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CHECK POINT SOFTWARE TECHNOLOGIES LTD

CHECK POINT SOFTWARE TECHNOLOGIES LTDCHKP财报

Nasdaq · 信息技术 · 服务-预包装软件

Check Point Software Technologies is an Israeli cybersecurity company with operations in over 60 countries. Its headquarters are located in Tel Aviv, Israel, and the company maintains a significant presence in Redwood City, California, United States. The company protects over 100,000 organizations globally and is home to the Check Point Research team. It is a partner organization of the World Economic Forum.

What changed in CHECK POINT SOFTWARE TECHNOLOGIES LTD's 20-F — 2024 vs 2025

Top changes in CHECK POINT SOFTWARE TECHNOLOGIES LTD's 2025 20-F

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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A significant natural disaster occurring at our facilities in Israel or the United States or elsewhere, or where our channel partners are located, could have a material adverse impact on our business, results of operations and financial condition.
A significant natural disaster occurring at our facilities in Israel, in the United States or elsewhere, or where our channel partners are located, could have a material adverse impact on our business, results of operations and financial condition.
Additional details are provided in “Item 4 – Information on Check Point”. 5 We may not be able to successfully compete, which could adversely affect our business and results of operations The market for information and network security solutions is intensely competitive and we expect that competition will continue to increase in the future.
Additional details are provided in “Item 4 – Information on Check Point”. We may not be able to successfully compete, which could adversely affect our business and results of operations The market for information and network security solutions is intensely competitive and we expect that competition will continue to increase in the future.
The instability in these regions could further exacerbate the macroeconomic impacts on a global scale. 7 Negative economic conditions may cause existing and prospective customers to reduce their spending. Customers may delay or cancel cyber security projects or seek to lower their costs by renegotiating renewals or maintenance and support agreements.
The instability in these regions could further exacerbate the macroeconomic impacts on a global scale. Negative economic conditions may cause existing and prospective customers to reduce their spending. Customers may delay or cancel cyber security projects or seek to lower their costs by renegotiating renewals or maintenance and support agreements.
The pursuit of acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable acquisitions, whether or not they are consummated. 8 Competition within our industry for acquisitions of businesses, technologies, assets and product lines has been, and may in the future continue to be, intense.
The pursuit of acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable acquisitions, whether or not they are consummated. Competition within our industry for acquisitions of businesses, technologies, assets and product lines has been, and may in the future continue to be, intense.
We cannot be certain that the steps taken by us will prevent misappropriation of our intellectual property or technology or infringement of our intellectual property rights. If we are unable to secure, protect and enforce our intellectual property rights, such failure could harm our brand and adversely impact our business, financial condition and results of operations.
We cannot be certain that the steps taken by us will prevent misappropriation of our intellectual property or technology or infringement of our intellectual property rights. 14 If we are unable to secure, protect and enforce our intellectual property rights, such failure could harm our brand and adversely impact our business, financial condition and results of operations.
Compliance with these laws and regulations can be costly and can delay or impede the development and offering of new products and services. For example, the General Data Protection Regulation (“GDPR”) (which is applicable in both the EU and the UK), imposes stringent requirements for data processors and controllers.
Compliance with these laws and regulations can be costly and can delay or impede the development and offering of new products and services. 16 For example, the General Data Protection Regulation (“GDPR”) (which is applicable in both the EU and the UK), imposes stringent requirements for data processors and controllers.
For example, our headquarters in the United States, as well as certain of our research and development operations, are located in the Silicon Valley area of Northern California, a region known for seismic activity. We also have significant operations in other regions that have experienced natural disasters.
Our headquarters in the United States, as well as certain of our research and development operations, are located in the Silicon Valley area of Northern California, a region known for seismic activity. We also have significant operations in other regions that have experienced natural disasters.
We may need to divert the attention of our engineering personnel from our research and development efforts to address instances of errors or defects. Our products are used to deploy and manage internet security and protect information, which may be critical to organizations.
