CHECK POINT SOFTWARE TECHNOLOGIES LTD — Call Transcript 2025

Relations and joining me today are our Chief Executive Officer Nadav Zafrir and our Chief Financial Officer Roei Golan. Before we begin, I'd like to remind everyone that this conference is being recorded and will be available for replay on our website at checkpoint.com. During the formal presentation, all participants are in a listen only mode that will be followed by a Q&A session. During this presentation, Check Point's representatives may make forward- looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. These statements involve risks and uncertainty that could cause actual results to differ materially from those projected in the forward-looking statements. Any forward-looking statements made speak only as of the date hereof and Check Point Software undertakes no obligation to update publicly any forward-looking statements. In our press release, which has been posted on our website, we present GAAP and non-GAAP results along with reconciliation of such results as well as the reasons for our presentation of non-GAAP information. If you have any questions after the call, please feel free to contact Investor Relations by email at [email protected]. Now I'd like to turn the call over to Nadav. Hey everyone, good morning to you and thanks for joining us today. As you already know, our industry is undergoing a generational transformation. It's marked by unprecedented change and I think more importantly the unprecedented pace of change. We're still in the very early innings of this revolution and I believe that at Check Point, you know, we're well positioned to lead it. In today's call I want to take some time to talk a little bit about our guiding principles and our vision. Obviously, before elaborating, I'd like to share we had a solid quarter, both revenue and EPS in line with our outlook. It was relatively backend loaded and resulted in several slip deals that have already closed in the last few weeks. The third quarter is shaping up well with strong indicators so far in July. Beyond that, we see a very healthy pipeline for the remainder of the year and we are reiterating our 2025 guidance and of course Roei will elaborate about the financials and the outlook shortly. If you bear with me for a few minutes, I'll try to be very brief. To lead the future, we are focused on four guiding principles. Number one, securing the connectivity fabric. Number two, a prevention-first ethos. Three, an open platform philosophy, and finally, an AI for security. The modern connectivity fabric is hyper. It's hyperconnected, and it's not only a critical infrastructure for every digital transaction, but it's also become a potential source of knowledge that can provide the ability to read between the nodes, revealing patterns, anomalies, emerging threats. I think that's an opportunity we must embrace. I can tell you that in Q2, our Quantum Force AI-Powered Firewalls posted another robust quarter, growing 12% year-over-year. It was driven by the refresh momentum and a growing demand altogether for AI-powered inspection. We also continue to accelerate our investment in SASE. We've opened a new R&D center in India that's coming up nicely. We doubled the size of our SASE R&D team, and we're only seeing the momentum that comes with that with sort of a steady growth across all regions. Recently, this progress was also acknowledged with our inclusion at the 2025 Gartner Magic Quadrant for SASE and also the recognition as a leader in the Forrester Wave for Zero Trust platforms. On the Workspace front, as I shared in our previous call, we continue to make progress under Gil Friedrich's leadership. The Workspace platform now brings together endpoint, email, and SaaS security, ultimately helping our customers' operations and improve protections. Also under Gil, we're expanding our MSP and pay-as-you-go offerings so that we can support onboarding and more flexible consumption models. This is contributing to a steady customer growth. Tens of thousands of new customers and millions of users are joining annually through this program. To summarize the first principle, our vision is to securely connect and optimize security across devices, networks, users, and clouds. To do that, we need to look at it as a holistic solution that ultimately delivers a consistent, unified security across what we call the modern hybrid mesh network. The second principle out of four is prevention-first. You know, it's been foundational for Check Point forever that we must strive to stop attacks before they cause damage. Now, preventing attacks may not be glamorous. It's difficult to receive sort of acknowledgments for things that did not happen. At the end of the day, it's like a constant behind the scenes effort that requires discipline, smart design, and a proactive mindset. True prevention is about acting in real time. You need to stop the zero-day phishing site before a user engages so that you can also block Log4j exploit before it runs. The secret sauce is to be able to deliver this in real time so that you can get prevention without a negative impact on the user experience. That's the hard part. It takes intelligent engines that are working silently across data streams and are now driven by AI that make those split-second decisions without disruption. It may not be flashy, but it's foundational. In some ways, I'm seeing a renaissance of the importance of prevention. Especially when you look at the AI driven threat landscape, you know, it's expanding really, really fast. Just last week, the SharePoint ToolShell zero-day vulnerability was exposed. It's a vulnerability that effects on premise Microsoft SharePoint servers, and at the end of the day it allows unauthenticated attackers to gain full access. Our customers at Check Point were protected. We also enhanced our prevention stack with the Veriti acquisition, which we announced recently. This now provides an automated threat intelligence and real time remediation. I think that this acquisition positions us at the forefront of preemptive prevention and threat exposure management, and it strengthens our leadership in proactive cybersecurity. Moving on to our next principle, it's all about an open platform. You know, there are different ways that we can approach a cybersecurity philosophy. We believe that an open platform is the right approach. When we speak about an open platform, it's the ability, not to, for us to create the core networking fabric, pulling everything together, but being able to collaborate and to create an extensible collaborative situation for our platform. Philosophically, I believe that an open platform also makes you more resilient. I believe that trying to go for an all-in-one catalog option actually makes you more brittle and fragile. You know, again, the acquisition that we just made of Veriti gives us another capability to put together 70 other vendors that work together with us. That's the open platform strategy. Finally, we are embracing AI as a new tool. This means not only that we have cool LLMs that organizations are bringing together, but actually it's a shift in mindset because if AI is going to make decisions for us, we're going to have to trust AI to make those decisions, those predictions going forward. This is a major change in our industry. At Check Point, we now have an AI engine that runs to allow our customers to use AI on the personal level. All the popular AI capabilities that we see, we're also embedding it in each one of our products. This takes us, I think, to the forefront of embedding AI, using AI to simplify and to provide a unified management that is actually making our customers' lives easier. Long story short, I've spoken to you about the four principles. They're important for our vision going forward and I think we're well positioned to lead the future of cybersecurity based on those four principles and our vision of the open platform. With that, I'll turn over to Roei. Thank you, Nadav. Let me just open the presentation. Okay. Okay, okay. One moment, one moment. I have some issue here. I will be with you in a moment. Okay. Can you see my screen? Great. Yup. Okay, great. Sorry for the delay. As Nadav indicated, we had a great quarter. I think our revenues exceeded our midpoint of our projection by $3 million and achieved $665 million. Our non-GAAP EPS were $2.37 in the midpoint of our projections presenting 9% growth year-over-year. Moving to the results, as I mentioned, our revenues grew by 6%. That was mainly driven by strong quarter, another strong quarter for product revenues that driven by strong customer demand for new appliances and higher volume of product refreshes. I have to say that this refresh cycle reflects continuous investment in our platform and broader adoption of our latest technologies, our Quantum Force technology that we released a year ago. As a result of these refreshes, a larger portion of our deals were bundled including subscription and support and were offered at higher discount level compared to standalone renewals. This dynamic has led to slight deceleration in our subscription revenues and declining our support. Slight decline in our support revenues for the quarter. However, we view this as a positive trend for the long term as this strengthens the customer relationship, expands our install base and positions us for increased renewal install revenues and upsell opportunities in the future. As for the billing, the calculated billing grew by 4% to $642 million this quarter. Our RPO grew by 6% and reached $2.4 billion this quarter. This quarter, as Nadav indicated, was heavily backend loaded resulting as several deals that were pushed from the last few days to the first two weeks of July and were already closed. These deals alone we're talking about few 7-digit deals affect our billing by approximately 3 points. That will benefit us in the third quarter. As a reminder, in the same quarter last year we had a three multi-year deal totaling $130 million which also had a significant impact on our RPO last year. Moving to our revenues by geographies, we are looking at our America and EMEA grew by 5% this quarter while APAC had a strong quarter with double digit growth and reached 15% growth year-over-year this quarter. Moving into our P&L, our gross profit increased from $557 million to $585 million representing a gross margin of 88%. Our operating expenses increased by 7%. This increase is mainly as a result of our continued investment in our workforce organically and also the impact related to Cyberint and Veriti acquisition that I remind you Cyberint we acquired during Q3 2024 and Veriti we completed the acquisition during June this quarter. Our non-GAAP operating income continues to be strong at $271 million or 41% margin. I think it's important to discuss also the FX impact as we all see the U.S. dollar is weakening. This is most of the currencies and especially against the Israeli shekel given that we are approximately 50% of our operating expenses are denominated in non-USD currencies and mainly the shekel and we are not adding 100% of these expenses. This currency movement resulting in an estimated half a point headwind to our margin this quarter. If I'm looking on the second half of the year, although we add significant portion of our foreign exchange exposure, we still going to have an impact because again we are not hedging 100% of our foreign currency and we do expect to see a headwind of approximately half a point to one point if the U.S. dollar will stay in these levels. That's important to say and if we're looking into 2026 if the FX rates will stay at these levels this could increase our operating expenses next year by approximately $50 million to $60 million. Moving into our cash flow, we had a strong operating cash flow this quarter, achieved $262 million, a 31% growth year-over-year. I think it's important to mention here that it includes the benefit of $50 million from hedging transactions offset by $6 million related to our Veriti acquisition. Our cash balance was $2.9 billion and we continue to do our buyback and purchase 1.5 million shares at an average price of $220. Also, we acquired Veriti during the quarter that was a net cash of around $90 million. That's also part of the cash flow for this quarter and two notes regarding the next quarter regarding Q3 that will impact our cash flow, we have two items. First, we announced that we acquired the land for building our new Check Point campus in Tel Aviv in Israel and we completed this purchase during July and paid a total of $160 million for that land. We do not expect any significant additional investments in CapEx in connection with this campus until the beginning of 2027. In addition, and other items relevant for the third quarter for the cash flow as part of tax settlement recently signed recently last week actually for prior years, we're going to pay approximately $66 million during the third quarter to settle this tax disputes for prior years as we had higher provision in connection with this dispute. This settlement may also have a material positive impact on our third quarter P&L and EPS. We are still as this settlement was just signed few days ago, we are still assessing the effects. Please note that this potential impact is not reflected in the guidance that I'm going to share with you in the next few slides. To summarize our second quarter, revenues and EPS in line with our projection, accelerated Quantum Force appliances demand, second quarter in a row of double digit, continued strong demand for email, SASE, and ERM, I think very important, we do see strong, continued strong demand and another strong profitability quarter with great operating margin and strong operating cash flow. Before we move to the Q&A, I'll move to the guidance for the next quarter. As Nadav indicated, we started July, we started this quarter very strong. We see, we are looking, we have some indicators, internal indicators and of course together also with the deals that were pushed from the second quarter, but also with the funnel and the deal that already closed in July and the funnel that we have for the remaining of the quarter, we feel very positive about the third quarter and the remaining of the year. Our guidance for the third quarter is between $657-$687 million. Midpoint sits at $672 million. Our non-GAAP EPS is between $2.40-$2.50 while the GAAP EPS is expected to be approximately $0.68 less. As for the full year, we are not changing the guidance. The guidance stays the same, same range that we gave you in the beginning of the year. We feel positive that we'll be able to finish in the high end of the, but still the range is the same and same for the EPS and revenues and the GAAP EPS is expected to be $2.30 less. Thank you, Kip. All right, now we'll move to the Q&A and first up today will be Adam Tindle followed by Tal Liani of BofA. All right, thanks Kip. Good morning Nadav. I just wanted to maybe start with the elephant in the room here with the announcement that Palo Alto is acquiring CyberArk in a $25 billion deal. As it relates to your comments specifically to Check Point, you're talking about how an open platform is the right approach. I wonder if you could maybe just expand on that, areas where you're thinking it makes more sense to partner versus maybe own or acquire. Certainly, any comments that you can make on the identity space, given that large transaction this morning. Thank you. Yeah, thanks, Adam. Yeah, sure. Very interesting announcement. Impact on us is, I think, minimal as we're not a player in the identity space. As I said, our vision is to focus on what we think we can do best. In my opinion, it's the breadth of the connectivity fabric and that has the hybrid mesh on one side, Workspace on the other side, and creating a unified platform for everything. Connectivity fabric. On top of that, winning with AI. Having said that, our philosophy is to focus on an open platform. To focus on an open platform for a couple of reasons. Number one, I spend my time speaking to dozens of CISOs a month at least. When you go to the enterprise and up, I think that between this idea of best of breed and best of suite dilemma, an open platform is the right approach. It's unified layers, deeply integrated, allowing it to be extensible, collaborative. That's from the CISO perspective. Also, they don't want to be in a vendor lock. I can tell you, as someone that's been in the industry on all of its side for many, many years, I also think an open platform makes more sense from a security perspective. If you think about the attackers, you don't want to have a monolithic approach. You don't want to come from one shop with the same philosophy, same software, same people, same intelligence. You want to have an open approach to it that allows you to have sort of an open garden and approach that allows you to import and to use different platforms, working together. I think that this, it's not a technical framework, but it's a real differentiator and our vision and approach to the market. Thanks. Up next is Tal Liani of BofA, followed by Joseph Gallo from Jefferies. Hey, Nadav. Good morning. Question. I look at your growth, 6%, your billing growth. Even if I add the delay, the deals that slipped, we're not seeing acceleration. The question, I asked you the same question last quarter. I ask, what I want to focus on is to understand what are the challenges that you see in accelerating growth? Meaning I understand what you're doing, but it does take time. It looks like it takes time from the numbers' perspective. What are the challenges? When you talk about operational challenges, culture challenges, product challenges, go-to-market challenges. Can you just discuss what prevents the company today from accelerating growth and what would take for the growth to accelerate in the future? Yeah, great question. Tal, and you're right, it's not an overnight shift. It's a vision. You have to have the principles and you have to make the investment. That's number one. Number two, as you know, as I said, and this is something that is already coming around, it's building the right go-to-market approach and the sense of urgency, culture, and we're doing all of that. Like you said, it's nothing that's going to happen overnight. Having said that, I don't think that there is a specific challenge. I think we have the right products, I think we're in the right market. I think we have the vision. We need to focus on what we do best, on executing it and up our game and go-to-market. That's the plan. Got it. Would you say that if you have to kind of rank in order? The things you're dealing with, would you say that most of the focus is on go-to market or most of the focus is on improving the portfolio? Where, where is the focus of the company that would drive growth acceleration? I think for the short run, definitely go-to market. Right? For the short run, definitely go-to market. Having said that, I do think we are in a pivotal time in the industry. I really believe that AI is going to change the way we live, operate, do digital infrastructure. We need to make a hefty investment here and lead the way. If you ask me, what are the three areas? One is go-to market. We have been speaking about that. It does not happen overnight, but we are making the changes. The second is in heavily investing in AI. I think we are already leading with embedding AI in our own products. Number three is a culture of execution and sense of urgency. It all happens in parallel. Some will have impact in the short run, some will have impact in the medium term, and some in the long term. Great, thank you. Thank you, Tom. All right, next up is Joseph Gallo, followed by Junaid Siddiqui. Hey guys, thanks for the question. I understand the impact of the discounting, but can you just talk through some of the confidence and why that is a positive long term? Is it upsell to SASE or where should we see some of that goodness over time? And then just any quantitative metrics regarding the performance on the new logo side of the business. Thanks. Yeah. Okay, so I think when I'm looking on, on we have our internal indicators when we were looking on the, on the customers that are doing refresh, we are seeing that over time. The AR from this, I mean, I'm not talking about the appliances, I'm talking only about the AR associated with these customers, is increasing, increasing nicely. And we see that on the long term, maybe not on the first quarter, on the second quarter, but on the long term the AR is increasing. We have, we have this internal indicator that we feel confident that because we see very strong demand for these appliances from our existing customers, sometime it's coming also with cross selling SASE or email or ERM, but even without that, we see that even with the firewall, we see that the AR is increasing over time when they are buying from us, the appliances. Therefore, we feel confident it's not only in this quarter, we feel it, we see these indicators over deals. And Nadav, you want to add around it? You want to add something? Yeah. To your question on where we see, we're seeing the growth, I would say two main areas. Number one is the new product lines, right? If you look at email, ERM, SASE, those are growing above 40% year-over-year, right. A very healthy growth. As I said, we just, you know, we doubled the size of our SASE team and we're making a huge effort to grow it as fast as we can. The other place is what we call the Infinity Platform that at the end of the day, I think we have a real, you know, differentiation with our roadmap to create this unified platform that allows you to have all of your connectivity fabric in one. In my opinion, this is not long term, this is midterm with what we're seeing coming from the attacker's perspective, with the, you know, becoming AI ready enterprise, having that holistic view into your network fabric and being able to read between the nodes and go from a static reactive to a predictive proactive approach, I think that's going to have a huge impact. When you couple that with the fact that we are going to be making more investments in our marketing, I think that over time you will see the impact and the growth coming at the same time. This investment, and we've been talking about this for a long time, will also call for, you know, probably having to give up a few margins, a few points on the margin so we can grow faster. Makes sense. Thank you. All right, Junaid Siddiqui is up, followed by Rob Owens. Great, thanks for taking my question. Nadav, you've talked about SASE being one of the key focus areas for you. Could you just give us an update on the Perimeter 81 acquisition and you know where you are from a go-to market and from a technology integration perspective and, and you know, overall, what's the vision that you're trying to articulate to customers that's a bit differentiated from the many vendors that are providing SASE solutions to customers? Yeah, thanks. So since the acquisition, we first in terms of numbers, we're seeing a solid 40%-ish growth. So solid, what we're doing is moving it up to the large enterprise level. So we're now at a position where we have fully deployed capabilities in up to 10,000. And the beginning of 2026, we're already going to have the ability to do that beyond that. So that's one part of the answer. And as I said, this is a critical aspect for us both on the R&D and on the go-to-market. Talking about go-to-market, the idea is that it's no longer just a small sales force of an overlay, but we are bringing up to speed the mass field capability that we have that comes more from the gateway side to also be able to go out there and showcase what we have in SASE. To your question on the differentiation, I think the differentiation has two parts. Number one, it's the whole connectivity fabric platform approach. On the one hand, we have the hybrid mesh, which we've been talking about. On the other side, we have the Workspace where we're unifying different capabilities so that we can look at personas and not different technologies. SASE is sort of something that is the glue that connects all that. Our architecture is different than others. Most of the architectures out there of some of the incumbents are architectures that are cloud only. The fact that we have the hybrid capability, the fact that we're