Why Is Cybersecurity Stock Check Point Software Sliding On Wednesday?

Cybersecurity provider Check Point Software Technologies CHKP reported fiscal first-quarter results on Wednesday.

The company reported quarterly revenue growth of 7% year over year to $637.8 million, topping the analyst consensus estimate of $636.2 million. 

The American Israeli enterprise security solution provider’s adjusted EPS of $2.21 beat the analyst consensus estimate of $2.19. The stock declined following the report, despite the earnings beat.

Also Read: Check Point Boosts Threat Prevention with Upgraded Infinity Platform

Revenue from Products and licenses grew by 14% Y/Y to $114 million, Security subscriptions increased 10% Y/Y to $291 million, and Software updates and maintenance declined 0.9% Y/Y to $233 million.

Margin: Adjusted operating margin declined to 40.5% from 42.1% the prior year. The operating margin declined to 30.7% from 32.4% a year ago as operating expenses surged by 9.2% Y/Y.

The company generated $421.1 million in operating cash flow, compared to $361.0 million a year ago, and held $2.93 billion in cash and equivalents as of March 31, 2025.

CEO Nadav Zafrir said strong demand for its Quantum Force appliances, fueled by refresh cycles and new projects, delivered double-digit year-over-year product and license revenue growth. He added that the AI-driven Infinity Platform, featuring a Hybrid Mesh Architecture, continues to resonate with customers and delivered another quarter of impressive double-digit year-over-year growth.

Outlook: Check Point Software projected second-quarter revenue of $642.00 million —$682.00 million versus the analyst consensus estimate of $665.75 million and adjusted EPS of $2.32-$2.42 versus the analyst consensus estimate of $2.36.

The company affirmed fiscal 2025 revenue of $2.66 billion-$2.76 billion versus the $2.72 billion analyst consensus estimate and adjusted EPS of $9.60-$10.20 versus the $9.91 analyst consensus estimate.

Price Action: CHKP stock is down 5.04% at $201.61 at the last check on Wednesday.

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