Check Point Software Technologies (CHKP) Q1 2026 earnings summary

Executive summary

• Achieved 5% revenue growth in Q1 2026 to $668 million, with double-digit growth in non-GAAP EPS and adjusted free cash flow, driven by strong subscription revenue and emerging technologies like email security, CTEM, and SASE.

• Non-GAAP EPS rose 13% year-over-year to $2.50, reflecting operational efficiency and margin improvement.

• Adjusted free cash flow increased 11% to $457 million, exceeding guidance.

• Product revenues, especially firewall appliances, declined due to go-to-market changes and lower refresh activity, but management remains confident in long-term value creation.

• Leadership team strengthened with key appointments, including a new Chief Revenue Officer, to support multi-pillar platform strategy and AI security initiatives.

Financial highlights

• Q1 total revenues reached $668 million, up 5% year-over-year, with subscription revenues growing 11% to $323 million.

• Adjusted free cash flow was $457 million, up 11% and $70 million above midpoint guidance.

• Non-GAAP EPS was $2.50, up 13% year-over-year, exceeding guidance.

• Deferred revenues grew 8% to $2.06 billion; calculated billings declined 1% year-over-year.

• Gross profit increased to $586 million, with an 88% gross margin; non-GAAP operating income was $265 million (40% margin); non-GAAP net income rose 8% to $265 million.

• Cash and equivalents totaled $4.4 billion at quarter-end, up from $2.93 billion a year ago, mainly due to convertible notes proceeds.

Outlook and guidance

• Q2 2026 revenue guidance: $660–$690 million; subscription revenue: $328–$338 million; non-GAAP EPS: $2.40–$2.50.

• Full-year 2026 revenue guidance revised to $2.77–$2.85 billion, reflecting lower firewall appliance revenues; subscription revenue and non-GAAP EPS guidance unchanged.

• Adjusted free cash flow for FY2026 expected at $1.15–$1.25 billion.

• Expect improvement in appliance revenues in the second half of the year as sales disruption subsides.

• Management expects go-to-market changes and technology leadership to drive sustainable long-term growth and continued strong demand for secure, enterprise-grade AI transformation solutions.