also on device, means that I believe we can do three things better and we're proving it in the market. Number one is better user experience, sometimes 10x, because we're able to in every transaction find the right way. We don't have to go to the cloud every time we do it. That leads to a 10x faster capability on the user experience. Number two, it's cloud cost. The fact that we have this hybrid approach allows us to not use the cloud in every transaction that controls cost. And number three, the fact that we have all of the capabilities on a small agent on the device in the AI era means that we can protect you where the threat is coming. I think that when you put all that together and with what we've seen so far, I'm very optimistic about it. All right, next up is Rob Owens, followed by Brian Essex. Great. Thanks Kippy and good afternoon everybody. Hoping you could drill down a little bit just into the slip deals that you mentioned. I know you quantified them and appreciate that but rhyme or reason for the slippage, geos that they slipped in, and anything that you're seeing more broadly out there in the environment. Thanks. Based on what we've seen, especially this quarter, I think again it's a combination of macro and execution. In the end, we did see more deals that were slipped than usual. I mean, we have every quarter slip deals. We have to be honest with everyone here, it's not that we don't have, there is no quarter that you don't have any slip deals. This quarter we had more than usual. I think why we feel confident that these, most of these large deals, we're talking about 7-digit deals, I would say all of them were closed in the first three weeks, three weeks of the quarter. We feel confident that it's just an issue of timing, you know, sometime we, we mentioned that we did see much more backend loaded quarter than usual. I think that was the most backend loaded quarter that I have ever seen since I'm in Check Point, and therefore there is a risk when you have more backend loaded. There is a risk that some deals will be, more deals will be slipped, but we feel confident because we close them and we feel more confident around it. Yeah, look to add to that, I think Rob, each one of them is sort of a snowflake. There's no one thing. Good news is that it's already closed and we're seeing a great start to Q3. July so far has been great and we're optimistic about Q3 and the rest of the year. Were they equally split amongst the geos or were they predominantly in one? Yeah, pretty much. Pretty much, yeah. There is no common denominator to it. I really think its back end loaded execution and again all of them have already been closed. So we're confident that doesn't have a meaningful impact. Thank you. All right, up next is Brian Essex, followed by Shaul Eyal. Hi, good morning and thank you for taking the question. I was wondering if we could dig in on Quantum a little bit. Nadav, what do you see in terms of, you know, the Quantum product cycle, refresh cycle, like how far through your installed base is the penetration there and what are you seeing architecturally? Are your customers kind of taking a step back and reassessing the network architecture and maybe throttling spending into other areas of their network security environment? Thank you. Yeah, thanks. On the refresh cycle, I'll let Roei also chime in on the architecture part though. Again, this is sort of the principles that we're talking about. The first one is to look at the whole connectivity fabric. A Quantum gateway is one instance. It's a critical instance. We're seeing everything stay hybrid. The ability to do it on prem is important. We also have our CloudGuard, the ability to do the same thing to the cloud and more importantly, bringing all that together as one connectivity fabric platform. That's where I think we're going. With that, where are we investing? We're investing on creating one unified management that could push all the policies at the same time, whether it's on the cloud, multi-cloud, on prem, branch, data center, et cetera. It's connecting that to the SASE. Each one of the nodes in this very complex environment can get the same capabilities that a data center can get. All of them together are giving you sort of that sense of what a network is really about. Number three, embedding AI in this to simplify and automate. Again, I think we're in the very early innings. It's going to take not just engineering, it's going to take not just bringing AI in, but also a change in sentiment because at some point, which we're already seeing, we need to trust that AI to make real decisions in split-seconds because the attackers are not going to give us any more time. For me, when you think about Quantum, I think about the whole connectivity fabric and what that brings to our customers. Again, I believe that's not the whole cyber state market, but it's a core and I believe that it can be the core platform and being an open platform, open up to other better breed platform, just like we did with Wiz and we're going to do with others. Yeah, and for the refresh cycle, I think we're in the middle of that. I think when I'm looking on the potential for, the potential is huge. We are looking on the funnel for this for the second half of deal and when I'm looking even on the funnel for the first half of 2026, the potential is there. I mean we still have a significant installment that's up to refresh and the potential is also to have a competitive replacement and we did see some of them during the first half of the year. We need to have more of them. Definitely there is a huge potential on that front. Any sense of the duration in the back half of the year or into next year? Like is it an acceleration that you might expect or how meaningful can that be? Just based on my, this, my when I'm looking on the funnel and discussion, it should last at least until the first half of 2026. Tough to me to say if it will be, but again, this trend continue to, I mean, expect it to continue in the next 12 months. Helpful. Thank you so much. All right, up next we haveShaul Eyal, followed by Keith Bachman. Thank you. Hey, good afternoon guys. Roei or Nadav on Harmony Email, is it still growing at similar rates like we've seen in prior quarters? Maybe on those slipped deals, are they like geographic based or across the board pretty much. I think, yeah, go ahead Nadav. I think the slip is your answer, but go ahead. Yeah, no, I mean just to reiterate on the slip deals, there's no common thread. It's not many but it's a few big ones and it's not geographically based. We have it both in the Americas, EMEA, etc., and again it's deals that have already closed in the last few weeks giving us a really good head start for the next quarter. On email, the answer is absolutely yes. It's continuing to grow at a very healthy rate. Not only is it continuing to grow at a very healthy rate, but also around that, around the leadership and the capabilities. We're baking together a few different solutions. Instead of looking at different products, different devices or different locations, we want to look at the modern workforce. This is the new Workspace division under Friedrich where we're bringing together email, endpoint, SaaS security, browser security and putting together a holistic capability. At the end of the day we can look at personas and what they do, their security, their efficiency, their effectiveness as personas that are moving around the world and hopefully that can lift the whole Workspace solution, not just email. Thank you. All right, next up is Keith Bachman followed by Andrew Nowinski. Hi, thanks guys. I wanted to go back to subscriptions and discounting and a couple different threads to pull on. I think you said the impact was 50 basis points this quarter on subscription, but I just want to make sure I heard that clearly and we did hear from the channel that Check Point was more flexible in the pricing this quarter. My question is that that's not a one-time event, right? We should be assuming that that discounting impacts presumably the next four quarters' growth on that subscription line item. I just wanted to hear any thoughts you might want to offer. Excuse me. On how we should construct our subscription line. Candidly, the number looks disappointing. Even if we layer in 50 basis points, what investors want to see is that line not holding steady but increasing. You know, there's not a lot of conviction that firewalls over the next three years, the product revenue will be a durable source of growth. Is that sort of the line item that investors really view as important? Maybe just help us think about the ongoing headwind associated with the next couple quarters if there is this discounting that's going to be involved. Yeah, so first of all, you're right I mentioned the half point effect. The headwind that we had from aisle discounting related to the subscription which is part of the refresh, the bundle with the refresh. You're right around that. I do expect that as long, I mean I'm talking about the refresh from existing customer. We do expect to see the refresh. We're gonna see this refresh and we see in the final that the refresh is going to be strong hopefully in the next four quarters at least. That will have a headwind effect on the subscription. On the other end we have tailwinds. I mean we see that the email is getting bigger and bigger out of the total subscription revenues and that has higher portions. It should drive because that email is growing much higher than the 10% subscription. Also SASE and also, ERM, all of them are growing farther north of 40% year-over-year. All these items are getting bigger in the subscription line items. Of course we also expect to have more competitive replacement in the quantum on the firewall. Together that should drive us, should drive the accelerate growth on the subscription. I, we do expect to see if we'll see the trend. We do expect to see slight acceleration in the next few quarters pushed by these specific emerging technologies that I just mentioned. Okay, perfect. All right, many thanks. All right, next up is Andrew Nowinski followed by Shrenik. Thanks, Kip. Good afternoon. Nadav, at the analyst day you talked about the need to win the SASE market, you know, to drive subscription growth. But it seems like identity is the foundation for that Zero Trust SASE market. I mean you have to verify the user is who they say they are before connecting them to an application. I'm trying to understand how critical is identity security to your SASE solution and to the future adoption of SASE as you push more into that large enterprise space? Thank you. Look, secret management and identity are a part of the whole estate. Creating Zero Trust with the capabilities that we already have is actually, I believe, very doable and we are leaving it and, you know, the customer needs to choose actually what provider they want to use as an identity broker. Again, that goes back to the open platform approach. I do not see this as a big impact and I definitely do not think that this is a big impact on the SASE solution that we have. Okay, thank you. All right, next up is Shrenik, followed by Patrick Colville. Yeah, sorry. Yeah, thanks. Kip, Nadav, you have articulated a strong vision around AI-powered prevention. Talked about, of course, Quantum Force to unified management, real-time detection. Just curious, like how are you thinking about monetizing these structurally? Also get a little bit into timing, like overall net new SKUs, pricing, uplift, broader adoption. And just on that note, since you've said in the past about being brutally honest and takes a village and rarity being integrated for real time prevention. Just on M&A front, given your cash position and the cash generation, how you're prioritizing AI-focused M&A and, and also internal R&D in your, just your philosophy there? Yeah. To start with the second question, this is one of the four guiding principles in AI First Security. In order to get to AI First Security, we're doing mainly three things. Number one is hiring the right talent to lead this future. To this end, we announced last quarter that we're going to be hiring about 500 new individuals that can lead us to that future, both on SASE and AI. We're already halfway through this program. Number two, as you said, there's always the opportunity to make acquisitions. We have a strong position and we're looking all the time to the right people, the right IP, the right market access. We're doing this as we speak. I believe that we will make moves there as well. It's the balance between these two, the acquisitions and the talent that we already have, the talent that we're onboarding together to lead this future. That's on the investment that we're making. Generally speaking, on the monetization front, I think that there are three things that you need to look at. Number one is a standalone product. We already have that. In fact, we're already selling the capability to allow users to have access based on policy and governance so that organizations and enterprises can embrace these technologies safely and not block them. That could be a standalone product. We're also looking at this as a new platform because when you think about AI, cybersecurity or security for AI, you're looking at observability, you're looking at users' capabilities, you're looking at governance, you're looking at runtime, and you're looking at CICD. We're looking at the whole gamut. It's an evolving space, making our first moves. The next, which is more about optimizing and being more competitive with our capabilities that we already have, usually mostly on the management side. We've launched almost 12 months ago Playblocks and AIOps, and we're seeing that play a major part. As you can see, it's a very wide range. Absolutely, to your question, we already have, and we'll have more separate SKUs, if you like, that are actually being sold either as a part of our network fabric and Infinity consolidated platform, but also as a standalone. These are going to be a part of our Workspace platform, they're going to be a part of the network fabric, and as a standalone. Got it. Thanks a lot. All right, Patrick Colville, followed by Jonathan Ho. All right, thank you for taking my question. I'm actually going to ask Nadav this one, please. I mean, you mentioned earlier in the call that you'd be happy to give up a few points of margin to achieve your goals. I guess my question is should we interpret that as new information or should we interpret that nugget as consistent with the messaging from last quarter and the analyst day. The reason I ask this is because many had thought, you know, this time last year when your appointment was announced, that given your background at Team8, there would be an acceleration of tuck in deals and we haven't seen that. You know, any color you could provide there on that margin comment or, you know, might there be a change in the pace of tuck-in deals? So there is no new information, Patrick, it's part of our vision. We've spoken about that. We are looking to accelerate growth. It's a journey. I think we're already seeing good initial cues that we're going the right way. In order to go there, you need to galvanize the strategy, and that's what we're doing. You've seen the four guiding principles, and yes, you are going to see an acceleration in the way that we either build in-house to be ready for the future that we've been speaking about extensively, but also acquisitions. For 2025, we already gave the guidance, we already reiterated it in January of next year. We'll give the guidance for 2026. As we've spoken about on the analyst days and in other calls, we are willing to make the investments for a faster, more, faster but sustainable growth. These tuck-ins and these acquisitions are going to be within the strategy that are articulated and within the four guidelines. You know, when we're talking about the connectivity fabric and how we lead that, we don't have everything. Some of it we can build, some of it we can acquire. Same thing goes for Workspace and definitely for AI. We're very active in assessing the possibilities that are out there. We're willing to—not willing—we are making the strides to make sure that we see the best in class in each one of these categories. Very clear. Thank you, Nadav. Hey, thanks Patrick, for telling us you're European with your outfit. Next up is Jonathan Ho, followed by Keith Weiss. Good morning. With your go-to-market changes, what have been sort of the most relevant changes that you've made? And can you give us a sense of the timing of when you expect these impacts to be more meaningful and maybe where you are seeing those impacts work today? Thank you. Yeah, thanks. I think first and foremost it's about the leadership. All right, so in the C-suite today we started out, when I started out, we had one leader. Today we have six, or sorry, we had two and now we have six. So President of Americas, President of International, CMO, Customer Success, CRO are all a part of this. And so the balance between the product engineering and the rest of the folks and the go-to-market folks is differentiated. The second is the people that we are looking to attract, right. So, you know, we are hiring people that are coming more from a marketing perspective. The second is on a cultural level, being less shy about what we stand for and why we stand for it. And all this is, you know, in the process of happening. More news to come shortly. Thank you. All right, next up is Keith Weiss, followed by Saket Kalia. Go ahead, Keith. I know you don't have a camera open. Hey, can you guys hear me? Yes. Excellent, thank you. Maybe a question for Roei. Nadav talked about the necessity for more marketing dollars to get more of the message out and that makes sense to get to a pace of acceleration. I think one of the things investors broadly have been hoping for or expecting within software companies is the internal use of generative AI and more AI technologies to be able to drive more efficiencies within the business. So maybe you could talk about the potential within Check Point of you guys utilizing the technologies yourself. Maybe get more productive in development, more productive in go-to-market using generative AI. What ability is there to offset some of that necessity for higher investment so you can sustain the operating margins and maybe do both, right. Get to that level of acceleration just by being more productive and still putting incremental investments where they're needed. First of all, great question. I think definitely that's one of our priorities when we are looking. Also, we're talking a lot about AI and security for AI. Definitely, AI is an opportunity also to be more productive internally and to optimize operations. That is something that we are already working on today and it should help us in the future. I don't think that in the short term we'll see it contribute to our operating margin. This is optimization, but we have. We're actually a task force in the company with the development team, with the go-to-market team, with my team, everything is working to see how we can leverage these AI tools today and how we can be more productive and optimize what we are doing. I have to say again, to quantify it for now today will be difficult, but in the long run, in the long term it should benefit us. More like a 2026, 2027 benefit? Hopefully. Yes. Yeah. To add to that, Keith, because I think that's on everybody's top of mind. You know, every organization on the planet is dealing with this. We need to lead it, but we need to lead it on different fronts. One of the fronts that you said is being an AI first company. I think we're at the front line, but it's one of those things that, how do you know if you're at the bleeding edge when there, you know, there is no sort of benchmark. So we're never going to be content enough. The way I look at it is yes, to become more efficient, more effective, but rather than try to, it's the latter. It's sort of the last piece of what you said. It's not. Since we are investing in our future, I think that will allow us to do more, not with less, but with the same. Right. And enable us to go for growth. Lastly, I'll say, you know, because Roei talked about the task force, Jonathan Zanger, who I told you about last time we spoke, our new CTO, you know, he's obsessed with those three things. How do we become an AI first company? The second part is how do we help, and I think this is one of our number one tasks in the world today, is how do we allow our customers to become an AI first company without, you know, taking huge risks on privacy, security, governance, etc. And then finally, constantly having an eye open. That is why we put together the research center that's looking to where the puck is going. I think attackers have less, you know, they're flexible, they don't have procurement committees, governance, etc. They're embracing these technologies extremely fast. We at Check Point have to do all three of these things in parallel. I think we're already, we're off to a really good start, but a lot more to come of that. Got it, got it. Maybe one quick follow up for Nadav. Not to try to put excuses in your guys' mouths, but in Israel you guys had a 12-day war during the quarter. I think it could be forgiven if that created some disruption or some distraction for the Workforce within Check Point during the quarter. I mean, do you think that had any impact on slip deals or execution in the quarter? I mean, it was a pretty big deal. Yeah, obviously it was a big deal and we can talk about the implications for the next few hours. Specifically on Check Point, no, you know, we're a global company, we have people around the globe. We didn't see any direct impact, but believe me, we probably have one of the best BCP DRP programs in the world for obvious reasons. No, it didn't have an impact, but what it did have is it shows us what kind of a world we're looking at. You know, obviously we all know most of the world has been looking at the impact, the direct impact, the kinetic impact, but behind the scenes there's a cyber war going and Iran is one of the proponents of that war. They have good capabilities, they have a lot of motivation and we're seeing an increased, I would say, boldness and the amplitude of what the Iranians are doing with some of their friends around the world. Got it. All right, our final call, our final question will come from Saket Kalia from Barclays. Excellent. Thanks so much for fitting me in here, guys. Nadav, maybe, maybe we can, we can end with, with one of the things you said in your prepared comments, which was steady growth in SASE. Clearly Check Point has a big customer base to cross sell SASE to. Maybe the question is, what are you seeing in terms of your SASE wins, in terms of why you win? And Roei, maybe the related question is anything that you can or want to share just on the scale or run rate of this business. As we think about the future of Check Point. Yeah, to begin with, we're still a relatively small player in SASE per se, but we are the leading player when it comes to a connected fabric platform and the hybrid mesh and SASE is embedded in that. Many of our wins, I would say most of our wins, are customers that are already using our Quantum base and want to, you know, have a more holistic connectivity fabric capability. I do not think there is any other company that has sort of the inspection engines, the AI engines, the intelligence that comes from 32 years and dozens of thousands of customers that now once you put the SASE in, you immediately get all that benefit and bring it together as a platform. You are right. Today it is mostly the upsell from existing customers, you know, through our new division that also is going to bring up our MSP pay as you go. I think we are all. We also have an opportunity in the downstream and I do see opportunity for SASE to come into customers that do not have Check Point and hopefully then embrace the other Check Point customers. You are right that the beginning of the journey is the upsell from existing enterprise customers. Very helpful. Thank you. All right, thank you all for joining us today. We appreciate it and we will look forward to seeing you throughout the quarter and also this time next quarter. Thank you. Thanks, guys. Thank you.

