Check Point (CHKP) Q2 FY26 earnings call: guidance and Q&A

Given the investment in sales capacity, what is the normal ramp-to-productivity for new hires, and how does this align with the confidence in a Q4 rebound, as new hires typically benefit 2027?

The impact of new sales hires is expected in Q1 and Q2 of 2027, meaning the Q3/Q4 guidance does not factor in their productivity. The Q4 confidence stems from the stabilization of the go-to-market reorg and a strong existing pipeline, not the new hires.

“The impact to sales is expected in Q1 and Q2 of 2027. So the guidance and what we're expecting for Q3 and Q4 does not take into consideration the ramp-up.”

asked by Joseph Gallo · answered by Nadav Zafrir

Are buying patterns changing due to enterprise concerns about advanced AI risks, and how is this affecting Check Point's financial model, specifically at the firewall layer or non-chat subscriptions?

Attackers now have access to more resources, leading to more sophisticated attacks at a higher cadence, challenging existing security paradigms. Buyers are focusing on both fundamental prevention and new technologies like CTEM and the AI network firewall. The financial impact is seen in strong demand for emerging technologies and the new AI firewall.

“So when you think about the security paradigm that -- or the assumptions that we have around security, we're seeing signs that some of these assumptions and the current paradigm does not necessarily withstand the change that's coming from the attackers.”

asked by Patrick Edwin Colville · answered by Nadav Zafrir

Beyond hiring more sales staff, what needs to be done to change the perception of Check Point as 'legacy,' despite its strong technology and loyal installed base, and how does the open platform strategy fit in?

Changing perception requires better marketing and being louder about their technology, especially the AI network firewall. The open platform strategy, allowing management of multi-vendor environments, is truly unique and customer-centric, aiming to provide resilience and autonomous remediation in the AI era.

“And so with our unified management, which I think is one of the strongest features that Check Point has, within the next few months, we're going to offer our customers the ability to manage different products and different firewalls, even if they are our fiercest competitors because at the end of the day, especially in the Mythos era, we just don't have the time to take care of things one by one with an SLA of days and weeks.”

asked by John DiFucci · answered by Nadav Zafrir

The implied Q4 revenue of ~$800M would be a record. What markers support this confidence? Also, can you clarify the billings trajectory, especially with a difficult Q3 comparable?

Q4 confidence is based on internal metrics, a much higher funnel of qualified deals, and the expectation of product revenues returning to growth. Q4 is typically product-driven. Billings were impacted by a shift from annual to quarterly billing for large deals, affecting Q2 by 2 points. Q3 billings comparables are tougher, but Q4 is expected to be strong.

“But again, the billing this quarter affected, for example, from large deals that was renewed. It's not only renewal, it's renewal and new business that last year, we build annually and this year, we build quarterly. This alone have an effect of 2 points on our billings this quarter, just moving from annually to quarterly.”

asked by Adam Tindle · answered by Roei Golan

Why is firewall appliance demand softer than expected, especially when peers see stronger demand? Is it internal execution, customer behavior, or re-evaluation of architecture in the AI era?

It's a combination of internal disruption from the go-to-market reorg and customer behavior, though internal factors are seen as more dominant. The demand for firewall technology is there, as evidenced by competition and the company's own Q4 pipeline. Customers are also re-evaluating security in the AI era, focusing on fundamentals and new AI-driven solutions.

“I think it's a combination of still facing internal disruption that's affecting our execution that Again, we are -- our execution in Q2, I mean, you've seen the numbers was not what we wanted when we started the year. But I would say it's a combination of internal disruption and definitely also behavior of customers that I think again, some of them, we are looking on the memory cost, and it's something that I'm spending significant part of my time to find a way to make sure that we have the enough inventory to give -- by the way, it's not only for appliances, it's also for internal users.”

asked by Shrenik Kothari · answered by Roei Golan

What milestones should investors watch for SASE over the next year, and how close is Check Point to competing for global enterprise deployments?

SASE is now ready for enterprise-level capacity and is being integrated into unified management. Check Point's SASE offers best-in-class latency with its hybrid device architecture, making it fast and easy to deploy. The focus is on going bigger with SASE and integrating it as part of the broader platform, connected to firewalls and the AI Defense plane.

“We are now at a point where in terms of capacity, we're already ready for the enterprise level and integrating SASE into our unified management as we speak. I think we already have a proposition that in some aspects is best-in-class.”

asked by Junaid Siddiqui · answered by Nadav Zafrir