Check Point Software reported Nov. 2 that third-quarter revenue fell 1% from a year earlier to $670 million, while security-subscription revenue rose 11% to $339 million. The figures show growth in recurring security services alongside a decline in overall sales.
The results cover the quarter ended Sept. 30. Remaining performance obligations reached $2.5 billion, up 5% year over year, the company said. That measure concerns contracted future business rather than revenue already recognized in the quarter.
Subscription growth and earnings comparisons
GAAP operating income was $177 million, or 26% of revenue. Adjusted operating income was $251 million, or 37%. The adjusted figure is not interchangeable with the GAAP result.
GAAP earnings per share declined 45% to $1.82. Check Point said the comparison reflected a one-time tax benefit in the year-earlier period; excluding that benefit, GAAP earnings per share increased 1%. The headline decline therefore should not be presented as an equivalent collapse in operating demand.
In the second quarter, Check Point reported total revenue of $674 million, up 1% year over year, and subscription revenue of $333 million, up 12%. The new report extends that pattern of subscription growth outpacing total sales, but switches the overall year-over-year revenue comparison into negative territory.
Second-quarter remaining performance obligations were $2.6 billion, up 7% year over year. The third-quarter balance was lower than that prior-quarter figure even though it remained above the year-earlier level. Sequential and annual comparisons therefore point in different directions.