Shares dropped 9% after the quarter as investors punished Check Point for a visible deceleration in product revenues, particularly firewall appliances, and cautious near-term outlook for hardware recovery despite solid subscription growth.
- Total revenues grew just 1% to $674 million, a touch below the midpoint of guidance due to a 14% decline in product revenues.
- Subscription revenues grew a healthy 12% to $333 million, driven by strong demand for emerging technologies like email security, CTEM, and AI security.
- Gross margin slipped slightly to 87%, pressured by higher memory costs.
- Operating expenses excluding R&D grants rose 13%, reflecting investments in expanded sales capacity and go-to-market initiatives.
- Management expects product revenue softness to continue in Q3 with improvement delayed to Q4, signaling ongoing challenges in appliance sales and cautious near-term outlook.
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