafrir, CEO & Director at Check Point Software]

But but absolutely to your question, they are we already have and we'll have more separate SKUs, if you like, that are actually being sold either as a part of our network fabric and infinity platform, but also as a standalone. And these are going to be a part of our workspace. They're gonna be a part of the network fabric and as a standalone.

[Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co]

Got it. Thanks a lot.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Patrick Colville followed by Jonathan Ho. Alright.

[Patrick Colville, Director & Equity Research Analyst - U.S. Software at Scotiabank]

Thank you for taking my question. I'm actually gonna ask Nadav this one, please. I mean, you mentioned earlier in the call that you'd be happy to give up a few points of margin to achieve your goals. I guess my question is, should we interpret that as new information, or should we interpret that nugget as consistent with the messaging from last quarter and the analyst day? And and the the reason I asked this is because many had thought, you know, this time last year when your appointment was announced that given your background at teammate, there would be an acceleration of tuck in deals, and we haven't seen that.

[Patrick Colville, Director & Equity Research Analyst - U.S. Software at Scotiabank]

So so, you know, any color you could provide there on on that margin comment or, you know, might there be a change in the pace of tuck in deals?

[Nadav Zafrir, CEO & Director at Check Point Software]

So there there is no new information, Patrick. It's, it's it's part of our vision. We've spoken about the that we we are looking to, accelerate growth. It's a journey. I think we're already seeing, you know, good, initial cues that we're going the right way.

[Nadav Zafrir, CEO & Director at Check Point Software]

But in order to go there, you need to galvanize the strategy, and that's what we're doing. You've seen the four guiding principles. And, yes, you are going to see an acceleration, in the way that, we either built in house to be ready for the future that we've been spoke speaking about extensively, but also acquisitions. 2025, we already gave the guidance. We already reiterated it in January.

[Nadav Zafrir, CEO & Director at Check Point Software]

We'll give the guidance for, 2026. And as we've spoke about on the analyst days and in other calls, we are, we are willing to make the investments, for faster, more and faster but sustainable growth. And so these tuck ins and these acquisitions are going to be, within the strategy that are articulated and within the four guidelines. So, you know, when we're talking about the connectivity fabric, and how we lead that, we don't have everything. Some of it we can build, some of it we can acquire.

[Nadav Zafrir, CEO & Director at Check Point Software]

Same thing goes for Workspace and definitely for AI. And we're very active, in assessing the, the possibilities that are out there. And we're willing to not willing. We we are making the to make sure that we see the best in class in each one of these categories.

[Patrick Colville, Director & Equity Research Analyst - U.S. Software at Scotiabank]

Very clear. Thank you, Nadav.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Hey. Thanks, Patrick, for telling us you're European with your outfit. Next up is Jonathan Ho followed by Keith Weiss.

[Jonathan Ho, Research Analyst at William Blair]

Good morning. With your go to market changes, you know, what have been sort of the most relevant changes that you've made? And can you give us a sense of the timing of when you expect these impacts to be more meaningful and, you know, maybe where you are seeing those impacts, you know, work today? Thank you.

[Nadav Zafrir, CEO & Director at Check Point Software]

Yeah. Thanks. So I think first and foremost, it's about the leadership. Right? So, in the c suite today, we started out, when I started out, we had a, one leader.

[Nadav Zafrir, CEO & Director at Check Point Software]

Today, we have six. Or sorry, we had two and now we have six. So president of Americas, president of international, CMO, customer success, CRO, are are all a part of this. And so that the balance between the the product engineering and the rest of the folks and the go to market folks is differentiated. The second is the people that we are looking to attract.

[Nadav Zafrir, CEO & Director at Check Point Software]

Right? So, you know, we we are we're people that are that are coming more from a marketing perspective. The second is on a cultural level, being less shy about what we stand for and why we stand for it. And all this is, you know, in the process of happening and more news to come shortly.

[Jonathan Ho, Research Analyst at William Blair]

Thank you.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Next up is Keith Weiss followed by Saket Kalia. Go ahead, Keith. I know you don't have a camera open.

[Keith Weiss, Equity Analyst at Morgan Stanley]

Hey. Can you guys hear me?

