Check Point Software: Growth Despite Shrinking Margins and Rising Expenses

The American-Israeli security company Check Point Software Technologies reported a revenue growth of 7% year-over-year for the third quarter, reaching $635.10 million. This slightly missed the analysts' expectation of $635.14 million. The adjusted earnings per share matched analysts' forecasts, standing at $2.25. In detail, revenues from products and licenses rose by 4.1% to $118.9 million, while security subscriptions increased by an impressive 11.5% year-over-year to $276.9 million. Software updates and maintenance recorded moderate growth of 2.4% to $239.3 million. The adjusted operating margin decreased from 45% to 43%, and the operating margin fell to 34% from 38% compared to the previous year, due to a 12.5% increase in operating expenses. Nevertheless, the company generated an operating cash flow of $248.9 million, compared to $222.3 million in the previous year, and had financial resources amounting to $2.87 billion at the end of September. CEO and founder Gil Shwed expressed satisfaction with the quarterly results, particularly due to the double-digit growth of the Infinity platform as well as Harmony Email and Infinity Global Services. With the acquisition of Cyberint, Check Point has also entered the market for security operations centers with AI-driven threat intelligence and exposure management. Since the beginning of the year, Check Point's stock has seen an increase of 37%, despite a recent decline of 7.69% in pre-market trading, bringing the price down to $191.96.