Q4 2025 Check Point Software Technologies Ltd Earnings Call

February 12, 2026

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Kip E. Meintzer: ... Hi, Fourth Quarter and Full Year Financial Results Video Conference. I'm Kip Meintzer, Global Head of Investor Relations, and joining me today, our Chief Executive Officer, Nadav Zafrir, and our Chief Financial Officer, Roei Golan. Before we begin, I'd like to remind everyone that the conference is being recorded and will be available for replay on our website at checkpoint.com. During the formal presentation, all participants are in a listen-only mode that will be followed by a Q&A session. During this presentation, Check Point's representatives may make forward-looking statements. Forward-looking statements generally relate to future events or our future financial and/or operating performance, including statements related to the anticipated ratification of the Israeli Government Research and Development Incentive Program and potential impact of these grants on our financial results.

Moderator: ... Hi, Fourth Quarter and Full Year Financial Results Video Conference. I'm Kip Meintzer, Global Head of Investor Relations, and joining me today, our Chief Executive Officer, Nadav Zafrir, and our Chief Financial Officer, Roei Golan. Before we begin, I'd like to remind everyone that the conference is being recorded and will be available for replay on our website at checkpoint.com. During the formal presentation, all participants are in a listen-only mode that will be followed by a Q&A session. During this presentation, Check Point's representatives may make forward-looking statements. Forward-looking statements generally relate to future events or our future financial and/or operating performance, including statements related to the anticipated ratification of the Israeli Government Research and Development Incentive Program and potential impact of these grants on our financial results.

You have joined the meeting as an attendee and will be muted throughout the meeting. Fourth quarter and full year financial results video conference. I'm Kip Meintzer, Global Head of Investor Relations, and joining me today are our Chief Executive Officer, Nadav Zafrir, and our Chief Financial Officer, Roei Golan. Before we begin, I'd like to remind everyone that the conference is being recorded and will be available for replay on our website at checkpoint.com. During the formal presentation, all participants are in a listen-only mode that will be followed by a Q&A session. During this presentation, Check Point's representatives may make forward-looking statements. Forward-looking statements generally relate to future events or our future financial and/or operating performance, including statements related to the anticipated ratification of the Israeli government.

Kip E. Meintzer: These statements involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Any forward-looking statements made speak only as of the date hereof, and Check Point Software undertakes no obligation to update publicly any forward-looking statements. In our press release, which has been posted on our website, we present GAAP and non-GAAP results, along with a reconciliation of such results, as well as the reasons for our presentation of non-GAAP information. If you have any questions after the call, please, please feel free to contact Investor Relations by email at kipp@checkpoint.com. And now I'd like to turn the call over to Nadav for the-

Moderator: These statements involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Any forward-looking statements made speak only as of the date hereof, and Check Point Software undertakes no obligation to update publicly any forward-looking statements. In our press release, which has been posted on our website, we present GAAP and non-GAAP results, along with a reconciliation of such results, as well as the reasons for our presentation of non-GAAP information. If you have any questions after the call, please, please feel free to contact Investor Relations by email at kipp@checkpoint.com. And now I'd like to turn the call over to Nadav for the-

Research and development incentive program and potential impact of these grants. On our financial results, these statements involve risks and uncertainties that could cause actual results to differ materially from those projected. In the forward-looking statements, any forward-looking statements made speak only as of the date hereof and checkpoint softer undertakes. No obligation to update publicly any forward-looking statements in our press release, which has been posted on our website, we present, gaap and non-gaap results along with a Reconciliation of such results, as well as the reasons for our presentation of non-gaap information. If you have any questions after the call, please, please feel free to contact. Investor relations by email at KIPP at checkpoint.com, and now I'd like to turn the call over to nadav for the

Nadav Zafrir: Thank you, Kip. It's great to be with everyone here today. I want to begin with a recap of 2025, followed by our plans for 2026 and beyond. We printed solid 2025 fourth quarter and full year results. During the year, we delivered consistent execution while building a stronger foundation for our long-term sustainable growth. We expanded our platform with two new pillars, security for AI and exposure management. We're building both organically and through targeted acquisitions. We also strengthened our go-to-market engine. We expanded and flattened our C-suite structure and aligned it to our operating model. We're laser-focused on strategic customers, new logo acquisition, and partner leverage, and our sales are focused and designed to develop deeper enterprise penetration and broader portfolio adoption and increase new logo wins.

Thank you, Kip. Uh, it's great to be with everyone here today.

I want to begin with a recap of 2025, followed by our plans for 2026 and beyond.

We print in solid 2025, fourth quarter and full year results. During the year, we delivered consistent execution, while building a stronger foundation for our long-term sustainable growth,

We expanded our platform with two new pillars: security for AI, and exposure management.

Nadav Zafrir: We also enhanced our financial flexibility with a $2 billion zero coupon convertible notes offering, strengthening our balance sheet and creating the capacity to invest in our highest conviction priorities. Looking ahead to 2026 and beyond, we are positioning the company to lead the AI era of cybersecurity. As you're keenly aware, AI is fundamentally changing the threat landscape, and this requires organizations to revisit their core security assumptions and revalidate their security foundations. In fact, decades of corporate infrastructure is now vulnerable because the very nature of attacks is changing. And so security leaders must revalidate their existing security foundations, protect new attack surfaces that are driven by the adoption of new capabilities and tools, as well as embrace AI as a force multiplier just to remain competitive. And our mission at Check Point is very clear: We secure our customers' AI transformation.

We're building both organically and through targeted acquisitions. We also strengthened our go-to-market engine; we expanded and flattened our sales structure and aligned it to our operating model, with laser focus on strategic customers, new logo acquisition, and partner leverage. And our sales are focused and designed to develop deeper enterprise penetration of a broader portfolio, adoption, and increase new logo wins.

We also enhance our financial flexibility with a $2 billion zero coupon convertible notes offering, expanding our balance sheet and creating the capacity to invest in our highest conviction priorities.

Looking ahead to 2026 and Beyond. We are positioning the company to lead the AI era of cyber security.

As you're keenly aware AI is fundamentally changing the threat landscape. And this requires organizations to revisit their core security assumptions and revalidate their security foundations.

In fact, Decades of corporate infrastructure is now vulnerable because of the very nature of a taxi changing. And so Security leaders must revalidate their existence security foundations.

Protect new attack surfaces that are driven by the adoption of new capabilities and tools, as well as embrace AI as a force multiplier, just to remain competitive.

And our mission at checkpoint is very clear. We secure our customers, AI transformation.

Nadav Zafrir: That means we continuously update our existing security solutions to defend against evolving threats. We're securing the expanding AI-driven attack surface with purpose-built capabilities and leveraging AI to simplify and automate security management and operations. We do this by applying a proactive prevention-first approach, which leverages our superior capabilities and continuously research, discover, and build solutions to anticipate the evolving threats. We secure our customers' AI transformation through four strategic solution pillars, each one of them a platform of its own. Hybrid Mesh network security, securing the infrastructure, workspace security, securing the employees, exposure management that provides situational awareness, and then finally, AI security across all of these pillars. We secure the Hybrid Mesh infrastructure across data centers, hybrid cloud, branch, and SASE, and we have a very clear market differentiation for a Hybrid Mesh.

That means we continuously update our existing security solutions to defend against evolving threats.

We're securing the expanding AI driven attack surface with purpose-built capabilities and leveraging AI to simplify and automate Security Management and operations.

And build solutions to anticipate the evolving threats.

We secure our customers AI transformation through 4, strategic solution, pillars. Each 1 of them at platform of its own

Hybrid mesh network security securing the infrastructure workspace security, securing the employees exposure management that provides situational awareness and then finally AI security across all of these pillars.

We secure the hybrid mission information across data centers, hybrid cloud, branch, and SASE.

Nadav Zafrir: Our advantages are we have the superior proactive prevention, second to none, a hybrid architecture that optimizes user experience at the edge, an unparalleled ability to scale, and then finally, an AI-powered unified management. As you know, AI is embedded everywhere, and so the attacks can originate from everywhere, from anywhere. And so we're building an integrated and unified workspace platform that's spanning across devices, browser, email, SaaS applications, and remote access. We believe that our recognized leadership position in email security and superior phishing prevention capability is a springboard to lead the way in exposure management. Managed service providers, or MSPs, also represent an important opportunity in the workspace security pillar. We identified Rotate as a provider of a comprehensive platform, purpose-built for MSPs.

And we have a very clear Market differentiation for hybrid mesh and our advantages are we have the superior proactive, prevention, Second To None, a hybrid architecture that optimizes user experience at the edge.

And are parallel to the ability to scale and then finally an AI powered unified management.

As you know, AI is embedded everywhere. And so that the attacks can originate from everywhere uh from anywhere. And so we're building an integrated and unified workspace platform that spanning across devices browser, emails SAS applications and remote access

We believe that our recognized leadership position in email security and superior phishing prevention capability is a springboard to lead the way in exposure management.

Nadav Zafrir: We acquired the team of Rotate to build momentum in the MSP market, leveraging our position as a leading MSP email security provider. Next, we establish exposure management as a new strategic pillar, and we believe we're uniquely positioned to expand our market share in the coming few years. Security teams are challenged by the overwhelming volumes of vulnerability, disconnected intelligence, shrinking remediation windows, and, in an AI-driven threat landscape, weeks-long resolution cycle for critical vulnerabilities are no longer viable. At Check Point, we deliver real-time situational awareness, unified across threat intelligence, attack surface visibility, providing context and automated remediation. Today, I'm also excited to announce the acquisition of Cyclops, a cyber asset attack surface management company that brings AI-driven asset discovery to enable accurate vulnerability, context, and risk prioritization.

Managed service providers or msps. Also represent an important opportunity in the workspace, security pillar. We identified rotate as a provider of a comprehensive platform purpose-built for msps. We acquired the team of rotate to build momentum in the MSP Market. Leverage our position as a leading mssp, email security provider,

Next, we establish exposure management as a new strategic pillar, and we believe we're uniquely positioned to expand our market share in the coming few years.

Security teams are challenged by the overwhelming volumes of vulnerability, disconnected intelligence shrinking, remediation windows. And in an AI driven threat landscape weeks, long resolution cycle, for critical vulnerabilities are no longer viable, a checkpoint. We deliver real-time situational awareness, unified across threat, intelligence attack surface visibility providing context and automated remediation.

Nadav Zafrir: Cyclops strengthens our exposure management platform and delivers robust CTEM offering that includes threat intelligence, vulnerability scanning, and prioritization, and at the end of the day, also actionable and safe remediation. Finally, as organizations rush to adopt AI just to remain relevant, this breakneck pace of AI adoption presents many new risks to organizations. We get data leakage via prompts, the uploading of sensitive data, AI threats like jailbreaking or modeling version, and lastly, agents with uncontrolled autonomy, sometimes acting beyond their scope. AI security is a foundational pillar of our strategy. Our comprehensive AI security stack protects employee usage, enterprise application, agents, and models. Late last year, we made the acquisition of Lakera to deliver runtime protection across AI applications and agents based on an industry-leading foundational model.

Today, I'm also excited to announce the acquisition of Cyclops, a cyber acid attack surface management company, that brings AI driven asset Discovery to enable accurate, vulnerability context, and risk criteria.

Cyclops strengthens our exposure management platform and delivers. Robust CM offering that includes threat, intelligence vulnerability, scanning and prioritization. And at the end of the day, also, actionable and safe remediation.

And finally, as organizations rush to adopt AI just to remain relevant.

This Breakneck pace of AI adoption prevents many new risks to organizations, we get data leakage through a prompts, the uploading of sensitive data, um, AI threats, like jailbreaking or modeling version. And lastly, agents with uncontrolled autonomy, sometimes acting beyond their scope.