[Nadav Zafrir, CEO & Director at Check Point Software]

Yes.

[Keith Weiss, Equity Analyst at Morgan Stanley]

Oh, excellent. Thank you. Maybe a a question for Rui. Nadav talked about, the necessity for more marketing dollars to get more of the message out, and that makes sense to to get to to a pace of acceleration. I think one of the things investors broadly have been hoping for or expecting within software companies is the internal use of generative AI and more AI technologies to be able to drive more efficiencies within the business.

[Keith Weiss, Equity Analyst at Morgan Stanley]

So maybe you could talk about, like, the potential within Checkpoint of you guys utilizing, the technologies yourself, maybe, get more productive in development, more more productive in go to market using generative AI. What ability is there to offset some of that necessity for higher investment so you can sustain the operating margins and maybe do both? Right? Get to that level of acceleration just by being more productive, and still putting incremental investments where they're needed.

[Roei Golan, CFO at Check Point Software]

So, Keith, definitely first of all, great question. I think definitely that's one of our priorities when we are looking also. We're talking a lot about AI and security for AI, but definitely AI is a opportunity also to be more productive internally and to optimize operations. And definitely, that's something that we are already working on that today and definitely should help us in the future. I don't think that in the short term, we'll see it contributed to our operating margin this optimization.

[Roei Golan, CFO at Check Point Software]

But definitely, we have we have actually a task force in the company that with the development team, with the go to market team, with my team, everything is working to see how we can leverage these AI tools today and how we can be more productive and optimize what we are doing. But I have to say again, to quantify it for now today, it would be it will be it will be difficult, but definitely on the long run and the long term, it should it should it should benefit us.

[Keith Weiss, Equity Analyst at Morgan Stanley]

Got it. So more like a 2026, 2027 benefit.

[Roei Golan, CFO at Check Point Software]

Hopefully, yes.

[Nadav Zafrir, CEO & Director at Check Point Software]

Yeah. To to add to that, Keith, because I think that's on everybody's top of mind. You know, every organization on the planet is dealing with this. We need to lead it, but we need to lead it on on different fronts. The one of the fronts that you said is being an AI first company.

[Nadav Zafrir, CEO & Director at Check Point Software]

I I think we're at the frontline, but it's one of those things that how do you know if you're at the bleeding edge when there, you know, there is no sort of benchmark. So we're never gonna be content enough. The way I look at it is, yes, to become more efficient, more effective. But rather than try to it's the latter. It's it's sort of the last piece of what you said.

[Nadav Zafrir, CEO & Director at Check Point Software]

It's not since we are investing in our future, I think that will allow us to do more, not with less, but with the same, right, and enable us to go for growth. And then lastly, I'll say, you know, because Roy talked about the task force. Jonathan Zanger, who I told you about last time we spoke, our new CTO. You know, he he's obsessed with those three things. How do we become an AI first company?

[Nadav Zafrir, CEO & Director at Check Point Software]

The second part is how do we help and I think this is one of our number one tasks in the world today, is how do we allow our customers to become an AI first company without, you know, taking huge risks on privacy, security, governance, etcetera. And then finally, constantly having an eye open. That's why we put together the research center that's looking to where the puck is going. Because I think attack look, attackers have less, you know they're flexible. They don't have procurement committees, governance, etcetera.

[Nadav Zafrir, CEO & Director at Check Point Software]

They're embracing these technologies extremely fast. And we at Check Point have to do all three of these things in parallel. And I think we're already we're we're off to a really good start, but a lot more to come with that.

[Keith Weiss, Equity Analyst at Morgan Stanley]

Got it. Got it. And you one quick follow-up for Nidav. Not to try to put excuses in in you guys' mouths, but in in Israel, you guys had a twelve day war during the during the quarter. And and and I think it could be forgiven if that created some disruption or some distraction for the workforce within Checkpoint during the quarter.

[Keith Weiss, Equity Analyst at Morgan Stanley]

I mean, do you think that had any impact on slip deals or execution in the quarter? I mean, it it was pretty big deal.