Speaker 8: Relations and joining me today are our Chief Executive Officer Nadav Zafrir and our Chief Financial Officer Roei Golan. Before we begin, I'd like to remind everyone that this conference is being recorded and will be available for replay on our website at checkpoint.com. During the formal presentation, all participants are in a listen only mode that will be followed by a Q&A session. During this presentation, Check Point's representatives may make forward- looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. These statements involve risks and uncertainty that could cause actual results to differ materially from those projected in the forward-looking statements. Any forward-looking statements made speak only as of the date hereof and Check Point Software undertakes no obligation to update publicly any forward-looking statements. Relations and joining me today are our Chief Executive Officer Nadav Zafrir and our Chief Financial Officer Roei Golan. relations and joining me today are our chief executive officer nadav zafrir and our chief financial officer roei golan Before we begin, I'd like to remind everyone that this conference is being recorded and will be available for replay on our website at checkpoint.com. before we begin i'd like to remind everyone that this conference is being recorded and will be available for replay on our website at checkpoint.com During the formal presentation, all participants are in a listen only mode that will be followed by a Q & A session. during the formal presentation all participants are in a listen only mode that will be followed by a q & a session During this presentation, Check Point's representatives may make forward- looking statements. during this presentation, check point's representatives may make forward- looking statements Forward-looking statements generally relate to future events or our future financial or operating performance. forward-looking statements generally relate to future events or our future financial or operating performance These statements involve risks and uncertainty that could cause actual results to differ materially from those projected in the forward-looking statements. these statements involve risks and uncertainty that could cause actual results to differ materially from those projected in the forward-looking statements Any forward-looking statements made speak only as of the date hereof and Check Point Software undertakes no obligation to update publicly any forward-looking statements. any forward-looking statements made speak only as of the date hereof and check point software undertakes no obligation to update publicly any forward-looking statements In our press release, which has been posted on our website, we present GAAP and non-GAAP results along with reconciliation of such results as well as the reasons for our presentation of non-GAAP information. If you have any questions after the call, please feel free to contact Investor Relations by email at [email protected]. Now I'd like to turn the call over to Nadav. In our press release, which has been posted on our website, we present GAAP and non-GAAP results along with reconciliation of such results as well as the reasons for our presentation of non-GAAP information. in our press release which has been posted on our website we present gaap and non-gaap results along with reconciliation of such results as well as the reasons for our presentation of non-gaap information If you have any questions after the call, please feel free to contact Investor Relations by email at [email protected]. if you have any questions after the call please feel free to contact investor relations by email at [email protected] Now I'd like to turn the call over to Nadav. now i'd like to turn the call over to nadav

Speaker 16: Hey everyone, good morning to you and thanks for joining us today. As you already know, our industry is undergoing a generational transformation. It's marked by unprecedented change and I think more importantly the unprecedented pace of change. We're still in the very early innings of this revolution and I believe that at Check Point, you know, we're well positioned to lead it. In today's call I want to take some time to talk a little bit about our guiding principles and our vision. Hey everyone, good morning to you and thanks for joining us today. hey everyone good morning to you and thanks for joining us today As you already know, our industry is undergoing a generational transformation. as you already know our industry is undergoing a generational transformation It's marked by unprecedented change and I think more importantly the unprecedented pace of change. it's marked by unprecedented change and i think more importantly the unprecedented pace of change We're still in the very early innings of this revolution and I believe that at Check Point, you know, we're well positioned to lead it. we're still in the very early innings of this revolution and i believe that at check point you know we're well positioned to lead it In today's call I want to take some time to talk a little bit about our guiding principles and our vision. in today's call i want to take some time to talk a little bit about our guiding principles and our vision Obviously, before elaborating, I'd like to share we had a solid quarter, both revenue and EPS in line with our outlook. It was relatively backend loaded and resulted in several slip deals that have already closed in the last few weeks. The third quarter is shaping up well with strong indicators so far in July. Beyond that, we see a very healthy pipeline for the remainder of the year and we are reiterating our 2025 guidance and of course Roei will elaborate about the financials and the outlook shortly. If you bear with me for a few minutes, I'll try to be very brief. To lead the future, we are focused on four guiding principles. Number one, securing the connectivity fabric. Number two, a prevention-first ethos. Three, an open platform philosophy, and finally, an AI for security. The modern connectivity fabric is hyper. Obviously, before elaborating, I'd like to share we had a solid quarter, both revenue and EPS in line with our outlook. obviously before elaborating i'd like to share we had a solid quarter both revenue and eps in line with our outlook It was relatively back end loaded and resulted in several slip deals that have already closed in the last few weeks. it was relatively back end loaded and resulted in several slip deals that have already closed in the last few weeks The third quarter is shaping up well with strong indicators so far in July. the third quarter is shaping up well with strong indicators so far in july Beyond that, we see a very healthy pipeline for the remainder of the year and we are reiterating our 2025 guidance and of course Roei will elaborate about the financials and the outlook shortly. beyond that we see a very healthy pipeline for the remainder of the year and we are reiterating our 2025 guidance and of course roei will elaborate about the financials and the outlook shortly If you bear with me for a few minutes, I'll try to be very brief. if you bear with me for a few minutes i'll try to be very brief To lead the future, we are focused on four guiding principles. to lead the future we are focused on four guiding principles Number one, securing the connectivity fabric. number one securing the connectivity fabric Number two, a prevention-first ethos. number two a prevention-first ethos Three, an open platform philosophy, and finally, an AI for security. three an open platform philosophy and finally an ai for security The modern connectivity fabric is hyper. the modern connectivity fabric is hyper It's hyperconnected, and it's not only a critical infrastructure for every digital transaction, but it's also become a potential source of knowledge that can provide the ability to read between the nodes, revealing patterns, anomalies, emerging threats. I think that's an opportunity we must embrace. I can tell you that in Q2, our Quantum Force AI-Powered Firewalls posted another robust quarter, growing 12% year-over-year. It was driven by the refresh momentum and a growing demand altogether for AI-powered inspection. We also continue to accelerate our investment in SASE. We've opened a new R&D center in India that's coming up nicely. We doubled the size of our SASE R&D team, and we're only seeing the momentum that comes with that with sort of a steady growth across all regions. It's hyperconnected, and it's not only a critical infrastructure for every digital transaction, but it's also become a potential source of knowledge that can provide the ability to read between the nodes, revealing patterns, anomalies, emerging threats. it's hyperconnected and it's not only a critical infrastructure for every digital transaction but it's also become a potential source of knowledge that can provide the ability to read between the nodes revealing patterns anomalies emerging threats I think that's an opportunity we must embrace. i think that's an opportunity we must embrace I can tell you that in Q2, our Quantum Force AI-Powered Firewalls posted another robust quarter, growing 12% year-over-year. i can tell you that in q2 our quantum force ai-powered firewalls posted another robust quarter growing 12% year-over-year It was driven by the refresh momentum and a growing demand altogether for AI-powered inspection. it was driven by the refresh momentum and a growing demand altogether for ai-powered inspection We also continue to accelerate our investment in SASE. we also continue to accelerate our investment in sase We've opened a new R&D center in India that's coming up nicely. we've opened a new r&d center in india that's coming up nicely We doubled the size of our SASE R&D team, and we're only seeing the momentum that comes with that with sort of a steady growth across all regions. we doubled the size of our sase r&d team and we're only seeing the momentum that comes with that with sort of a steady growth across all regions Recently, this progress was also acknowledged with our inclusion at the 2025 Gartner Magic Quadrant for SASE and also the recognition as a leader in the Forrester Wave for Zero Trust platforms. On the Workspace front, as I shared in our previous call, we continue to make progress under Gil Friedrich's leadership. The Workspace platform now brings together endpoint, email, and SaaS security, ultimately helping our customers' operations and improve protections. Also under Gil, we're expanding our MSP and pay-as-you-go offerings so that we can support onboarding and more flexible consumption models. This is contributing to a steady customer growth. Tens of thousands of new customers and millions of users are joining annually through this program. To summarize the first principle, our vision is to securely connect and optimize security across devices, networks, users, and clouds. Recently, this progress was also acknowledged with our inclusion at the 2025 Gartner Magic Quadrant for SASE and also the recognition as a leader in the Forrester Wave for Zero Trust platforms. recently this progress was also acknowledged with our inclusion at the 2025 gartner magic quadrant for sase and also the recognition as a leader in the forrester wave for zero trust platforms On the Workspace front, as I shared in our previous call, we continue to make progress under Gil Friedrich's leadership. on the workspace front as i shared in our previous call we continue to make progress under gil friedrich's leadership The Workspace platform now brings together endpoint, email, and SaaS security, ultimately helping our customers' operations and improve protections. the workspace platform now brings together endpoint email and saas security ultimately helping our customers' operations and improve protections Also under Gil, we're expanding our MSP and pay-as-you-go offerings so that we can support onboarding and more flexible consumption models. also under gil we're expanding our msp and pay-as-you-go offerings so that we can support onboarding and more flexible consumption models This is contributing to a steady customer growth. this is contributing to a steady customer growth Tens of thousands of new customers and millions of users are joining annually through this program. tens of thousands of new customers and millions of users are joining annually through this program To summarize the first principle, our vision is to securely connect and optimize security across devices, networks, users, and clouds. to summarize the first principle our vision is to securely connect and optimize security across devices networks users and clouds To do that, we need to look at it as a holistic solution that ultimately delivers a consistent, unified security across what we call the modern hybrid mesh network. The second principle out of four is prevention-first. You know, it's been foundational for Check Point forever that we must strive to stop attacks before they cause damage. Now, preventing attacks may not be glamorous. It's difficult to receive sort of acknowledgments for things that did not happen. At the end of the day, it's like a constant behind the scenes effort that requires discipline, smart design, and a proactive mindset. True prevention is about acting in real time. You need to stop the zero-day phishing site before a user engages so that you can also block Log4j exploit before it runs. To do that, we need to look at it as a holistic solution that ultimately delivers a consistent, unified security across what we call the modern hybrid mesh network. to do that we need to look at it as a holistic solution that ultimately delivers a consistent unified security across what we call the modern hybrid mesh network The second principle out of four is prevention-first. the second principle out of four is prevention-first You know, it's been foundational for Check Point forever that we must strive to stop attacks before they cause damage. you know it's been foundational for check point forever that we must strive to stop attacks before they cause damage Now, preventing attacks may not be glamorous. now preventing attacks may not be glamorous It's difficult to receive sort of acknowledgments for things that did not happen. it's difficult to receive sort of acknowledgments for things that did not happen At the end of the day, it's like a constant behind the scenes effort that requires discipline, smart design, and a proactive mindset. at the end of the day it's like a constant behind the scenes effort that requires discipline smart design and a proactive mindset True prevention is about acting in real time. true prevention is about acting in real time You need to stop the zero-day phishing site before a user engages so that you can also block Log4j exploit before it runs. you need to stop the zero-day phishing site before a user engages so that you can also block log4j exploit before it runs The secret sauce is to be able to deliver this in real time so that you can get prevention without a negative impact on the user experience. That's the hard part. It takes intelligent engines that are working silently across data streams and are now driven by AI that make those split-second decisions without disruption. It may not be flashy, but it's foundational. In some ways, I'm seeing a renaissance of the importance of prevention. Especially when you look at the AI driven threat landscape, you know, it's expanding really, really fast. Just last week, the SharePoint ToolShell zero-day vulnerability was exposed. It's a vulnerability that effects on premise Microsoft SharePoint servers, and at the end of the day it allows unauthenticated attackers to gain full access. Our customers at Check Point were protected. The secret sauce is to be able to deliver this in real time so that you can get prevention without a negative impact on the user experience. the secret sauce is to be able to deliver this in real time so that you can get prevention without a negative impact on the user experience That's the hard part. that's the hard part It takes intelligent engines that are working silently across data streams and are now driven by AI that make those split-second decisions without disruption. it takes intelligent engines that are working silently across data streams and are now driven by ai that make those split-second decisions without disruption It may not be flashy, but it's foundational. it may not be flashy but it's foundational In some ways, I'm seeing a renaissance of the importance of prevention. in some ways i'm seeing a renaissance of the importance of prevention Especially when you look at the AI driven threat landscape, you know, it's expanding really, really fast. especially when you look at the ai driven threat landscape you know it's expanding really really fast Just last week, the SharePoint ToolS hell zero-day vulnerability was exposed. just last week the sharepoint tools hell zero-day vulnerability was exposed It's a vulnerability that effects on premise Microsoft SharePoint servers, and at the end of the day it allows unauthenticated attackers to gain full access. it's a vulnerability that effects on premise microsoft sharepoint servers and at the end of the day it allows unauthenticated attackers to gain full access Our customers at Check Point were protected. our customers at check point were protected We also enhanced our prevention stack with the Veriti acquisition, which we announced recently. This now provides an automated threat intelligence and real time remediation. I think that this acquisition positions us at the forefront of preemptive prevention and threat exposure management, and it strengthens our leadership in proactive cybersecurity. Moving on to our next principle, it's all about an open platform. You know, there are different ways that we can approach a cybersecurity philosophy. We believe that an open platform is the right approach. When we speak about an open platform, it's the ability, not to, for us to create the core networking fabric, pulling everything together, but being able to collaborate and to create an extensible collaborative situation for our platform. Philosophically, I believe that an open platform also makes you more resilient. We also enhanced our prevention stack with the Veriti acquisition, which we announced recently. we also enhanced our prevention stack with the veriti acquisition which we announced recently This now provides an automated threat intelligence and real time remediation. this now provides an automated threat intelligence and real time remediation I think that this acquisition positions us at the forefront of preemptive prevention and threat exposure management, and it strengthens our leadership in proactive cybersecurity. i think that this acquisition positions us at the forefront of preemptive prevention and threat exposure management and it strengthens our leadership in proactive cybersecurity Moving on to our next principle, it's all about an open platform. moving on to our next principle it's all about an open platform You know, there are different ways that we can approach a cybersecurity philosophy. you know there are different ways that we can approach a cybersecurity philosophy We believe that an open platform is the right approach. we believe that an open platform is the right approach When we speak about an open platform, it's the ability, not to, for us to create the core networking fabric, pulling everything together, but being able to collaborate and to create an extensible collaborative situation for our platform. when we speak about an open platform it's the ability not to for us to create the core networking fabric pulling everything together but being able to collaborate and to create an extensible collaborative situation for our platform Philosophically, I believe that an open platform also makes you more resilient. philosophically i believe that an open platform also makes you more resilient I believe that trying to go for an all-in-one catalog option actually makes you more brittle and fragile. You know, again, the acquisition that we just made of Veriti gives us another capability to put together 70 other vendors that work together with us. That's the open platform strategy. Finally, we are embracing AI as a new tool. This means not only that we have cool LLMs that organizations are bringing together, but actually it's a shift in mindset because if AI is going to make decisions for us, we're going to have to trust AI to make those decisions, those predictions going forward. This is a major change in our industry. At Check Point, we now have an AI engine that runs to allow our customers to use AI on the personal level. I believe that trying to go for an all-in-one catalog option actually makes you more brittle and fragile. i believe that trying to go for an all-in-one catalog option actually makes you more brittle and fragile You know, again, the acquisition that we just made of Veriti gives us another capability to put together 70 other vendors that work together with us. you know again the acquisition that we just made of veriti gives us another capability to put together 70 other vendors that work together with us That's the open platform strategy. that's the open platform strategy Finally, we are embracing AI as a new tool. finally we are embracing ai as a new tool This means not only that we have cool LLMs that organizations are bringing together, but actually it's a shift in mindset because if AI is going to make decisions for us, we're going to have to trust AI to make those decisions, those predictions going forward. this means not only that we have cool llms that organizations are bringing together but actually it's a shift in mindset because if ai is going to make decisions for us we're going to have to trust ai to make those decisions those predictions going forward This is a major change in our industry. this is a major change in our industry At Check Point, we now have an AI engine that runs to allow our customers to use AI on the personal level. at check point we now have an ai engine that runs to allow our customers to use ai on the personal level All the popular AI capabilities that we see, we're also embedding it in each one of our products. This takes us, I think, to the forefront of embedding AI, using AI to simplify and to provide a unified management that is actually making our customers' lives easier. Long story short, I've spoken to you about the four principles. They're important for our vision going forward and I think we're well positioned to lead the future of cybersecurity based on those four principles and our vision of the open platform. With that, I'll turn over to Roei. All the popular AI capabilities that we see, we're also embedding it in each one of our products. all the popular ai capabilities that we see we're also embedding it in each one of our products This takes us, I think, to the forefront of embedding AI, using AI to simplify and to provide a unified management that is actually making our customers' lives easier. this takes us i think to the forefront of embedding ai using ai to simplify and to provide a unified management that is actually making our customers' lives easier Long story short, I've spoken to you about the four principles. long story short i've spoken to you about the four principles They're important for our vision going forward and I think we're well positioned to lead the future of cybersecurity based on those four principles and our vision of the open platform. they're important for our vision going forward and i think we're well positioned to lead the future of cybersecurity based on those four principles and our vision of the open platform With that, I'll turn over to Roei. with that i'll turn over to roei

Speaker 4: Thank you, Nadav. Let me just open the presentation. Thank you, Nadav. thank you nadav Let me just open the presentation. let me just open the presentation

