Wednesday was an eventful day for Check Point Software Technologies (CHKP 2.88%). The company published its latest quarterly earnings report, but this was overshadowed by a big-ticket buyout of a peer company in its native Israel.
The latter was dismaying for Check Point investors, and many sold out of the stock. It ended up closing nearly 15% lower in price, for a much steeper tumble than the S&P 500 index's 0.1% slip.
Growth where it counted
In a way, the market's punishment of Check Point was undeserved, because that report wasn't bad at all. The veteran cybersecurity company's second quarter saw it increase total revenue by 6% year-over-year to $665 million, accompanied by a 4% advance in "calculated" billings -- total revenue plus the change in deferred revenue -- to $642 million.
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Profitability improved too, with non-GAAP (adjusted) net income rising to slightly over $261 million ($2.37 per share) from the year-ago figure of $246 million.
Both headline results beat the average analyst's estimates, although not spectacularly. Collectively, those prognosticators were anticipating Check Point would book slightly less than $662 million in revenue, and net an adjusted profit of $2.36 per share.
In the earnings release, Check Point attributed its growth to success in its emerging technologies offerings, a slate of products that includes enterprise risk tools among other offerings.
NASDAQ: CHKP
Key Data Points
A big suitor is acquiring a rival
Management also reiterated its guidance for full-year 2025, which calls for revenue of $2.66 billion to $2.76 billion; this would mean growth of at least 4% over the previous year. Adjusted per-share earnings are forecast at $9.60 to $10.20, for an improvement ranging from 5% to 11%.
Again, none of these numbers is particularly discouraging. What investors were reacting more to was U.S. cybersecurity company Palo Alto Networks' news that it is acquiring Israeli peer CyberArk Software for roughly $25 billion. That's a big chunk of change, and some investors were surely unhappy that Palo Alto chose CyberArk to be its bride instead of Check Point.
