Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

Risk Reward – Check Point Software Technologies Ltd. (CHKP.O)

KEY EARNINGS INPUTS

Drivers Dec 2025 Dec 2026e Dec 2027e Dec 2028e

Total Billings YoY Growth (%) 9.3 4.5 4.0 4.0

Product & Licensing Revenue YoY

7.9 (5.4) (1.0) 1.8

Growth (%)

Subscription Revenue YoY Growth

10.4 12.2 8.5 7.1

(%)

Operating Margin % (%) 40.9 39.0 39.0 39.0

INVESTMENT DRIVERS RISKS TO PT/RATING MS ESTIMATES VS. CONSENSUS

Inflection in the up-sell of incremental blades RISKS TO UPSIDE FY Dec 2026e

into the installed base. Firewall refreshes could sustain longer and

Faster uptake of non-Firewall solutions such as stronger than our base case assumptions, Sales / 2,810

Harmony and CloudGuard. driving better top-line growth for Check Point. Revenue 2,770 2,902

New solutions like Horizon picking up traction. Increased S&M and R&D spend could drive ($, mm) 2,812

better than expected new customer acquisition.

GLOBAL REVENUE EXPOSURE With ~$3.0B in cash on the balance sheet, 1,147

additional acquisitions to accelerate growth are EBITDA APAC, ex Japan, Mainland 0-10% a risk. ($, mm) 1,059 1,216 China and India

1,142

0-10% India RISKS TO DOWNSIDE

0-10% Japan Share losses accelerate in CY25/CY26 vs peers

0-10% Latin America who are outspending on S&M. Net income 1,077

0-10% UK 1,055 1,114 ($, mm)

10-20% MEA 1,083

OWNERSHIP POSITIONING 30-40% Europe ex UK

30-40% North America Inst. Owners, % Active 68.1% 10.44

EPS

Source: Morgan Stanley Research Estimate HF Sector Long/Short Ratio 2.1x ($) 10.05 10.68

View explanation of regional hierarchies here 10.44

HF Sector Net Exposure 29.5%

MS ALPHA MODELS Refinitiv; MSPB Content. Includes certain hedge fund Mean Morgan Stanley Estimates

exposures held with MSPB. Information may be Source: Refinitiv, Morgan Stanley Research