Check Point Software's Q1 Earnings Top Estimates, Revenues Rise Y/Y

Check Point Software Technologies Ltd. CHKP reported first-quarter 2025 non-GAAP earnings per share (EPS) of $2.21, which beat the Zacks Consensus Estimate by 0.91%. The figure came at the higher end of management’s guidance of $2.13-$2.23. The bottom line increased 8.3% from the year-ago quarter’s $2.04. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

Check Point Software's earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 0.72%.

CHKP’s first-quarter revenues of $637.8 million surpassed the consensus mark by 0.22% and came above the midpoint of the previously guided range of $619-$649 million. The top line increased 7% year over year, mainly driven by a strong
demand for Quantum Force appliances, fueled by refresh cycles and new projects which delivered double-digit year-over-year growth in products and licenses revenues.

Check Point Q1 Details

Security subscription revenues were $291 million, which increased 10% year over year but missed the consensus mark by 0.49%. Products and licenses revenues rose 14% year over year to $114 million and beat the consensus mark by 8.94%. 

Check Point Software Technologies Ltd. Price, Consensus and EPS Surprise

Check Point Software Technologies Ltd. price-consensus-eps-surprise-chart | Check Point Software Technologies Ltd. Quote

Total revenues from product and security subscriptions were $404.7 million, up 11.27% year over year. The figure beat the consensus mark for the segment sales by 2.12%.

Software updates and maintenance revenues decreased 0.9% year-over-year to $233.1 million and missed the consensus mark by 2.45%.

As of March 31, 2025, deferred revenues totaled $1.915 billion, up 5% year over year.

Non-GAAP gross profit increased 5.2% year over year to $564 million while gross margin contracted 110 basis points (bps) to 88.4% from the year-ago quarter. Non-GAAP operating expenses soared 7.4% to $305 million. As a percentage of revenues, operating expenses expanded 40 bps to 47.8% from the year-ago quarter.

Non-GAAP operating income for the first quarter of 2025 totaled $259 million, up 2.8% year over year. Non-GAAP operating margin contracted 150 bps from the year-ago quarter to 40.6% to higher operating expenses.

Balance Sheet & Other Details of CHKP

Check Point Software exited the first quarter with cash and cash equivalents, marketable securities and short-term deposits of $2.93 billion compared with the previous quarter’s $2.78 billion.

The company generated cash worth $421.1 million from operational activities in the first quarter compared with the previous quarter’s $249 million. It repurchased stocks worth $325 million in the reported quarter.

Check Point Software Initiates Q2 & FY25 Guidance

Check Point Software initiated guidance for the second quarter and full-year 2025. For the second quarter, it projects revenues between $642 million and $682 million and non-GAAP EPS in the range of $2.32-$2.42. The Zacks Consensus Estimate for the second quarter’s top and bottom lines is currently pegged at $661.89 million and $2.37, respectively.

For 2025, Check Point Software expects revenues in the range of $2.66-$2.76 billion and non-GAAP EPS in the band of $9.60-$10.20. The consensus mark for 2025 revenues and EPS is pinned at $2.71 billion and $9.9, respectively.

CHKP’s Zacks Rank & Stocks to Consider

Currently, Check Point Software carries a Zacks Rank #3 (Hold).

StoneCo STNE, Baidu BIDU and Qorvo QRVO are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. While StoneCo sports a Zacks Rank #1 (Strong Buy), Baidu and Qorvo carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

StoneCo shares have appreciated 65.8% year to date. The Zacks Consensus Estimate for STNE’s full-year 2025 earnings is pegged at $1.26 per share, suggesting a decline of 6.67% from the year-ago quarter’s reported figure.

Baidu shares are up 4.7% year to date. The Zacks Consensus Estimate for BIDU’s full-year fiscal 2025 earnings is pegged at $10.08 per share, suggesting a decline of 4.27% from the year-ago quarter’s reported figure.

Qorvo shares have lost 10.7%, year to date. The Zacks Consensus Estimate for QRVO’s full-year 2025 earnings is pegged at $5.36 per share, suggesting a decline of 13.83% from the year-ago quarter’s reported figure.

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This article originally published on Zacks Investment Research (zacks.com).

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