Shares of Check Point Software Technologies Ltd. (NASDAQ:CHKP) fell around 10% after the company reported first-quarter results that missed revenue expectations, with investors focusing on weaker performance in its security appliance segment.
The cybersecurity firm generated revenue of $668 million for the quarter ended March 31, marking a 5% year-over-year increase but coming in below the analyst consensus of $672.59 million. Adjusted earnings per share reached $2.50, ahead of the $2.40 estimate. Security subscription revenue rose 11% year-over-year to $323 million, while product and license revenue declined to $110.8 million from $114.1 million in the same period last year.
Chief Executive Officer Nadav Zafrir said the softness in product revenue was linked to recent changes in the company’s go-to-market strategy introduced early in the quarter. “Product revenue was impacted by go-to-market changes implemented at the beginning of the quarter, which created near-term headwinds in our security appliance business,” Zafrir said. “We remain confident these go-to-market changes together with our market-leading technology will drive sustainable long-term value.”
Adjusted operating income came in at $265 million, representing 40% of total revenue. Cash flow from operations totaled $445 million, up 6% year-over-year, while adjusted free cash flow increased 11% to $457 million.
Check Point also confirmed the appointment of Sherif Seddik as Chief Revenue Officer, effective May 1. He will replace Itai Greenberg, who is stepping down from the position.