Check Point Software Technologies Ltd (CHKP)

“We're already seeing that engagement with our customers and the funnel are returning to normal, so we're optimistic that this is a blip but it does take a little time to get the motion back and everybody in their seats.”

“Our adjusted free cash flow is expected to be between $145 million to $175 million.”

“Our subscription revenues are expected to be between $328 million to $338 million and non-GAAP EPS is between $2.40 to $2.50 while our GAAP EPS is expected to be around $0.70 less.”

“For the second quarter, our total revenues are expected to be between $660 million to $690 million.”

“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 it will be a small part of 2026 but has significant potential for the future.”

“So it will be both stand-alone and integrated to drive cross-sell, and we expect to see meaningful contribution in 2027 as adoption and commercialization scale.”

“As a stand-alone business, to be a substantial part of Check Point's revenue it will likely take until 2027.”

“I can't tell you it has shifted buyer behavior in a measurable way yet, but memory costs are continuing to rise and we don't see that stopping in the near term.”

“That doesn't necessarily mean year-over-year product revenue growth in Q3 or Q4, but it does mean improvement quarter-to-quarter versus the first half of the year.”

“For the second half of the year, we expect to see improvement. For the second quarter, we expect a sharper decline in product revenues due to the disruption, but in the third and fourth quarters we expect gradual improvement.”

“Our adjusted free cash flow guidance is not being updated and remains as previously communicated.”

“We are keeping the same range for non-GAAP EPS, which remains between $10.05 to $10.85.”

“Our subscription guidance is not changing; we see strong demand for emerging products and expect to finish in the upper end of the range.”

“The new revenue guidance is between $2.770 billion to $2.850 billion.”

“We expect to have an approximately $100 million benefit for the full year on our operating income, reflecting the new law that was just approved.”

“It is important to note that although these revenues are still not a large portion of the total business, we see significant growing momentum for our AI security offering and that, together with CTEM, we expect to drive subscription revenue growth in the next few quarters.”

“Regarding subscription revenue, we do see a trajectory for reacceleration, and we expect to see acceleration in our subscription revenues in the second quarter and for the full year driven by strong demand for emerging pillars, mainly CTEM, e-mail security and SASE.”

“Looking into the second quarter, we do expect this disruption to impact product revenue. But based on the finance metrics that we see, we expect to see an improvement in the second half of the year.”

“Therefore, we anticipate the main effects to be seen starting in the second quarter of this year.”

“GAAP EPS for Q1 is expected to be $0.64 less, while for the full year, it is expected to be $2.58 less.”

“We expect to see this impact also in Q1 of approximately $4 million to $5 million on our product revenues.”

“When we look at the funnel for next year, it is expected to be even in 2026 a major driver for our subscription line item.”

“Yes. If you're looking at the four pillars, of course, the most significant one is hybrid mesh, which includes also our firewall, which is still a significant part of our business. It's growing, of course, mainly driven by the SASE and our cloud network.”

“Our target is to achieve mid-to-high single-digit growth in the firewall, alongside sustained momentum in our other key areas, which should ultimately lead us to double-digit growth.”

“That's the main driver that you see our subscription revenues continue to accelerate, and we expect it to accelerate every quarter.”

“I think we have already passed the $160 million in ARR and continue to grow in very strong double digits, so definitely, we're aiming to be above $200 million this year.”

“We see a positive outlook for hardware sales, particularly in the second half of the year, as well as in the first half.”

“First, regarding the acquisitions, they are included in our guidance and are expected to have an impact of about 0.5 points on our margin.”

“And as for the total billings, similar to the revenues, we expect around high single-digit growth, 6%, 7%, that's the expectation in order to achieve the midpoint.”

“So the margin that we took into account in our guide is between 39% to 40%. So that's the operating margin.”

“Looking ahead to 2026, we see a favorable pipeline for hardware, particularly in the second half of the year. However, when considering subscriptions, we expect the product to be roughly flat to low single-digit growth.”

“For the full year, we expect it to be 42% of the revenues in the midpoint, which is $1.150 billion to $1.250 billion.”

“For the full year, we expect our revenues to be between $2.83 billion to $2.950 billion, which reflects 4% to 8% growth, while the midpoint is 6%.”