Speaker 16: Okay. Okay. okay

Speaker 4: Okay, okay. One moment, one moment. I have some issue here. I will be with you in a moment. Okay. Can you see my screen? Great. Okay, okay. okay okay One moment, one moment. one moment one moment I have some issue here. i have some issue here I will be with you in a moment. i will be with you in a moment Okay. okay Can you see my screen? Great. can you see my screen? great

Speaker 16: Yup. Yup. yup

Speaker 4: Okay, great. Sorry for the delay. As Nadav indicated, we had a great quarter. I think our revenues exceeded our midpoint of our projection by $3 million and achieved $665 million. Our non-GAAP EPS were $2.37 in the midpoint of our projections presenting 9% growth year-over-year. Moving to the results, as I mentioned, our revenues grew by 6%. That was mainly driven by strong quarter, another strong quarter for product revenues that driven by strong customer demand for new appliances and higher volume of product refreshes. I have to say that this refresh cycle reflects continuous investment in our platform and broader adoption of our latest technologies, our Quantum Force technology that we released a year ago. As a result of these refreshes, a larger portion of our deals were bundled including subscription and support and were offered at higher discount level compared to standalone renewals. Okay, great. okay great Sorry for the delay. sorry for the delay As Nadav indicated, we had a great quarter. as nadav indicated we had a great quarter I think our revenues exceeded our midpoint of our projection by $3 million and achieved $665 million. i think our revenues exceeded our midpoint of our projection by $3 million and achieved $665 million Our non-GAAP EPS were $2.37 in the midpoint of our projections presenting 9% growth year-over-year. our non-gaap eps were $2.37 in the midpoint of our projections presenting 9% growth year-over-year Moving to the results, as I mentioned, our revenues grew by 6%. moving to the results as i mentioned our revenues grew by 6% That was mainly driven by strong quarter, another strong quarter for product revenues that driven by strong customer demand for new appliances and higher volume of product refreshes. that was mainly driven by strong quarter another strong quarter for product revenues that driven by strong customer demand for new appliances and higher volume of product refreshes I have to say that this refresh cycle reflects continuous investment in our platform and broader adoption of our latest technologies, our Quantum Force technology that we released a year ago. i have to say that this refresh cycle reflects continuous investment in our platform and broader adoption of our latest technologies our quantum force technology that we released a year ago As a result of these refreshes, a larger portion of our deals were bundled including subscription and support and were offered at higher discount level compared to standalone renewals. as a result of these refreshes a larger portion of our deals were bundled including subscription and support and were offered at higher discount level compared to standalone renewals This dynamic has led to slight deceleration in our subscription revenues and declining our support. Slight decline in our support revenues for the quarter. However, we view this as a positive trend for the long term as this strengthens the customer relationship, expands our install base and positions us for increased renewal install revenues and upsell opportunities in the future. As for the billing, the calculated billing grew by 4% to $642 million this quarter. Our RPO grew by 6% and reached $2.4 billion this quarter. This quarter, as Nadav indicated, was heavily backend loaded resulting as several deals that were pushed from the last few days to the first two weeks of July and were already closed. These deals alone we're talking about few 7-digit deals affect our billing by approximately 3 points. That will benefit us in the third quarter. This dynamic has led to slight deceleration in our subscription revenues and declining our support. this dynamic has led to slight deceleration in our subscription revenues and declining our support Slight decline in our support revenues for the quarter. slight decline in our support revenues for the quarter However, we view this as a positive trend for the long term as this strengthens the customer relationship, expands our install base and positions us for increased renewal install revenues and upsell opportunities in the future. however we view this as a positive trend for the long term as this strengthens the customer relationship expands our install base and positions us for increased renewal install revenues and upsell opportunities in the future As for the billing, the calculated billing grew by 4% to $642 million this quarter. as for the billing the calculated billing grew by 4% to $642 million this quarter Our RPO grew by 6% and reached $2.4 billion this quarter. our rpo grew by 6% and reached $2.4 billion this quarter This quarter, as Nadav indicated, was heavily backend loaded resulting as several deals that were pushed from the last few days to the first two weeks of July and were already closed. this quarter as nadav indicated was heavily backend loaded resulting as several deals that were pushed from the last few days to the first two weeks of july and were already closed These deals alone we're talking about few 7-digit deals affect our billing by approximately 3 points. these deals alone we're talking about few 7-digit deals affect our billing by approximately 3 points That will benefit us in the third quarter. that will benefit us in the third quarter As a reminder, in the same quarter last year we had a three multi-year deal totaling $130 million which also had a significant impact on our RPO last year. Moving to our revenues by geographies, we are looking at our America and EMEA grew by 5% this quarter while APAC had a strong quarter with double digit growth and reached 15% growth year-over-year this quarter. Moving into our P&L, our gross profit increased from $557 million to $585 million representing a gross margin of 88%. Our operating expenses increased by 7%. This increase is mainly as a result of our continued investment in our workforce organically and also the impact related to Cyberint and Veriti acquisition that I remind you Cyberint we acquired during Q3 2024 and Veriti we completed the acquisition during June this quarter. As a reminder, in the same quarter last year we had a three multi-year deal totaling $130 million which also had a significant impact on our RPO last year. as a reminder in the same quarter last year we had a three multi-year deal totaling $130 million which also had a significant impact on our rpo last year Moving to our revenues by geographies, we are looking at our America and EMEA grew by 5% this quarter while APAC had a strong quarter with double digit growth and reached 15% growth year-over-year this quarter. moving to our revenues by geographies we are looking at our america and emea grew by 5% this quarter while apac had a strong quarter with double digit growth and reached 15% growth year-over-year this quarter Moving into our P&L, our gross profit increased from $557 million to $585 million representing a gross margin of 88%. moving into our p&l our gross profit increased from $557 million to $585 million representing a gross margin of 88% Our operating expenses increased by 7%. our operating expenses increased by 7% This increase is mainly as a result of our continued investment in our workforce organically and also the impact related to Cyberint and Veriti acquisition that I remind you Cyberint we acquired during Q3 2024 and Veriti we completed the acquisition during June this quarter. this increase is mainly as a result of our continued investment in our workforce organically and also the impact related to cyberint and veriti acquisition that i remind you cyberint we acquired during q3 2024 and veriti we completed the acquisition during june this quarter Our non-GAAP operating income continues to be strong at $271 million or 41% margin. I think it's important to discuss also the FX impact as we all see the U.S. dollar is weakening. This is most of the currencies and especially against the Israeli shekel given that we are approximately 50% of our operating expenses are denominated in non-USD currencies and mainly the shekel and we are not adding 100% of these expenses. This currency movement resulting in an estimated half a point headwind to our margin this quarter. Our non-GAAP operating income continues to be strong at $271 million or 41% margin. our non-gaap operating income continues to be strong at $271 million or 41% margin I think it's important to discuss also the FX impact as we all see the U.S. dollar is weakening. i think it's important to discuss also the fx impact as we all see the u.s. dollar is weakening This is most of the currencies and especially against the Israeli shekel given that we are approximately 50% of our operating expenses are denominated in non-USD currencies and mainly the shekel and we are not adding 100% of these expenses. this is most of the currencies and especially against the israeli shekel given that we are approximately 50% of our operating expenses are denominated in non-usd currencies and mainly the shekel and we are not adding 100% of these expenses This currency movement resulting in an estimated half a point headwind to our margin this quarter. this currency movement resulting in an estimated half a point headwind to our margin this quarter If I'm looking on the second half of the year, although we add significant portion of our foreign exchange exposure, we still going to have an impact because again we are not hedging 100% of our foreign currency and we do expect to see a headwind of approximately half a point to one point if the U.S. dollar will stay in these levels. That's important to say and if we're looking into 2026 if the FX rates will stay at these levels this could increase our operating expenses next year by approximately $50 million to $60 million. Moving into our cash flow, we had a strong operating cash flow this quarter, achieved $262 million, a 31% growth year-over-year. I think it's important to mention here that it includes the benefit of $50 million from hedging transactions offset by $6 million related to our Veriti acquisition. If I'm looking on the second half of the year, although we add significant portion of our foreign exchange exposure, we still going to have an impact because again we are not hedging 100% of our foreign currency and we do expect to see a headwind of approximately half a point to one point if the U.S. dollar will stay in these levels. if i'm looking on the second half of the year although we add significant portion of our foreign exchange exposure we still going to have an impact because again we are not hedging 100% of our foreign currency and we do expect to see a headwind of approximately half a point to one point if the u.s. dollar will stay in these levels That's important to say and if we're looking into 2026 if the FX rates will stay at these levels this could increase our operating expenses next year by approximately $50 million to $60 million. that's important to say and if we're looking into 2026 if the fx rates will stay at these levels this could increase our operating expenses next year by approximately $50 million to $60 million Moving into our cash flow, we had a strong operating cash flow this quarter, achieved $262 million, a 31% growth year-over-year. moving into our cash flow we had a strong operating cash flow this quarter achieved $262 million a 31% growth year-over-year I think it's important to mention here that it includes the benefit of $50 million from hedging transactions offset by $6 million related to our Veriti acquisition. i think it's important to mention here that it includes the benefit of $50 million from hedging transactions offset by $6 million related to our veriti acquisition Our cash balance was $2.9 billion and we continue to do our buyback and purchase 1.5 million shares at an average price of $220. Also, we acquired Veriti during the quarter that was a net cash of around $90 million. That's also part of the cash flow for this quarter and two notes regarding the next quarter regarding Q3 that will impact our cash flow, we have two items. First, we announced that we acquired the land for building our new Check Point campus in Tel Aviv in Israel and we completed this purchase during July and paid a total of $160 million for that land. We do not expect any significant additional investments in CapEx in connection with this campus until the beginning of 2027. Our cash balance was $2.9 billion and we continue to do our buyback and purchase 1.5 million shares at an average price of $220. our cash balance was $2.9 billion and we continue to do our buyback and purchase 1.5 million shares at an average price of $220 Also, we acquired Veriti during the quarter that was a net cash of around $90 million. also we acquired veriti during the quarter that was a net cash of around $90 million That's also part of the cash flow for this quarter and two notes regarding the next quarter regarding Q3 that will impact our cash flow, we have two items. that's also part of the cash flow for this quarter and two notes regarding the next quarter regarding q3 that will impact our cash flow we have two items First, we announced that we acquired the land for building our new Check Point campus in Tel Aviv in Israel and we completed this purchase during July and paid a total of $160 million for that land. first we announced that we acquired the land for building our new check point campus in tel aviv in israel and we completed this purchase during july and paid a total of $160 million for that land We do not expect any significant additional investments in CapEx in connection with this campus until the beginning of 2027. we do not expect any significant additional investments in capex in connection with this campus until the beginning of 2027 In addition, and other items relevant for the third quarter for the cash flow as part of tax settlement recently signed recently last week actually for prior years, we're going to pay approximately $66 million during the third quarter to settle this tax disputes for prior years as we had higher provision in connection with this dispute. This settlement may also have a material positive impact on our third quarter P&L and EPS. We are still as this settlement was just signed few days ago, we are still assessing the effects. Please note that this potential impact is not reflected in the guidance that I'm going to share with you in the next few slides. In addition, and other items relevant for the third quarter for the cash flow as part of tax settlement recently signed recently last week actually for prior years, we're going to pay approximately $66 million during the third quarter to settle this tax disputes for prior years as we had higher provision in connection with this dispute. in addition and other items relevant for the third quarter for the cash flow as part of tax settlement recently signed recently last week actually for prior years we're going to pay approximately $66 million during the third quarter to settle this tax disputes for prior years as we had higher provision in connection with this dispute This settlement may also have a material positive impact on our third quarter P&L and EPS. this settlement may also have a material positive impact on our third quarter p&l and eps We are still as this settlement was just signed few days ago, we are still assessing the effects. we are still as this settlement was just signed few days ago we are still assessing the effects Please note that this potential impact is not reflected in the guidance that I'm going to share with you in the next few slides. please note that this potential impact is not reflected in the guidance that i'm going to share with you in the next few slides To summarize our second quarter, revenues and EPS in line with our projection, accelerated Quantum Force appliances demand, second quarter in a row of double digit, continued strong demand for email, SASE, and ERM, I think very important, we do see strong, continued strong demand and another strong profitability quarter with great operating margin and strong operating cash flow. Before we move to the Q&A, I'll move to the guidance for the next quarter. As Nadav indicated, we started July, we started this quarter very strong. To summarize our second quarter, revenues and EPS in line with our projection, accelerated Quantum Force appliances demand, second quarter in a row of double digit, continued strong demand for email, SASE, and ERM, I think very important, we do see strong, continued strong demand and another strong profitability quarter with great operating margin and strong operating cash flow. to summarize our second quarter revenues and eps in line with our projection accelerated quantum force appliances demand second quarter in a row of double digit continued strong demand for email sase and erm i think very important we do see strong continued strong demand and another strong profitability quarter with great operating margin and strong operating cash flow Before we move to the Q&A, I'll move to the guidance for the next quarter. before we move to the q&a i'll move to the guidance for the next quarter As Nadav indicated, we started July, we started this quarter very strong. as nadav indicated we started july we started this quarter very strong We see, we are looking, we have some indicators, internal indicators and of course together also with the deals that were pushed from the second quarter, but also with the funnel and the deal that already closed in July and the funnel that we have for the remaining of the quarter, we feel very positive about the third quarter and the remaining of the year. Our guidance for the third quarter is between $657-$687 million. Midpoint sits at $672 million. Our non-GAAP EPS is between $2.40-$2.50 while the GAAP EPS is expected to be approximately $0.68 less. As for the full year, we are not changing the guidance. The guidance stays the same, same range that we gave you in the beginning of the year. We see, we are looking, we have some indicators, internal indicators and of course together also with the deals that were pushed from the second quarter, but also with the funnel and the deal that already closed in July and the funnel that we have for the remaining of the quarter, we feel very positive about the third quarter and the remaining of the year. we see we are looking we have some indicators internal indicators and of course together also with the deals that were pushed from the second quarter but also with the funnel and the deal that already closed in july and the funnel that we have for the remaining of the quarter we feel very positive about the third quarter and the remaining of the year Our guidance for the third quarter is between $657- $687 million. our guidance for the third quarter is between $657- $687 million Midpoint sits at $672 million. midpoint sits at $672 million Our non-GAAP EPS is between $2.40-$2.50 while the GAAP EPS is expected to be approximately $0.68 less. our non-gaap eps is between $2.40-$2.50 while the gaap eps is expected to be approximately $0.68 less As for the full year, we are not changing the guidance. as for the full year we are not changing the guidance The guidance stays the same, same range that we gave you in the beginning of the year. the guidance stays the same same range that we gave you in the beginning of the year We feel positive that we'll be able to finish in the high end of the, but still the range is the same and same for the EPS and revenues and the GAAP EPS is expected to be $2.30 less. Thank you, Kip. We feel positive that we'll be able to finish in the high end of the, but still the range is the same and same for the EPS and revenues and the GAAP EPS is expected to be $2.30 less. we feel positive that we'll be able to finish in the high end of the but still the range is the same and same for the eps and revenues and the gaap eps is expected to be $2.30 less Thank you, Kip. thank you kip

Speaker 8: All right, now we'll move to the Q&A and first up today will be Adam Tindle followed by Tal Liani of BofA. All right, now we'll move to the Q& A and first up today will be Adam Tindle followed by Tal Liani of BofA . all right now we'll move to the q& a and first up today will be adam tindle followed by tal liani of bofa

Speaker 7: All right, thanks Kip. Good morning Nadav. I just wanted to maybe start with the elephant in the room here with the announcement that Palo Alto is acquiring CyberArk in a $25 billion deal. As it relates to your comments specifically to Check Point, you're talking about how an open platform is the right approach. I wonder if you could maybe just expand on that, areas where you're thinking it makes more sense to partner versus maybe own or acquire. Certainly, any comments that you can make on the identity space, given that large transaction this morning. All right, thanks Kip. all right thanks kip Good morning Nadav. good morning nadav I just wanted to maybe start with the elephant in the room here with the announcement that Palo Alto is acquiring CyberArk in a $25 billion deal. i just wanted to maybe start with the elephant in the room here with the announcement that palo alto is acquiring cyberark in a $25 billion deal As it relates to your comments specifically to Check Point, you're talking about how an open platform is the right approach. as it relates to your comments specifically to check point you're talking about how an open platform is the right approach I wonder if you could maybe just expand on that, areas where you're thinking it makes more sense to partner versus maybe own or acquire. i wonder if you could maybe just expand on that areas where you're thinking it makes more sense to partner versus maybe own or acquire Certainly, any comments that you can make on the identity space, given that large transaction this morning. certainly any comments that you can make on the identity space given that large transaction this morning Thank you. Thank you. thank you

