It has been about a month since the last earnings report for Check Point Software (CHKP). Shares have lost about 6.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Check Point due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Check Point Software Q3 Earnings Top Estimates, Revenues Rise Y/Y
Check Point Software Technologies Ltd. reported third-quarter 2025 non-GAAP earnings per share (EPS) of $3.94, which beat the Zacks Consensus Estimate by 60.82%. The figure exceeded the company’s prior projection of $2.40-$2.50. The bottom line increased 75.1% from the year-ago quarter’s $2.25 per share.
CHKP’s third-quarter revenues of $677.5 million surpassed the consensus mark by 0.48% and came $6 million above the midpoint of the previously guided range of $657-$687 million. The top line increased 6.7% year over year.
Check Point Q2 Details
Security subscription revenues were $305.4 million, which increased 10.3% year over year but missed the consensus mark by 0.25%. Products and licenses revenues rose 9.7% year over year to $130.4 million and beat the consensus mark by 2.22%.
Total revenues from product and security subscriptions were $435.8 million, up 10.1% year over year. The figure beat the consensus mark for the segment sales by 0.54%.
Software updates and maintenance revenues increased 1% year over year to $241.7 million and surpassed the consensus mark by 0.46%.
As of Sept. 30, 2025, deferred revenues totaled $1.887 billion, up 8% year over year.
Non-GAAP gross profit increased 6.9% year over year to $602 million and gross margin expanded 20 basis points (bps) to 88.9% from the year-ago quarter. Non-GAAP operating expenses grew 10.7% to $320 million. As a percentage of revenues, operating expenses expanded 170 bps to 47.2% from the year-ago quarter.
Non-GAAP operating income for the third quarter of 2025 totaled $282 million, up 2.9% year over year. The non-GAAP operating margin contracted 150 bps from the year-ago quarter to 41.6% due to higher operating expenses.
Balance Sheet & Other Details of CHKP
Check Point Software exited the third quarter with cash and cash equivalents, marketable securities and short-term deposits of $2.8 billion compared with the previous quarter’s $2.91 billion.
The company generated cash worth $241 million from operational activities in the third quarter compared with the previous quarter’s $262 million. It repurchased stocks worth $325 million in the reported quarter.
Check Point’s Q4 & 2025 Guidance
For the fourth quarter, Check Point projects revenues between $724 million and $764 million and non-GAAP EPS in the range of $2.70-$2.80. The Zacks Consensus Estimate for the fourth quarter’s top line and EPS is currently pegged at $741.1 million and $2.90, respectively.
For 2025, Check Point expects revenues in the range of $2.71-$2.75 billion and non-GAAP EPS in the band of $11.22-$11.32. The consensus mark for 2025 revenues and EPS is pinned at $2.72 billion and $9.93, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -8.08% due to these changes.
VGM Scores
Currently, Check Point has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Check Point has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Check Point Software Technologies Ltd. (CHKP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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