Nov 2, 2026 earnings call — Product trough; AI and subscription growth
Q3 total revenue was $670 million, with subscription revenue $339 million and adjusted free cash flow $258 million.
Revenue $0.7B (est $0.7B) · EPS $2.49 (est $2.48) · Next-quarter revenue outlook $0.7B
Key quotes
"Subscription revenue today already represent 51% of our total revenues."
"We believe Q3 marked the bottom for revenue, and we expect sequential improvement beginning in the fourth quarter."
"In July, we launched our AI Network Firewall, bringing visibility and control specifically over AI traffic directly to the Check Point firewalls that our customers already rely on."
Analyst Q&A 11
shifting company perception
Q (John DiFucci · Guggenheim Partners): Is Check Point losing new customers and seen as legacy? Will current changes be enough to change that perception?
A: Management said perception is changing because emerging technologies (email, CTEM, AI) are growing fast and let them talk to new buyers. They said the company is moving from being seen as a firewall/network company to preemptive security and will present more at their February event.
"we're no longer a firewall company, and we're no longer a network security company" — Nadav Zafrir
subscription durability in 2027
Q (Joseph Gallo · Jefferies): Can subscription grow double digits in 2027 given decelerating subs and current headwinds? How durable is subscription revenue?
A: Management said they believe double-digit subscription growth is doable. They cited strong organic growth in SIEM, AI security, and email security (growing ~38% ARR) and said refresh stabilization and price increases should help into 2027.
"As we said in July, we're also hiring more people at the front line, across the board, strategic accounts, major accounts, specialists, sales engineers, increasing our capacity substantially, so that when we go into 2027, we're set to start accelerating." — Nadav Zafrir
pricing impact and AI data centers
Q (Patrick Colville · Scotiabank): How large is the price increase impact? And what is the opportunity to protect AI data centers with Check Point products?
A: Roei said if they captured 100% of the price increase it could add up to three points to total revenue growth, though historically they captured slightly less than half. Nadav said AI data center investment is huge, some demand is already in the pipeline and more should be incremental in 2027, and Check Point is investing to secure east-west AI traffic.
"The full impact, I mean, if it will manage to benefit 100% of this price increase, it can be up to three points equal to three points to our growth, in total growth of revenues." — Roei Golan
leading indicators and sales forecast
Q (Todd Weller): What leading indicators give you confidence about recovery? How confident are you in sales forecasting after go-to-market changes?
A: Management pointed to funnel quality and large deals for new technologies (AI, exposure management) as key indicators. They said they've added dozens of sellers and new leadership, and believe structural changes are now embedded and should improve execution and forecasting going forward.
"Second, as I mentioned in the script that we prepared for you today, it's these large deals that we're winning with some of our new technologies, such as AI and the integration of exposure management to modern network security." — Nadav Zafrir
drivers of $1.5B subs and pricing timing
Q (Adam Tindle · Raymond James): What drives the $1.5 billion subscription target for 2027 and why raise prices amid weakening product demand?
A: Roei said the $1.5 billion target comes from growth in AI security, email, and SIEM, plus some pricing benefit and stabilization of refreshes. On pricing, they announced increases in early September citing rising memory costs and market-wide component price increases, and said customers understand the need for the increase.
"This $1.5 billion, we take into account the trend that usually we got, that we have seen historically when we did the price increase." — Roei Golan
refresh delays and firewall as a service
Q (Shrenik Kothari · Baird): Are refresh delays structural or budget-driven? Will firewall-as-a-service reduce upfront CapEx and help modernization?
A: Nadav said trends are mixed: AI-centric data centers increase demand for high inspection and on-prem solutions for sovereignty, while some customers prefer security as a service. They are launching firewall-as-a-service to address both, and emphasized customers want automated, preemptive protection that fixes issues for them.
"I am proud to say that when you look at our customers in the last weekend, they were protected before they needed to do anything." — Nadav Zafrir
what changed about the recovery
Q (Joshua Tilton · Wolfe): If the quarter was in line, why is the recovery taking longer? Is it execution or lower firewall demand?
A: Nadav said demand is rising but hiring and onboarding salespeople took longer than expected, so execution slowed. Roei added that some large refresh deals were pushed to next year by existing customers, so the funnel magnitude is slightly lower and Q4 is back-end loaded.
"I will remind you, Joshua, when we talked back then in the beginning of August when we announced our earnings, we did say that we do see very strong funnel, qualified funnel for Q4 back then when we announced earnings." — Roei Golan
data sovereignty and appliance demand
Q (Junaid Siddiqui · Truist): Is sovereign architecture demand meaningful and does it favor appliances/private cloud footprint?
A: Nadav said the shift toward sovereignty and local open-weight models is meaningful and can favor on-prem and private cloud deployments. He said modern network security needs to adapt for these use cases and Check Point already has strengths they can leverage in that space.
"I do think that network security, modern network security does not necessarily mean what it meant a couple of years ago." — Nadav Zafrir
sales investments and margins
Q (Speaker 11): How will sales investments and FX affect margins next year and what returns do you expect?
A: Roei said they'll provide specific margin guidance in February and noted an incremental ~$50 million FX headwind based on current rates; margins will depend on top-line performance and Q4/backlog. Nadav added investments are shifting toward automation and AI, and sales investments will be a full-year factor in 2027 margins.
"In the end, the margins is also a result of the growth in the top line." — Roei Golan
returns from R&D and M&A spending
Q (Brad): What timing and magnitude of returns from acquisitions and R&D do you expect, and how will capital allocation (buybacks) change?
A: Nadav said investments aim for sustainable, gradual growth and many initiatives (security for AI) should show results in 2027 and beyond; acquisitions support those capabilities. Roei said buyback levels are assessed each quarter and currently remain unchanged while they keep flexibility for buybacks and M&A given a strong cash position.
AI Network Firewall subscription
Q (Richard Poland · Wells Fargo): Is the AI Network Firewall upsell part of the 3% price increase, and how is early traction?
A: Roei said the AI Network Firewall is a separate subscription upsell, not part of the 3% price increase. Nadav said they must do sales expansion and product work in parallel; some capabilities require hardware collaboration (e.g., with NVIDIA) for high east-west encrypted AI traffic.
"The AI Network Firewall is a different package, subscription package, that it is an upsell that can be sold to our customers." — Roei Golan