We may need to divert the attention of our engineering personnel from our research and development efforts to address instances of errors or defects. 8 Our products are used to deploy and manage internet security and protect information, which may be critical to organizations.
Disruptions to these servers or facilities could interrupt our ability to provide our products and services and materially adversely affect our business and results of operations. 10 Risks Related to Tax, Legal and Regulatory Matters We are the defendants in various lawsuits and have been subject to tax disputes and governmental proceedings, which could adversely affect our business, results of operations and financial condition As a global company we are subject to taxation in Israel, the United States and various other countries.
Disruptions to these servers or facilities could interrupt our ability to provide our products and services and materially adversely affect our business and results of operations. 11 Risks Related to Tax, Legal and Regulatory Matters We are the defendants in various lawsuits and have been subject to tax disputes and governmental proceedings, which could adversely affect our business, results of operations and financial condition As a global company we are subject to taxation in Israel, the United States and various other countries.
If these distributors reduce the amount of their purchases from us for any reason, including because they choose to focus their efforts on the sales of the products of our competitors, our business, results of operations and financial condition could be materially adversely affected. 9 Our future success is highly dependent upon our ability to establish and maintain successful relationships with our distributors.
If these distributors reduce the amount of their purchases from us for any reason, including because they choose to focus their efforts on the sales of the products of our competitors, our business, results of operations and financial condition could be materially adversely affected. 10 Our future success is highly dependent upon our ability to establish and maintain successful relationships with our distributors.
The results of our operations may be adversely affected in relation to foreign exchange fluctuations. During 2024, we entered into forward contracts to hedge against some of the risk of foreign currency exchange rates fluctuations resulting in changes in future cash flow from payments of payroll and related expenses denominated in Israeli Shekels and Euros.
The results of our operations may be adversely affected in relation to foreign exchange fluctuations. During 2025, we entered into forward contracts to hedge against some of the risk of foreign currency exchange rates fluctuations resulting in changes in future cash flow from payments of payroll and related expenses denominated in Israeli Shekels and Euros.
In addition, acts of terrorism or war (including the war and hostilities between Israel and Hamas, Hezbollah, Iran and Yemen, and the significant military action against Ukraine launched by Russia and any related political or economic responses and counter-responses or otherwise by various global actors or general effect on the global economy) have caused disruptions and could in the future cause disruptions to our or our customers’ businesses or the economy as a whole.
In addition, acts of terrorism or war (including the war between Israel, the U.S. and Iran, and the ongoing hostilities between Israel and Hezbollah, Hamas and Yemen, and the significant military action against Ukraine launched by Russia and any related political or economic responses and counter-responses or otherwise by various global actors or general effect on the global economy) have caused disruptions and could in the future cause disruptions to our or our customers’ businesses or the economy as a whole.
In connection with our Annual Report for fiscal 2024, our management assessed our internal control over financial reporting, and determined that our internal control over financial reporting was effective as of December 31, 2024, and our independent auditors have expressed an unqualified opinion over the effectiveness of our internal control over financial reporting as of December 31, 2024.
In connection with our Annual Report for fiscal 2025, our management assessed our internal control over financial reporting, and determined that our internal control over financial reporting was effective as of December 31, 2025, and our independent auditors have expressed an unqualified opinion over the effectiveness of our internal control over financial reporting as of December 31, 2025.
Our information technology systems, networks and products and services have been, and may continue to be, subject to various security threats and cyber security incidents Our information technology systems, networks, products, and services have in the past and may in the future be subject to various security threats or cyber security incidents, including from computer malware, ransomware, viruses, social engineering (including phishing attacks), denial of service or other attacks, human error, technical errors, employee theft or misuse and general hacking.
Our information technology systems, networks and products and services have been, and may continue to be, subject to various security threats and cyber security incidents Our information technology systems, networks, products, and services have in the past and may in the future be subject to various security threats or cyber security incidents, including from computer malware, malicious code injection, ransomware, viruses, social engineering (including phishing attacks), denial of service or other attacks, human error, technical errors, employee theft or misuse and general hacking.