Speaker 16: Yeah, thanks, Adam. Yeah, sure. Very interesting announcement. Impact on us is, I think, minimal as we're not a player in the identity space. As I said, our vision is to focus on what we think we can do best. In my opinion, it's the breadth of the connectivity fabric and that has the hybrid mesh on one side, Workspace on the other side, and creating a unified platform for everything. Connectivity fabric. On top of that, winning with AI. Having said that, our philosophy is to focus on an open platform. To focus on an open platform for a couple of reasons. Number one, I spend my time speaking to dozens of CISOs a month at least. When you go to the enterprise and up, I think that between this idea of best of breed and best of suite dilemma, an open platform is the right approach. Yeah, thanks, Adam. yeah thanks adam Yeah, sure. yeah sure Very interesting announcement. very interesting announcement Impact on us is, I think, minimal as we're not a player in the identity space. impact on us is i think minimal as we're not a player in the identity space As I said, our vision is to focus on what we think we can do best. as i said our vision is to focus on what we think we can do best In my opinion, it's the breadth of the connectivity fabric and that has the hybrid mesh on one side, Workspace on the other side, and creating a unified platform for everything. in my opinion it's the breadth of the connectivity fabric and that has the hybrid mesh on one side workspace on the other side and creating a unified platform for everything Connectivity fabric. connectivity fabric On top of that, winning with AI. on top of that winning with ai Having said that, our philosophy is to focus on an open platform. having said that our philosophy is to focus on an open platform To focus on an open platform for a couple of reasons. to focus on an open platform for a couple of reasons Number one, I spend my time speaking to dozens of CISOs a month at least. number one i spend my time speaking to dozens of cisos a month at least When you go to the enterprise and up, I think that between this idea of best of breed and best of suite dilemma, an open platform is the right approach. when you go to the enterprise and up i think that between this idea of best of breed and best of suite dilemma an open platform is the right approach It's unified layers, deeply integrated, allowing it to be extensible, collaborative. That's from the CISO perspective. Also, they don't want to be in a vendor lock. I can tell you, as someone that's been in the industry on all of its side for many, many years, I also think an open platform makes more sense from a security perspective. If you think about the attackers, you don't want to have a monolithic approach. You don't want to come from one shop with the same philosophy, same software, same people, same intelligence. You want to have an open approach to it that allows you to have sort of an open garden and approach that allows you to import and to use different platforms, working together. I think that this, it's not a technical framework, but it's a real differentiator and our vision and approach to the market. It's unified layers, deeply integrated, allowing it to be extensible, collaborative. it's unified layers deeply integrated allowing it to be extensible collaborative That's from the CISO perspective. that's from the ciso perspective Also, they don't want to be in a vendor lock. also they don't want to be in a vendor lock I can tell you, as someone that's been in the industry on all of its side for many, many years, I also think an open platform makes more sense from a security perspective. i can tell you as someone that's been in the industry on all of its side for many many years i also think an open platform makes more sense from a security perspective If you think about the attackers, you don't want to have a monolithic approach. if you think about the attackers you don't want to have a monolithic approach You don't want to come from one shop with the same philosophy, same software, same people, same intelligence. you don't want to come from one shop with the same philosophy same software same people same intelligence You want to have an open approach to it that allows you to have sort of an open garden and approach that allows you to import and to use different platforms, working together. you want to have an open approach to it that allows you to have sort of an open garden and approach that allows you to import and to use different platforms working together I think that this, it's not a technical framework, but it's a real differentiator and our vision and approach to the market. i think that this it's not a technical framework but it's a real differentiator and our vision and approach to the market

Speaker 7: Thanks. Thanks. thanks

Speaker 8: Up next is Tal Liani of BofA, followed by Joseph Gallo from Jefferies. Up next is Tal Liani of BofA, followed by Joseph Gallo from Jefferies. up next is tal liani of bofa followed by joseph gallo from jefferies

Speaker 13: Hey, Nadav. Good morning. Question. I look at your growth, 6%, your billing growth. Hey, Nadav. hey nadav Good morning. good morning Question. question I look at your growth, 6%, your billing growth. i look at your growth 6% your billing growth Even if I add the delay, the deals that slipped, we're not seeing acceleration. The question, I asked you the same question last quarter. Even if I add the delay, the deals that slipped, we're not seeing acceleration. even if i add the delay the deals that slipped we're not seeing acceleration The question, I asked you the same question last quarter. the question i asked you the same question last quarter I ask, what I want to focus on is to understand what are the challenges that you see in accelerating growth? I ask, what I want to focus on is to understand what are the c hallenges that you see in accelerating growth? i ask what i want to focus on is to understand what are the c hallenges that you see in accelerating growth Meaning I understand what you're doing, but it does take time. It looks like it takes time from the numbers' perspective. What are the challenges? When you talk about operational challenges, culture challenges, product challenges, go-to-market challenges. Meaning I understand what you're doing, but it does take time. meaning i understand what you're doing but it does take time It looks like it takes time from the numbers' perspective. it looks like it takes time from the numbers' perspective What are the challenges? what are the challenges When you talk about operational challenges, culture challenges, product challenges, go-to-market challenges. when you talk about operational challenges culture challenges product challenges go-to-market challenges Can you just discuss what prevents the company today from accelerating growth and what would take for the growth to accelerate in the future? Can you just discuss what prevents the c ompany today from accelerating growth and what would take for the growth to accelerate in the future? can you just discuss what prevents the c ompany today from accelerating growth and what would take for the growth to accelerate in the future

Speaker 16: Yeah, great question. Tal, and you're right, it's not an overnight shift. It's a vision. You have to have the principles and you have to make the investment. That's number one. Number two, as you know, as I said, and this is something that is already coming around, it's building the right go-to-market approach and the sense of urgency, culture, and we're doing all of that. Like you said, it's nothing that's going to happen overnight. Having said that, I don't think that there is a specific challenge. I think we have the right products, I think we're in the right market. I think we have the vision. We need to focus on what we do best, on executing it and up our game and go-to-market. That's the plan. Yeah, great question. yeah great question Tal, and you're right, it's not an overnight shift. tal and you're right it's not an overnight shift It's a vision. it's a vision You have to have the principles and you have to make the investment. you have to have the principles and you have to make the investment That's number one. that's number one Number two, as you know, as I said, and this is something that is already coming around, it's building the right go-to-market approach and the sense of urgency, culture, and we're doing all of that. number two as you know as i said and this is something that is already coming around it's building the right go-to-market approach and the sense of urgency culture and we're doing all of that Like you said, it's nothing that's going to happen overnight. like you said it's nothing that's going to happen overnight Having said that, I don't think that there is a specific challenge. having said that i don't think that there is a specific challenge I think we have the right products, I think we're in the right market. i think we have the right products i think we're in the right market I think we have the vision. i think we have the vision We need to focus on what we do best, on executing it and up our game and go-to-market. we need to focus on what we do best on executing it and up our game and go-to-market That's the plan. that's the plan

Speaker 13: Got it. Would you say that if you have to kind of rank in order? Got it. got it Would you say that if you have to kind of rank in order? would you say that if you have to kind of rank in order The things you're dealing with, would you say that most of the focus is on go-to market or most of the focus is on improving the portfolio? Where, where is the focus of the company that would drive growth acceleration? The things you're dealing with, would you say that most of the focus is o n go- to market or most of t he focus is on improving the portfolio? the things you're dealing with would you say that most of the focus is o n go- to market or most of t he focus is on improving the portfolio Where, where is the focus of the c ompany that would drive growth acceleration? where where is the focus of the c ompany that would drive growth acceleration

Speaker 16: I think for the short run, definitely go-to market. Right? For the short run, definitely go-to market. Having said that, I do think we are in a pivotal time in the industry. I really believe that AI is going to change the way we live, operate, do digital infrastructure. We need to make a hefty investment here and lead the way. If you ask me, what are the three areas? One is go-to market. We have been speaking about that. It does not happen overnight, but we are making the changes. The second is in heavily investing in AI. I think we are already leading with embedding AI in our own products. Number three is a culture of execution and sense of urgency. It all happens in parallel. I think for the short run, definitely go- to market. i think for the short run definitely go- to market Right? right For the short run, definitely go- to market. for the short run definitely go- to market Having said that, I do think we are in a pivotal time in the industry. having said that i do think we are in a pivotal time in the industry I really believe that AI is going to change the way we live, operate, do digital infrastructure. i really believe that ai is going to change the way we live operate do digital infrastructure We need to make a hefty investment here and lead the way. we need to make a hefty investment here and lead the way If you ask me, what are the three areas? if you ask me what are the three areas One is go- to market. We have been speaking about that. one is go- to market. we have been speaking about that It does not happen overnight, but we are making the changes. it does not happen overnight but we are making the changes The second is in heavily investing in AI. the second is in heavily investing in ai I think we are already leading with embedding AI in our own products. i think we are already leading with embedding ai in our own products Number three is a culture of execution and sense of urgency. number three is a culture of execution and sense of urgency It all happens in parallel. it all happens in parallel Some will have impact in the short run, some will have impact in the medium term, and some in the long term. Some will have impact in the short run, some will have impact in the medium term, and some in the long term. some will have impact in the short run some will have impact in the medium term and some in the long term

Speaker 13: Great, thank you. Great, thank you. great thank you

Speaker 16: Thank you, Tom. Thank you, Tom. thank you tom

Speaker 8: All right, next up is Joseph Gallo, followed by Junaid Siddiqui. All right, next up is Joseph Gallo, followed by Junaid Siddiqui. all right next up is joseph gallo followed by junaid siddiqui

Speaker 3: Hey guys, thanks for the question. I understand the impact of the discounting, but can you just talk through some of the confidence and why that is a positive long term? Is it upsell to SASE or where should we see some of that goodness over time? And then just any quantitative metrics regarding the performance on the new logo side of the business. Thanks. Hey guys, thanks for the question. hey guys thanks for the question I understand the impact of the discounting, but can you just talk through some of the confidence and why that is a positive long term? i understand the impact of the discounting but can you just talk through some of the confidence and why that is a positive long term Is it upsell to SASE or where should we see some of that goodness over time? is it upsell to sase or where should we see some of that goodness over time And then just any quantitative metrics regarding the performance on the new logo side of the business. and then just any quantitative metrics regarding the performance on the new logo side of the business Thanks. thanks

Speaker 4: Yeah. Okay, so I think when I'm looking on, on we have our internal indicators when we were looking on the, on the customers that are doing refresh, we are seeing that over time. The AR from this, I mean, I'm not talking about the appliances, I'm talking only about the AR associated with these customers, is increasing, increasing nicely. And we see that on the long term, maybe not on the first quarter, on the second quarter, but on the long term the AR is increasing. Yeah. yeah Okay, so I think when I'm looking on, on we have our internal indicators when we were looking on the, on the customers that are doing refresh, we are seeing that over time. okay so i think when i'm looking on on we have our internal indicators when we were looking on the on the customers that are doing refresh we are seeing that over time The AR from this, I mean, I'm not talking about the appliances, I'm talking only about the AR associated with these customers, is increasing, increasing nicely. the ar from this i mean i'm not talking about the appliances i'm talking only about the ar associated with these customers is increasing increasing nicely And we see that on the long term, maybe not on the first quarter, on the second quarter, but on the long term the AR is increasing. and we see that on the long term maybe not on the first quarter on the second quarter but on the long term the ar is increasing We have, we have this internal indicator that we feel confident that because we see very strong demand for these appliances from our existing customers, sometime it's coming also with cross selling SASE or email or ERM, but even without that, we see that even with the firewall, we see that the AR is increasing over time when they are buying from us, the appliances. Therefore, we feel confident it's not only in this quarter, we feel it, we see these indicators over deals. And Nadav, you want to add around it? You want to add something? We have, we have this internal indicator that we feel confident that because we see very strong demand for these appliances from our existing customers, sometime it's coming also with cross selling SASE or email or ERM, but even without that, we see that even with the firewall, we see that the AR is increasing over time when they are buying from us, the appliances. we have we have this internal indicator that we feel confident that because we see very strong demand for these appliances from our existing customers sometime it's coming also with cross selling sase or email or erm but even without that we see that even with the firewall we see that the ar is increasing over time when they are buying from us the appliances Therefore, we feel confident it's not only in this quarter, we feel it, we see these indicators over deals. therefore we feel confident it's not only in this quarter we feel it we see these indicators over deals And Nadav, you want to add around it? and nadav, you want to add around it You want to add something? you want to add something

Speaker 16: Yeah. To your question on where we see, we're seeing the growth, I would say two main areas. Number one is the new product lines, right? If you look at email, ERM, SASE, those are growing above 40% year-over-year, right. A very healthy growth. As I said, we just, you know, we doubled the size of our SASE team and we're making a huge effort to grow it as fast as we can. The other place is what we call the Infinity Platform that at the end of the day, I think we have a real, you know, differentiation with our roadmap to create this unified platform that allows you to have all of your connectivity fabric in one. Yeah. yeah To your question on where we see, we're seeing the growth, I would say two main areas. to your question on where we see we're seeing the growth i would say two main areas Number one is the new product lines, right? number one is the new product lines right If you look at email, ERM, SASE, those are growing above 40% year-over-year, right. if you look at email erm sase those are growing above 40% year-over-year right A very healthy growth. a very healthy growth As I said, we just, you know, we doubled the size of our SASE team and we're making a huge effort to grow it as fast as we can. as i said we just you know we doubled the size of our sase team and we're making a huge effort to grow it as fast as we can The other place is what we call the Infinity Platform that at the end of the day, I think we have a real, you know, differentiation with our roadmap to create this unified platform that allows you to have all of your connectivity fabric in one. the other place is what we call the infinity platform that at the end of the day i think we have a real you know differentiation with our roadmap to create this unified platform that allows you to have all of your connectivity fabric in one In my opinion, this is not long term, this is midterm with what we're seeing coming from the attacker's perspective, with the, you know, becoming AI ready enterprise, having that holistic view into your network fabric and being able to read between the nodes and go from a static reactive to a predictive proactive approach, I think that's going to have a huge impact. When you couple that with the fact that we are going to be making more investments in our marketing, I think that over time you will see the impact and the growth coming at the same time. This investment, and we've been talking about this for a long time, will also call for, you know, probably having to give up a few margins, a few points on the margin so we can grow faster. In my opinion, this is not long term, this is midterm with what we're seeing coming from the attacker's perspective, with the, you know, becoming AI ready enterprise, having that holistic view into your network fabric and being able to read between the nodes and go from a static reactive to a predictive proactive approach, I think that's going to have a huge impact. in my opinion this is not long term this is midterm with what we're seeing coming from the attacker's perspective with the you know becoming ai ready enterprise having that holistic view into your network fabric and being able to read between the nodes and go from a static reactive to a predictive proactive approach i think that's going to have a huge impact When you couple that with the fact that we are going to be making more investments in our marketing, I think that over time you will see the impact and the growth coming at the same time. when you couple that with the fact that we are going to be making more investments in our marketing i think that over time you will see the impact and the growth coming at the same time This investment, and we've been talking about this for a long time, will also call for, you know, probably having to give up a few margins, a few points on the margin so we can grow faster. this investment and we've been talking about this for a long time will also call for you know probably having to give up a few margins a few points on the margin so we can grow faster

Speaker 3: Makes sense. Makes sense. makes sense Thank you. Thank you. thank you

Speaker 8: All right, Junaid Siddiqui is up, followed by Rob Owens. All right, Junaid Siddiqui is up, followed by Rob Owens. all right junaid siddiqui is up followed by rob owens

Speaker 12: Great, thanks for taking my question. Great, thanks for taking my question. great thanks for taking my question Nadav, you've talked about SASE being one of the key focus areas for you. Could you just give us an update on the Perimeter 81 acquisition and you know where you are from a go-to market and from a technology integration perspective and, and you know, overall, what's the vision that you're trying to articulate to customers that's a bit differentiated from the many vendors that are providing SASE solutions to customers? Nadav, you've talked about SASE being one of the key focus areas for you. nadav you've talked about sase being one of the key focus areas for you Could you just give us an update on the Perimeter 81 acquisition and you k now where you are from a go-t o market and from a technology integration perspective and, and you know, overall, what's the vision that you're trying to articulate to customers that's a bit differentiated from the many vendors that are providing SASE solutions to customers? could you just give us an update on the perimeter 81 acquisition and you k now where you are from a go-t o market and from a technology integration perspective and and you know overall what's the vision that you're trying to articulate to customers that's a bit differentiated from the many vendors that are providing sase solutions to customers

Speaker 16: Yeah, thanks. So since the acquisition, we first in terms of numbers, we're seeing a solid 40%-ish growth. So solid, what we're doing is moving it up to the large enterprise level. So we're now at a position where we have fully deployed capabilities in up to 10,000. And the beginning of 2026, we're already going to have the ability to do that beyond that. So that's one part of the answer. And as I said, this is a critical aspect for us both on the R&D and on the go-to-market. Yeah, thanks. yeah thanks So since the acquisition, we first in terms of numbers, we're seeing a solid 40%- ish growth. so since the acquisition we first in terms of numbers we're seeing a solid 40%- ish growth So solid, what we're doing is moving it up to the large enterprise level. so solid what we're doing is moving it up to the large enterprise level So we're now at a position where we have fully deployed capabilities in up to 10,000. so we're now at a position where we have fully deployed capabilities in up to 10,000 And the beginning of 2026, we're already going to have the ability to do that beyond that. and the beginning of 2026 we're already going to have the ability to do that beyond that So that's one part of the answer. so that's one part of the answer And as I said, this is a critical aspect for us both on the R&D and on the go-to-market. and as i said this is a critical aspect for us both on the r&d and on the go-to-market Talking about go-to-market, the idea is that it's no longer just a small sales force of an overlay, but we are bringing up to speed the mass field capability that we have that comes more from the gateway side to also be able to go out there and showcase what we have in SASE. To your question on the differentiation, I think the differentiation has two parts. Number one, it's the whole connectivity fabric platform approach. On the one hand, we have the hybrid mesh, which we've been talking about. On the other side, we have the Workspace where we're unifying different capabilities so that we can look at personas and not different technologies. SASE is sort of something that is the glue that connects all that. Talking about go-to-market, the idea is that it's no longer just a small sales force of an overlay, but we are bringing up to speed the mass field capability that we have that comes more from the gateway side to also be able to go out there and showcase what we have in SASE. talking about go-to-market the idea is that it's no longer just a small sales force of an overlay but we are bringing up to speed the mass field capability that we have that comes more from the gateway side to also be able to go out there and showcase what we have in sase To your question on the differentiation, I think the differentiation has two parts. to your question on the differentiation i think the differentiation has two parts Number one, it's the whole connectivity fabric platform approach. number one it's the whole connectivity fabric platform approach On the one hand, we have the hybrid mesh, which we've been talking about. on the one hand we have the hybrid mesh which we've been talking about On the other side, we have the Workspace where we're unifying different capabilities so that we can look at personas and not different technologies. on the other side we have the workspace where we're unifying different capabilities so that we can look at personas and not different technologies SASE is sort of something that is t he glue that connects all that. sase is sort of something that is t he glue that connects all that Our architecture is different than others. Most of the architectures out there of some of the incumbents are architectures that are cloud only. The fact that we have the hybrid capability, the fact that we're also on device, means that I believe we can do three things better and we're proving it in the market. Number one is better user experience, sometimes 10x, because we're able to in every transaction find the right way. We don't have to go to the cloud every time we do it. That leads to a 10x faster capability on the user experience. Number two, it's cloud cost. The fact that we have this hybrid approach allows us to not use the cloud in every transaction that controls cost. Our architecture is different than others. our architecture is different than others Most of the architectures out there of some of the incumbents are architectures that are cloud only. most of the architectures out there of some of the incumbents are architectures that are cloud only The fact that we have the hybrid capability, the fact that we're also on device, means that I believe we can do three things better and we're proving it in the market. the fact that we have the hybrid capability the fact that we're also on device means that i believe we can do three things better and we're proving it in the market Number one is better user experience, sometimes 10x, because we're able to in every transaction find the right way. number one is better user experience sometimes 10x because we're able to in every transaction find the right way We don't have to go to the cloud every time we do it. we don't have to go to the cloud every time we do it That leads to a 10x faster capability on the user experience. that leads to a 10x faster capability on the user experience Number two, it's cloud cost. number two it's cloud cost The fact that we have this hybrid approach allows us to not use the cloud in every transaction that controls cost. the fact that we have this hybrid approach allows us to not use the cloud in every transaction that controls cost And number three, the fact that we have all of the capabilities on a small agent on the device in the AI era means that we can protect you where the threat is coming. I think that when you put all that together and with what we've seen so far, I'm very optimistic about it. And number three, the fact that we have all of the capabilities on a small agent on the device in the AI era means that we can protect you where the threat is coming. and number three the fact that we have all of the capabilities on a small agent on the device in the ai era means that we can protect you where the threat is coming I think that when you put all that together and with what we've seen so far, I'm very optimistic about it. i think that when you put all that together and with what we've seen so far i'm very optimistic about it