AI security is a foundational pillar of our strategy.

Our comprehensive AI security stack. Protects employee usage, Enterprise application, agents and models.

Late. Last year we made the acquisition of leira to deliver runtime protection across AI applications and agents based on an industry-leading foundational model.

Nadav Zafrir: You know that this is evolving faster than anything we've ever seen and requires design partnerships and open gardener and the ability to track and acquire the innovators. And so today, I'm happy to announce the acquisition of Saia, specializing in discovering and understanding and ultimately governing autonomous AI agents. Saia extends our platform by protecting the emerging AI workforce, enabling organizations to safely accelerate their AI transformation. In summary, 2025, as you know, my first year as CEO of Check Point. During the year, we strengthened our leadership team, we improved our go-to-market execution, and enhanced our financial flexibility, all while delivering solid results. I believe during my first year, we built a foundation that positions us to accelerate our growth over the next few years. Looking ahead, our strategy is focused and aligned.

You know, that this is evolving faster than anything we've ever seen and requires design partnerships and open governance, and the ability to track and acquire the innovators. And so, today, I'm happy to announce the acquisition of Sciata, specializing in discovering and understanding and ultimately governing autonomous AI agents. Sciata extends our platform by protecting the emerging AI workforce, enabling organizations to safely accelerate their AI transformation.

Nadav Zafrir: Organizations around the world are accelerating AI adoption, and our mission is to secure their AI transformation. Through our four strategic pillars, we are addressing the expanding AI-driven attack surface and bringing critical innovation to customers. The recent acquisition of Cyclops, Saia, and Rotate's talents further enhance our capabilities in exposure management, AI security, and workspace. And these acquisitions strengthen our competitive position and ultimately support our long-term growth ambitions. We're executing with discipline, investing behind our highest conviction opportunities, and driving greater value for customers, partners, and shareholders in 2026 and beyond. And with that, I'll turn to Roei Golan to address our financials.

In summary, uh, 2025, as you know, my first year, as CEO, of checkpoint. During the year, we strengthened our leadership team, we improved our go to market execution and enhanced our financial flexibility. All while delivering solid results. I believe during my first year, we build a foundation that positions us to accelerate our growth over the next few years. And looking ahead, our strategy is focused and aligned

organizations around the world are accelerating our deduction.

To our fourth strategic pillar, we are addressing the expanding AI-driven attack surface and bringing critical innovation to customers.

The recent acquisition of Cyclops, Sciata, and Rotates talents further enhances our capabilities in exposure management, AI security, and workspace. These acquisitions strengthen our competitive position and ultimately support our long-term growth ambitions.

We're executing with discipline.

Investing behind our highest conviction opportunities and driving greater value for customers partners and shareholders in 2026 and Beyond. And with that I'll turn to Roy Eagle on to address our financials.

Roei Golan: Thank you, Nadav. One moment. Can you see my slides?

Thank you, madve.

1 moment. Can you see my slides?

Nadav Zafrir: Yes.

Yes.

Roei Golan: Great. Okay, so thank you, Nadav, and thank you everyone for joining the call. As Nadav said, we had a solid fourth quarter with 6% growth in revenues, driven by 11% growth in our subscription revenues. Our revenues reached $745 billion, and we're 1 million above the midpoint of our projection. Our Non-GAAP EPS was $3.40 per diluted share and exceeded our guidance. The figure includes the one-time tax benefit of approximately $0.52, related to a reduction in our corporate tax rate in Israel that impacted prior period income taxes and also updates into our tax reserves. Excluding the one-time benefit, EPS exceeded the top end of our projection by approximately $0.08.

Great.

Okay, so, thank you and and thank you everyone for joining the call. And it's not up said, we had a solid third quarter was a solid quarter with 6% growth in revenues driven by 11% growth in our subscription revenues.

Our revenues reached 745 billion and we're 1 million above the midpoint of our projections. Our non-gaap EPS was 3.40 cents per diluted, chill and exceeded our guidance.

The figure includes the one-time tax benefit of approximately $0.52 related to a reduction in our corporate tax rate in Israel, which impacted prior periods' income taxes and also updates into our tax results.

Excluding the 1-time benefit EPA succeeded. The topic of our projection by approximately 8 cents.

Roei Golan: As for the full year, our revenues reached $2.725 billion, and were $15 million above the midpoint of our original projections. Our non-GAAP EPS was $11.89 per diluted share and exceeded our guidance. This figure includes a tax benefit of approximately $1.90, related to a reduction in our corporate tax rate that impacted prior prior year income taxes and updates in our tax reserves, also due to the tax settlement that we announced last quarter. Excluding one-time benefit, EPS exceeded the midpoint of our projection by approximately 9 cents. As mentioned, our revenues grew by 6% year-over-year, while deferred revenues grew by 9% to $2.18 billion.

As for the full year, our revenues reached 2,725 million and we're 15 million above the midpoint of our original projections.

Our non-GAAP EPS was $0.1189 per diluted share and exceeded our guidance.

This figure includes the tax benefits of approximately $1.90 related to a reduction in our corporate tax rate that impacted prior in. Prior year income taxes and upsets in all tax jobss also due to the tax settlement that we announced last quarter.

Excluding 1 time benefit, EPS, exceeded the midpoint of our projection by Prophet approximately 9 cents.

Roei Golan: It is important to note that our product revenues growth was moderated in the quarter, mainly as a result of our subscription price increase that we announced in July 2025, which shifted a larger portion, a portion of bundled hardware deals towards subscription. This resulted in headwind of $6 million to our product revenues in this quarter, as we allocated relatively to a smaller product component without changing overall deal value. We do expect to see this impact also in Q1 of approximately $4 to 5 million on our product revenues. We expect the benefits of this strategy to increasingly materialize in subscription revenue during Q1 and throughout 2026, while also the product price increase that we have effectively from 1/1/2026 of 5%, expect to support our product growth primarily from the second quarter of 2026.

As mentioned, our revenues grew by 6% over real. While the third revenues grew by 9% to 2.1, uh, 2 billion, 180 million,

It is important to note that our product revenues growth was moderated in the quarters. Mainly, as a result of our subscription price increase that we announced in July 2025, which shifted a larger portion, a portion of bundled outward bills towed subscription, this resulted in Ed, wind of 600 million to our product revenues in this quarter. As we allocated relatively a smaller product.

Roei Golan: When we are looking on our calculated billing, they total to $1.039 billion, reflecting an 8% year-over-year growth, while our current calculated billing grew by 6%. Our remaining performance obligation, RPO, grew by 8% to $2.7 billion. On an annual perspective, our revenue grew by 6% year-over-year, while our calculated billing grew by 9% to $2.9 billion. Our current, current calculated billing totaled to $2.784 billion, reflecting a 6% growth year-over-year. When we are looking on our recurring calculated billing, which will present the calculated billing from subscription and maintenance and updates, this grew by 10% year-over-year. As we mentioned, our growth this quarter was driven by our subscription revenues.

Component without changing overall deal value. We do expect to see this impact. Also in q1 of approximately 4 to 5 million on our product revenues. We expect the benefits of this strategy to increasingly materiality in subscription Revenue during q1 and fall 2026. While also the product pricing is that we have effectively from 11 2026. So 5% expect to support our product growth primarily from the second quarter of 2026.

When we are looking on our calculated billing, they total to 1 billion and 39 million reflecting an 8% year-over-year growth while our current calculated billing Group by 6%.

Our remaining performance obligation, RPO grew by 8% to 2.7 billion dollars.

On an annual perspective, our Revenue grew by 6% over real. While our calculated billing, grew by 9% to 2.9 billion.

Our calling and calculated billing total to $2.784 billion, reflecting a 6% growth ego value.

when we are looking on our returning calculated billing, which will present, the calculated billing from subscription and, uh, maintenance and update this grow by 10% e over the list,

Roei Golan: We continue to experience strong demand for our emerging product portfolio, which remains the primary driver for our revenues growth. In this quarter, in Q4, we had a growth across all our pillars, CTEM, Workspace, and Hybrid Mesh, while our emerging product, Email Security, SASE and ERM, exceeded 40%, more than 40% growth in ARR. We're now looking on the global revenue distribution, so we did see growth in all regions. 48% of our revenues came from EMEA, and that grew by 5% year-over-year. 40% of the revenues came from Americas, which had 6% growth year-over-year, while the remaining 12% came from Asia Pacific, that grew 9% year-over-year. When I'm looking on the full year, 2025, so actually, so 46% of our revenue came from EMEA, grew by 5%.

As we mentioned our group, this quarter was driven by a subscription revenues. Uh, we continue to experience strong demand for our emerging products portfolio, which Remains the primary driver for our revenues growth.

In this quote, in Q4, we had a growth across all our pillows. See them workspace and hybrid mesh while our emerging product email, security, sassy and ERM exceeded 40% more than 40% growth in a

We're now looking at the global revenue distribution. We did see growth in all regions. 48% of our revenues came from EMEA, and that grew by 5%. Overall, 40% of the revenues came from the Americas, which had 6% growth there. The remaining 12% came from Asia Pacific, which grew 9% over the year.

Roei Golan: 42% of the revenues came from Americas, and that grew 7%, while the remaining 12% came from Asia Pacific, and that grew double digits, 11% year-over-year. Looking into our PNL in this quarter, so our gross profit increased from $623 million to $660 million, representing a gross margin of 89%. Our operating expenses increased by 13% to $358 million. On constant currency basis, our Opex increased by 11%. The increase is primarily as a result of increase in our workforce and investment in sales and marketing and channel programs. Our non-GAAP operating income continues to be strong at $302 million or 41% operating margin.

So actually, so 46% of our Revenue came from in grew by 5% 42% of the revenues came from America and that grew 7%. While the remaining 12% came from Asia Pacific and that grew double digit 11% overview.

Looking into our p&l in this quarter. So our goals profit increased from 623 million to 660 million dollars. Representing a gross margin of 89%.

our operating expenses increased by 13% to 300 and 358 million on constant currency basis, our office, increased by 11%,

The increase is primarily as a result of increasing our workforce and investment in sales and marketing and channel programs.

Roei Golan: Our non-GAAP net income increased by 21%, mainly as a result of the one-time tax benefit that I mentioned in the beginning of this deck. In connection with reduction in tax rate and obviously, tax results. The non-GAAP EPS grew by 26%, while the one-time benefit contributed approximately $0.52. Our GAAP net income reached $305 million, increase of 18% year-over-year, while our GAAP EPS was $2.81 and grew by 22% year-over-year. When I'm looking on the full year, our gross profit increased to $2.4 billion, and that represent a gross margin of 88%.

Our non Gap, operating income continues to be strong, as 302 million, or 41% operating margin. Our non-gaap net income, increased by 21%, mainly, as a result of the 1-time tax benefit that I I mentioned in the beginning of this deck in connection with deduction in tax rate and update the tax results.

the non-gaap EPS grew by 26% while the 1 time benefit contributed approximately 52 cents,

Our government income reached 305 million increase of 18% year-over-year. While our gaap EPS was 2.81 cents in grew by 22% year-over-year.

Roei Golan: When I'm looking ahead on, in, into 2026, we all know the memory price increase, the recent memory price increase that we have in the market over the past few months, and there it is expected to have an impact also on our gross margin in 2026. We estimated this impact to be approximately 1 point for the full year, 1 point on our gross margin for the full year, with most of the impact expected in the second half of 2026, as we have enough inventory, a sufficient inventory to support the needs for the first half of 2026. We will continue to closely monitor supply and pricing dynamics into the second half of the year and adjust our procurement strategy as needed, including potential product price increase.