We are also exempt from the provisions of Regulation FD, which prohibits issuers from making selective disclosure of material nonpublic information to, among others, broker-dealers and holders of a company’s securities under circumstances in which it is reasonably foreseeable that the holder will trade in the company’s securities on the basis of the information.
We are also exempt from the provisions of Regulation FD, which prohibits issuers from making selective disclosure of material nonpublic information to, among others, broker-dealers and holders of a company’s securities when it is reasonably foreseeable that the holder will trade in the company’s securities on the basis of the information.
Moreover, because the interpretation and application of many laws, regulations, industry standards, contractual obligations and other actual and asserted obligations to which we are or may become subject relating to privacy, data protection and security are uncertain, it is possible that these laws, regulations, industry standards, contractual obligations or other actual or asserted obligations to which we are or may become subject may be interpreted and applied in a manner that is inconsistent with our existing or future data processing practices or features of our products and services.
Moreover, because the interpretation and application of many laws, regulations, industry standards, contractual obligations and other actual and asserted obligations to which we are or may become subject relating to privacy, data protection, security, AI, and other new and evolving areas are uncertain, it is possible that these laws, regulations, industry standards, contractual obligations or other actual or asserted obligations to which we are or may become subject may be interpreted and applied in a manner that is inconsistent with our existing or future data processing practices or features of our products and services.
The legal, regulatory, and policy environments around artificial intelligence and machine learning are evolving rapidly. For example, the EU Artificial Intelligence Act (the “AI Act”), which achieved approval by the European Council on February 2, 2024, and the European Parliament on March 13, 2024, will impose obligations on providers and users of artificial intelligence technologies.
The legal, regulatory, and policy environments around artificial intelligence and machine learning are evolving rapidly. For example, the EU Artificial Intelligence Act (the “AI Act”), which achieved approval by the European Council on February 2, 2024, and the European Parliament on March 13, 2024, imposes obligations on providers and users of artificial intelligence technologies.
Further, vendors of operating system software, networking hardware or central processing units, or CPUs, may enhance their products to include functionality that is currently provided by our products.
Further, vendors of operating system software, networking hardware or central processing units (“CPUs”), may enhance their products to include functionality that is currently provided by our products.
For example, we have been impacted by security incidents of widely trusted third-party software and technology infrastructure, such as the SolarWinds Orion incident in December 2020.
We have been impacted by security incidents of widely trusted third-party software and technology infrastructure, such as the SolarWinds Orion incident in December 2020.
Some of our current and potential competitors have various advantages over us, including longer operating histories; access to larger customer bases; significantly greater financial, technical and marketing resources; a broader portfolio of products, applications and services; and larger patent and intellectual property portfolios.
Some of our current and potential competitors have various advantages over us, including longer operating histories; access to larger customer bases; significantly greater financial, technical and marketing resources; a broader portfolio of products, applications and services including AI and machine learning; and larger patent and intellectual property portfolios.
Terrorist attacks and hostilities within Israel; and the war and hostilities between Israel and Hamas, Hezbollah, Iran and Yemen, have also heightened these risks. In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets.
Terrorist attacks and hostilities within Israel; and the war between Israel, the U.S. and Iran, and the ongoing hostilities between Israel and Hezbollah, Hamas and Yemen, have also heightened these risks. In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets.
Additional worldwide trade protectionism may increase as a result of the trade policies of a new U.S. administration as well as global response to such policies, as discussed elsewhere in these risk factors. Our efforts to comply with any such measures may be costly and time consuming.
As discussed elsewhere in these risk factors, additional worldwide trade protectionism may increase as a result of the trade policies of the U.S. administration and/or as a result of the global response to such policies. Our efforts to comply with any such measures may be costly and time consuming.
Iran has also launched missile, rocket, and shooting attacks against Israel and the Houthi movement, which controls parts of Yemen, launched missile, rocket, and shooting attacks against Israel and attacks on marine vessels traversing the Red Sea, which marine vessels were thought to either be in route towards Israel or to be partly owned by Israeli businessmen.