“We do not expect any significant additional payment in connection with this new campus in 2026.”

“The outcome from this program, which is expected to be effective from January 2026, can be approximately a $50 million benefit to our operating income.”

“As a result, we currently estimate that our tax rate for 2026 will be between 16% to 17%.”

“As a result, we expect higher financial income in 2026, estimated to be between $40 million to $45 million per quarter.”

“We anticipate an additional headwind of approximately 1 to 1.5 points on our operating margin for next year.”

“We estimate this impact to be approximately one point for the full year, with most of the impact expected in the second half of 2026, as we have sufficient inventory to support the needs for the first half of 2026.”

“We expect the benefits of this strategy to increasingly materialize in subscription revenue during Q1 and throughout 2026, while also the product price increase that we have effectively from 1/1/2026 of 5% is expected to support our product growth primarily from the second quarter of 2026.”

“we're raising our midpoint for 2025 revenue guidance”

“You can expect to see this reflected in revenues over the next four quarters, primarily because most of the billings occurred in the last month of the quarter.”

“Our guidance does not factor in any significant budget flush, which is my perspective.”

“The new strategy with our leadership will be implemented in the first quarter of 2026.”

“Regarding appliances, we expect year-over-year growth to be around the midpoint in the mid-single digits.”

“Nevertheless, we anticipate an acceleration in our subscription revenues compared to this quarter, maintaining similar gross rates to what you observed in the third quarter.”

“We expect to achieve double-digit growth in subscription revenue with a slight improvement in Q3.”

“The EPS in Q4 will be influenced by factors such as the FX impact, estimated at about $0.07 to $0.08 based on current rates, plus the expected effect from Lakera, estimated at $0.04 to $0.05 on Q4 EPS.”

“Our non-GAAP EPS is forecasted between $2.70 and $2.80, while GAAP EPS is expected to be $0.60 less.”

“we finalized the acquisition of Lakera, a leader in AI-driven security for agent applications, which will create a margin headwind of about 0.5 points in Q4.”

“As we look ahead, we plan to continue hedging our foreign exchange exposures, anticipating a similar 1 point headwind to our margin in Q4.”

“our investment in Fed ramping our products is something we'll continue to do for a couple of reasons.”

“We are looking at acquisition targets as we speak. I literally just had a meeting before this call with our M&A team; they are looking at multiple companies. Nothing is imminent right now, but there will be more.”

“I aim to demonstrate sustainable growth in services billing, ideally similar to what we experienced this quarter.”

“We do not anticipate significant further investments until 2027.”

“Looking ahead to Q4, we see promising deals in the pipeline, although Q4 tends to be trickier with numerous large refresh and outdoor deals, which also depend on budget flush.”

“We are starting to be more aggressive with our marketing dollars across the board, and we'll see an increase in that in 2026, hopefully offset with operational excellence so that we don't hurt our margins, but are more effective in our go-to-market.”

“So no, we don't see a deceleration. In fact, we're hoping for an acceleration, and we'll speak about it in our guidance.”

“Looking ahead to 2026, we are optimistic about scaling and addressing larger enterprises.”

“Looking further to 2026, based on current exchange rates, we could see an increase in NL expenses between $50 million and $60 million, a point we touched on last quarter, and I wanted to reiterate here.”

“Overall, we remain committed to driving accelerated growth on this line item.”

“In pursuing AI-first security, we primarily focus on three areas. First, we are hiring the right talent to lead this initiative, with plans to onboard about 500 new individuals to drive our SASE and AI efforts.”

“I do expect to see continued effects from the discounts in the upcoming quarters.”

“We feel positive about finishing at the high end of the guidance, but the range stays the same for both EPS and revenues, with GAAP EPS expected to be around $2.30 less.”

“We are not changing the full-year guidance; it remains the same as provided at the start of the year.”

“We expect a headwind of approximately 0.5 to 1 point if the U.S. dollar remains at these levels.”

“We do not expect any significant additional investments in CapEx in connection with this campus until early 2027.”

“This could increase our operating expenses next year by $50 million to $60 million if these FX rates remain.”

“As it stands, billings should align closely with revenue growth, reflecting the positive outlook we see now.”