So our gospel with increased to 2.4 billion and that's represent a ghost margin of 88%. When I'm looking ahead on in into 2026, we all know, the memory price increase in memory pricing is that we have in the market H and over the past few months and there it is expected to have an impact. Also on our boss margin in 2026, we estimated this impact to be approximately 1 point for the full year. 1.2 now, go margin for the full year with most of the impact expected in the second half of 2026. As we have enough inventory, a sufficient inventory to support the needs for the first half of 2026.

We will continue to closely monitor Supply and pricing Dynamics into the second half of this year and adjust our procurement strategies as needed, including potential product pricing increase.

Roei Golan: Our operating expenses increased by 10%, mainly as a result of our continued investment in our workforce organically, and also the impact related to the Cyberint acquisition that we closed back in September 2024, and the acquisitions that we've done during 2025 of Veriti and Lakera. Our non-GAAP operating income was $1.13 billion, or 41% operating margin. Looking ahead to 2026, we continue to actively hedge our foreign exchange exposure. However, not all currencies are fully covered. As we disclosed in the previous earnings calls, if current exchange levels persist, we anticipate an additional headwind of approximately 1 to 1.5 points on our operating margin for next year. Our financial income increased to $114 million in 2025, as we kept reinvested our cash in IRAs compared to 2024.

Our operating expenses increase by 10% mainly as a result of our continued investment in our Workforce organically and also the impact related to cyber Inquisition that we closed back in 20, in September 2024 and the acquisition that we've done during 2025 of v and L.

Our non-gaap operating income was 1 billion or 41% operating margin.

Looking at to 2026, we continue to actively Edge our foreign exchange exposure. However not all currency are fully covered as we disclosed in the previous earning calls if current exchanges levels. Persist, we anticipate an additional Edwin of approximately 1 to 1 and a half points on our operating margin for next year.

Roei Golan: In December 2025, as Nadav mentioned, we completed a $2 billion convertible notes offering. As a result, we expect higher financial income in 2026, that's estimated to be between 40 to 45 -- the financial income in 2026 is expected to be 40 to 40 million dollar per quarter. In 2025, we had income tax benefit of $79 million, which included the benefit of approximately $209 million or $1.90 non-GAAP EPS, in connection with updating our tax results due to the tax assessment, and also the reduction of the tax rate, for prior years....

Our financial income increased to 114 million in 2025. As we get reinvested, our cash in IRAs compared to 2024 in the 72025. As NAD mentioned, we completed the 2 billion dollar convertible notes offering as a result, we expect a higher Financial income in 2026 that estimated to be between 40, to 40. The financial income in 2026 is expected to be 40 to 40 million per quarter.

Roei Golan: As for 2026 taxes, it is important to update that in December 2025, Israel enacted the OECD Pillar Two framework, established a 15% global minimum effective tax rate for large multinational groups, effective for taxes beginning in 2026. As a result, we currently estimated our tax rate for 2026 will be between 16% to 17%. In parallel, a complementary Israeli government R&D incentive program was initially approved in January 2026. The outcome from this program that expected to be effective from January 2026 can be approximately $50 million benefit into our operating income. This program is expected to be finally approved by the end of Q1 2026.

In 2025, we had income tax benefits of $79 million, which included the benefit of approximately $29 million, or $1 in 1990, set non-GAAP EPS, in connection with updating our taxes due to the tax settlement, also, and also the reduction of the tax rate for prior ills.

As for 2026 taxes, it is imposed to update that in December, 2025 Israeli, enacted, the oecd pillar 2 framework established, a 15%, global global minimum effective tax rate for large multinational, groups effective for tax beginning in 2026.

As a result, we currently estimate that. Our tax rate for 2026 will be between 16 to 17%.

Roei Golan: Our outlook reflects this development as part of our forward-looking statements, including the anticipated certification of the R&D program, incentive program, and the potential financial in impact of related grants on our future financial results. One moment. Moving into our cash flow and our cash position. Our cash balance as of the end of the quarter was $4.3 billion. As a reminder, on December 2025, we also announced the $2 billion, and we received $1.8 billion net proceeds, net of issuance costs and third-party purchase of the capital. Also, during October 2025, we acquired Lakera for approximately $190 million of net cash consideration.

In parallel a comp a complimentary Israeli government R&D. Incentive program was initially approved in January 2026. The outcome from this program that expected to be effective from January. 2026 can be approximately 50 million dollar benefit in into our operating income. This program is expected to be finally approved by the, by the end of q1 2026. Our Outlook reflects this development, as part of our forward-looking statements, including the anticipated notification of the R&D program incentive program and the potential Financial in in impact of related. Grants on our future Financial results.

1 moment.

Roei Golan: Our operating cash flow was very strong this quarter, with $310 million, 24% growth year-over-year, and representing 42% of our revenues. In Q4, we also continued our buyback program and purchased 2.2 million shares for $425 million, at an average price of $193 per share. On an annual perspective, our operating cash flow grew by 17% to $1,234 million. While important to note that this includes $66 million tax payment, one-time tax payment that's related to our tax settlement that we signed in Q3, while our balance sheet hedge transaction resulted from the other end, the benefit of $51 million in 2025.

I'll catch balances as of the end of the quarter was 4.3 billion as a reminder on December 2025. We, we also announced the 2 billion and we received 1.8 billion, net proceed, net of issuance code. And, and the touches of the cap call. Also, during October 2025, we, we acquired laera for approximately 190 million dollar of net cash consideration. Our operating cash flow was very strong, this quarter with 310 million 24% growth in a presenting 42% of our revenues in Q4. We also continued our buyback program and purchased 2.2 million shares for 425 million at an average price of 193 billion.

On an annual prospective. Our operating cash flow grew by 17% to 1 billion 234 million while important to note that this include 66 million, tax payment, 1-time tax payment that related to our tax settlement that we signed in Q3,

Roei Golan: Also, as a reminder, during 2025, we completed the $160 million payment for the land purchase associated with the new Check Point campus that we are building here in Tel Aviv. We do not expect any significant additional payment in connection with this new campus in 2026. So to summarize, our revenues were above the midpoint of our projection, and the EPS exceeded our projection. We do see continuous strong demand for emerging technologies, if it's email, if it's SaaS, SASE, and we had another quarter of strong operating cash flow and strong profitability. Now moving to the business outlook, to our projection for Q1 and for the full year. So for Q1 and the full year, I'll start with the revenues.

While our balance sheet edged transaction, resulted from the other and the benefit of 51 million in 2025.

Also, as a reminder during 2025, we completed the 160 million payment for the land purchase associated with the new checkpoint campus, that we are building here in Tel Aviv. We do not expect any significant additional payment in connection with this new campus in 2026,

So, to summarize, our revenues were above the midpoint of our projection and the APS exceeded our projection. We do see continued strong demand for Imaging Technologies, whether it's email, whether it's system SASE, and we had another quarter and another strong operating cash flow and some stability.

Now, moving to the business, Outlook to our projection, for q1, and for the full year.

Roei Golan: So first, our revenues is expected to be between $655 million to $685 million in Q1 2026. I'll remind you the, the short-term headwind that we have only specifically in Q1 in terms of product revenues. For the full year, we expect, our revenues to be between $2.83 billion to $2.95 billion, between 4% to 8%, the while the midpoint is 6%. This time, we also gonna give you the subscription revenue guidance, which expected to to continue to accelerate. As for Q1, we do expect it to be between $318 million and $328 million, while as for the full year, we expect it to be between 10% and 14%, which means that the midpoint expect to be 12% growth. Our non-GAAP EPS, including it takes into effect, the expected grants, the R&D incentive program, that needs to be, completed by the end of Q1.

So, for q1 and the full year, I'll start with the revenues. So first, our revenues is expected to be between 65, say, 655 million to 685 million in q1 2026. I remind you the the short-term Edwin that we have only specifically in q1 in terms of product revenues.

Roei Golan: As for Q1, we do expect it to be between $318 million and $328 million, while as for the full year, we expect it to be between 10% and 14%, which means that the midpoint expect to be 12% growth. Our non-GAAP EPS, including it takes into effect, the expected grants, the R&D incentive program, that needs to be, completed by the end of Q1. This take into account that the EPS is between $2.35 and $2.45, while the full year, EPS, non-GAAP EPS, expect to be between $10.05 and $10.85. GAAP EPS for Q1 expect to be $0.64 less, while for the full year, expect to be $2.58 less.

Roei Golan: This take into account that the EPS is between $2.35 and $2.45, while the full year, EPS, non-GAAP EPS, expect to be between $10.05 and $10.85. GAAP EPS for Q1 expect to be $0.64 less, while for the full year, expect to be $2.58 less. Also, we're gonna share with you guidance, projection, so for adjusted free cash flow for Q1 and for the full year. This is the operating cash flow minus CapEx, minus any acquisition-related costs. In Q1, we expect to have a strong adjusted free cash flow between $420 million and $460 million, which represents 66% of our midpoint, the expected revenues in Q1. While for the full year, we expect it to be 42% of the revenues in the midpoint, which is $1.15 billion to $1.25 billion. That's it. The floor is yours.

Or for the full year. We expect our revenues to be between 2 billion. 830 million to 2 billion, 950 million between 4 to 8 percent. While the midpoint is 6% this time, we also going to give you 6 the subscription Revenue guidance, which expected to to accelerate to continue to accelerate s for q1. We do expect it to be between 300 and 18 million to 328 million. While, as for the full year, we expect it to be between 10 to 14% which means that the midpoint expect to be 12% growth and our non the PPS, including a text into effect, the expected, grants the R&D incentive program that needs to be a completed by the end of q1.

Roei Golan: Also, we're gonna share with you guidance, projection, so for adjusted free cash flow for Q1 and for the full year. This is the operating cash flow minus CapEx, minus any acquisition-related costs. In Q1, we expect to have a strong adjusted free cash flow between $420 million and $460 million, which represents 66% of our midpoint, the expected revenues in Q1. While for the full year, we expect it to be 42% of the revenues in the midpoint, which is $1.15 billion to $1.25 billion. That's it. The floor is yours.

This take into account that the EPS is between 2 dollars and 35 cents to 2.45 cents. While the full year, EPS non-gaap EPS expect to be between $10 and 5 cents and $10.85 gaps for q1 expect to be 64 cents, less while for the fullest expect to be $2.58 cents, less.

Also, we're going to we're going to share with you guys a projection. So if for for for free, adjusted free cash flow for q1. And for the full year, this is the operating cash flow, minus capex, minus any acquisition related cost and we are in q1, we expect to have a strong free, adjusted free cash flow between 400 and 220 to 460 million which represents 66% of our midpoint, the expected revenues in q1. And while in, for the full year, we expect it to be 42% of the revenues in the midpoint which is

1 billion 150 million, to 1 billion to 150 million. And

that's it. And we are keep the floor is yours.

Kip E. Meintzer: All right. So for Q&A, today, first up, we're gonna have Adam Tindle from Raymond James.

Moderator: All right. So for Q&A, today, first up, we're gonna have Adam Tindle from Raymond James.

All right. So for Q and A, um, today, first up, we're going to have Adam Tindle.

Uh, from Raymond James.

Roei Golan: All right. Thanks. Can you hear me?

Adam Tindle: All right. Thanks. Can you hear me?

All right. Thanks, can you hear me?

Kip E. Meintzer: Yes.

Moderator: Yes.

Roei Golan: Yes.

Nadav Zafrir: Yes.

Kip E. Meintzer: We'll be followed by Shaul Eyal from TD Cowen.

Moderator: We'll be followed by Shaul Eyal from TD Cowen.