The Houthi movement, which controls parts of Yemen, launched missile, rocket, and shooting attacks against Israel and attacks on marine vessels traversing the Red Sea, which marine vessels were thought to either be in route towards Israel or to be partly owned by Israeli businessmen.
In addition, a foreign private issuer must disclose in its annual reports filed with the SEC each such requirement that it does not follow and describe the home country practice followed by the issuer instead of any such requirement. Accordingly, our shareholders may not be afforded the same protection as provided under Nasdaq’s corporate governance rules. 21
In addition, a foreign private issuer must disclose in its annual reports filed with the SEC each such requirement that it does not follow and describe the home country practice followed by the issuer instead of any such requirement. Accordingly, our shareholders may not be afforded the same protection as provided under Nasdaq’s corporate governance rules. 25 ITEM 4 .
Stringent privacy, data protection and security requirements in the GDPR, CCPA, and other laws and regulations could decrease demand for our products and services, increase our costs, and impair our ability to maintain and grow our customer base and increase our revenue, We may face challenges in addressing these requirements and making necessary changes to our policies and practices, and may incur significant costs and expenses in an effort to do so.
Stringent privacy, data protection and security requirements in the GDPR, CCPA, and other laws and regulations (e.g., in those regulating AI) could decrease demand for our products and services, increase our costs, and impair our ability to maintain and grow our customer base and increase our revenue, We may face challenges in addressing these requirements and making necessary changes to our policies and practices, and may incur significant costs and expenses in an effort to do so.
We generate a majority of our revenues and expenses in U.S. dollars. In 2024, we incurred approximately 44% of our expenses in foreign currencies, primarily Israeli Shekels and Euros. As such, changes in exchange rates may have a material adverse effect on our business, results of operations and financial condition.
We generate a majority of our revenues and expenses in U.S. dollars. In 2025, we incurred approximately 42% of our expenses in foreign currencies, primarily Israeli Shekels and Euros. As such, changes in exchange rates may have a material adverse effect on our business, results of operations and financial condition.
As of December 31, 2024, our total outstanding forward contracts that hedge against these fluctuations in foreign currency exchange rates was $359 million. In addition, we entered into forward contracts to hedge the impact of fluctuations in exchange rates on assets and liabilities denominated in Israeli Shekels and other currencies.
As of December 31, 2025, our total outstanding forward contracts that hedge against these fluctuations in foreign currency exchange rates was $329 million. In addition, we entered into forward contracts to hedge the impact of fluctuations in exchange rates on assets and liabilities denominated in Israeli Shekels and other currencies.
Failures of the third-party technology, third-party servers, cloud service providers and other third-party hardware, software and infrastructure on which we rely could adversely affect our business We rely on third-party technology, third-party servers, cloud service providers and other third-party hardware, software and infrastructure to support our operations.
Failures of the third-party technology, third-party servers, cloud service providers, such as AWS, and other third-party hardware, software and infrastructure on which we rely could adversely affect our business We rely on third-party technology, third-party servers, cloud service providers, such as AWS, and other third-party hardware, software and infrastructure to support our operations.
Our business, results of operations and financial condition are subject to, have been and may continue to be adversely affected by the risks of earthquakes, fire, floods, pandemics such as the COVID-19 pandemic and other natural events, as well as manmade problems such as power disruptions or terrorism or war, such as the war and hostilities between Israel and Hamas, Hezbollah, Iran and Yemen We operate our business primarily from Israel, we sell our products and have operations worldwide.
Our business, results of operations and financial condition are subject to, have been and may continue to be adversely affected by the risks of earthquakes, fire, floods, pandemics and other natural events, as well as manmade problems such as power disruptions or terrorism or war, such as the war between Israel, the U.S. and Iran, and the ongoing hostilities between Israel and Hezbollah, Hamas and Yemen We operate our business primarily from Israel, and operate and sell our products worldwide.