Speaker 8: All right, next up is Rob Owens, followed by Brian Essex. All right, next up is Rob Owens , followed by Brian Essex. all right next up is rob owens followed by brian essex

Speaker 1: Great. Thanks Kippy and good afternoon everybody. Hoping you could drill down a little bit just into the slip deals that you mentioned. I know you quantified them and appreciate that but rhyme or reason for the slippage, geos that they slipped in, and anything that you're seeing more broadly out there in the environment. Thanks. Great. great Thanks Kippy and good afternoon everybody. thanks kippy and good afternoon everybody Hoping you could drill down a little bit just into the slip deals that you mentioned. hoping you could drill down a little bit just into the slip deals that you mentioned I know you quantified them and appreciate that but rhyme or reason for the slippage, geos that they slipped in, and anything that you're seeing more broadly out there in the environment. i know you quantified them and appreciate that but rhyme or reason for the slippage geos that they slipped in and anything that you're seeing more broadly out there in the environment Thanks. thanks

Speaker 4: Based on what we've seen, especially this quarter, I think again it's a combination of macro and execution. In the end, we did see more deals that were slipped than usual. I mean, we have every quarter slip deals. We have to be honest with everyone here, it's not that we don't have, there is no quarter that you don't have any slip deals. This quarter we had more than usual. I think why we feel confident that these, most of these large deals, we're talking about 7-digit deals, I would say all of them were closed in the first three weeks, three weeks of the quarter. We feel confident that it's just an issue of timing, you know, sometime we, we mentioned that we did see much more backend loaded quarter than usual. Based on what we've seen, especially this quarter, I think again it's a combination of macro and execution. based on what we've seen especially this quarter i think again it's a combination of macro and execution In the end, we did see more deals that were slipped than usual. in the end we did see more deals that were slipped than usual I mean, we have every quarter slip deals. i mean we have every quarter slip deals We have to be honest with everyone here, it's not that we don't have, there is no quarter that you don't have any slip deals. we have to be honest with everyone here it's not that we don't have there is no quarter that you don't have any slip deals This quarter we had more than usual. this quarter we had more than usual I think why we feel confident that these, most of these large deals, we're talking about 7-digit deals, I would say all of them were closed in the first three weeks, three weeks of the quarter. i think why we feel confident that these most of these large deals we're talking about 7-digit deals i would say all of them were closed in the first three weeks three weeks of the quarter We feel confident that it's just an issue of timing, you know, sometime we, we mentioned that we did see much more backend loaded quarter than usual. we feel confident that it's just an issue of timing you know sometime we we mentioned that we did see much more backend loaded quarter than usual I think that was the most backend loaded quarter that I have ever seen since I'm in Check Point, and therefore there is a risk when you have more backend loaded. There is a risk that some deals will be, more deals will be slipped, but we feel confident because we close them and we feel more confident around it. I think that was the most backend loaded quarter that I have ever seen since I'm in Check Point, and therefore there is a risk when you have more backend loaded. i think that was the most backend loaded quarter that i have ever seen since i'm in check point and therefore there is a risk when you have more backend loaded There is a risk that some deals will be, more deals will be slipped, but we feel confident because we close them and we feel more confident around it. there is a risk that some deals will be more deals will be slipped but we feel confident because we close them and we feel more confident around it

Speaker 8: Yeah, look to add to that, I think Rob, each one of them is sort of a snowflake. There's no one thing. Good news is that it's already closed and we're seeing a great start to Q3. July so far has been great and we're optimistic about Q3 and the rest of the year. Yeah, look to add to that, I think Rob, each one of them is sort of a snowflake. yeah look to add to that i think rob each one of them is sort of a snowflake There's no one thing. there's no one thing Good news is that it's already closed and we're seeing a great start to Q3. good news is that it's already closed and we're seeing a great start to q3 July so far has been great and we're optimistic about Q3 and the rest of the year. july so far has been great and we're optimistic about q3 and the rest of the year

Speaker 1: Were they equally split amongst the geos or were they predominantly in one? Were they equally split amongst the geos or were they predominantly in one? were they equally split amongst the geos or were they predominantly in one

Speaker 16: Yeah, pretty much. Pretty much, yeah. There is no common denominator to it. I really think its back end loaded execution and again all of them have already been closed. So we're confident that doesn't have a meaningful impact. Yeah, pretty much. yeah pretty much Pretty much, yeah. pretty much yeah There is no common denominator to it. there is no common denominator to it I really think its back end loaded execution and again all of them have already been closed. i really think its back end loaded execution and again all of them have already been closed So we're confident that doesn't have a meaningful impact. so we're confident that doesn't have a meaningful impact

Speaker 1: Thank you. Thank you. thank you

Speaker 8: All right, up next is Brian Essex, followed by Shaul Eyal. All right, up next is Brian Essex, followed by Shaul Eyal . all right up next is brian essex followed by shaul eyal

Speaker 14: Hi, good morning and thank you for taking the question. Hi, good morning and thank you for taking the question. hi good morning and thank you for taking the question I was wondering if we could dig in on Quantum a little bit. Nadav, what do you see in terms of, you know, the Quantum product cycle, refresh cycle, like how far through your installed base is the penetration there and what are you seeing architecturally? Are your customers kind of taking a step back and reassessing the network architecture and maybe throttling spending into other areas of their network security environment? Thank you. I was wondering if we could dig in on Quantum a little bit. i was wondering if we could dig in on quantum a little bit Nadav, what do you see in terms of, you know, the Quantum product cycle, refresh cycle, like how far through your installed base is the penetration there and what are you seeing architecturally? nadav what do you see in terms of you know the quantum product cycle refresh cycle like how far through your installed base is the penetration there and what are you seeing architecturally Are your customers kind of taking a step back and reassessing the network architecture and maybe throttling spending into other areas of their network security environment? are your customers kind of taking a step back and reassessing the network architecture and maybe throttling spending into other areas of their network security environment Thank you. thank you

Speaker 16: Yeah, thanks. On the refresh cycle, I'll let Roei also chime in on the architecture part though. Again, this is sort of the principles that we're talking about. The first one is to look at the whole connectivity fabric. A Quantum gateway is one instance. It's a critical instance. We're seeing everything stay hybrid. The ability to do it on prem is important. We also have our CloudGuard, the ability to do the same thing to the cloud and more importantly, bringing all that together as one connectivity fabric platform. That's where I think we're going. With that, where are we investing? We're investing on creating one unified management that could push all the policies at the same time, whether it's on the cloud, multi-cloud, on prem, branch, data center, et cetera. It's connecting that to the SASE. Yeah, thanks. yeah thanks On the refresh cycle, I'll let Roei also chime in on the architecture part though. on the refresh cycle i'll let roei also chime in on the architecture part though Again, this is sort of the principles that we're talking about. again this is sort of the principles that we're talking about The first one is to look at the whole connectivity fabric. the first one is to look at the whole connectivity fabric A Quantum gateway is one instance. a quantum gateway is one instance It's a critical instance. it's a critical instance We're seeing everything stay hybrid. we're seeing everything stay hybrid The ability to do it on prem is important. the ability to do it on prem is important We also have our CloudGuard, the ability to do the same thing to the cloud and more importantly, bringing all that together as one connectivity fabric platform. we also have our cloudguard the ability to do the same thing to the cloud and more importantly bringing all that together as one connectivity fabric platform That's where I think we're going. that's where i think we're going With that, where are we investing? with that where are we investing We're investing on creating one unified management that could push all the policies at the same time, whether it's on the cloud, multi-cloud, on prem, branch, data center, et cetera. we're investing on creating one unified management that could push all the policies at the same time whether it's on the cloud multi-cloud on prem branch data center et cetera It's connecting that to the SASE. it's connecting that to the sase Each one of the nodes in this very complex environment can get the same capabilities that a data center can get. All of them together are giving you sort of that sense of what a network is really about. Number three, embedding AI in this to simplify and automate. Again, I think we're in the very early innings. It's going to take not just engineering, it's going to take not just bringing AI in, but also a change in sentiment because at some point, which we're already seeing, we need to trust that AI to make real decisions in split-seconds because the attackers are not going to give us any more time. For me, when you think about Quantum, I think about the whole connectivity fabric and what that brings to our customers. Each one of the nodes in this very complex environment can get the same capabilities that a data center can get. each one of the nodes in this very complex environment can get the same capabilities that a data center can get All of them together are giving you sort of that sense of what a network is really about. all of them together are giving you sort of that sense of what a network is really about Number three, embedding AI in this to simplify and automate. number three embedding ai in this to simplify and automate Again, I think we're in the very early innings. again i think we're in the very early innings It's going to take not just engineering, it's going to take not just bringing AI in, but also a change in sentiment because at some point, which we're already seeing, we need to trust that AI to make real decisions in split-seconds because the attackers are not going to give us any more time. it's going to take not just engineering it's going to take not just bringing ai in but also a change in sentiment because at some point which we're already seeing we need to trust that ai to make real decisions in split-seconds because the attackers are not going to give us any more time For me, when you think about Quantum, I think about the whole connectivity fabric and what that brings to our customers. for me when you think about quantum i think about the whole connectivity fabric and what that brings to our customers Again, I believe that's not the whole cyber state market, but it's a core and I believe that it can be the core platform and being an open platform, open up to other better breed platform, just like we did with Wiz and we're going to do with others. Again, I believe that's not the whole cyber state market, but it's a core and I believe that it can be the core platform and being an open platform, open up to other better breed platform, just like we did with Wiz and we're going to do with others. again i believe that's not the whole cyber state market but it's a core and i believe that it can be the core platform and being an open platform open up to other better breed platform just like we did with wiz and we're going to do with others

Speaker 4: Yeah, and for the refresh cycle, I think we're in the middle of that. I think when I'm looking on the potential for, the potential is huge. We are looking on the funnel for this for the second half of deal and when I'm looking even on the funnel for the first half of 2026, the potential is there. I mean we still have a significant installment that's up to refresh and the potential is also to have a competitive replacement and we did see some of them during the first half of the year. We need to have more of them. Definitely there is a huge potential on that front. Yeah, and for the refresh cycle, I think we're in the middle of that. yeah and for the refresh cycle i think we're in the middle of that I think when I'm looking on the potential for, the potential is huge. i think when i'm looking on the potential for the potential is huge We are looking on the funnel for this for the second half of deal and when I'm looking even on the funnel for the first half of 2026, the potential is there. we are looking on the funnel for this for the second half of deal and when i'm looking even on the funnel for the first half of 2026 the potential is there I mean we still have a significant installment that's up to refresh and the potential is also to have a competitive replacement and we did see some of them during the first half of the year. i mean we still have a significant installment that's up to refresh and the potential is also to have a competitive replacement and we did see some of them during the first half of the year We need to have more of them. we need to have more of them Definitely there is a huge potential on that front. definitely there is a huge potential on that front

Speaker 14: Any sense of the duration in the back half of the year or into next year? Like is it an acceleration that you might expect or how meaningful can that be? Any sense of the duration in the back half of the year or into next year? any sense of the duration in the back half of the year or into next year Like is it an acceleration that you might expect or how meaningful can that be? like is it an acceleration that you might expect or how meaningful can that be

Speaker 4: Just based on my, this, my when I'm looking on the funnel and discussion, it should last at least until the first half of 2026. Tough to me to say if it will be, but again, this trend continue to, I mean, expect it to continue in the next 12 months. Just based on my, this, my when I'm looking on the funnel and discussion, it should last at least until the first half of 2026. just based on my this my when i'm looking on the funnel and discussion it should last at least until the first half of 2026 Tough to me to say if it will be, but again, this trend continue to, I mean, expect it to continue in the next 12 months. tough to me to say if it will be but again this trend continue to i mean expect it to continue in the next 12 months

Speaker 14: Helpful. Helpful. helpful Thank you so much. Thank you so much. thank you so much

Speaker 8: All right, up next we haveShaul Eyal, followed by Keith Bachman. Thank you. All right, up next we have Shaul Eyal , followed by Keith Bachman. all right up next we have shaul eyal followed by keith bachman Thank you. thank you

Speaker 10: Hey, good afternoon guys. Roei or Nadav on Harmony Email, is it still growing at similar rates like we've seen in prior quarters? Maybe on those slipped deals, are they like geographic based or across the board pretty much. Hey, good afternoon guys. hey good afternoon guys Roei or Nadav on Harmony Email, is it still growing at similar rates like we've seen in prior quarters? roei or nadav on harmony email is it still growing at similar rates like we've seen in prior quarters Maybe on those slipped deals, are they like geographic based or across the board pretty much. maybe on those slipped deals are they like geographic based or across the board pretty much

Speaker 4: I think, yeah, go ahead Nadav. I think the slip is your answer, but go ahead. I think, yeah, go ahead Nadav. i think yeah go ahead nadav I think the slip is your answer, but go ahead. i think the slip is your answer but go ahead

Speaker 16: Yeah, no, I mean just to reiterate on the slip deals, there's no common thread. It's not many but it's a few big ones and it's not geographically based. We have it both in the Americas, EMEA, etc., and again it's deals that have already closed in the last few weeks giving us a really good head start for the next quarter. On email, the answer is absolutely yes. It's continuing to grow at a very healthy rate. Not only is it continuing to grow at a very healthy rate, but also around that, around the leadership and the capabilities. We're baking together a few different solutions. Instead of looking at different products, different devices or different locations, we want to look at the modern workforce. This is the new Workspace division under Friedrich where we're bringing together email, endpoint, SaaS security, browser security and putting together a holistic capability. Yeah, no, I mean just to reiterate on the slip deals, there's no common thread. yeah no i mean just to reiterate on the slip deals there's no common thread It's not many but it's a few big ones and it's not geographically based. it's not many but it's a few big ones and it's not geographically based We have it both in the Americas, EMEA, etc., and again it's deals that have already closed in the last few weeks giving us a really good head start for the next quarter. we have it both in the americas emea etc and again it's deals that have already closed in the last few weeks giving us a really good head start for the next quarter On email, the answer is absolutely yes. on email the answer is absolutely yes It's continuing to grow at a very healthy rate. it's continuing to grow at a very healthy rate Not only is it continuing to grow at a very healthy rate, but also around that, around the leadership and the capabilities. not only is it continuing to grow at a very healthy rate but also around that around the leadership and the capabilities We're baking together a few different solutions. we're baking together a few different solutions Instead of looking at different products, different devices or different locations, we want to look at the modern workforce. instead of looking at different products different devices or different locations we want to look at the modern workforce This is the new Workspace division under Friedrich where we're bringing together email, endpoint, SaaS security, browser security and putting together a holistic capability. this is the new workspace division under friedrich where we're bringing together email endpoint saas security browser security and putting together a holistic capability At the end of the day we can look at personas and what they do, their security, their efficiency, their effectiveness as personas that are moving around the world and hopefully that can lift the whole Workspace solution, not just email. At the end of the day we can look at personas and what they do, their security, their efficiency, their effectiveness as personas that are moving around the world and hopefully that can lift the whole Workspace solution, not just email. at the end of the day we can look at personas and what they do their security their efficiency their effectiveness as personas that are moving around the world and hopefully that can lift the whole workspace solution not just email

Speaker 10: Thank you. Thank you. thank you

Speaker 8: All right, next up is Keith Bachman followed by Andrew Nowinski. All right, next up is Keith Bachman followed by Andrew Nowinski. all right next up is keith bachman followed by andrew nowinski

