Key points
- Check Point cut its 2026 revenue forecast for a second time
- Check Point's product and license revenue fell 19% in the third quarter
- Check Point raised firewall prices in October
Check Point Software Technologies (CHKP) cut its 2026 revenue forecast for the second time this year as sales of its firewall appliances continued to weaken. Shares fell 5.3% to $144.03 as of 11:37 a.m. ET on November 2.
The cybersecurity company now expects revenue of $2.732 billion to $2.782 billion, down from the $2.77 billion to $2.85 billion range it had kept since April.
Third-quarter revenue fell 1% from a year earlier to $669.8 million, according to Check Point’s earnings release. Adjusted earnings of $2.49 a share beat the $2.39 average analyst estimate in Robinhood’s data.
That was down from $3.94 a share a year earlier, when a tax settlement added about $1.47. Without that benefit, adjusted earnings per share rose 1%, the company said.
Check Point has cut its forecast twice this year
Check Point began the year expecting 2026 revenue of $2.83 billion to $2.95 billion. It lowered the range on April 30, citing weaker firewall appliance sales, Reuters reported, and kept the revised forecast in July.
The midpoint of its latest range is $2.757 billion, about 4.6% below the midpoint of its original forecast, by our calculations.
For the fourth quarter, Check Point expects revenue of $720 million to $770 million and adjusted earnings of $2.71 to $2.83 a share, Chief Financial Officer Roei Golan said on the earnings call. He said the $745 million midpoint would be flat from a year earlier. The average estimate in Robinhood's data was $2.81 a share.
For the full year, Check Point now expects adjusted earnings of $10.25 to $10.37 a share, a narrower range than the $10.05 to $10.85 it gave in April. The midpoint fell to $10.31 from $10.45. Subscription revenue is expected to come in between $1.345 billion and $1.356 billion.
Product and license revenue fell 19% in the third quarter
Revenue from products and licenses, the line that includes firewall appliances, fell 19% from a year earlier to $105.5 million. Software updates, maintenance, and services fell 7% to $225.7 million. Security subscriptions rose 11% to $338.6 million and made up about half of total revenue.
Golan said fewer customers were replacing older firewall appliances, which also cut into maintenance and professional services. In July, he had said Check Point expected product revenue to return to growth in the fourth quarter. On Monday, he said the fourth-quarter forecast still assumes product revenue declines.
Chief Executive Nadav Zafrir said the company now sees the third quarter as the low point. "We believe revenues reached a trough in the third quarter, and we expect gradual improvement beginning in the fourth quarter. The recovery is taking longer than anticipated," he said in the release.
Check Point raised firewall prices as the shekel adds costs
Check Point raised prices on all of its firewall products, including the support and subscriptions sold with them, starting October 4. Golan said most of the effect would show up from the first quarter of 2027.
The price increase comes as product and license revenue is shrinking. Guggenheim analyst John DiFucci raised a related concern on the call, saying the installed base is loyal but that "it really sounds like it's been hard for you guys to capture new customers." Zafrir said Check Point's email, exposure management, and AI security products are growing almost 40% a year and are reaching new buyers. "We're no longer a firewall company," he said.
Currency movements are adding to costs. A weaker dollar against the Israeli shekel has added about $30 million to operating expenses so far this year, Golan said. At current exchange rates, that could add up to $50 million more in 2027, he said.
Check Point bought back about 2.5 million shares for about $325 million in the third quarter. It held $4.12 billion in cash, deposits, and marketable securities at September 30, including about $1.8 billion in net proceeds from a $2 billion convertible note sale.
Check Point is one of the network security companies on our cybersecurity stocks page, alongside Palo Alto Networks and Fortinet.
