Check Point’s recovery remains elusive as revenue and profits continue to fall
The Israeli cybersecurity company reported $670 million in third-quarter revenue, while its shares have fallen 18% this year. CEO Nadav Zafrir says he expects a gradual improvement beginning in the fourth quarter.
Another weak quarter for Check Point, with declines in revenue and operating profit. Revenue in the third quarter of 2026 stood at $670 million, down from both the same period last year and the previous quarter. Operating profit also fell, reaching $177 million under GAAP (Generally Accepted Accounting Principles) and $251 million on an adjusted basis. In the previous quarter, operating profit was $185 million under GAAP and $260 million excluding one-time items.
Net income totaled $185 million, or $1.82 per diluted share, a sharp 45% decline in earnings per share. The drop was partly due to a one-time tax-related item recorded in the third quarter of last year, which boosted the comparison base. Nevertheless, Check Point remains one of the most profitable technology companies, generating $264 million in cash flow, equivalent to 39% of revenue.
The weak results come as little surprise, after management lowered its forecasts three months ago. The latest figures are broadly in line with those revised expectations. Investors will now be looking for a credible roadmap to tangible improvement from the Israeli cybersecurity giant, whose stock has fallen 18% since the beginning of the year, even as shares of many other cybersecurity companies have posted sharp gains.
Check Point is signaling that it believes the worst is behind it. “Revenues hit a low in the third quarter, and we expect a gradual improvement starting in the fourth quarter. The recovery is taking longer than we anticipated, but we remain confident in our vision,” the company said.
CEO Nadav Zafrir, who replaced founder Gil Shwed nearly two years ago, has been working to put Check Point back on a growth trajectory. His efforts center on the company's technology, where it is seeking to close gaps in cloud computing and adapt its products to the AI era. At the same time, Zafrir is leading a major overhaul of the sales organization, shifting its focus toward chief information security officers (CISOs), who oversee corporate security, rather than the senior engineering executives who were traditionally the company's main points of contact.
Investors are also looking for Check Point to use its $4 billion cash reserve to accelerate efforts to close its technological gaps. Earlier this year, the company raised $1.8 billion through convertible bonds, the first such issuance in its history. Yet it continues to direct its cash primarily toward share buybacks. In the third quarter, Check Point repurchased 2.5 million shares for $325 million, continuing a pattern established in the first two quarters of the year.
The company has now spent approximately $1 billion on the buyback program. While the purchases support earnings per share by reducing the number of shares outstanding, they have so far failed to deliver the desired boost to the stock price.
