Check Point Software Technologies Ltd.

Q2 total revenue was $674 million, up 1% year over year and roughly $1 million below the midpoint of guidance. Subscription revenue reached $333 million and grew 12% year over year; product revenue declined 14% amid weaker firewall appliance demand. Gross profit was $588 million, with gross margin at 87%, slightly down due to higher memory costs. Operating income was $260 million, or a 39% operating margin; non-GAAP net income was $264 million, GAAP net income was $194 million, non-GAAP EPS was $2.55 and GAAP EPS was $1.87. Adjusted free cash flow was $161 million, and deferred revenue grew 7% to $2.025 billion; RPO was $2.55 billion and current RPO was $1.6 billion. For Q3, the company guided to revenue of $665 million-$685 million, subscription revenue of $332 million-$343 million, non-GAAP EPS of $2.43-$2.53, GAAP EPS $0.70 lower than non-GAAP, and adjusted free cash flow of $235 million-$265 million. Full-year guidance was maintained.

Nadav Zafrir framed the quarter as a period of execution improvement and portfolio transition, saying Q2 was in line with expectations and that the company is seeing a growing pipeline. He emphasized a shift in the cyber threat landscape driven by AI, arguing that attackers now have access to capabilities that used to be scarce and that Check Point must pair stronger fundamentals with new AI-native security. His tone was confident and forward-looking, centered on the AI Network Firewall launch, an AI Defense plane, and a broader open-platform strategy.

Roei Golan said Q2 came in as planned, with 1% revenue growth led by 12% subscription growth and adjusted free cash flow of $161 million. He cited $674 million of revenue, $333 million of subscription revenue, 87% gross margin, $260 million of operating income, and $4.2 billion of cash and marketable securities and deposits. He also noted $325 million spent to repurchase about 2.5 million shares at an average price of $131, and said the board approved a $2 billion expansion of the buyback program. On outlook, he reiterated full-year guidance, guided Q3 revenue to $665 million-$685 million, and said product revenue should remain soft in Q3 before returning to growth in Q4.

Analysts pressed on whether the new sales hiring can affect 2026, and management said the impact should mostly show up in 2027, with Q1-Q2 2027 cited as the ramp window. Several questions focused on AI security and the new AI Network Firewall; management said customers are asking for both stronger prevention and AI-era controls, but Check Point will stay focused on security rather than expanding into broad cost-management or general observability. Analysts also questioned the weak firewall appliance demand and the tough Q4 target, and management said the softness is mostly tied to internal go-to-market disruption plus some deal timing, while internal pipeline metrics support a stronger Q4.