“Yes, the decline in maintenance is lagging. We expect it to rebound in the second half of the year as we continue to see growth from the refresh cycle.”

“In terms of operating margins, we do not expect any significant changes in the near term as we look to accelerate top-line growth.”

“Even with the potential high tariffs that may be imposed, our maximum exposure is expected to be minimal, less than half a point to our total margin.”

“Our FY 2025 outlook remains unchanged, with a little modeling commentary reiterating what Roei said earlier”

“GAAP EPS is expected to be approximately $0.55 lower.”

“Our goal is to enhance our existing offerings and achieving $200 million in ARR within the next year.”

“Same as in previous quarters, the revenues from Infinity will keep increasing and already exceeded 15% of our total revenues.”

“Looking ahead, we believe this refresh trend will continue through to 2026.”

“We expect directionally more growth in 2025 as we enhance our offerings and capabilities based on our efforts over the past year's development and product advancements.”

“Infinity currently constitutes approximately 15% of our revenues, and we anticipate this proportion to grow significantly in 2025.”

“I've established a new leadership role to oversee our SaaS growth, which achieved a notable 27% growth last year, and I intend to accelerate that growth further through effective strategies at the Infinity platform and hybrid mesh levels.”

“We're starting 2025 strong, with a solid pipeline in Q1.”

“Therefore, our aim for 2025 and beyond is to establish this hybrid mesh network, leveraging our quantum firewall alongside a robust SASE product unified through the Infinity platform.”

“We foresee even more success in 2025.”

“Looking into 2025, we are expecting to maintain strong profitability and growth.”

“The guidance has not taken into account the potential benefits of the refresh cycle; it would be seen as an upside if it materializes.”

“In 2024, we grew very well with new logos, and I hope we can maintain that momentum.”

“But we do see a strong pipeline that will contribute positively to Q4 including the benefit from slipped deals. So we anticipate having a strong Q4 based on our current pipeline.”

“Regarding Cyberint, while we expect it to contribute, we believe it will be less than 1% of our total revenues in Q4.”

“Currently, we expect good product growth in Q4. We see a strong pipeline for appliances and demand there.”

“For Q4, we have a few seven-digit deals on that SASE platform.”

“This, alongside SASE, will become more significant mainly in 2025 after integration. I think that will drive our growth and subscription revenues.”

“I think that in terms of double-digit growth, we are better positioned today to accelerate our growth than we have been in the past.”

“GAAP EPS is expected to be approximately $0.45 less.”

“we do expect that this will provide us a benefit of approximately 3 points to the billing in Q4 as some of them were already closed in October, and the majority will be closed before the end of the year”

“However, there is some risk of the timing of Infinity deals that could result in revenue recognition being pushed into 2025.”

“Our EBIT and free cash flow are tracking well, with free cash flow's performance largely dependent on our billing growth. We aim to maintain our operating margin while ramping up investment for future growth.”

“We announced the expansion of our buyback program to $2 billion, increasing it to $325 million per quarter, reflecting our positive outlook.”

“Predicting budget behaviors is uncertain, but I hope for a robust second half.”

“I am optimistic about the second half, with stronger engagement and a healthy pipeline. The macro-level indicators also suggest a positive trend going forward.”

“We observed strong new business bookings this quarter, maintaining double-digit growth as seen in the prior quarters. This turnaround has been promising, and if sustained, can translate into higher revenue growth moving forward.”

“We hope to maintain this level of consistent double-digit growth in the upcoming quarters.”

“While it takes time for customers to evaluate the new hardware and software, I believe we have a robust promise for the remainder of the year.”

“There is no change to the full-year guidance; it's the same as before.”

“I want to remind everyone that for this year, we expect the operating margin to range between 42% to 43% for bookings over the full year.”

“Looking ahead to the rest of the year, we expect to see increased adoption of the new product by our customers, particularly in the second half of the year, which we hope will contribute to our growth.”

“Our industry is very competitive, and while we haven't experienced much of it in the first quarter, I expect to see increased competitive pressure moving forward.”

“We plan to make this available later in the year, which I believe will open up a compelling market opportunity.”