We do not expect to be within the scope of Pillar One. 11 In December 2022, the Council of the European Union (“EU”) unanimously adopted the Directive on BEPS’s Pillar Two ensuring a global minimum tax rate of 15% for certain companies with an annual global turnover exceeding €750 million, in the Union (the Directive).
We do not expect to be within the scope of Pillar One. 12 In December 2022, the Council of the European Union (“EU”) unanimously adopted the Directive on BEPS’s Pillar Two ensuring a global minimum tax rate of 15% for certain companies with an annual global turnover of at least €750 million, in the Union (the Directive).
The tax benefits available to us require us to meet several conditions, and may be terminated or reduced in the future, which would increase our taxes For the year ended December 31, 2024, our effective tax rate was 13%.
The tax benefits available to us require us to meet several conditions, and may be terminated or reduced in the future, which would increase our taxes For the year ended December 31, 2025, our effective tax rate was (12%).
Additionally, the CCPA and CPRA, and other legal and regulatory changes are making it easier for certain individuals to opt-out of having their personal data processed and disclosed to third parties through various opt-out mechanisms, which could result in an increase to our operational costs to ensure compliance with such legal and regulatory changes.
The CCPA and CPRA, and other US state laws are making it easier for certain individuals to opt-out of having their personal data processed and disclosed to third parties through various opt-out mechanisms, which could result in an increase to our operational costs to ensure compliance with such legal and regulatory requirements.
Our international sales and operations subject us to many potential risks inherent in international business activities, including, but not limited to: • technology import and export license requirements; • costs of localizing our products for foreign countries, and the lack of acceptance of localized products in foreign countries; • varying economic and political instability or war, including the war and hostilities between Israel and Hamas, Hezbollah, Iran and Yemen and the significant military action against Ukraine launched by Russia; • potential tariffs, sanctions, fines or other trade restrictions, including any political or economic responses and counter-responses or otherwise by various global actors to the significant military action against Ukraine launched by Russia, as well as the possibility of further international trade disputes that result in tariffs and other protectionist measures; • imposition of or increases in tariffs or other payments on our revenues in these markets; • greater difficulty in protecting intellectual property; • difficulties in managing our overseas subsidiaries and our international operations; • economic, social, or political conditions, including conditions resulting from a decline in the macroeconomic environment, rising interest rates, exchange rate fluctuations and inflation; • political instability and civil unrest which could discourage investment and complicate our dealings with governments; • widespread health emergencies or pandemics, such as the COVID-19 pandemic; • difficulties in complying with a variety of foreign laws and legal standards and changes in regulatory requirements; • expropriation and confiscation of assets and facilities; • difficulties in collecting receivables from foreign entities or delayed revenue recognition; • recruiting and retaining talented and capable employees; • differing labor standards; 14 • increased tax rates; • potentially adverse tax consequences, including taxation of a portion of our revenues at higher rates than the tax rate that applies to us in Israel; • fluctuations in currency exchange rates and the impact of such fluctuations on our results of operations and financial position; and • the introduction of exchange controls and other restrictions by foreign governments.
To the extent that we are unable to do so effectively, our growth is likely to be limited and our business, results of operations and financial condition may be materially adversely affected. 15 Our international sales and operations subject us to many potential risks inherent in international business activities, including, but not limited to: • technology import and export license requirements; • costs of localizing our products for foreign countries, and the lack of acceptance of localized products in foreign countries; • varying economic and political instability or war, including the war between Israel, the U.S. and Iran and the ongoing hostilities between Israel and Hezbollah, Hamas and Yemen and the significant military action against Ukraine launched by Russia; • potential tariffs, sanctions, fines or other trade restrictions, including any political or economic responses and counter-responses or otherwise by various global actors to the significant military action against Ukraine launched by Russia, as well as the possibility of further international trade disputes that result in tariffs and other protectionist measures; • imposition of or increases in tariffs or other payments on our revenues in these markets; • greater difficulty in protecting intellectual property; • difficulties in managing our overseas subsidiaries and our international operations; • economic, social, or political conditions, including conditions resulting from a decline in the macroeconomic environment, rising interest rates, exchange rate fluctuations and inflation; • political instability and civil unrest which could discourage investment and complicate our dealings with governments; • widespread health emergencies or pandemic; • difficulties in complying with a variety of foreign laws and legal standards and changes in regulatory requirements; • expropriation and confiscation of assets and facilities; • difficulties in collecting receivables from foreign entities or delayed revenue recognition; • recruiting and retaining talented and capable employees; • differing labor standards; • increased tax rates; • potentially adverse tax consequences, including taxation of a portion of our revenues at higher rates than the tax rate that applies to us in Israel; • fluctuations in currency exchange rates and the impact of such fluctuations on our results of operations and financial position; and • the introduction of exchange controls and other restrictions by foreign governments.
