Check Point revenue reaches $669.8 million as shares fall 9.93% premarket
Key Facts
Check Point Software reported revenue of $669.8 million for the quarter ended September 30, 2026, compared with $677.5 million in the same period a year earlier. The company said revenue declined 1% year over year and that quarterly results were in line with its expectations. But the stock fell 9.93% in premarket trading on November 2, according to a report published by Investing.com after the results announcement. The report attributed the reaction to fourth-quarter revenue guidance below analysts’ consensus and management’s comments on the slow recovery. The decline, according to the report, was therefore not a response to a demonstrated third-quarter revenue shortfall against expectations.
Revenue streams diverged within the company: security subscription revenue rose to $338.6 million from $305.4 million a year earlier. CEO Nadav Zafrir said the revenue grew 11% year over year, driven by strong demand for email security, continuous threat exposure management and AI security services. By contrast, product and license revenue fell to $105.5 million from $130.4 million. That decline exceeded the increase in subscriptions, while total remaining performance obligations stood at $2.5 billion, up 5% year over year. The figures reflect subscription expansion alongside weaker product and license sales.
Third-quarter diluted non-GAAP earnings per share were $2.49, compared with $3.94 a year earlier, while GAAP earnings per share were $1.82, compared with $3.28. The company said the year-over-year comparison was affected by a one-time tax benefit of about $1.47 per share in the third quarter of 2025. Excluding the effect of that benefit, Check Point said earnings per share rose 1% year over year under both measures. Operating income was $177 million, or 26% of revenue, on a GAAP basis, and $251 million, or 37%, on a non-GAAP basis. The company also recorded a $25 million reduction in research and development expenses during the quarter, tied to Israel’s new tax incentive program enacted on March 30, 2026.
Cash flow improved from the year-earlier quarter: cash generated from operations was $264.3 million, compared with $240.6 million in the third quarter of 2025. Adjusted free cash flow rose to $257.9 million from $74.8 million. Cash, marketable securities and short-term deposits totaled $4.123 billion on September 30, 2026, compared with $2.817 billion on the same date a year earlier. The company said the increase was primarily due to proceeds from a $1.8 billion convertible note issuance. The company repurchased about 2.5 million shares during the quarter for about $325 million, bringing the number of shares repurchased over the previous twelve months to about 9 million.
The results follow a second quarter in which the company posted revenue of $674 million, up 1% year over year, and security subscription revenue of $333 million, up 12%. In the third quarter of 2025, revenue was $678 million, up 7% year over year, while calculated billings rose 20% to $672 million. Zafrir said the company believes revenue reached a bottom in the third quarter and expects gradual improvement starting in the fourth quarter. He added that the recovery is taking longer than expected, with leading indicators improving and the company focused on delivering sustainable growth. The comparison highlights slower growth in overall revenue alongside continued expansion in security subscriptions.
The company is preparing for investor appearances in November, beginning with the BMO Technology Conference on November 12, 2026. The RBC Global Markets and Technology, Internet, Media and Telecommunications Conference follows on November 17. The company is also scheduled to take part in the annual Stephens Investor Conference in Nashville on November 18 and 19. It is scheduled to participate virtually in the 7th Annual Needham Technology Week on November 20. The events follow management’s guidance for expected gradual revenue improvement starting in the fourth quarter.