[Nadav Zafrir, CEO & Director at Check Point Software]

Yeah. Well, obviously, was a big deal, and we can talk about the implications for the next few hours. Specifically on Checkpoint, no. You know, we're a global company. We have people around the globe.

[Nadav Zafrir, CEO & Director at Check Point Software]

We didn't see any direct impact, but believe me, we probably have one of the best BCP, DRP's programs in the world for obvious reasons. And so, no, it didn't have an impact. What what but if you but what it did have is that it shows us what kind of a world we're looking at. And, you know, obviously, we're all, you know, most of the world has been looking at, the impact, the direct impact, the kinetic impact. But behind the scenes, there's the cyber war going.

[Nadav Zafrir, CEO & Director at Check Point Software]

And Iran is one of the proponents of that, where they have good capabilities. They have a lot of motivation, and we're seeing an increased, I would say, boldness and and and the amplitude of what the Iranians are doing with some of their friends around the world.

[Keith Weiss, Equity Analyst at Morgan Stanley]

Got it. Alright.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Our final call our final question will come from Saket Kalia from Barclays.

[Saket Kalia, Managing Director at Barclays Capital]

Thanks so much for for fitting me in here, guys. Nadev, maybe maybe we can we we can end with with one of the things you said in your prepared comments, which was steady growth in SASE. Clearly, Checkpoint has a big customer base to cross sell, SASE too. Maybe the question is, what are you seeing in terms of your Sassy wins in terms of why you win? And Roy, maybe maybe the related question is, anything that you can or wanna share just on on the scale or run rate of this business as we think about the future of of Checkpoint?

[Nadav Zafrir, CEO & Director at Check Point Software]

Yeah. To begin with, we're we're still, a relatively small player in SASE per se, but we're the leading player when it comes to a connected fabric platform and the hybrid mesh, and SASE is embedded in that. And so many of our wins, I would say, most of our wins are customers that are already using our quantum base and want to, you know, have a more holistic connectivity fabric capability. I don't think there's any other company that has sort of the inspection engines, the AI engines, the intelligence that comes from thirty two years and, you know, dozens of thousands of customers that now once you put the SASE in, you immediately get all that benefit and bring it together as a platform. So you're right.

[Nadav Zafrir, CEO & Director at Check Point Software]

Today, it's mostly the upsell from existing customers. You know, through our new division that also is going to bring up our MSP pay as you go, I think we are all we also have an opportunity in the downstream. And I do see opportunity for SASE to come into customers that don't have Checkpoint and hopefully then embrace the other Checkpoint customers. But you're right at the beginning of the journey is the upsell from existing enterprise customers.

[Saket Kalia, Managing Director at Barclays Capital]

Very helpful. Thank you.

[Kip Meintzer, Head of Global Investor Relations at Check Point Software]

Alright. Thank you all for joining us today. We appreciate it, and we'll look forward to seeing you throughout the quarter and, also this time, next quarter. Thank you.

[Nadav Zafrir, CEO & Director at Check Point Software]

Thanks, guys.

[Roei Golan, CFO at Check Point Software]

Thank you.

Participants

Analysts

• Kip Meintzer, Head of Global Investor Relations at Check Point Software
• Nadav Zafrir, CEO & Director at Check Point Software
• Roei Golan, CFO at Check Point Software
• Adam Tindle, Managing Director at Raymond James Financial
• Tal Liani, Technology Analyst at Bank of America
• Joseph Gallo, SVP at Jefferies & Company Inc
• Junaid Siddiqui, Investment Analyst - Software at Truist Securities
• Rob Owens, MD & Senior Research Analyst at Piper Sandler Companies
• Brian Essex, Executive Director at JP Morgan
• Shaul Eyal, MD - Equity Research at Cowen
• Keith Bachman, Senior Research Analyst at BMO Capital Markets
• Andrew Nowinski, Senior Research Analyst at Wells Fargo
• Shrenik Kothari, Senior Research Analyst at Robert W. Baird & Co
• Patrick Colville, Director & Equity Research Analyst - U.S. Software at Scotiabank
• Jonathan Ho, Research Analyst at William Blair
• Keith Weiss, Equity Analyst at Morgan Stanley
• Saket Kalia, Managing Director at Barclays Capital