A small number of shareholders own a substantial portion of our ordinary shares, and they may make decisions with which you or others may disagree As of February 28, 2025, our directors and executive officers owned approximately 23.1% of the voting power of our outstanding ordinary shares, or 26.1% of our outstanding ordinary shares if the percentage includes options currently exercisable or exercisable within 60 days of February 28, 2025 and RSUs and PSUs vesting within 60 days of February 28, 2025.
A small number of shareholders own a substantial portion of our ordinary shares, and they may make decisions with which you or others may disagree As of February 28, 2026, our directors and executive officers owned approximately 23.96% of the voting power of our outstanding ordinary shares, or 25.43% of our outstanding ordinary shares if the percentage includes options currently exercisable or exercisable within 60 days of February 28, 2026 and RSUs and PSUs vesting within 60 days of February 28, 2026.
Other matters that influence customer confidence and spending, such as, political unrest, public health crises, including global pandemic such as COVID-19, terrorist attacks, armed conflicts (such as the war and hostilities between Israel and Hamas, Hezbollah, Iran and Yemen, and the ongoing conflict between Russia and Ukraine), rising energy costs, and natural disasters, could also negatively affect our customers’ spending on our products and services.
Other matters that influence customer confidence and spending, such as, political unrest, public health crises, terrorist attacks, armed conflicts (such as the war between Israel, the U.S. and Iran, and the ongoing hostilities between Israel and Hezbollah, Hamas and Yemen, and the ongoing conflict between Russia and Ukraine), rising energy costs, and natural disasters, could also negatively affect our customers’ spending on our products and services.
Our actual or perceived failure to adequately protect personal data or customer data, or to otherwise comply with data privacy and protection laws and regulations, could subject us to sanctions and damages and could harm our reputation and business A variety of state, national, foreign, and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data and customer data.
Our actual or perceived failure to adequately protect personal data or customer data, or to otherwise comply with data privacy and protection laws and regulations or other technology related regulations, could subject us to sanctions and damages and could harm our reputation and business A variety of state, national, foreign, and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data and customer data, and other areas in new and evolving technologies.
The OECD has also issued the Safe Harbours and Penalty Relief : Global Ani-Base Erosion Rules (Pillar Two) and related guidance.
The OECD has also issued the Safe Harbours and Penalty Relief : Global Ani-Base Erosion Rules (“Pillar Two Rules”) and related guidance.
Had we reported the cumulative changes in the fair value of our fixed income securities as part of our income, our reported net income for the year ended December 31, 2024, would have decreased by $13 million. Currency fluctuations may affect the results of our operations or financial condition Our functional and reporting currency is the U.S. dollar.
Had we reported the cumulative changes in the fair value of our fixed income securities as part of our income, our reported net income for the year ended December 31, 2025, would have increased by $10 million. 20 Currency fluctuations may affect the results of our operations or financial condition Our functional and reporting currency is the U.S. dollar.
During 2024, 2023 and 2022, we derived approximately 56%, 56% and 59%, respectively, of our sales from our ten largest distributors. In each of 2024, 2023 and 2022, our three largest distributors accounted for approximately 39%, 40% and 40%, respectively, of our sales.
