Goldman Sachs Communacopia + Tech Conf 2025: Check Point Software (CHKP) Investor Q&A – Growth, AI, SASE, Channel

Key Takeaways

TL;DR: CHKP remains highly confident in hitting the upper end of FY25 guide despite Q2 billings slip. Key growth bets: SASE/AI product ramp, channel transformation. Mgmt willing to trade several %p of margin for sustainable DD growth, though near-term FX headwinds (~$60mn; 1–2% margin drag) are a constraint. SASE scaling fast, full product launch Q4; mgmt touts tech edge and Y/Y doubling. APAC outperformed (Q2 +15%) on local execution. GenAI monetization early, but efficacy leadership (native SharePoint hack protection) is a comp. advantage. Identity strategy stays “open garden” (interop > vertical integration).

1. Guide, Pipeline & Macro

• FY25 Guide Confidence:
  • Mgmt reaffirms “higher end” of FY25 rev. guide despite Q2 billings slip; all $18mn shifted to Q3 and now signed.
  • No material macro/pipeline deterioration; “2H pipe very strong.”
• Q3 Linear/Macro:
  • Early Q3 linearity above typical (excl. $18mn shift). Mgmt sees “some signs” of broader mkt improvement.
• APAC Outperformance:
  • Q2 APAC rev. +15% Y/Y, driven by SASE, local sales leadership, and mgmt focus.

2. Margins, FX & Resource Allocation

• Margin Guide & Trade-off:
  • Margins to “go up” by YE on seasonality, but 2026 margin drag of 1–2% from FX (~$60mn USD/ILS headwind).
  • Willing to trade “a few %p of margin for growth,” but not reckless. 40% margin “floor” may be breached if FX persists.
• Investment Focus:
  • Incremental opex to:
    • Demand gen (new CMO)
    • Channel enablement/commissions
    • Product (SASE, AI/ML) hires — 500 net hires YTD for AI/SASE.

3. Product, Tech & Growth

• SASE Momentum:
  • SASE customer count doubled Y/Y; late-stage scale-up, full launch Q4’25.
  • Scalability: Tens of thousands supported, target 100K+; driven by infra/app layer, not just PoPs (“50+” PoPs today).
  • Differentiation: 10x speed vs. peers, single-policy mgmt, native firewall integration, user-friendly deployment.
• Firewall Refresh:
  • “20%+” of installed base renewed in 2024/2025; strength expected into 1H26. High efficacy in critical vuln. prevention.
  • Customers prioritize efficacy/TCO; CHKP wins on “no patch required” vs. peers post-SharePoint exploits.
• AI Initiatives:
  • Product: 60+ AI engines in ThreatCloud; Copilot (platform CLI); “AI innovation centers” led by CTO Zanger.
  • Hiring: 500 AI-focused YTD; AI in product and internal productivity (e.g., finance org AI challenge).
  • Monetization: Early days; expects future growth in threat prevention/prediction, possible incremental pricing; no evidence AI is shrinking sec. budgets.
  • Internal Use: Mandate for AI-driven efficiency—new finance hires must show AI leverage.
• Identity/Open Garden:
  • “Switzerland” approach—interop w/ Okta, SailPoint, etc. Unlikely to pursue integrated “stack” M&A (unlike PANW–CyberArk); prefers smaller, tuck-in deals.