Check Point Software Technologies Ltd. Q4 FY2025 earnings call

Key Points

• 2025 Recap: Strengthened leadership team, improved go-to-market execution, enhanced financial flexibility with $2 billion convertible notes. Expanded platform with security for AI and exposure management pillars. Aligned C-suite structure to operating model.
• 2026 and Beyond: Positioned to lead AI era of cybersecurity. Focus on 4 strategic solution pillars: hybrid mesh network security, workspace security, exposure management, AI security. Acquisitions like SyCOps, Siyata to enhance capabilities. Emphasis on revalidating security, proactive prevention, and leveraging AI as a force multiplier for customers' AI transformation.

In the 2025 fourth quarter, revenues were $745 million, up 6% year-over-year, with subscription revenues growing 11%. Full-year revenues reached $2.725 billion. Product revenues were moderated by a subscription price increase announced in July 2025, which shifted bundled hardware deals towards subscription, creating a $6 million headwind in Q4. Emerging products like e-mail security, SASE, and ERM had over 40% growth in ARR. Regionally, EMEA accounted for 48% of Q4 revenues, growing 5%; Americas 40% with 6% growth; APAC 12% with 9% growth. Full-year EMEA was 46% (5% growth), Americas 42% (7% growth), APAC 12% (11% growth). Gross margin in Q4 was 89%, full year 88%.

Guidance

• Q1 2026 revenues expected $655M-$685M; full year 2026 revenues $2.83B-$2.950B (4%-8% growth). Subscription revenue Q1 $318M-$328M; full year 10%-14% growth. Non-GAAP EPS Q1 $2.35-$2.45; full year $10.05-$10.85. Adjusted free cash flow Q1 $420M-$460M; full year $1.150B-$1.250B. Memory price increase expected to impact gross margin by 1 point in 2026, most in second half.

Risks

• Memory price increase affecting gross margin. Foreign exchange exposure could create 1-1.5 point headwind on operating margin if current exchange levels persist. Uncertainty around Israeli government R&D incentive program approval and its financial impact.

Q: Adam Tindle asked about the comparison between AI security and cloud security.

A: Nadav Zafrir responded that AI transformation is more foundational and faster-paced than cloud, emphasizing Check Point's 4-pillar approach and acquisitions to lead in AI security.

Q: Joseph Gallo inquired about product mix in 4Q and product guidance for 2026.

A: Roei Golan explained product revenues were impacted by subscription price increase mix shift, with main impact on Q4, and product growth outlook considering memory shortages and market dynamics.

Q: Brian Essex asked about operating margins and hardware price increases.

A: Roei Golan stated operating margin guidance 39%-40%, and Nadav Zafrir noted no immediate shift in customer spending on hardware but focus on subscription and SaaS growth.

Q: Todd Weller asked about key changes in 2025 impacting 2026 growth.

A: Nadav Zafrir highlighted 4-pillar approach, C-suite refocus, and security for AI as key, with acquisitions and ecosystem play supporting growth.

Q: Junaid Siddiqui asked about SASE progress.

A: Nadav Zafrir mentioned SASE ARR growth over 40%, maturing product, and integration into hybrid mesh pillar with upsell to existing customers and new logo acquisition.