Check Point published third-quarter results yesterday, as we previewed, and they disappointed. Revenue was $669.8 million, down 1% from a year earlier and slightly below analyst forecasts. Adjusted earnings per share of $2.49 met expectations. The stock fell sharply in early trading, by between 5% and more than 10% according to reports.
Bright spots
Security subscription revenue, the part most important to the company's future, grew 11% to about $339 million. Check Point remained highly profitable: adjusted operating income reached $251 million, a 37% margin, and GAAP net income reached $185.2 million.
"A trough"
CEO Nadav Zafrir, who succeeded founder Gil Shwed, said revenue "reached a trough in the third quarter" and that the company expects gradual improvement starting in the fourth quarter. Even so, he admitted that the recovery is taking longer than anticipated.
The big picture
The gap between Check Point and young Israeli cybersecurity companies keeps widening. While Upwind, Cyera and Wiz grow by tens and hundreds of percent, and Israeli cyber companies raised nearly half of global cyber investment in the third quarter, the veteran giant struggles to grow. The four Israeli AI security acquisitions it made this year have not yet changed the trend.
