Check Point Software Technologies Ltd.'s CHKP shares gained 7.4% on Thursday after the company reported better-than-expected fourth-quarter 2024 results. This IT security solutions provider reported non-GAAP earnings of $2.70 per share, which beat the Zacks Consensus Estimate of $2.66. The figure met the top end of management’s guidance of $2.60-$2.70. The bottom line increased 5% from the year-ago quarter’s level of $2.57.

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Check Point Software's earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and met once, the average surprise being 1.6%.

Check Point Software’s fourth-quarter revenues of $703.7 million surpassed the consensus mark of $698.2 million and came above the mid-point of the previously guided range of $675-$715 million. The top line increased 6% year over year, mainly driven by an 8% increase in the company’s core Quantum Force appliance business and strong growth in the Harmony Email and Infinity Platform revenues.

Check Point Fourth-Quarter Details

Security subscription revenues were $292.2 million, which increased 9.9% year over year. Products and licenses revenues increased 7.8% year over year to $170.6 million. The Zacks Consensus Estimate for security subscription and products and licenses revenues was pegged at $293 million and $162 million.

Total revenues from product and security subscriptions were $462.8 million, up 9.1% year over year. The consensus mark for the segment sales was pinned at $455 million.

Software updates and maintenance revenues increased to $240.9 million from $239.4 million reported in the year-ago quarter. The Zacks Consensus Estimate for software updates and maintenance revenues was pegged at $243 million.

As of Dec. 31, 2024, deferred revenues totaled $2 billion, up 5% year over year.

Non-GAAP gross profit increased 6% year over year to $623 million while gross margin remained unchanged at 89%. Non-GAAP operating expenses soared 12%, primarily due to an 18% increase in selling & marketing expenses and a 6% rise in research & development costs, partially offset by a 3% decline in general & administrative expenses. As a percentage of revenues, operating expenses increased to 45% from 42.5% in the year-ago quarter.

Non-GAAP operating income for the fourth quarter of 2024 totaled $306 million, down from $309 million reported in the year-ago quarter. Non-GAAP operating margin was 43.5%, which contracted 300 basis points due to higher operating expenses as a percentage of revenues.

Check Point’s FY24 Performance in Brief

For 2024, Check Point Software reported non-GAAP earnings of $9.16 per share, beating the Zacks Consensus Estimate of $9.11 and came above the mid-point of management’s guidance range of $8.70-$9.30. The bottom line increased 9% from the year-ago quarter’s earnings of $8.42 per share.

Check Point Software’s full-year revenues of $2.57 billion surpassed the consensus mark of $2.56 billion and came above the mid-point of the previously provided guidance range of $2.475-$2.625 billion. The top line increased 6% on a year-over-year basis.

Check Point’s Balance Sheet & Other Details

Check Point Software exited the fourth quarter with cash and cash equivalents, marketable securities and short-term deposits of $2.78 billion compared with the previous quarter’s $2.87 billion.

The company generated cash worth $249 million from operational activities in the fourth quarter and $1.06 billion in the full year. It repurchased stocks worth $325 million in the reported quarter and $1.3 billion in full-year 2024.

Check Point Initiates Q1 & FY25 Guidance

Check Point Software initiated guidance for the first quarter and full year 2025. For the first quarter, it projects revenues between $619 million and $649 million and non-GAAP EPS in the range of $2.13-$2.23. The Zacks Consensus Estimate for the first quarter’s top and bottom lines is currently pegged at $632.1 million and $2.23, respectively.

For the full year 2025, Check Point Software expects revenues of $2.66-$2.76 billion and non-GAAP EPS of $9.60-$10.20. The consensus mark for 2025 revenues and EPS is pinned at $2.70 billion and $9.90, respectively.

CHKP’s Zacks Rank & Stocks to Consider

Currently, Check Point Software carries a Zacks Rank #4 (Sell).

Gitlab GTLB, Planet Labs PBC PL and Fortinet FTNT are some top-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. GTLB, PL and FTNT carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Gitlab shares have dropped 4% for the past year. The Zacks Consensus Estimate for GTLB’s full-year 2025 earnings is pegged at 63 cents per share, up 37% over the past 60 days, suggesting an increase of 215% from the year-ago quarter’s reported figure.

Planet Labs PBC shares have surged 152% in the past year. The Zacks Consensus Estimate for PL’s full-year fiscal 2025 loss has contracted to 15 cents from the year-ago quarter’s loss of 50 cents.

Fortinet shares have gained 52.2% for the past year. The Zacks Consensus Estimate for FTNT’s full-year 2025 earnings is pegged at $2.39 per share, up by a couple of pennies over the past 60 days, suggesting an increase of 6.5% from the year-ago quarter’s reported figure.

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