Speaker 9: Hi, thanks guys. I wanted to go back to subscriptions and discounting and a couple different threads to pull on. I think you said the impact was 50 basis points this quarter on subscription, but I just want to make sure I heard that clearly and we did hear from the channel that Check Point was more flexible in the pricing this quarter. My question is that that's not a one-time event, right? We should be assuming that that discounting impacts presumably the next four quarters' growth on that subscription line item. Hi, thanks guys. hi thanks guys I wanted to go back to subscriptions and discounting and a couple different threads to pull on. i wanted to go back to subscriptions and discounting and a couple different threads to pull on I think you said the impact was 50 basis points this quarter on subscription, but I just want to make sure I heard that clearly and we did hear from the channel that Check Point was more flexible in the pricing this quarter. i think you said the impact was 50 basis points this quarter on subscription but i just want to make sure i heard that clearly and we did hear from the channel that check point was more flexible in the pricing this quarter My question is that that's not a one- time event, right? my question is that that's not a one- time event right We should be assuming that that discounting impacts presumably the next four quarters' growth on that subscription line item. we should be assuming that that discounting impacts presumably the next four quarters' growth on that subscription line item I just wanted to hear any thoughts you might want to offer. Excuse me. On how we should construct our subscription line. Candidly, the number looks disappointing. Even if we layer in 50 basis points, what investors want to see is that line not holding steady but increasing. You know, there's not a lot of conviction that firewalls over the next three years, the product revenue will be a durable source of growth. Is that sort of the line item that investors really view as important? Maybe just help us think about the ongoing headwind associated with the next couple quarters if there is this discounting that's going to be involved. I just wanted to hear any thoughts you might want to offer. i just wanted to hear any thoughts you might want to offer Excuse me. excuse me On how we should construct our subscription line. on how we should construct our subscription line Candidly, the number looks disappointing. candidly the number looks disappointing Even if we layer in 50 basis points, what investors want to see is that line not holding steady but increasing. even if we layer in 50 basis points what investors want to see is that line not holding steady but increasing You know, there's not a lot of conviction that firewalls over the next three years, the product revenue will be a durable source of growth. you know there's not a lot of conviction that firewalls over the next three years the product revenue will be a durable source of growth Is that sort of the line item that investors really view as important? is that sort of the line item that investors really view as important Maybe just help us think about the ongoing headwind associated with the next couple quarters if there is this discounting that's going to be involved. maybe just help us think about the ongoing headwind associated with the next couple quarters if there is this discounting that's going to be involved

Speaker 4: Yeah, so first of all, you're right I mentioned the half point effect. The headwind that we had from aisle discounting related to the subscription which is part of the refresh, the bundle with the refresh. You're right around that. I do expect that as long, I mean I'm talking about the refresh from existing customer. We do expect to see the refresh. We're gonna see this refresh and we see in the final that the refresh is going to be strong hopefully in the next four quarters at least. That will have a headwind effect on the subscription. On the other end we have tailwinds. I mean we see that the email is getting bigger and bigger out of the total subscription revenues and that has higher portions. It should drive because that email is growing much higher than the 10% subscription. Yeah, so first of all, you're right I mentioned the half point effect. yeah so first of all you're right i mentioned the half point effect The headwind that we had from aisle discounting related to the subscription which is part of the refresh, the bundle with the refresh. the headwind that we had from aisle discounting related to the subscription which is part of the refresh the bundle with the refresh You're right around that. you're right around that I do expect that as long, I mean I'm talking about the refresh from existing customer. i do expect that as long i mean i'm talking about the refresh from existing customer We do expect to see the refresh. we do expect to see the refresh We're gonna see this refresh and we see in the final that the refresh is going to be strong hopefully in the next four quarters at least. we're gonna see this refresh and we see in the final that the refresh is going to be strong hopefully in the next four quarters at least That will have a headwind effect on the subscription. that will have a headwind effect on the subscription On the other end we have tailwinds. on the other end we have tailwinds I mean we see that the email is getting bigger and bigger out of the total subscription revenues and that has higher portions. i mean we see that the email is getting bigger and bigger out of the total subscription revenues and that has higher portions It should drive because that email is growing much higher than the 10% subscription. it should drive because that email is growing much higher than the 10% subscription Also SASE and also, ERM, all of them are growing farther north of 40% year-over-year. All these items are getting bigger in the subscription line items. Of course we also expect to have more competitive replacement in the quantum on the firewall. Together that should drive us, should drive the accelerate growth on the subscription. I, we do expect to see if we'll see the trend. We do expect to see slight acceleration in the next few quarters pushed by these specific emerging technologies that I just mentioned. Also SASE and also, ERM, all of them are growing farther north of 40% year-over-year. also sase and also erm all of them are growing farther north of 40% year-over-year All these items are getting bigger in the subscription line items. all these items are getting bigger in the subscription line items Of course we also expect to have more competitive replacement in the quantum on the firewall. of course we also expect to have more competitive replacement in the quantum on the firewall Together that should drive us, should drive the accelerate growth on the subscription. together that should drive us should drive the accelerate growth on the subscription I, we do expect to see if we'll see the trend. i we do expect to see if we'll see the trend We do expect to see slight acceleration in the next few quarters pushed by these specific emerging technologies that I just mentioned. we do expect to see slight acceleration in the next few quarters pushed by these specific emerging technologies that i just mentioned

Speaker 9: Okay, perfect. All right, many thanks. Okay, perfect. okay perfect All right, many thanks. all right many thanks

Speaker 8: All right, next up is Andrew Nowinski followed by Shrenik. All right, next up is Andrew Nowinski followed by Shrenik. all right next up is andrew nowinski followed by shrenik

Speaker 15: Thanks, Kip. Thanks, Kip. thanks kip Good afternoon. Good afternoon. good afternoon Nadav, at the analyst day you talked about the need to win the SASE market, you know, to drive subscription growth. But it seems like identity is the foundation for that Zero Trust SASE market. I mean you have to verify the user is who they say they are before connecting them to an application. Nadav, at the analyst day you t alked about the need to win the SASE market, you know, to drive subscription growth. nadav at the analyst day you t alked about the need to win the sase market you know to drive subscription growth But it seems like identity is the foundation for that Zero Trust SASE market. but it seems like identity is the foundation for that zero trust sase market I mean you have to verify the user is who they say they are b efore connecting them to an application. i mean you have to verify the user is who they say they are b efore connecting them to an application I'm trying to understand how critical is identity security to your SASE solution and to the future adoption of SASE as you push more into that large enterprise space? I'm trying to understand how critical is identity security to your SASE solution and to the future adoption of SASE as you push more into that large enterprise space? i'm trying to understand how critical is identity security to your sase solution and to the future adoption of sase as you push more into that large enterprise space Thank you. Thank you. thank you

Speaker 16: Look, secret management and identity are a part of the whole estate. Creating Zero Trust with the capabilities that we already have is actually, I believe, very doable and we are leaving it and, you know, the customer needs to choose actually what provider they want to use as an identity broker. Again, that goes back to the open platform approach. I do not see this as a big impact and I definitely do not think that this is a big impact on the SASE solution that we have. Look, secret management and identity are a part of the whole estate. look secret management and identity are a part of the whole estate Creating Zero Trust with the capabilities that we already have is actually, I believe, very doable and we are leaving it and, you know, the customer needs to choose actually what provider they want to use as an identity broker. creating zero trust with the capabilities that we already have is actually i believe very doable and we are leaving it and you know the customer needs to choose actually what provider they want to use as an identity broker Again, that goes back to the open platform approach. again that goes back to the open platform approach I do not see this as a big impact and I definitely do not think that this is a big impact on the SASE solution that we have. i do not see this as a big impact and i definitely do not think that this is a big impact on the sase solution that we have

Speaker 15: Okay, thank you. Okay, thank you. okay thank you

Speaker 8: All right, next up is Shrenik, followed by Patrick Colville. All right, next up is Shrenik, followed by Patrick Colville. all right next up is shrenik followed by patrick colville

Speaker 6: Yeah, sorry. Yeah, thanks. Kip, Nadav, you have articulated a strong vision around AI-powered prevention. Talked about, of course, Quantum Force to unified management, real-time detection. Just curious, like how are you thinking about monetizing these structurally? Also get a little bit into timing, like overall net new SKUs, pricing, uplift, broader adoption. And just on that note, since you've said in the past about being brutally honest and takes a village and rarity being integrated for real time prevention. Just on M&A front, given your cash position and the cash generation, how you're prioritizing AI-focused M&A and, and also internal R&D in your, just your philosophy there? Yeah, sorry. yeah sorry Yeah, thanks. yeah thanks Kip, Nadav, you have articulated a strong vision around AI-powered prevention. kip nadav you have articulated a strong vision around ai-powered prevention Talked about, of course, Quantum Force to unified management, real-time detection. talked about of course quantum force to unified management real-time detection Just curious, like how are you thinking about monetizing these structurally? just curious like how are you thinking about monetizing these structurally Also get a little bit into timing, like overall net new SKUs, pricing, uplift, broader adoption. also get a little bit into timing like overall net new skus pricing uplift broader adoption And just on that note, since you've s aid in the past about being brutally h onest and takes a village and rarity being integrated for real time prevention. J ust on M&A front, given your cash position and the cash generation, how you're prioritizing AI-focused M&A and, and also internal R&D in your, j ust your philosophy there? and just on that note since you've s aid in the past about being brutally h onest and takes a village and rarity being integrated for real time prevention. j ust on m&a front given your cash position and the cash generation how you're prioritizing ai-focused m&a and and also internal r&d in your, j ust your philosophy there

Speaker 16: Yeah. To start with the second question, this is one of the four guiding principles in AI First Security. In order to get to AI First Security, we're doing mainly three things. Number one is hiring the right talent to lead this future. To this end, we announced last quarter that we're going to be hiring about 500 new individuals that can lead us to that future, both on SASE and AI. We're already halfway through this program. Number two, as you said, there's always the opportunity to make acquisitions. We have a strong position and we're looking all the time to the right people, the right IP, the right market access. We're doing this as we speak. I believe that we will make moves there as well. Yeah. yeah To start with the second question, this is one of the four guiding principles in AI First Security. to start with the second question this is one of the four guiding principles in ai first security In order to get to AI First Security, we're doing mainly three things. in order to get to ai first security we're doing mainly three things Number one is hiring the right talent to lead this future. number one is hiring the right talent to lead this future To this end, we announced last quarter that we're going to be hiring about 500 new individuals that can lead us to that future, both on SASE and AI. to this end we announced last quarter that we're going to be hiring about 500 new individuals that can lead us to that future both on sase and ai We're already halfway through this program. we're already halfway through this program Number two, as you said, there's always the opportunity to make acquisitions. number two as you said there's always the opportunity to make acquisitions We have a strong position and we're looking all the time to the right people, the right IP, the right market access. we have a strong position and we're looking all the time to the right people the right ip the right market access We're doing this as we speak. we're doing this as we speak I believe that we will make moves there as well. i believe that we will make moves there as well It's the balance between these two, the acquisitions and the talent that we already have, the talent that we're onboarding together to lead this future. That's on the investment that we're making. Generally speaking, on the monetization front, I think that there are three things that you need to look at. Number one is a standalone product. We already have that. In fact, we're already selling the capability to allow users to have access based on policy and governance so that organizations and enterprises can embrace these technologies safely and not block them. That could be a standalone product. We're also looking at this as a new platform because when you think about AI, cybersecurity or security for AI, you're looking at observability, you're looking at users' capabilities, you're looking at governance, you're looking at runtime, and you're looking at CICD. We're looking at the whole gamut. It's the balance between these two, the acquisitions and the talent that we already have, the talent that we're onboarding together to lead this future. it's the balance between these two the acquisitions and the talent that we already have the talent that we're onboarding together to lead this future That's on the investment that we're making. that's on the investment that we're making Generally speaking, on the monetization front, I think that there are three things that you need to look at. generally speaking on the monetization front i think that there are three things that you need to look at Number one is a standalone product. number one is a standalone product We already have that. we already have that In fact, we're already selling the capability to allow users to have access based on policy and governance so that organizations and enterprises can embrace these technologies safely and not block them. in fact we're already selling the capability to allow users to have access based on policy and governance so that organizations and enterprises can embrace these technologies safely and not block them That could be a standalone product. that could be a standalone product We're also looking at this as a new platform because when you think about AI, cybersecurity or security for AI, you're looking at observability, you're looking at users' capabilities, you're looking at governance, you're looking at runtime, and you're looking at CICD. we're also looking at this as a new platform because when you think about ai cybersecurity or security for ai you're looking at observability you're looking at users' capabilities you're looking at governance you're looking at runtime and you're looking at cicd We're looking at the whole gamut. we're looking at the whole gamut It's an evolving space, making our first moves. The next, which is more about optimizing and being more competitive with our capabilities that we already have, usually mostly on the management side. We've launched almost 12 months ago Playblocks and AIOps, and we're seeing that play a major part. As you can see, it's a very wide range. Absolutely, to your question, we already have, and we'll have more separate SKUs, if you like, that are actually being sold either as a part of our network fabric and Infinity consolidated platform, but also as a standalone. These are going to be a part of our Workspace platform, they're going to be a part of the network fabric, and as a standalone. It's an evolving space, making our first moves. it's an evolving space making our first moves The next, which is more about optimizing and being more competitive with our capabilities that we already have, usually mostly on the management side. the next which is more about optimizing and being more competitive with our capabilities that we already have usually mostly on the management side We've launched almost 12 months ago Playblocks and AIOps, and we're seeing that play a major part. we've launched almost 12 months ago playblocks and aiops and we're seeing that play a major part As you can see, it's a very wide range. as you can see it's a very wide range Absolutely, to your question, we already have, and we'll have more separate SKUs, if you like, that are actually being sold either as a part of our network fabric and Infinity consolidated platform, but also as a standalone. absolutely to your question we already have and we'll have more separate skus if you like that are actually being sold either as a part of our network fabric and infinity consolidated platform but also as a standalone These are going to be a part of our Workspace platform, they're going to be a part of the network fabric, and as a standalone. these are going to be a part of our workspace platform they're going to be a part of the network fabric and as a standalone

Speaker 6: Got it. Thanks a lot. Got it. got it Thanks a lot. thanks a lot

Speaker 8: All right, Patrick Colville, followed by Jonathan Ho. All right, Patrick Colville, followed by Jonathan Ho. all right patrick colville followed by jonathan ho

Speaker 2: All right, thank you for taking my question. I'm actually going to ask Nadav this one, please. I mean, you mentioned earlier in the call that you'd be happy to give up a few points of margin to achieve your goals. I guess my question is should we interpret that as new information or should we interpret that nugget as consistent with the messaging from last quarter and the analyst day. The reason I ask this is because many had thought, you know, this time last year when your appointment was announced, that given your background at Team8, there would be an acceleration of tuck in deals and we haven't seen that. You know, any color you could provide there on that margin comment or, you know, might there be a change in the pace of tuck-in deals? All right, thank you for taking my question. all right thank you for taking my question I'm actually going to ask Nadav this one, please. i'm actually going to ask nadav this one please I mean, you mentioned earlier in the call that you'd be happy to give up a few points of margin to achieve your goals. i mean you mentioned earlier in the call that you'd be happy to give up a few points of margin to achieve your goals I guess my question is should we interpret that as new information or should we interpret that nugget as consistent with the messaging from last quarter and the analyst day. i guess my question is should we interpret that as new information or should we interpret that nugget as consistent with the messaging from last quarter and the analyst day The reason I ask this is because many had thought, you know, this time last year when your appointment was announced, that given your background at Team8, there would be an acceleration of tuck in deals and we haven't seen that. the reason i ask this is because many had thought you know this time last year when your appointment was announced that given your background at team8 there would be an acceleration of tuck in deals and we haven't seen that You know, any color you could provide there on that margin comment or, you know, might there be a change i n the pace of tuck-in deals? you know any color you could provide there on that margin comment or you know might there be a change i n the pace of tuck-in deals

Speaker 16: So there is no new information, Patrick, it's part of our vision. We've spoken about that. We are looking to accelerate growth. It's a journey. I think we're already seeing good initial cues that we're going the right way. In order to go there, you need to galvanize the strategy, and that's what we're doing. You've seen the four guiding principles, and yes, you are going to see an acceleration in the way that we either build in-house to be ready for the future that we've been speaking about extensively, but also acquisitions. For 2025, we already gave the guidance, we already reiterated it in January of next year. We'll give the guidance for 2026. As we've spoken about on the analyst days and in other calls, we are willing to make the investments for a faster, more, faster but sustainable growth. So there is no new information, Patrick, it's part of our vision. so there is no new information patrick it's part of our vision We've spoken about that. we've spoken about that We are looking to accelerate growth. we are looking to accelerate growth It's a journey. it's a journey I think we're already seeing good initial cues that we're going the right way. i think we're already seeing good initial cues that we're going the right way In order to go there, you need to galvanize the strategy, and that's what we're doing. in order to go there you need to galvanize the strategy and that's what we're doing You've seen the four guiding principles, and yes, you are going to see an acceleration in the way that we either build in-house to be ready for the future that we've been speaking about extensively, but also acquisitions. you've seen the four guiding principles and yes you are going to see an acceleration in the way that we either build in-house to be ready for the future that we've been speaking about extensively but also acquisitions For 2025, we already gave the guidance, we already reiterated it in January of next year. for 2025 we already gave the guidance we already reiterated it in january of next year We'll give the guidance for 2026. we'll give the guidance for 2026 As we've spoken about on the analyst days and in other calls, we are willing to make the investments for a faster, more, faster but sustainable growth. as we've spoken about on the analyst days and in other calls we are willing to make the investments for a faster more faster but sustainable growth These tuck-ins and these acquisitions are going to be within the strategy that are articulated and within the four guidelines. You know, when we're talking about the connectivity fabric and how we lead that, we don't have everything. Some of it we can build, some of it we can acquire. Same thing goes for Workspace and definitely for AI. We're very active in assessing the possibilities that are out there. We're willing to—not willing—we are making the strides to make sure that we see the best in class in each one of these categories. These tuck-ins and these acquisitions are going to be within the strategy that are articulated and within the four guidelines. these tuck-ins and these acquisitions are going to be within the strategy that are articulated and within the four guidelines You know, when we're talking about the connectivity fabric and how we lead that, we don't have everything. you know when we're talking about the connectivity fabric and how we lead that we don't have everything Some of it we can build, some of it we can acquire. some of it we can build some of it we can acquire Same thing goes for Workspace and definitely for AI. same thing goes for workspace and definitely for ai We're very active in assessing the possibilities that are out there. we're very active in assessing the possibilities that are out there We're willing to—not willing—we are making the strides to make sure that we see the best in class in each one of these categories. we're willing to—not willing—we are making the strides to make sure that we see the best in class in each one of these categories