Adam Tindle: Thanks, Kip. Good morning. Nadav, I wanted to ask, AI security is obviously a clear focus in your script today, and it sounds like you're investing both organically and inorganically with some of the acquisitions here. I wonder, and this is sort of a high-level strategic question for you, the heart of it is to kind of compare and contrast your view of AI security versus how cloud security played out, and with the context being that you made the very smart decision in cloud security to choose to partner with Wiz, essentially exiting Check Point's efforts in organically as the ROI wasn't there. Again, in hindsight, very smart, given the cloud security market has been problematic for your competitors, bad pricing, bad profitability there. And I see some similarities in cloud security and AI security.

Yes, yes. And we'll be followed by Shahul from Kitty Cohen.

Adam Tindle: Again, in hindsight, very smart, given the cloud security market has been problematic for your competitors, bad pricing, bad profitability there. And I see some similarities in cloud security and AI security. So I guess, what's different about AI security that got you more comfortable to invest here versus the decision to invest in cloud? And how big do you think this could be for Check Point over time? Thanks.

Adam Tindle: So I guess, what's different about AI security that got you more comfortable to invest here versus the decision to invest in cloud? And how big do you think this could be for Check Point over time? Thanks.

Roi wasn't there. Uh, again in hindsight, very smart, given the cloud security Market has been problematic for your competitors bad pricing, bad profitability there. Um, and I see some similarities in Cloud security and AI security. So I guess what's different about AI security that got you more comfortable to invest here versus the decision to invest, in cloud. And how big do you think this could be for, for checkpoint? Over time? Thanks.

Nadav Zafrir: ... Yeah, no, great question. And, you know, the sort of analogy is in place. However, in my opinion, the AI transformation is both more foundational. It's not shift and lift, your activities from on-prem to the cloud, but rather it's a real shift in the way you use technology, do business, employ people, et cetera. And the second change, in my humble opinion, is that it's. We're seeing it already, but I expect this to accelerate, so it's happening much faster. So in my opinion, you know, you can look at the cloud analogy, but you need to have it as a reference for difference. The second thing I'll say is that here are two fundamental issues. Number one, attackers are using AI much faster than defenders.

Nadav Zafrir: This is just the nature of this, asymmetry between offense and defense, and in this learning competition, and how, unfortunately, for several reasons, you know, the, the attackers can adapt faster. And so what we're seeing is larger scale, more precision, and a real change in the nature of attacks, right? And so that's one angle that we need to look at. The other is... And that's sort of the nature of what we're seeing right now. Every organization on the planet is racing to adopt AI to stay relevant, and as they're doing that, they're sort of, creating a new attack surface. When you look at these two things separately, in my humble opinion, this is time to revalidate security altogether.

Yeah. Oh, great question. And and you know the the sort of the analogy is is in place. However, in my opinion, um, the AI transformation is both more foundational. It's not shift and lift, uh, your activities from on-prem to the cloud, but rather, it's a real shift in the way you, uh, use technology do business employee, people, Etc. And the second change in my humble opinion is that it's we're seeing it already, but I expect this to accelerate so it's happening, much faster. Um, so in my opinion, um, you know, you can look at the cloud analogy, but you need to have it as a reference for difference. The second thing I'll say is that here are 2 fundamental issues. Number 1 attackers are using AI much faster than Defenders. This is just the nature of this uh uh asymmetry between offense and defense and in this learning competition how

Well, unfortunately for several reasons, uh, you know, the the attackers can adapt faster. And so what we're seeing is

Larger scale, more precision, and a real change in the nature of attacks, right? And so,

Nadav Zafrir: We think we're really well positioned to lead the way to secure our customers' AI transformation based on the four pillars that we were talking about, based on the fact that we truly have the best prevention, proactive prevention security, which has always been important, but it's now becoming critical. And so building, we have decades of data, 100,000 customers, four pillars, a vision that I believe is very specific to secure AI transformation. This is a must for us. We're making acquisitions, we're building organically, and we really believe this is our time and our space to challenge the status quo.

That's 1 angle that we need to. Look at the other is and that's sort of the nature of what we're seeing right now. Every organization on the planet is racing to adopt AI to stay relevant and as they're doing that, they're sort of uh creating a new attack surface. When you look at these 2 things separately in my humble opinion, this is time to revalidate security altogether.

Um we think we're really well positioned uh to lead the way uh to secure our customers AI transformation. Based on the 4 that uh, we were talking about based on the fact that we truly have the best Prevention, Pro proactive, prevention security, which has always been important, but it's now becoming critical and so building

We have decades data. Uh 100,000 customers, 4 pillars a vision that I believe is very specific to secure AI transformation. This is a must for us. We're we're we're making Acquisitions, we're building organically. Uh and we really believe this is our uh time and our space to challenge the status quo.

Shaul Eyal: Thank you.

Adam Tindle: Thank you.

Thank you.

Kip E. Meintzer: Next up is Shaul Eyal, followed by Joseph Gallo of Jefferies.

Moderator: Next up is Shaul Eyal, followed by Joseph Gallo of Jefferies.

Next up is Shaul followed by Joseph Gallow of Jeff.

Shaul Eyal: Thank you. Hi, good afternoon, everybody. Apologies for some background noise. Question for Roei. How should we be thinking about ASP hikes, from a linearity perspective? Are we seeing them coming in the first half of the year? Are we seeing them coming in the second half of the year? Can you just help us out a little bit? Thank you.

Thank you. Um, hi. Good afternoon everybody. Um,

Apologies for some background noise. Um, question for rho e. Um, how should we be thinking about the ASP hikes? Um, from a linearity perspective. Um, are we seeing them coming in the first half of the year? Are we seeing them coming in the second half of the year? Can you just help us out a little bit? Thank you.

Roei Golan: Yeah. So we did several price increase. One of them was, one of them was in July, only for the subscription, the firewall subscription, and all in, all in, generally, we've done it for all the firewalls, which including client, hardware, subscription, and support. In general, usually it takes to see the ASP going up. It takes usually it's a quarter. I mean, if I'm looking at about, for example, appliances, we talked about the appliances. So we, of course, it's effective from generally Q1, but from revenue perspective, that's something that usually we see the main impact coming from the quarter afterwards, because certain revenues that are recognizing in Q1 are coming from bookings that came from prior Q4 billings. And also, we are expecting quotes that being delivered to our customers before the effective price increase.

Yes. So we did a several price increase 1 of them was

1 of them was in July, only for the subscription, the 5 World subscription and all in all in, in in, in general, we've done it for all the firewalls, which including the client Hardware subscription and support in general. Usually, you take to see the ASP going up. It takes usually it's a quarter. I mean, if I'm looking at about, for example, appliances, we talked about the appliances. So we of course, it's effective from generally 1, but

Roei Golan: And also, we are expecting quotes that being delivered to our customers before the effective price increase. So most of the effects usually come in. We should expect to see from Q2 this year.

Roei Golan: So most of the effects usually come in. We should expect to see from Q2 this year.

From revenues perspective. That's something that usually we see the main impact coming from the quarter afterwards because certain certain revenues that are recognizing in. Q1 are coming from booking that came from prior prior periods and also we have we are expecting quote that being delivered to our customers before the the effective price increase.

so, most of the effects usually come in in should should we should expect to see from Q2 DC,

Kip E. Meintzer: All right, next up is Brian Essex, follow- or Robbie Owens, followed by Brian Essex, pardon me.

Moderator: All right, next up is Brian Essex, follow- or Robbie Owens, followed by Brian Essex, pardon me.

All right. Next up is Brian Essex.

Joseph Gallo: Am I in here first, Kip, or?

Robbie Owens: Am I in here first, Kip, or?

Kip E. Meintzer: You are in first, Joseph. I'm sorry.

Moderator: You are in first, Joseph. I'm sorry.

Joseph Gallo: I appreciate that. So hey, guys, thanks for the question. It was great to see the strength in subscription, but I just wanted to ask on product in Q4. I, I know there was some mix shifts and reallocation in large deals, but is there anything else we should be aware of? And then I believe your product guide for 2026 implies approximately flat. Just any comments on remaining refresh cycle available, or have you seen customers change their buying behaviors ahead of these, you know, incoming price increases? Thanks.

Roei Golan: Yeah. So, I think Q4 were the good quarter for product. Again, was less good than what we've seen in the first three quarters, but still, we did see a good, good quarter for the demand for our product. If I'm looking ahead for 2026, I think we still have we see good finance for hardware, specifically in the second half of the year. I do have to say that in the you, you are right, that when you're talking when you're taking into consideration what I get for subscriptions, so product is around flat to low single digits. In our guidance, we took more prudent approach, mainly because not we don't see the finance.

Shift and reallocation in large deals, but is there anything else we should be aware of? And then I believe your product guide for '26 implies approximately flat. Just any comments on remaining refresh cycle available, or have you seen customers change their buying behaviors ahead of these incoming price increases? Thanks.

Yeah. So so I think you forward a good quarter of for product again, was less good than what we've seen in the first 3 quarters. But still we did see a good good quarter for a plat for the demand for our product.

Roei Golan: Mainly because we are taking a more prudent approach of what's going on on the macro with the memory shortages, that, you know, we see everywhere: price increase, not specifically only on memories, by the way, on all raw materials. And that might affect some customer behavior that is postponing some CapEx projects. So we took it into account, but definitely, again, we want to be more than that. We want to be higher than that. I think we continue to still refresh, and but again, we cannot ignore what's going on in the market with the memory situation.

Joseph Gallo: Thank you.

If I'm looking at for 2026, uh, 2026, I think we still have we see good final for outwell specifically and the second half of the deal. I do have to say that in the you you are right that when you're talking into when you're taking into consideration what I get for subscriptions. So product is around flat to low single digit. In our guidance, we took more important approach mainly because not, we don't see the funnel mainly because we are taking more important approach of what's going on on the market with the memory shortages that, you know, we see everywhere price increase not specifically only on memory by the way and all raw materials and that's might affect some customer behavior that a postponing, some capex project. So we took it into account but definitely again. Uh, we we we want to be more than that. We want to be higher than that. I think we continue to still refresh and but again, we cannot ignore what's going on in the market with the with the memory situation.

Kip E. Meintzer: All right, next up is Todd Weller or Brian Essex, followed by Todd Weller.... Sorry about that, Brian.

Moderator: All right, next up is Todd Weller or Brian Essex, followed by Todd Weller.... Sorry about that, Brian.

Thank you.

Brian Essex: That's all right. And, J-Joy, I wasn't gonna let him pass you by, so, thanks, Kip. Appreciate, appreciate you taking the question. Really another question on guidance. Would love to understand maybe the puts and takes embedded in operating margins. What if we were to back into operating margins, what are the implicit margins in your guidance, and how do you think about spending? And then maybe one for Nadav, basically back on that, the dynamics around the hardware price increases, are you hearing any shift in spending intentions from your customers, anticipating maybe firewall and server prices accelerating on the back of the memory pricing? So, you know, one for each of you. Thank you.

All right next up is Todd Weller or Brian Essex, followed by Todd Weller. Sorry about that Brian. That's not all right, and Joe I wasn't going to let him pass you by. So uh thanks Kay appreciate. Appreciate you taking the question. Um really another question on guidance would would love to understand maybe the puts and takes embedded in operating margins. What if, if we were to back into operating margins, what are the implicit margins in your guidance in in how do you think about spending and then maybe 1 for nadav basically back on that the the Dynamics around the hardware price increases are you hearing,

Roei Golan: So the margin that we took into account in our guide, it's between 39% to 40%. So that's the operating margin. We're taking into account all the headwinds that we get from the memories, from the FICs, on the other end, the expected grants from the government, so all of that was taken into account, that puts you in the 39% to 40%.