“Infinity revenues also grew significantly, exceeding 13% of our overall revenues, and we anticipate this percentage will increase in the coming quarters.”

“On one side, the security marketplace is still healthy, and I expect it to remain that way for several years.”

“If billing continues to grow as it did in Q1 or even exceeds that, it will positively influence our cash flow as well.”

“We hope to improve our operating margin in the long term.”

“We anticipate that a substantial portion of our new business related to Infinity will continue to grow each quarter, driven by the current demand and the pipeline we have for the entire Infinity solution.”

“We anticipate revenues between $2.475 billion and $2.625 billion, translating to growth in the range of 6% to 9%.”

“We expect to decrease by about 1.3 million shares each quarter due to our buyback efforts, taking into account the effects of stock price fluctuations.”

“For the number of shares in 2024, we anticipate the average diluted share count to decline to approximately 130 million shares, starting at 160 million at the end of 2023 and reducing to around 111 million by year-end.”

“We expect to maintain a similar effective tax rate in 2024.”

“For 2024, we are estimating incremental financial income of about $1 million each quarter”

“Looking into 2024, we anticipate a headwind of approximately 2 points to the operating margin due to recent acquisitions, but we also expect benefits from currency fluctuations between the dollar and the shekel, which could provide a tailwind of up to 1 point.”

“If we are to continue seeing consistent growth in our new business like we did in Q4, I believe we will also observe that reflected in billing.”

“For now, we expect Perimeter to contribute positively; however, it is currently losing money and will take some time to become profitable.”

“We expect a benefit next year on FX, although it’s too early to quantify.”

“On the FX side, we will likely benefit in the next 12 months from the shekel.”

“In terms of CapEx, we expect to invest a few million dollars a year related to Perimeter 81; it's not significant.”

“I think in general, we saw very positive indicators in Q3, and we see positive momentum also going to Q4.”

“We do see a stronger pipeline for Q4 that includes also refresh projects that were postponed from prior quarters. So we hope that we are going to see the positive turnaround in Q4.”

“Yes, I want to add that we don't foresee any risks that could take us outside the guidance range.”

“There is no reason for us to change our guidance because I believe we are within the set range.”

“We also view a positive pipeline for upcoming deals in Q4.”

“I anticipate that this trend will continue.”

“I can assert that in the past three months, we've seen a significant positive change in engagement levels with our customers, which should lead to more opportunities and eventually increased sales, especially for the latter half of the year.”

“Our target is double-digit growth across all metrics, and we have begun many investments in our field and marketing organization over the past year and a half, focusing on growing the organization.”

“Non-GAAP EPS of $7.70 to $8.30, and GAAP EPS is expected to be approximately $1.22.”

“For the entire year, we are maintaining our previously released guidance; revenues in the range of $2.34 billion to $2.51 billion.”

“We expect to see more of this in the second half of the year as we launch more products and technologies with greater innovative collaboration in security.”

“We noted significantly more bookings and billing during the last month than usual, a trend we expect to continue since the beginning of the year, or actually since Q4.”

“We expect this positive trend to continue for the remainder of 2023.”

“I hope we see some improvement this quarter, and I anticipate further growth in Q4 and next year, 2024.”

“We are maintaining our projection for the year based on robust sales forecasts, despite being aware and responsible regarding risks involved.”

“Revenues for the year are expected to be between $2.34 billion to $2.510 billion, and non-GAAP EPS ranges between $7.70 to $8.30.”

“For the full year, we have maintained our previous guidance expectation as we still see potential for improvement in the second half, although aware of inherent risks that need to be considered.”

“We're observing improvements in the supply chain environment, which was very challenging last year, and we hope to see this trend continue in the remainder of 2023.”

“I expect SD-WAN to have a healthy contributing pipeline; however, rollouts take time as many branches are involved.”

“Our plan is to accelerate this growth significantly, as we have the potential to reach a wider customer base.”

“For 2023, we expect our average diluted number of shares to be approximately 119 million shares for the year, starting with 121 million shares in Q1 and moving down to 115 million shares by Q4, assuming share repurchases of $325 million.”

“As for the tax rate for 2023, we expect a similar tax rate this year compared to 2022 while for modeling purposes, we expect a 14% tax rate for all four quarters.”

