Check Point Q3 Revenue Falls 1% as Security Subscriptions Climb 11%

Check Point Software Technologies (CHKP ) reported total revenues of $670 million for the quarter ended September 30, 2026, a 1% decrease from a year earlier, while security subscriptions revenue rose 11% to $339 million, the company said in its third-quarter earnings announcement on November 2, 2026. GAAP earnings per diluted share fell 45% to $1.82 and non-GAAP EPS fell 37% to $2.49.

The year-over-year EPS declines reflect a tax settlement signed during the third quarter of 2025, when the company updated its tax provisions in a way that produced a benefit of approximately $1.47 to both GAAP and non-GAAP EPS in that period. Year-earlier EPS was $3.28 GAAP and $3.94 non-GAAP; excluding the one-time benefit, Check Point said both measures increased 1%.

CEO Nadav Zafrir said third-quarter results were in line with the company’s expectations, with security subscriptions growth supported by strong demand for its Email, CTEM, and AI Security offerings. “We believe revenues reached a trough in the third quarter, and we expect gradual improvement beginning in the fourth quarter,” Zafrir said. “The recovery is taking longer than anticipated, but we remain confident in our vision.”

Within the revenue mix, products and licenses revenue was $105.5 million, versus $130.4 million a year earlier, and software updates, maintenance and services revenue was $225.7 million, versus $241.7 million. Net income was $185.2 million, versus $358.7 million in the third quarter of 2025. For the first nine months of 2026, revenue totaled $2.01 billion and net income was $570.6 million.

GAAP operating income was $177 million, representing 26% of total revenues, and non-GAAP operating income was $251 million, representing 37%. Remaining performance obligation, which Check Point defines as the total value of non-cancellable contracted products and services yet to be recognized as revenue, stood at $2.5 billion as of September 30, a 5% increase year over year.

Cash, marketable securities and short-term deposits totaled $4.12 billion at quarter-end, compared with $2.82 billion a year earlier, an increase the company attributed primarily to $1.8 billion in proceeds from its $2 billion convertible senior notes offering, net of issuance costs and net of purchased capped calls. The year-earlier period also included a payment of approximately $160 million for the land of the company’s new Tel Aviv campus.

Cash flow from operations was $264 million, including $10 million of expense related to currency-hedging transactions, versus $241 million a year earlier, which included a $3 million hedging benefit. Adjusted free cash flow (defined as net cash provided by operating activities, less purchases of property, equipment, capitalization costs and other assets, net of acquisition-related costs) was $258 million, or 38% of total revenues.

During the quarter, Check Point repurchased approximately 2.5 million shares for approximately $325 million. Over the last twelve months, the company repurchased approximately 9 million shares.

The quarter also included a $25 million reduction in research and development expenses under Israel’s research and development tax incentive law, enacted on March 30, 2026 as part of the 2026 budget; the nine-month reduction was $80 million. The law allows eligible Israeli companies within multinational groups to receive tax credits for qualifying research and development expenses, which may be used to offset corporate taxes or minimum top-up tax, with unused credits convertible into cash grants after a defined period.