Any shift in spending intentions from your customers anticipating, maybe firewall and server prices accelerating on the back of the memory pricing. So, you know, 1 for each of you. Thank you.

So, the, the margin that day we took into account in, in our, in our guide, its between 39, to 40%. So, that's the operating margin. Uh, we're taking into account all the adins that we get from the memo is from the ethics on the other end.

The expected grants from the government. So, all of that was taken into account and that puts you in the 39 to 40%

Brian Essex: Beautiful.

Roei Golan: And Nadav, you want to-

Nadav Zafrir: Yeah, look, with regard to the hardware, as Huri said, we don't see any change as of now. As Huri said, we do need to be prudent looking into what's happening this year. I actually think for us, this could be a competitive advantage. You know, we have the supply for the first two quarters. We're gonna figure out how to take advantage of the situation. I don't see this as being a huge headwind, except for what Huri said about the one point in the margins that we just spoke about. Obviously, very encouraged by the high growth in the subscription rate that we're seeing and projecting.

Beautiful and adapt. Yeah, look with regard to the hardware as where you said we don't see any change as of now. Um, as where you said we do need to be prudent looking into what's happening this year. I actually think for us, this could be a competitive Advantage. Uh, um, you know, we we, we have, uh, we have the supply for the

Brian Essex: Those shift towards SASE or other types of architecture.

Nadav Zafrir: Exactly, exactly. Our SaaS products are becoming our SaaS products and subscription is becoming a much bigger part of our overall cake, and we intend to continue growing that, again, across the different pillars. So in Hybrid Mesh, it's SASE. Workspace is completely SASE, so is Exposure Management. And this year, for the first time, a true, you know, a North Star around security for AI, around the AI security pillar.

Brian Essex: Great. Thank you very much.

First 2 quarters, we're going to figure out how to take advantage of the situation. I don't see this as being a huge headwind except for what breed said about the 1 point in the, in the margins that, uh, uh, we just spoke about, obviously, very encouraged by the high growth. In the subscription rate that we're seeing and projecting, there's no shift towards sassy or other types of architecture. Exactly exactly. Our SAS products are becoming a, our, our SAS products, and subscription is becoming a much bigger part of our overall cake. And we intend to continue growing that. Um, again, again, again across the different pillars. So in hybrid mesh, it's sassy workspace is completely sassy. So is exposure management. And this year, for the first time, a true, uh, uh, you know, a Northstar around security for AI around the AI security pillar. Great, thank you very much.

Kip E. Meintzer: All right, next up is Todd Weller, followed by Junaid Siddiqui.

Moderator: All right, next up is Todd Weller, followed by Junaid Siddiqui.

Todd Weller: Thanks, thanks for the question. Nadav, you outlined all the changes that were implemented in 2025. What would be the two or three specific ones you think will most positively impact the growth trajectory in 2026, and when do you expect to see those start kinda showing up in the numbers?

All right. Next up is Todd Weller. Followed by janod situ

Thanks. Uh, thanks for the question. Uh, nadav, you outlined all the changes that were implemented in 2025, what would be the 2 or 3 specific ones? You think will most possibly impact the growth trajectory in 26? And when you expect to see those start kind of showing up in the numbers,

Nadav Zafrir: Yeah, look, I think that, we laid the foundations, right? The most importantly is the C-suite and the new leadership we had, and the way we are reorganizing or refocusing our go-to-market. That's number one. And the second thing that I'm very excited about is going to the market with these four pillars. Each one of them is a platform in itself. Some of our customers are going to choose to use one pillar as their platform, let's say, for Workspace; others are still using the Hybrid Mesh pillar, and some are using everything, and it's an open garden, so we can play with the others. So if you ask me, these are the two main things: number one is the four pillar approach, number two is the leadership and the C-suite change and the refocusing of the go-to-market.

Nadav Zafrir: So if you ask me, these are the two main things: number one is the four pillar approach, number two is the leadership and the C-suite change and the refocusing of the go-to-market. Above everything else, I am, I am a true believer that we need to revalidate security. Attackers are moving at an extreme speed. I think we have the foundations, but as you can see, we're also making the acquisitions. We have the right design partnerships. We wanna do this as an ecosystem play. So the third thing, of course, is security for AI. The race is on, and we're in it.

Nadav Zafrir: Above everything else, I am, I am a true believer that we need to revalidate security. Attackers are moving at an extreme speed. I think we have the foundations, but as you can see, we're also making the acquisitions. We have the right design partnerships. We wanna do this as an ecosystem play. So the third thing, of course, is security for AI. The race is on, and we're in it.

And above everything else.

I am, I am a true believer that we need to revalidate security. Uh, attackers are moving at an extreme speed. I think we have the foundations, but as you can see, we're also making the Acquisitions, we have the right design Partnerships, we want to do this as an ecosystem play. So, the third thing, of course, is security for AI. The race is on, um, and we're in it.

Todd Weller: Thank you.

Thank you.

Kip E. Meintzer: Thanks, Todd. Next up is Junaid, followed by Keith Bachman from BMO.

Moderator: Thanks, Todd. Next up is Junaid, followed by Keith Bachman from BMO.

Thanks Todd.

Next up is janod followed by Keith Bachmann from BMO.

Junaid Siddiqui: Great, thank you for taking my question. I just wanted to talk about the progress on the SASE front. You know, you mentioned ARR grew around 40%. In the past, you've talked about making it much more enterprise-ready, moving to a unified policy. How's that tracking? And is the focus right now mostly on upselling the existing customers?

Uh, great, thank you for taking my question. Um, I just, uh, wanted to talk about the progress on the SASE front. Uh, you know, you mentioned it grew around 40%. Uh, in the past, you’ve talked about, uh, making it much more enterprise-ready, moving to a unified policy, um, uh, how’s that tracking, and is the focus right now mostly on upselling the existing customers?

Nadav Zafrir: Yeah, so great question. As you can see, the SASE now is a part of our Hybrid Mesh pillar. We're maturing the product. We made significant investments organically in 2025, and the product is maturing, and we're integrating it as a part of the Hybrid Mesh, the Hybrid Mesh pillar and platform, like you said, with our unified management. Now, in terms of our sales motion, we are integrating the what used to be the, what we used to call the Rocket; we're now integrating it, this into the Hybrid Mesh pillar. We're also putting together the sales overlay of our CloudGuard, of our CloudGuard network security with SASE, to better integrate that into the overall motion.

Yeah, so great question. As you can see, the sassy now is a part of our Hardware mesh pillar. We're maturing the product we made, uh, um, significant Investments, uh, organically, uh, in 2025, and the product is maturing, and we're integrating it as a part of the hybrid, mesh up at the Hybrid mesh pillar and platform, like you said, with our unified management. Now, in terms of our sales motion, uh, we are integrating the, what, what used to be the what we used to call the rocket. We're now integrating

Nadav Zafrir: We're also putting together the sales overlay of our CloudGuard, of our CloudGuard network security with SASE, to better integrate that into the overall motion. You're right that I would say that 2/3 is upsell to existing customers, but that's not the only one. We're also seeing new customers that are actually buying our SASE, and we hope to actually move them to our firewall business to create the full capability of a Hybrid Mesh pillar.

Reading it, this into the hybrid mesh pillar. We're also putting together the sales overlay of our, uh, CloudGuard—of our CloudGuard network security with SASE, um, to better integrate that into the overall, uh, motion.

Nadav Zafrir: You're right that I would say that 2/3 is upsell to existing customers, but that's not the only one. We're also seeing new customers that are actually buying our SASE, and we hope to actually move them to our firewall business to create the full capability of a Hybrid Mesh pillar.

You're right. That's uh, I would say that 2/3. Uh, uh, is upsell to existing customers, but that's not the only 1. We're also seeing new customers that are actually uh, buying our sassy. And we hope to actually move them to our uh uh through our firewall business, to create the uh, the full capability of a hybrid mesh filler.

Junaid Siddiqui: Thank you.

Thank you.

Kip E. Meintzer: All right, next up is Keith Bachman, followed by Shrenik Kothari of Baird.

Moderator: All right, next up is Keith Bachman, followed by Shrenik Kothari of Baird.

All right. Next up is Keith Bachmann followed by shrenik catharus of beard.

Keith Bachman: Thank you very much. Nadav, I wanna put this to you, and it sort of reflects incoming comments already this morning. Investors are looking for an acceleration of growth. You're basically guiding to 6%, ±, total revenue growth, which is consistent with what's happened the last two years. So while... subscription is improving, which is nice to see, it's nice to see. Total growth isn't improving, right? So how do you sort of respond to that, because you're asking investors to be patient about this notion of acceleration. So how do you respond to that comment? And then consistent with that, Roy, any comments you want us to think about for total billings growth in light of the midpoint of rev growth? Thank you.

Thank you very much. And Dov I want to put this to you, uh, and it's sort of reflects incoming comments, uh, already this morning. Um,

Joshua Tilton: ... subscription is improving, which is nice to see, it's nice to see. Total growth isn't improving, right? So how do you sort of respond to that, because you're asking investors to be patient about this notion of acceleration. So how do you respond to that comment? And then consistent with that, Roy, any comments you want us to think about for total billings growth in light of the midpoint of rev growth? Thank you.

You, you've investors are looking for an acceleration or growth. You're basically guiding to 6% plus or minus, uh, total revenue growth, which is consistent with what's happened, the last 2 years. So while subscription is improving, which is nice to see it, it's nice to see total, growth isn't improving.

Right. So, how do you sort of respond to—because you're asking investors to be patient about this notion of acceleration. So, how do you respond to that comment? And then, consistent with that, really any comments you want us to think about for total billings growth in light of the midpoint of revenue growth? Thank you.

Nadav Zafrir: Yeah, sure. Thanks. Look, we laid the foundations, now it's all about execution. I think we have the four pillar approach, we have the foundations, we have the right people in place, we have the financial flexibility to make acquisitions. Now it's all about execution. And you're right, that it's not an overnight acceleration, but I think we're on the right trajectory. I think also, what we have in terms of product solutions around our superior ability to proactively prevent the acquisitions that we're making and the what we're building in the AI security, is putting us in the right trajectory, and now it's all about execution.

Yeah, sure. Thanks look, uh, we laid the foundations now, it's all about execution. Um, I think we have, uh, uh, we, we have the 4 Pillar approach. We have a foundations, we have the right people in place. We have the financial flexibility to make Acquisitions. Now, it's all about execution and you're right that it's not an overnight, uh, uh, acceleration. But I think we're on the right trajectory. I think also, uh, what we have in terms of product Solutions around our Superior ability to uh, uh, proactively prevent the Acquisitions that we're making in the uh what we're building in the AI security is putting us in the right trajectory, and now it's all about execution.

Roei Golan: As for the total billings, similar to the revenues, growth around high single digit, 6 to 7%, that's the expectation in order to achieve the midpoint.

and as for the total Billings similar to the revenues uh growth around, I single digit, uh 67% that's uh expectation in order to achieve the midpoint

Kip E. Meintzer: All right, next up is Shrenik Kothari, followed by Joshua Tilton from Wolfe Research.

Moderator: All right, next up is Shrenik Kothari, followed by Joshua Tilton from Wolfe Research.

All right. Next up is Shrenik Catharus, followed by Joshua Tilton from Wolfe Research.

Shrenik Kothari: Great. Thanks a lot for taking my question. So, Nadav, you just mentioned financial flexibility, ended Q4 with $4 billion in cash, and you have added $2 billion onward. Just in terms of so far, mentioned about favoring, you know, smaller AI native integrations and the announcements you made, just on the large scale M&A, right? Can you just talk to, as some of the other peers are kind of going after platform convergence waves, aggressively chasing through things. So what kind of sort of scale IP or a GenAI would actually justify a more transformative sort of AI M&A for you guys, if at all? Thanks.