“For 2023, we expect incremental financial income between $1 million to $2 million every quarter due to the higher yield pro forma investment yield.”

“As for the FX effects in 2023, more than 50% of our expenses are in local currency, and the strength of the U.S. dollar is expected to provide us a benefit.”

“We expect that our travel and entertainment expenses will continue to grow and normalize at higher levels this year.”

“While we still see supply chain challenges, there is some relief, and we expect to see modest improvement in 2023.”

“In 2022, we built many organizations and hired numerous salespeople, and while we did see positive outcomes, the changes will likely be seen in Q1 run rates.”

“We had hedged around an exchange rate of 3.1, if I recall correctly. Therefore, if the dollar stays strong, that should benefit us next year.”

“Although I can say that while we're starting to see relief on the shortages, we see an increase in the raw material price across many components. So I think it will end up in a lower cost, but not all the way to the original level.”

“GAAP EPS is expected to be $1.22 lower.”

“GAAP EPS is expected to be approximately $0.31 lower.”

“But again, we remain quite positive, and we have actually increased the range for revenue. So, you can see our third-quarter projection is actually better than our original plan and better than what many of you expect based on your current models.”

“We are probably going to come. Again, I want to tell you, don't kill me, but I think we will probably be roughly at least $10 million more than – the new midpoint should be probably at least $10 million more than the previous midpoint. On the revenue side, and I think we are very happy about that.”

“I mean, we probably won't get to the lower part of it because we have already received over $10 million in additional revenues from the first two quarters. I don't know, Tal, if you want to discuss it in a little more detail. But yes, the guidance for the – we can calculate a narrowing range a little more to the right, more to the upper end of the guidance that we provided at the beginning of the year.”

“For example, we had predicted that supply chain issues will kind of get solved in the second half of this year and costs will return to normal. Right now, we don't think it will happen in the next half of the year, and that has an impact on the expense side.”

“At the end, I think consolidation will also take a bigger pace both because it delivers better security and also because most organizations cannot manage the complexity of using tens or even more of different cyber solutions, which is happening in many cases.”

“With that, we anticipate and I think almost everyone around us anticipates that the strong demand for cybersecurity will continue with that continuous wave of fifth-generation cyber attacks.”

“I actually expect it to continue for the rest of the year, which is part of the pressure on the margin, but it's okay.”

“The real effect is the growth in the headcount, which is, again, you will see it also in Q2, you saw it as part of the guidance as well because we recruited them towards February, March. So you actually see the effect more fully in Q2.”

“As depicted in the chart, we have made significant progress within just one quarter, and I anticipate reaching this target in the next few months.”

“We are focused on increasing our investment in the organization, particularly in building our sales team, aiming for a 25% growth rate soon.”

“But we definitely believe in them and believe that they will grow significantly next year.”

“We have an internal goal to increase the number of frontline salespeople by 25%, which will help us support more customers and reach new ones.”

“We will see an estimated effect on next year's margins of around 1%.”

“We expect subscription revenues will continue to lead growth, showing 13% year-over-year growth.”

“And I gave the example of Avanan, which I think that within 30 to 60 days from the acquisition, we'll have a product that has joint engines, so that we didn't have before.”

“So let me first relate in the P&L is triple digit, of course, the number will grow. There will be some slowdown, but because we're ramping up actually enough so you still see nice growth.”

“For instance, if a customer begins with 10% of their deployment in the cloud, I anticipate that percentage will increase over the next two to three years.”

“GAAP EPS is expected to be approximately $0.94 less.”

“GAAP earnings per share is projected to be about $0.26 less.”

“Just related to Q4. Q4 is in line with our expectations. If you recall, every Q4, if everything goes as usual and there's no things that I can't predict, then we have lapse statute of limitation in Q4. Therefore, the taxes are expected to be around 0%.”

“We talked about the reduction quarterly of about $1 million to $1.5 million. This quarter, it's reduced slightly less than $1 million, standing on $9 million. We expect that to continue, of course.”

“I think we've seen this quarter, we've seen the US stabilize. Hopefully, in the next 2 or 3 quarters, we will see resuming growth, resuming fast-paced hiring and creating all the levels of sales people, leadership, and so on.”