Speaker 2: Very clear. Thank you, Nadav. Very clear. very clear Thank you, Nadav. thank you nadav

Speaker 8: Hey, thanks Patrick, for telling us you're European with your outfit. Next up is Jonathan Ho, followed by Keith Weiss. Hey, thanks Patrick, for telling us you're European with your outfit. hey thanks patrick for telling us you're european with your outfit Next up is Jonathan Ho, followed by Keith Weiss. next up is jonathan ho followed by keith weiss

Speaker 5: Good morning. With your go-to-market changes, what have been sort of the most relevant changes that you've made? And can you give us a sense of the timing of when you expect these impacts to be more meaningful and maybe where you are seeing those impacts work today? Thank you. Good morning. good morning With your go-to-market changes, what have been sort of the most relevant changes that you've made? with your go-to-market changes what have been sort of the most relevant changes that you've made And can you give us a sense of the timing of when you expect these impacts to be more meaningful and maybe where you are seeing those impacts work today? and can you give us a sense of the timing of when you expect these impacts to be more meaningful and maybe where you are seeing those impacts work today Thank you. thank you

Speaker 16: Yeah, thanks. I think first and foremost it's about the leadership. All right, so in the C-suite today we started out, when I started out, we had one leader. Today we have six, or sorry, we had two and now we have six. So President of Americas, President of International, CMO, Customer Success, CRO are all a part of this. Yeah, thanks. yeah thanks I think first and foremost it's about the leadership. i think first and foremost it's about the leadership All right, so in the C- suite today we started out, when I started out, we had one leader. all right so in the c- suite today we started out when i started out we had one leader Today we have six, or sorry, we had two and now we have six. today we have six or sorry we had two and now we have six So President of Americas, President of International, CMO, Customer Success, CRO are all a part of this. so president of americas president of international cmo customer success cro are all a part of this And so the balance between the product engineering and the rest of the folks and the go-to-market folks is differentiated. The second is the people that we are looking to attract, right. So, you know, we are hiring people that are coming more from a marketing perspective. The second is on a cultural level, being less shy about what we stand for and why we stand for it. And all this is, you know, in the process of happening. More news to come shortly. And so the balance between the product engineering and the rest of the folks and the go-to-market folks is differentiated. and so the balance between the product engineering and the rest of the folks and the go-to-market folks is differentiated The second is the people that we are looking to attract, right. the second is the people that we are looking to attract right So, you know, we are hiring people that are coming more from a marketing perspective. so you know we are hiring people that are coming more from a marketing perspective The second is on a cultural level, being less shy about what we stand for and why we stand for it. the second is on a cultural level being less shy about what we stand for and why we stand for it And all this is, you know, in the process of happening. and all this is you know in the process of happening More news to come shortly. more news to come shortly

Speaker 5: Thank you. Thank you. thank you

Speaker 8: All right, next up is Keith Weiss, followed by Saket Kalia. Go ahead, Keith. I know you don't have a camera open. All right, next up is Keith Weiss, followed by Saket Kalia . all right next up is keith weiss followed by saket kalia Go ahead, Keith. go ahead keith I know you don't have a camera open. i know you don't have a camera open

Speaker 17: Hey, can you guys hear me? Hey, can you guys hear me? hey can you guys hear me

Speaker 8: Yes. Yes. yes

Speaker 17: Excellent, thank you. Maybe a question for Roei. Excellent, thank you. excellent thank you Maybe a question for Roei. maybe a question for roei Nadav talked about the necessity for more marketing dollars to get more of the message out and that makes sense to get to a pace of acceleration. I think one of the things investors broadly have been hoping for or expecting within software companies is the internal use of generative AI and more AI technologies to be able to drive more efficiencies within the business. So maybe you could talk about the potential within Check Point of you guys utilizing the technologies yourself. Maybe get more productive in development, more productive in go-to-market using generative AI. What ability is there to offset some of that necessity for higher investment so you can sustain the operating margins and maybe do both, right. Get to that level of acceleration just by being more productive and still putting incremental investments where they're needed. Nadav talked about the necessity for more marketing dollars to get more of the message out and that makes sense to get to a pace of acceleration. nadav talked about the necessity for more marketing dollars to get more of the message out and that makes sense to get to a pace of acceleration I think one of the things investors broadly have been hoping for or expecting within software companies is the internal use of generative AI and more AI technologies to be able to drive more efficiencies within the business. i think one of the things investors broadly have been hoping for or expecting within software companies is the internal use of generative ai and more ai technologies to be able to drive more efficiencies within the business So maybe you could talk about the potential within Check Point of you guys utilizing the technologies yourself. so maybe you could talk about the potential within check point of you guys utilizing the technologies yourself Maybe get more productive in development, more productive in go-to-market using generative AI. maybe get more productive in development more productive in go-to-market using generative ai What ability is there to offset some of that necessity for higher investment so you can sustain the operating margins and maybe do both, right. what ability is there to offset some of that necessity for higher investment so you can sustain the operating margins and maybe do both right Get to that level of acceleration just by being more productive and still putting incremental investments where they're needed. get to that level of acceleration just by being more productive and still putting incremental investments where they're needed

Speaker 4: First of all, great question. I think definitely that's one of our priorities when we are looking. Also, we're talking a lot about AI and security for AI. Definitely, AI is an opportunity also to be more productive internally and to optimize operations. That is something that we are already working on today and it should help us in the future. I don't think that in the short term we'll see it contribute to our operating margin. This is optimization, but we have. We're actually a task force in the company with the development team, with the go-to-market team, with my team, everything is working to see how we can leverage these AI tools today and how we can be more productive and optimize what we are doing. First of all, great question. first of all great question I think definitely that's one of our priorities when we are looking. i think definitely that's one of our priorities when we are looking Also, we're talking a lot about AI and security for AI. also we're talking a lot about ai and security for ai Definitely, AI is an opportunity also to be more productive internally and to optimize operations. definitely ai is an opportunity also to be more productive internally and to optimize operations That is something that we are already working on today and it should help us in the future. that is something that we are already working on today and it should help us in the future I don't think that in the short term we'll see it contribute to our operating margin. i don't think that in the short term we'll see it contribute to our operating margin This is optimization, but we have. this is optimization but we have We're actually a task force in the company with the development team, with the go-to-market team, with my team, everything is working to see how we can leverage these AI tools today and how we can be more productive and optimize what we are doing. we're actually a task force in the company with the development team with the go-to-market team with my team everything is working to see how we can leverage these ai tools today and how we can be more productive and optimize what we are doing I have to say again, to quantify it for now today will be difficult, but in the long run, in the long term it should benefit us. I have to say again, to quantify it for now today will be difficult, but in the long run, in the long term it should benefit us. i have to say again to quantify it for now today will be difficult but in the long run in the long term it should benefit us

Speaker 17: More like a 2026, 2027 benefit? More like a 2026, 2027 benefit? more like a 2026 2027 benefit

Speaker 4: Hopefully. Yes. Yeah. Hopefully. hopefully Yes. yes Yeah. yeah

Speaker 16: To add to that, Keith, because I think that's on everybody's top of mind. You know, every organization on the planet is dealing with this. We need to lead it, but we need to lead it on different fronts. One of the fronts that you said is being an AI first company. I think we're at the front line, but it's one of those things that, how do you know if you're at the bleeding edge when there, you know, there is no sort of benchmark. So we're never going to be content enough. The way I look at it is yes, to become more efficient, more effective, but rather than try to, it's the latter. It's sort of the last piece of what you said. It's not. To add to that, Keith, because I think that's on everybody's top of mind. to add to that keith because i think that's on everybody's top of mind You know, every organization on the planet is dealing with this. you know every organization on the planet is dealing with this We need to lead it, but we need to lead it on different fronts. we need to lead it but we need to lead it on different fronts One of the fronts that you said is being an AI first company. one of the fronts that you said is being an ai first company I think we're at the front line, but it's one of those things that, how do you know if you're at the bleeding edge when there, you know, there is no sort of benchmark. i think we're at the front line but it's one of those things that how do you know if you're at the bleeding edge when there you know there is no sort of benchmark So we're never going to be content enough. so we're never going to be content enough The way I look at it is yes, to become more efficient, more effective, but rather than try to, it's the latter. the way i look at it is yes to become more efficient more effective but rather than try to it's the latter It's sort of the last piece of what you said. it's sort of the last piece of what you said It's not. it's not Since we are investing in our future, I think that will allow us to do more, not with less, but with the same. Since we are investing in our future, I think that will allow us to do more, not with less, but with the same. since we are investing in our future i think that will allow us to do more not with less but with the same Right. Right. right And enable us to go for growth. Lastly, I'll say, you know, because Roei talked about the task force, Jonathan Zanger, who I told you about last time we spoke, our new CTO, you know, he's obsessed with those three things. How do we become an AI first company? The second part is how do we help, and I think this is one of our number one tasks in the world today, is how do we allow our customers to become an AI first company without, you know, taking huge risks on privacy, security, governance, etc. And then finally, constantly having an eye open. That is why we put together the research center that's looking to where the puck is going. I think attackers have less, you know, they're flexible, they don't have procurement committees, governance, etc. They're embracing these technologies extremely fast. And enable us to go for growth. and enable us to go for growth Lastly, I'll say, you know, because Roei talked about the task force, Jonathan Zanger, who I told you about last time we spoke, our new CTO, you know, he's obsessed with those three things. lastly i'll say you know because roei talked about the task force jonathan zanger who i told you about last time we spoke our new cto you know he's obsessed with those three things How do we become an AI first company? how do we become an ai first company The second part is how do we help, and I think this is one of our number one tasks in the world today, is how do we allow our customers to become an AI first company without, you know, taking huge risks on privacy, security, governance, etc. And then finally, constantly having an eye open. the second part is how do we help and i think this is one of our number one tasks in the world today is how do we allow our customers to become an ai first company without you know taking huge risks on privacy security governance etc and then finally constantly having an eye open That is why we put together the research center that's looking to where the puck is going. that is why we put together the research center that's looking to where the puck is going I think attackers have less, you know, they're flexible, they don't have procurement committees, governance, etc. They're embracing these technologies extremely fast. i think attackers have less you know they're flexible they don't have procurement committees governance etc they're embracing these technologies extremely fast We at Check Point have to do all three of these things in parallel. I think we're already, we're off to a really good start, but a lot more to come of that. We at Check Point have to do all three of these things in parallel. we at check point have to do all three of these things in parallel I think we're already, we're off to a really good start, but a lot more to come of that. i think we're already we're off to a really good start but a lot more to come of that

Speaker 17: Got it, got it. Maybe one quick follow up for Nadav. Not to try to put excuses in your guys' mouths, but in Israel you guys had a 12-day war during the quarter. I think it could be forgiven if that created some disruption or some distraction for the Workforce within Check Point during the quarter. I mean, do you think that had any impact on slip deals or execution in the quarter? I mean, it was a pretty big deal. Got it, got it. got it got it Maybe one quick follow up for Nadav. maybe one quick follow up for nadav Not to try to put excuses in your guys' mouths, but in Israel you guys had a 12- day war during the quarter. not to try to put excuses in your guys' mouths but in israel you guys had a 12- day war during the quarter I think it could be forgiven if that created some disruption or some distraction for the Workforce within Check Point during the quarter. i think it could be forgiven if that created some disruption or some distraction for the workforce within check point during the quarter I mean, do you think that had any impact on slip deals or execution in the quarter? i mean do you think that had any impact on slip deals or execution in the quarter I mean, it was a pretty big deal. i mean it was a pretty big deal

Speaker 16: Yeah, obviously it was a big deal and we can talk about the implications for the next few hours. Yeah, obviously it was a big deal and we can talk about the implications for the next few hours. yeah obviously it was a big deal and we can talk about the implications for the next few hours Specifically on Check Point, no, you know, we're a global company, we have people around the globe. We didn't see any direct impact, but believe me, we probably have one of the best BCP DRP programs in the world for obvious reasons. No, it didn't have an impact, but what it did have is it shows us what kind of a world we're looking at. You know, obviously we all know most of the world has been looking at the impact, the direct impact, the kinetic impact, but behind the scenes there's a cyber war going and Iran is one of the proponents of that war. They have good capabilities, they have a lot of motivation and we're seeing an increased, I would say, boldness and the amplitude of what the Iranians are doing with some of their friends around the world. Specifically on Check Point, no, you know, we're a global company, we have people around the globe. specifically on check point no you know we're a global company we have people around the globe We didn't see any direct impact, but believe me, we probably have one of the best BCP DRP programs in the world for obvious reasons. we didn't see any direct impact but believe me we probably have one of the best bcp drp programs in the world for obvious reasons No, it didn't have an impact, but what it did have is it shows us what kind of a world we're looking at. no it didn't have an impact but what it did have is it shows us what kind of a world we're looking at You know, obviously we all know most of the world has been looking at the impact, the direct impact, the kinetic impact, but behind the scenes there's a cyber war going and Iran is one of the proponents of that war. you know obviously we all know most of the world has been looking at the impact the direct impact the kinetic impact but behind the scenes there's a cyber war going and iran is one of the proponents of that war They have good capabilities, they have a lot of motivation and we're seeing an increased, I would say, boldness and the amplitude of what the Iranians are doing with some of their friends around the world. they have good capabilities they have a lot of motivation and we're seeing an increased i would say boldness and the amplitude of what the iranians are doing with some of their friends around the world

Speaker 17: Got it. Got it. got it

Speaker 8: All right, our final call, our final question will come from Saket Kalia from Barclays. All right, our final call, our final question will come from Saket Kalia from Barclays. all right our final call our final question will come from saket kalia from barclays

Speaker 11: Excellent. Thanks so much for fitting me in here, guys. Nadav, maybe, maybe we can, we can end with, with one of the things you said in your prepared comments, which was steady growth in SASE. Clearly Check Point has a big customer base to cross sell SASE to. Maybe the question is, what are you seeing in terms of your SASE wins, in terms of why you win? And Roei, maybe the related question is anything that you can or want to share just on the scale or run rate of this business. As we think about the future of Check Point. Excellent. excellent Thanks so much for fitting me in here, guys. thanks so much for fitting me in here guys Nadav, maybe, maybe we can, we can end with, with one of the things you said in your prepared comments, which was steady growth in SASE. nadav maybe maybe we can we can end with with one of the things you said in your prepared comments which was steady growth in sase Clearly Check Point has a big customer base to cross sell SASE to. clearly check point has a big customer base to cross sell sase to Maybe the question is, what are you seeing in terms of your SASE wins, in terms of why you win? maybe the question is what are you seeing in terms of your sase wins in terms of why you win And Roei, maybe the related question is anything that you can or want to share just on the scale or run rate of this business. and roei maybe the related question is anything that you can or want to share just on the scale or run rate of this business As we think about the future of Check Point. as we think about the future of check point

Speaker 16: Yeah, to begin with, we're still a relatively small player in SASE per se, but we are the leading player when it comes to a connected fabric platform and the hybrid mesh and SASE is embedded in that. Many of our wins, I would say most of our wins, are customers that are already using our Quantum base and want to, you know, have a more holistic connectivity fabric capability. I do not think there is any other company that has sort of the inspection engines, the AI engines, the intelligence that comes from 32 years and dozens of thousands of customers that now once you put the SASE in, you immediately get all that benefit and bring it together as a platform. You are right. Yeah, to begin with, we're still a relatively small player in SASE per se, but we are the leading player when it comes to a connected fabric platform and the hybrid mesh and SASE is embedded in that. yeah to begin with we're still a relatively small player in sase per se but we are the leading player when it comes to a connected fabric platform and the hybrid mesh and sase is embedded in that Many of our wins, I would say most of our wins, are customers that are already using our Quantum base and want to, you know, have a more holistic connectivity fabric capability. many of our wins i would say most of our wins are customers that are already using our quantum base and want to you know have a more holistic connectivity fabric capability I do not think there is any other company that has sort of the inspection engines, the AI engines, the intelligence that comes from 32 years and dozens of thousands of customers that now once you put the SASE in, you immediately get all that benefit and bring it together as a platform. i do not think there is any other company that has sort of the inspection engines the ai engines the intelligence that comes from 32 years and dozens of thousands of customers that now once you put the sase in you immediately get all that benefit and bring it together as a platform You are right. you are right Today it is mostly the upsell from existing customers, you know, through our new division that also is going to bring up our MSP pay as you go. I think we are all. We also have an opportunity in the downstream and I do see opportunity for SASE to come into customers that do not have Check Point and hopefully then embrace the other Check Point customers. You are right that the beginning of the journey is the upsell from existing enterprise customers. Today it is mostly the upsell from existing customers, you know, through our new division that also is going to bring up our MSP pay as you go. today it is mostly the upsell from existing customers you know through our new division that also is going to bring up our msp pay as you go I think we are all. i think we are all We also have an opportunity in the downstream and I do see opportunity for SASE to come into customers that do not have Check Point and hopefully then embrace the other Check Point customers. we also have an opportunity in the downstream and i do see opportunity for sase to come into customers that do not have check point and hopefully then embrace the other check point customers You are right that the beginning of the journey is the upsell from existing enterprise customers. you are right that the beginning of the journey is the upsell from existing enterprise customers

Speaker 11: Very helpful. Thank you. Very helpful. very helpful Thank you. thank you

Speaker 8: All right, thank you all for joining us today. We appreciate it and we will look forward to seeing you throughout the quarter and also this time next quarter. Thank you. All right, thank you all for joining us today. all right thank you all for joining us today We appreciate it and we will look forward to seeing you throughout the quarter and also this time next quarter. we appreciate it and we will look forward to seeing you throughout the quarter and also this time next quarter Thank you. thank you

Speaker 16: Thanks, guys. Thanks, guys. thanks guys

Speaker 4: Thank you. Thank you. thank you