Great. Uh thanks a lot for taking my question. So uh, you just mentioned, uh, Financial flexibility and at 4K with 4 billion cash and you have added 2 billion convert just in terms of so far. Mentioned about favoring, you know, smaller AI, native Integrations and, and the announcements you made.

Uh, just on on the large scale m&a, right? I just

can, can you just talk to uh as some of the other peers are

kind of,

LIP or our agency would actually justify more transformative.

So, AI driven bad for you guys. If at all thanks.

Nadav Zafrir: Yeah. So yeah, we have the flexibility and we have the vision, and now in each one of those pillars, we need to be very disciplined and identify the targets. They could be tuck-ins, they could be larger, but the ones that actually take us to be a podium player in each one of those pillars, specifically. So these targets needs to have the right technology, the right people, the right culture, and so that we can see that we can integrate it and move fast to create a real platform. In my humble opinion, you know, just buying more and more products and putting sort of a supermarket approach, is not what our customers are looking for when they, when they look through consolidation.

Nadav Zafrir: They look for a real integrated, for us, pillar, and each one of those pillar we're looking at is as its own platform play. So if you take exposure management, we are looking to create the number one exposure management system. Some of the acquisitions are smaller. We're also looking at larger ones all the time, but we're gonna be disciplined about it. And again, through them, looking at each pillar separately, we're not stopping. We're moving fast.

Yeah, so yeah, we have the flexibility and we have the vision and now in each 1 of those pillars we need to be very disciplined and identify the targets they could be tuck in. They could be larger but the ones that actually uh take us to be a Podium player in each 1 of those pillars uh specifically. So these targets needs to have the right technology, the right people the right culture and so that we can see that we can integrate it and move fast to create a real platform in my humble opinion, you know, just buy more and more products. Uh, uh, and putting sort of a supermarket approach is not what our customers are looking for. When they when they look through consolidation, they look for a real integrated. Uh, uh, uh, uh, for us pillar and each 1 of those pillars. We're looking at is as its own, uh, platform place. So if you take, uh, exposure management, uh, we are looking to create the number 1 exposure management system.

So, the Acquisitions are smaller. We also looking at larger ones all the time, but we're going to be disciplined about it. Uh, and again, through the looking at each pillar separately, uh, we're not stopping, we're moving fast.

Kip E. Meintzer: Shrenik, it looks like you just stopped playing a game when you came on. Good seeing you, Shrenik. Next up is Joshua Tilton, followed by Roger Boyd from UBS.

Moderator: Shrenik, it looks like you just stopped playing a game when you came on. Good seeing you, Shrenik. Next up is Joshua Tilton, followed by Roger Boyd from UBS.

It looks like you just stopped playing a game when you came on.

Good seeing you shrenik.

Next up is Joshua, Tilton followed by Roger Boyd from UBS.

Joshua Tilton: Thank you, guys. Maybe, Roei, for you, any way to think about how much the acquisitions that you announced today are contributing to the guidance that you provided for 2026? And maybe outside of pricing, could you just talk to why or what gives you conviction in the belief that guiding to, I think what you said, flat to low single digit growth for product is prudent from your perspective?

Roei Golan: Okay. So first, in terms of the acquisitions, we, of course, it's part of the guidance, and that says it should have an effect of approximately half a point into our margin, because it's mainly right now in 2026, we expect it to have mainly, mainly cost, mainly dilution to our margin. That's approximately half a point to the operating margin. As for the pricing and the product, so I think again, I'm looking at when we are-- of course, we are working on the guidance and of course working for our plan of 2026. We're looking on the final, we are looking on the potential. We're looking, of course, on the, in pricing calls that we've done in January first.

Thank you guys, uh, maybe Roi for you any way to think about, uh, how much the acquisition that you announced today or contributing to the guidance, uh, that you provided for 2026 and maybe outside of pricing, could you just talk to why? Or what gives you conviction in the belief that guiding to? I think what you said flat to low single digit growth for product. Uh, is prudent from your perspective.

Okay, so first the in terms of the Acquisitions when it's of course it's part of the guidance and that's have it should have an effect of approximately after Point uh, into our margin. Because it's mainly right now in 2026, we expect it to have many

many costs many dilution, as to our margin that approximately as a point to the operating margin and

Roei Golan: And I think that again, we can do, we should - I mean, we need to continue the stronger demand that we've seen in 2025. We see good funnel also for R&D, mainly in the second half of the year, also in the first half, but mainly in second half of the year. And I think that definitely also the price increase and the effect that we've seen, that the discounts this year will actually even improve compared to last year, in 2025 compared to 2024. So if we manage to continue that and maintain the discounts, we also can benefit from this price increase. I do have to say, it's important to say we didn't take into account in our guidance any additional price increase.

As for the pricing and the products, I think. Again, I'm looking, I'm, when we are, of course, we are working on the guidance, on working for our planet 2026. We're looking on the final, we are looking on the potential, we're looking, of course, on the in pricing that we've done in generally first. And, and I think that again, we can do, uh we should I mean we we need to continue the this the stronger demand that we've seen in 2025. We see good fun and also for all many

Roei Golan: Because of the memory shortages, there might, of course, we might consider additional pricing during the year, but that was not a factor in the guidance right now.

In the second half of the Year. Also, in the first half at million second half of the year. And I think they definitely also the pricing is and the fact that we've seen the the discounts this year. Well actually even improved compared to last year in 2025 compared to 2024. So if if we manage to to continue that and maintain the discounts, we will also can um can benefit from this price increase. I do have to say, it's important to say, we didn't take into account in our guidance, any additional price increase because of the memory shortages. The might, of course, we might consider additional pricing is during the year. But that was not a factor in the guidance right now.

Joshua Tilton: And just to be clear, that half a point is in the 39 to 40% margin.

Roei Golan: Yes, of course, of course.

Joshua Tilton: -already.

Roei Golan: Part of the guidance that we've provided you. Yeah.

And just to be clear that half a point is in the 39 to 40% margin. Yes, of course, it's already out of the guidance that we provided. Yeah.

Joshua Tilton: Any way to think about the top line contribution from the acquisition?

Roei Golan: Minimal. Minimal to see, I would say, few millions or even a few millions of dollars. Yeah.

And any way to think about the Top Line contribution from the acquisitions.

minimum minimum to the, I would say,

Few million. So even a few millions of dollars, yeah.

Joshua Tilton: Super helpful. Thank you, guys.

Kip E. Meintzer: All right, next up is Roger Boyd from UBS, followed by Peter Levine from Evercore.

Moderator: All right, next up is Roger Boyd from UBS, followed by Peter Levine from Evercore.

Super helpful. Thank you guys.

Roger Boyd: Awesome. Thanks, Kip. Nadav, I wanted to hit on Rotate. They have a lot on their platform. So I guess in addition to the MSP enablement tools that you talked about and some of the exposure management technology, how much interest is there in the rest of their portfolio, which I think includes some native technology for detection across endpoint and some other attack surfaces? And when you think about MSPs in general, can you just talk about the what percent of revenue they represent today and how you see that evolving? How important is that in terms of your general strategy this year? Thanks.

All right, next up is Roger Boyd from UBS followed by Peter LaVine from evercore.

Awesome. Thanks good. No, no. I wanted to hit on on rotate. Um, they have a lot on their platform. So I guess in addition to the MSP enablement tools that you talked about, and some of the exposure management technology. How much interest is there in in the rest of their portfolio, which I think includes some native technology for detection across endpoint and some other attack services. And and when you think about msps in general, can you just talk

Talk about that. What what? What percent of Revenue they represent today and how you see that evolving? How important is that in terms of your your channel strategy this year? Thanks.

Nadav Zafrir: Yeah, thanks. So, today, I think it's not only still relatively small, but I think it's a high potential growth for us in 2026 and beyond. The MSP, we're going to consolidate everything under a workspace, under Gil Friedrich. And the Rotate technology and the folks that are coming with it are going to enable us to actually streamline everything to the MSPs, and that's where the opportunity is. And you're right, it's not- it's email, it's endpoint, it's browser, it's SASE, all put together for the smaller customers working with our partners and the MSPs. And so this acquisition is will allow us to accelerate, to move faster into a consolidated, unified ability to work with those MSPs.

Yeah, thanks. So um

today, I think it's

Uh, um, it's sassy, uh, all put together for the smaller customers working with our partners and the msps. And so this acquisition is uh, uh, will allow us to accelerate to move faster into a Consolidated, unified ability to work with those msps.

Kip E. Meintzer: All right. Thanks, Roger. Next up is Peter Levine with Evercore, followed by Saket Kalia from Barclays.

Moderator: All right. Thanks, Roger. Next up is Peter Levine with Evercore, followed by Saket Kalia from Barclays.

All right. Thanks Roger.

Peter Levine: Great. Thanks, guys. I, Nadav, I mean, what's changing customer demand that makes kind of exposure management more of a priority today? You've touched upon it on your call and, you know, in your, in your prepared remarks, but, you know, are customers explicitly asking for, like, a united, you know, exposure, visibility across network, cloud, identity, whatever it is? And then maybe just, Roei, help us understand, like, how meaningful could this category be over the next, call it, two or three years in terms of revenue contribution?

Next up is Peter LaVine with evercore, followed by sacket Kalia from Barkley's.

Nadav Zafrir: Yeah. So first, I can't resist to answer Roei's question. It's meaningful. It, it's not huge right now, but we see great potential in it. When I look at this, you know, I come from the trenches, ultimately. When I look at this, as a practitioner, you gotta have this situational awareness. And so, yes, we're seeing more and more demand, and we're seeing it going upstream as our capabilities become more and more mature. And what we're building is the full gamut. So on the one hand, based on an acquisition that we made, you know, year before last around cyber, we have the intelligence. Now, with Cyclops, we can see the posture, and we can prioritize based on what we're seeing, CVEs, dark web stuff. We're seeing, we're seeing what's coming, and from the inside, we're seeing what's vulnerable.

All right. Thanks guys. I um, give me a do. You mean what's changing customer, man? At makes kind of exposure management, more of a priority today. You touched upon it on your call and, you know, your your prepared remarks. But, you know, our customers explicitly asking for like a United, you know, exposure visibility across Network, Cloud, identity, whatever it is. And then maybe just worried help us understand like, how meaningful could this category B over the next call at 2 or 3 years in terms of Revenue contribution? Yeah, the first, I can't resist to answer, or is a a question, it's meaningful. It it's not huge right now but we see great potential in it. Uh, when I look at this, you know, I Come From The Trenches ultimately, when I look at this, uh, um, as a practitioner, you've got to have the situational awareness. And so yes, we're seeing more and more demand and we're seeing it going Upstream as our capabilities, become more, and more mature, and what we're building is the full gamut. So, on the 1 hand based on an acquisition that we made, uh, you know, year before last around

Nadav Zafrir: With the Veriti acquisition, we can actually do the automatic remediation. So what our customers find is, once they deploy that, a lot of the things that are coming at them are no longer in danger, because we can block it automatically before it even happens. In my opinion, again, looking at this as a practitioner, there's one of the shifts: attackers can actually weaponize vulnerabilities much, much faster, and they can also use autonomous agents that are doing their... Once there is a breach, they operate much, much faster. So having that proactive prevention has become more important than ever, and building this triage around these three components, I think, is unique in the industry, and I think will carry more and more traction.

