Check Point Software ((CHKP)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call from Check Point Software highlighted a positive sentiment with strong growth and strategic advancements, particularly in AI and cybersecurity. The company reported significant increases in revenue and billing, although challenges such as foreign exchange impacts and rising operating expenses were noted as potential concerns for future profitability.
Strong Revenue Growth
Check Point Software reported a 7% increase in revenue, reaching $678 million, which exceeded the midpoint of projections by $6 million. The company also achieved a non-GAAP EPS of $3.94 per diluted share, surpassing its guidance.
Record Calculated Billings
The company experienced a robust 20% year-over-year growth in calculated billings, totaling $672 million. This growth was driven by strong demand across its portfolio, reflecting the company’s strategic positioning in the market.
Strategic Acquisitions
Check Point made strategic acquisitions of Veriti and Lakera to bolster its AI and cybersecurity capabilities. Lakera, in particular, offers unique solutions for AI security, enhancing the company’s technological edge.
Global Revenue Distribution
The company saw double-digit growth in the Americas (10%) and APAC (8%) regions, while EMEA experienced a 3% increase. This global revenue distribution underscores Check Point’s expanding international presence.
Emerging Technology Success
Annual recurring revenue (ARR) for emerging technologies like Harmony SASE, Harmony email, and collaboration solutions grew organically by over 40% year-over-year, highlighting the success of these innovations.
Impact of Foreign Exchange Rates
The weakening of the US dollar against the Israeli shekel negatively impacted Check Point’s margins by approximately 1 point, equivalent to $0.06, posing a challenge to profitability.
Operational Expense Increase
Operating expenses increased by 11% due to continued investment and acquisitions, which affected overall profitability. This increase reflects the company’s commitment to growth and innovation.
Q4 Margin Headwinds
Check Point anticipates margin headwinds in Q4 due to foreign exchange rates and the recent acquisition of Lakera, which could potentially affect profitability.
Forward-Looking Guidance
Looking ahead, Check Point raised its midpoint for 2025 revenue guidance, indicating confidence in its growth trajectory. The company anticipates Q4 revenue between $724 million and $764 million, with non-GAAP EPS projected between $2.70 and $2.80. Strategic hires and continued investments in AI and cybersecurity innovation were also emphasized.
In conclusion, Check Point Software’s earnings call reflected a positive sentiment with strong growth and strategic advancements. Despite challenges such as foreign exchange impacts and rising operating expenses, the company remains confident in its future trajectory, driven by strategic acquisitions and innovations in AI and cybersecurity.