“Now while we're confident that the changes made are setting us up for success in the mid and long term, we do see a short-term impact on our business that will negatively affect our 2026 revenue projections.”

In context

“Nadav Zafrir (Chief Executive Officer): Thank you, Kip. And thank you all for joining us. So I'm going to begin with the key operating dynamics of the quarter and obviously talk a little bit about how we're advancing our strategy to drive sustainable long-term growth. So to begin, in our first quarter, we delivered double-digit growth in non-GAAP earnings per share and adjusted free cash flow with revenue growth at 5%. Subscription revenue remained a key strength, driven by strong demand across our emerging technologies, which generated 45% growth in calculated billings led by e-mail security, CTEM and SASE. At the same time, we did see a decrease in some research projects that resulted in lower-than-expected product revenues. As we discussed in our last earnings call, during the second half of 2025, we conducted a comprehensive go-to-market assessment with the objective of accelerating both new logo acquisition and increasing wallet share in large enterprise accounts in order to enable the successful execution of a multi-pillar platform strategy. So based on this, we implemented changes to our go-to-market model to align with these goals. And the transition to the new model did create short-term disruption to the rhythm of our sales execution and primarily affects our appliances business. Now while we're confident that the changes made are setting us up for success in the mid and long term, we do see a short-term impact on our business that will negatively affect our 2026 revenue projections. We believe these headwinds are transitory and they reflect a deliberate reset to position our business for improved execution and scalability. We're already seeing that the current pipeline trends and ongoing customer engagements and our plans to further invest in our firewall business make us optimistic about the future growth trajectory. Beyond that, our strategy continues to be anchored around our four-pillar approach, which we believe is well aligned with the evolving security requirements of the enterprise, particularly as AI adoption expands the threat landscape. And in support of our go-to-market execution, we're strengthening our leadership team with four key appointments. So first, Sherif Seddik has been named Chief Revenue Officer and will lead our go-to-market organization. Sherif has successfully led our international sales business over the past few years. He brings more than three decades of global sales leadership experience, and he'll be replacing Itai Greenberg. I want to take this opportunity to thank Itai for his continued support during my first year and for his leadership in the go-to-market changes. Beyond that, a leader from Cyberint, who has led our CTEM offering since the acquisition of Cyberint and has driven 96% year-over-year ARR growth, will join the leadership team. As organizations operate in this increasingly complex environment, exposure management is becoming mission-critical because it enables security teams to rapidly identify emerging threats and materially accelerate their remediation. I think we have an advantage here, and I'm happy to welcome this leader to the team. Alongside that, to lead our AI pillar, I'm happy to say that Adam Elin has joined as General Manager of AI security, and he'll also join the leadership team. Adam brings deep experience at the intersection of cybersecurity and large-scale enterprise security operations because in his previous roles he was a CISO at Fidelity and is also a founder of Blue Box Security. I think Adam adds a proven operator perspective, which is essential at this time, and we will focus on building our AI security platform to scale with speed, rigor and a strong commercial pipeline. And then lastly, Rafi Kretchmer is appointed VP of Global Marketing. He replaced Brett Theiss, and we wish Brett well in his future endeavors. Beyond that, AI is a watershed moment for the security industry. When you look at the emergence of these frontier AI models, including models in the GPT class, they're driving two structural shifts in cybersecurity. The first is that the barrier to sophisticated cyber attacks is literally collapsing because AI is democratizing capabilities that were once exclusive to nation-states and a very small set of elite criminal organizations, and this is exposing a far broader set of enterprises to material risk. Second, cyber attacks are undergoing structural industrialization. Agentic AI enables attackers to continuously scan global infrastructure, and they're generating a continuous flow of novel attack techniques. Manual operations are giving way to automated attack pipelines. This is what we call the Check Point AI attack factories. When you look at the convergence of these two forces, it creates a different threat environment: a larger attack population executing more sophisticated campaigns with greater speed and volume, and the time to exploit is shrinking dramatically. I believe this directly validates our ethos of prevention-first, in which we are second to none in the industry. At Check Point, we're not waiting for this threat environment to materialize. Our response is ready and active, structured across our four-pillar framework: security for the network through our hybrid mesh, CTEM and workspace security. During this quarter, we introduced solutions to secure enterprise AI transformation. For example, we launched the AI Defense Plan which is designed to secure enterprises across employee AI usage, applications and agents that both people and applications use. We also introduced the AI Factory Security Blueprint. It's integrated with NVIDIA GPU service pinning on the server itself and provides end-to-end protection for AI infrastructure, and we are very bullish about this. Most recently, we also announced our partnership with Google Cloud. We're integrating the AI Defense Plan with Google Cloud's enterprise agent platform and this can deliver real-time runtime protection at scale. We also delivered AI-driven exposure management, enabling customers to close the remediation gap through improved intelligence, better risk prioritization and safe remediation, which is critical to reduce time to remediate in organizations today. Finally, we launched a Secure AI Advisory Service to help enterprises and government deploy and ultimately scale AI with security and responsibility. To close my opening remarks, while we're experiencing near-term headwinds in our appliances business and adjusting our annual revenue guidance, we remain confident in our ability to gain market share in this expanding security market. The emerging technologies continue to perform strongly and position Check Point well to secure the rapidly growing enterprise attack surface driven by AI adoption. Our differentiated strategy, our core capabilities, our strong financial profile with industry-leading profitability, and disciplined execution over time position us to benefit from accelerating demand for secure enterprise AI, which is transforming organizations at scale. So before I take the question, I'll turn to Roei to give you some of the financials.”