Fiber and we have the intelligence now, uh, with Cyclops. We can see the posture and we can prioritize based on what we're seeing cve, dark grip stuff, we're seeing, we're seeing, what's coming. And from the inside, we're seeing what's vulnerable. And with the variety acquisition, we can actually, uh, do the automatic remediation. And so, what our, what our customers find us, when, once they deploy that, um, is that a lot of the things that are coming at them, are no longer in danger and because we can block it automatically before it even happens in my opinion. Again, looking at this as a practitioner

Nadav Zafrir: For us at Check Point, it's also important because it allows us to go outside of our installed base right now to new customers and hopefully upsell and cross-sell, once we go beyond that. And so, yes, we see this as something which is becoming a core pillar, and an important part of the four pillar strategy that we're going with. The last thing I'll say about it is that when we do the remediation, the automatic remediation, we don't do it just for Check Point products, and that's the beauty of it. This is where an open platform, open guarding comes in.

There's the, the 1 of the shifts is that attackers can actually weaponize, uh, vulnerabilities much, much faster. Um, and they can also use autonomous agents that are are doing their, are once there is a breach, they operate much, much faster. And so having that, uh, proactive prevention has become more important than ever and building this triage around these 3 components, I think is unique in the industry and I think we'll, we'll carry more and more traction for us as checkpoints. It's also important because it allows us to go outside of our install base right now, to new customers and hopefully upsell and cross-sell. Uh, once we go, uh, uh, beyond that. And so, yes, we we see this as something, uh, um, which is becoming a core pillar, um, and an important part of the 4 Pillar,

Nadav Zafrir: When we see a vulnerability, you know, some of our customers are not using Check Point products to secure their Hybrid Mesh, but we can go in and fix the other vendors' mesh, other vendors' vulnerabilities when we can, after we prioritize them. And at the end of the day, I think it gives our customers better security.

Strategy, um, that we're going with the last thing I'll say about it is that when we do the remediation, the automatic remediation, we don't do it just for checkpoint products and that's the beauty of it. This is where an open platform. Open guarding comes in when we see, uh, vulnerability. Um, you know, some of our customers are not using checkpoint products to secure their hybrid mesh, but we can go in and fix the other vendors, uh, uh, mesh other vendors vulnerabilities, when we can, after we prioritize them. And at the end of the day, I think it gives our customers better security

Kip E. Meintzer: Thank you, Peter. Next up is Saket Kalia, followed by Brad Zelnick from Deutsche Bank.

Moderator: Thank you, Peter. Next up is Saket Kalia, followed by Brad Zelnick from Deutsche Bank.

Thanks uh Peter. Um, next up is second. Kalia followed by Brad zelnick from Deutsche Bank.

Saket Kalia: Okay, great. Hey, guys, thanks for taking my question here. And by the way, I appreciate the additional detail on guidance. Thank you. Maybe a question for both Nadav and Roei. You know, the four pillars are a really helpful framework for thinking about the business. Roei, for you, are there any guardrails that you can give us just on the mixes across those four, high level, of course? And Nadav, what are you changing from either a contracting or sales comp perspective, to drive higher growth across those smaller, maybe faster-growing pillars? Does that make sense?

Okay, great. Hey guys, thanks for taking my question here. And by the way, appreciate the additional detail on uh on guidance. Thank you.

Um, maybe a question for both nadav and Roy. Um,

You know, the four pillars are a really helpful framework for thinking about the business.

Nadav Zafrir: Yeah.

Roi for you. Are there any guard rails that you can give us just on the mixes across those across those 4 high level, of course, and the dove, what are you changing from either a Contracting or sales comp uh, uh perspective to drive higher growth? Those smaller maybe faster growing pillars. Does that make sense?

Yep.

Roger Boyd: So I think if you're looking on the four pillars, so of course, the most significant one is Hybrid Mesh, which includes also our firewall, which is still a significant part of our business. It's growing, of course, mainly driven by the SASE and our cloud network. That's mainly driving the growth, both of them, SASE and cloud network, sitting on the subscription line item. That's a part of the acceleration that we see in the subscription line item. And the others that I think have the, the highest growth that we see today are Workspace and, and System.

Roei Golan: So I think if you're looking on the four pillars, so of course, the most significant one is Hybrid Mesh, which includes also our firewall, which is still a significant part of our business. It's growing, of course, mainly driven by the SASE and our cloud network. That's mainly driving the growth, both of them, SASE and cloud network, sitting on the subscription line item. That's a part of the acceleration that we see in the subscription line item. And the others that I think have the, the highest growth that we see today are Workspace and, and System.

Roei Golan: CTEM, we talked a lot about it, this, in this call. We do see very strong demand. Of course, still small numbers from total Check Point, but very strong demand, which started when we acquired Cyberint, then we added the other, other acquisition that we've done and included in, in the offering. And, and again, when we are looking on the final for next year, definitely will be- it's expect to be, even in 2026, a, a major driver for subscription line item. And also email. Email is going to-- continue to be very strong. We talked about the numbers, I think, talked about the numbers, few quarters, for the few quarters. I mean, we already, passed the $160 million ARR and continue to grow in very, in very strong double digit.

Them. We talked a lot about it. This, uh, in this call. Uh, we do see very strong demand, of course, still small numbers from Total checkpoint, but very strong demand, uh, which started when we acquired cyber in, then we added the other other acquisition that was done and included in in the offering. And and again, when we are looking on the final for next year, definitely will be it's it's expect to be even in 2026, a major driver for subscription line item and also email email is going you you continue to be very strong. Uh we talked about the numbers, I think.

Roei Golan: So definitely we're aiming to pass the $200 million this year. And I think that's the main driver that we-- that's why you see our subscription revenues continue to accelerate, and we expect it to accelerate every quarter. Of course, with the contribution also from firewall, again, contribution that it's a mix of the price increase, but also gaining new logos and expanding our market share in the firewall. So that's the total picture in how it translates into our revenues. And Nadav, you want to-

Talked about the numbers, few quarters for the few quarters. I mean, we already passed the 160 million ARR and continue to grow in very in very strong, double digits and so definitely we're aiming to pass the 200 million this year. And and I think that's the main driver that we, that's why you see our subscription revenues continue to accelerate and we expect it to accelerate every every quarter of course with the contribution for, for, also from firewall,

Again contribution that it's a mix of the price increase, but also gaining a new logos and expanding, our market, share in the firewall. And so that's that's in total picture. Uh,

Nadav Zafrir: Yeah, the four pillars is strategic, as you said, you know. And the first one is the infrastructure and the network, the second one is your employees, the third one is the situational awareness, and then finally, security for AI, which is as a standalone, but also embedded in the three others, and we have the services that engulf all that. To your question, to grow these pillars faster, we're doing a few things. Number one, in each pillar, we're trying to see what is a differentiated advantage, right? So like I said, for the hybrid mesh, it's the prevention first, it's the scalability, it's the unified management, and it's the hybrid architecture. But there are other things that we want to improve in. So some of them we're doing organically, some we're looking for acquisitions.

and I would, I would translate into our revenues now that we want to

yeah, the the the 4

Pillars um is is strategic, as you said, you know, in the first 1, it's the infrastructure and the network. The second 1 is your employees. The third 1 is the situational awareness and then finally security for AI which is uh as a standalone. But also embedded in the 3 others and we have the services that engulf all that.

Nadav Zafrir: We're doing the same thing for each one of those pillars. The second thing is, from our go-to-market focus, we are moving to a multi-pillar, multi-platform company so that our frontliner sellers can sell each one of those pillars. And of course, in each one of them, there's also different products, and we're better aligning our account managers with the specialists that can come in and support them. And that's a major change in the way we're going to market as of literally now. The one thing I wanna add is that in each one of those pillars, we're also going to challenge. We're gonna challenge some of the existing status quo in the market.

To your question, uh, to, to grow, uh, the these pillars faster, we're doing a few things. Number 1, in each pillar. Uh, we're trying to see what is the differentiated Advantage, right? So like I said, for the hybrid mesh, it's the prevention first, it's the scalability, um, it's the unified management and it's the hybrid architecture. But there are other things that we want to improve in. So some of them were doing organically, some were looking for Acquisitions. We're doing the same thing for each 1 of those pillars. The second thing is from a, our go to market Focus. Uh, we are moving to a multi-platform companies, so that, our Frontline or sellers can sell each 1 of those pillars. And of course, in each 1 of them, there's also different products and we're better, aligning our account managers with the Specialists that can come in and support them. And that's a major, uh, uh, change in the way. Uh, uh, we're going to Market, uh, as a literally now, um,

Nadav Zafrir: So you know, and we're gonna, we're challenging status quo around, you know, supermarket approach consolidation to a real platform approach. We're challenging a closed garden to an open garden. We're challenging complexity. So in each one of these, we're not just building our own security platform pillar, but also challenging the existing status quo. Again, some of it with existing capabilities that I think are critical and becoming more important, and in others, by building new stuff and making acquisitions.

Nadav Zafrir: At the end of the day, I think we need to realize that especially the world we're going into, every morning there is a new reality and a new threat, so we need to constantly evolve, we need to constantly see the roadmap of our customers, we need to constantly look around the corner, so we can truly be their companion for a secure AI transformation.

The the 1 thing I want to add is that in each 1 of those pillars, uh, we're also going to challenge. We're going to challenge some of the existing status quo in the market. Um, so you know, uh and we're going to uh we're challenging status score around uh um, you know, Supermarket approach consolidation to a real platform approach. We're challenging a closed Garden to an Open Garden. Uh, we're challenging complexity. So in each 1 of these, we're not just building our own security, uh, platform pillar, but also challenging, the existing status quo, again, some of it with existing, uh, capabilities that we I think are critical in becoming more important than any others by, by building new stuff and, uh, making Acquisitions. And at the end of the day, I think we need to realize that especially the world. We're going into every morning, there's a new reality and a new threat. So we need to constantly evolve. We need to constantly

See the roadmap of our customers. We need to constantly look around the corner so we can truly be their companion for a secure, AI transformation.

Joshua Tilton: Very helpful. Thank you.

Saket Kalia: Very helpful. Thank you.

Very helpful. Thank you.

Brad Zelnick: All right, next up is Brad Zelnick, followed by Shyam Patel from Susquehanna.

Moderator: All right, next up is Brad Zelnick, followed by Shyam Patel from Susquehanna.

All right. Next up is Brad. Zelnik followed by shyam patil from Susana.

Roei Golan: Thanks, Kip.

Brad Zelnick: Thanks, Kip. Nadav, I've heard you loud and clear. The foundation is in place. It now comes down to execution, and I take that to mean more go-to-market than product, because Check Point's always had great product, and you're acquiring high-quality tuck-ins that only strengthen your, your offerings in the position that you're in. But where do we stand from a go-to-market perspective? How much more ramp distribution capacity do you have heading into 2026? And, and maybe for Roei to chime in, what needs to happen to exit 2026 growing double-digit and to get us to double-digit growth for the full year in 2027?

Nadav Zafrir: Nadav, I've heard you loud and clear. The foundation is in place. It now comes down to execution, and I take that to mean more go-to-market than product, because Check Point's always had great product, and you're acquiring high-quality tuck-ins that only strengthen your, your offerings in the position that you're in. But where do we stand from a go-to-market perspective? How much more ramp distribution capacity do you have heading into 2026? And, and maybe for Roei to chime in, what needs to happen to exit 2026 growing double-digit and to get us to double-digit growth for the full year in 2027? Yeah, thank you for that. So you're right that it's about go-to-market execution. It starts with a louder voice around our marketing effort.

Thanks tip nadav. I've heard you loud and clear. The foundation is in place, it now comes down to execution and I take that to mean more go to market than product because checkpoints always had great product and you're acquiring high-quality tuck-ins that only strengthen your, your offerings in the position that you're in. But where do we stand from a go to market perspective? How much more ramp distribution capacity? Do you have heading into 2026 and, and maybe for Rohit to chime in what needs to happen to exit, 26 growing double digit and to get us to double digit growth for the full year in 27,

Nadav Zafrir: Yeah, thank you for that. So you're right that it's about go-to-market execution. It starts with a louder voice around our marketing effort. It's about the focus, and as I described, we're gonna be focusing on large enterprise, we're gonna be focusing on new logos. We're gonna be focusing on the multi-pillar, multi-product company approach. We're gonna be focusing on hiring the best people in the industry. So it's a, it's a plethora of things that we're doing to create a better execution as we go to market. And lastly, it's also about challenging the status quo. I think this is a time where the nature of security is changing. I think the criticality of the basis of what security means has become more critical than ever.

Yeah, thank you for that. So

Nadav Zafrir: It's about the focus, and as I described, we're gonna be focusing on large enterprise, we're gonna be focusing on new logos. We're gonna be focusing on the multi-pillar, multi-product company approach. We're gonna be focusing on hiring the best people in the industry. So it's a, it's a plethora of things that we're doing to create a better execution as we go to market. And lastly, it's also about challenging the status quo. I think this is a time where the nature of security is changing. I think the criticality of the basis of what security means has become more critical than ever. And we're gonna take advantage of, we're gonna take advantage of some of the assets that we already have. We're gonna take advantage of where we are situated.

Nadav Zafrir: And we're gonna take advantage of, we're gonna take advantage of some of the assets that we already have. We're gonna take advantage of where we are situated. We're seeing all the innovators, and we're trying them out as design with our design on the customer side. We've got new leaders in marketing, we've got new leaders in sales, and we're gonna continue bringing in the best of the best in the industry to join us to do exactly what you said, by the end of the year.

Nadav Zafrir: We're seeing all the innovators, and we're trying them out as design with our design on the customer side. We've got new leaders in marketing, we've got new leaders in sales, and we're gonna continue bringing in the best of the best in the industry to join us to do exactly what you said, by the end of the year.

Focusing on large Enterprise, we're going to be focusing on new logos, we're going to be focusing on a 4 on the multipar multi-product company approach. We're going to be focusing on hiring the best people in the industry. Um, so it's a it's a plethora of things that we're doing to create a better, uh, execution execution. Um, as we go to market, and lastly, it's also about challenging. The status quo. I think this is a time where the nature of security is changing. I think the criticality of uh, of the the basis of what security means is become more critical than ever. And we're going to take advantage of, uh, we're going to take advantage of uh, our, some of the assets that we already have. We're going to take advantage of where we are situated. Uh, we're seeing all the innovators and we're trying them out as designed, with our design Partners on the, uh, on the, on the customer side. Um, we've got new leaders in marketing, we've got new leaders in sales, uh, and we're going to continue bringing

Uh, the best of the best in the industry to join us, uh, to do exactly what you said—that by the end of the year.

Roei Golan: ... As for the double-digit question, so I think, again, I think we need to show first, we need to continue the strong momentum, the strong demand that we've seen for the we mentioned the system, we mentioned the email security, the workspace, and SASE. So definitely, we want we need to see here. We need to see specifically in email and system, continuous strong demand there, as we see already, we see it in the funnel. We saw it last year. We saw it in the last few years, but email in the last few years, but system, specifically in 2025 and also in the funnel for next year, for 2026. But definitely, in order to be double digits, we need to grow even faster than in firewall.

Uh, as for the double digit question. So, I think again, I think we need to show first. We we need to continue the strong momentum, the strong demand that we've seen. For the, we mentioned the system, we mentioned, the email security, the workspace and and Sassy. So definitely we want, we want, we need to see here. We need to see specifically an email and see them continued strong demand there, as we see already.

Roei Golan: I mean, we are positioned much better today on the firewall, than what we've been, two years ago or three years ago. I think we did a significant improvement, both on the product side, also on the go-to-market and DAF stock. On the go-to-market, I think we brought, we had great, we have great leadership in the go-to-market, and, and I think we are positioned much better today to accelerate our growth on, on the firewall. Definitely, me too, I think a digit in the firewall, together with the continuous strong momentum that we have in the other pillar, that should bring us to double digits.

Shyam Patil: Thank you very much.

Brad Zelnick: Thank you very much.

They will sit in the funnel. We saw it last year, we saw it in the last few years, but email in the last few years, but see them specifically in 2025 and also in the final for next year for 2026, but definitely, in order to be double digits, we need to grow even faster. And firewall, I mean, we are positioned much better today on the firewall than what we've been 2 years ago or 3 years ago. I think we did a significant Improvement both on the product side, also on the go to market and have talked on the go to market. I think we brought, we had a great, we have great leadership in the go tomorrow market and uh, and I think we're positioned much better today to accelerate our growth on on the firewall. Definitely. Me too. I single digits in the firewall together with the continuous strong momentum that we have in the other pillows that should bring us to double digits.

Kip E. Meintzer: All right, next up is Shyam Patel, followed by Ben Bolan of Cleveland Research.

Moderator: All right, next up is Shyam Patel, followed by Ben Bolan of Cleveland Research.

Thank you very much.

All right. Next up is Cheyenne Patel followed by Ben Bolan of Cleveland research.

Shyam Patil: This is Daneel on for Shyam. Thanks so much for taking the question. I guess with the price of memory increasing significantly of late, just-- I know you talked about potentially increasing prices, but what levers do you have to maybe try to get better deals from suppliers? And how are you looking at that as we progress through the year and try to get through sort of these shortages?

This is daniil on paschim. Thanks so much for taking the question. Um I think it's worth the price of memory in Precinct significantly of late, just

I know you talked about potentially increasing prices but what levers do you have to maybe try to get better deals from suppliers and how are you looking at that as we progress through the year and and try to get through sort of be shortages.

Roei Golan: So I think we are working 24/7 with suppliers around the world to get better pricing. I think we are doing. We have a great team here that are doing an amazing job in order to get to get the best pricing, I think. But still, we cannot avoid the situation that there is a price, the price of the memory is increased significantly. So even if we're getting better pricing, it's still significantly higher than what we used to pay a few months ago before this trend starts. But definitely, we are investing a lot on that, on getting the best pricing, and again, we're doing it. We have teams around the world that exploring opportunities in order to get to get the best pricing in the market.

So I think we're walking 24/7 with suppliers around the world to get a better pricing. I think we are doing. We have a great email that they're doing amazing job. In order to get

Roei Golan: We have teams around the world that exploring opportunities in order to get to get the best pricing in the market. Of course, we can; we always want to do even better, but I think definitely we are doing a great job there.

Roei Golan: Of course, we can; we always want to do even better, but I think definitely we are doing a great job there.

To get the best pricing, I think. But still we, we cannot avoid the situation that there is a price that the, the price of the memo is increasingly. So even if we're getting better pricing, it's still significantly higher than what we used to pay a few months ago before this trend starts. But definitely we're investing a lot on that and on on, on getting the best pricing and again we're doing it. We have teams around the world that exploring the opportunities in order to get to get the best pricing in in the market. Um, of course we can do, we always want to do even better but I think it's definitely we are doing a great job there.

Kip E. Meintzer: All right. Our last caller is going to be Patrick Colville. Ben Bolan's not on the call today. Patrick, nice of you to show up.

Moderator: All right. Our last caller is going to be Patrick Colville. Ben Bolan's not on the call today. Patrick, nice of you to show up.

All right, our last caller is going to be Patrick caval. Um, Ben, bolan's not on the call today.

Patrick Colville: Oh, thank you, and I'll make it a good one to close. It's actually a clarification question. Can you just, Roei, please, just go over again, what drove the product revenue to be a little bit softer than we might have hoped in Q4?

Patrick, nice to see you to show up.

Roei Golan: Yes.

Patrick Colville: Can you just also just reclarify why the pricing benefit doesn't really hit in one Q, and then why it builds throughout the year?

Oh, thank you. And I'll make it a good 1 to close. Um, I I it's actually a clarification question. Can you just Roy, please just just go over again. What drove the product Revenue to be a little bit softer than we might have hoped in, in 4 q. Yeah. And, and then can you just also just wreck clarify why? The pricing benefit doesn't really hit in 1 e and and then and then why it builds through?

Roei Golan: So for product, most of our hardware that we are selling today, that is a significant portion of our product revenues, is sold as a bundle, to get the bundle together with the software subscription, actually with subscription. And when we announced the subscription pricing back in July, so we announced only pricing for subscription without increasing the appliances, price list. From accounting perspective, that's more accounting, we need to allocate, because the standalone subscription price will increase without the total price, so the allocation of the revenues are smaller to the product, to the bare hardware.

So, for product, most of our hardware that we are selling today—that is, a significant portion of our product revenues—is sold as a bundle. You get the bundle together with the software subscriptions, actually with subscription. And when we announced the subscription pricing, it was back in July.

Roei Golan: It's small, it's smaller, and that impacts mainly Q4, because in Q3, we just announced it, some of the deals were not recognized as revenues, but in Q4, we already saw that, and that has a second. Again, it's only mainly short-term headwind. It's not going to affect our total revenues. It's more kind of headwind on our short-term product revenues, and we're going to see the benefit from the subscription over time. So again, that's in general. And your question on the price increase, so let's separate between billings and revenues. Billings, most of it, you're going to see it in the same quarter that we did the price increase.

Roei Golan: From a revenues perspective, sometimes, like in Infinity, some in some other ELAs that we have, we have deals that have been closed before, I mean, in prior quarters, and we are recognizing. It's part of our backlog, and we are recognizing the revenues in future periods. So in that factor, you don't see the price increase in the revenues. You're not gonna see that. You might see billings for new deals, but not. You're not gonna see the main impact in the same quarter. So as I said, the main impact we start to see is from the quarter, from Q2, which is the quarter after the price increase on the revenues, not on the billings.

Product to the bare Hardware. It's, it's allocated. It's small, it's smaller. And that impact, mainly Q4, because in Q3 we just announced, we just announced it. Some of the deals were not recognized as revenues, but in Q4, we already saw that. And that has a again, it's only mainly short-term Edwin, it's not going to affect how total revenues. It's more kind of Edwin on our short term and product revenues, and we're going to see the benefit from the subscription over time. So so again that's that's in in general and your question on the price increase. So let's separate between Billings and revenues billing. Most of it, you're going to see it in the same quarter that we did. The price increase.

from revenues perspective sometime like in Infinity S, I mean, in in some other alas that we have

We have deals that have been closed before we, I mean, in Prior quarters, and we are recognized, it's part of our backlog, and we are recognizing the revenues.

In in future periods. So in that factor you don't see. The pricing is in the revenues, you're not going to see that. You might see Billings for New Deals but not you're not going to see the main impact in the same quarter. So as I said your main, the main impact will start to see it from the quarter from Q2 which is a quarter after the price increase.

On the revenues, not on the billings.

Kip E. Meintzer: All right.

Moderator: All right.

Patrick Colville: Thank you.

Kip E. Meintzer: Thank you, everybody, for joining us. We appreciate it, and we'll see you throughout the quarter, and then obviously, next quarter. Have a great day. Bye-bye.

Moderator: Thank you, everybody, for joining us. We appreciate it, and we'll see you throughout the quarter, and then obviously, next quarter. Have a great day. Bye-bye.

All right. Thank you.

Roei Golan: Bye. Thank you.

Thank you everybody for joining us. We appreciate it and, uh, we'll see you throughout the quarter and then obviously next quarter have a great day. Bye. Bye bye. Thank you.

Shyam Patil: Goodbye.

Operator: Goodbye.

Goodbye.

Q4 2025 Check Point Software Technologies Ltd Earnings Call

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