During 2025, 2024 and 2023, we derived approximately 57%, 56% and 56%, respectively, of our sales from our ten largest distributors. In each of 2025, 2024 and 2023, our three largest distributors accounted for approximately 39%, 39% and 40%, respectively, of our sales.
These laws and regulations, as demonstrated by the examples below, continue to evolve. New or modified laws and regulations relating to privacy, data protection and security are proposed and implemented frequently and existing laws and regulations subject to new or different interpretations.
These laws and regulations, as demonstrated by the examples below, continue to evolve. New or modified laws and regulations relating to these matters are proposed and implemented frequently and existing laws and regulations subject to new or different interpretations.
As of December 31, 2024, the total amount of outstanding forward contracts that did not qualify for hedge accounting, was $254 million.
As of December 31, 2025, the total amount of outstanding forward contracts that did not qualify for hedge accounting, was $196 million.
Our actual or alleged failure to comply with applicable laws and regulations, or any other actual or asserted obligations relating to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data and customer data, could result in investigations, enforcement actions and other proceedings, significant penalties imposed by a regulator or data subject, claims, demands, and litigation or other legal action or proceedings against us or our customers or suppliers, which could result in negative publicity, increased operating costs, restrictions upon our practices and damages, financial penalties and other liabilities, all of which could have a material adverse effect on our business and results of operations. 15 Issues relating to our use of artificial intelligence and machine learning technologies, combined with an uncertain legal and regulatory environment, could materially and adversely affect our business, financial condition and results of operations.
Our actual or alleged failure to comply with applicable laws and regulations, or any other actual or asserted obligations relating to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data and customer data, could result in investigations, enforcement actions and other proceedings, significant penalties imposed or sought by a regulator or data subject, claims, demands, and litigation or other legal action or proceedings against us or our customers or suppliers, which could result in negative publicity, increased operating costs, restrictions upon our practices and damages, financial penalties and other liabilities, all of which could have a material adverse effect on our business and results of operations.
The terrorist groups in Yemen, which are currently limiting the movement of marine shipments to Israel through the Red Sea, and the armed conflict involving Russia and Ukraine has resulted in sanctions which restrict the selling of goods, services, or technology in affected regions.
The activities of certain terrorist groups in Yemen, have previously limited the movement of marine shipments to Israel through the Red Sea, and the armed conflict involving Russia and Ukraine has resulted in sanctions which restrict the selling of goods, services, or technology in affected regions.
In addition, this instability may affect the global economy and marketplace, including as a result of changes in oil and gas prices. As of beginning of 2023, there has been political tension in Israel due to the government’s intent to pursue a reform in Israel’s judicial system. This has prompted protests in Israel and triggered a considerable political debate.
In addition, this instability may affect the global economy and marketplace, including as a result of changes in oil and gas prices. Beginning in 2023, governmental attempts to pursue a reform in Israel’s judicial system have prompted significant political tension in Israel. This controversy has prompted protests in Israel and triggered a considerable political debate.
Our cash, cash equivalents, short-term bank deposits and fixed-income marketable securities totaled $ 2,784 million as of December 31, 2024. The performance of the debt capital markets affects the market values of funds that are held in marketable securities.
Our cash, cash equivalents, short-term bank deposits and fixed-income marketable securities valued total of $4,342 million as of December 31, 2025. The performance of the debt capital markets affects the market values of funds that are held in marketable securities.
We may use derivative financial instruments, such as foreign exchange forward contracts, put and call options, and others, to mitigate the risk of fluctuations changes in foreign exchange rates on assets, cash flows receivables and payables denominated in certain currencies.
We may use derivative financial instruments, such as foreign exchange forward contracts, put and call options, and others, to mitigate the risk of fluctuations changes in foreign exchange rates on assets, cash flows receivables and payables denominated in certain currencies. We may not be able to purchase derivative instruments adequate to fully protect us from foreign currency exchange risks.
In addition, the ITA has issued tax assessment for the 2020 tax year in which it demanded the payment of additional taxes in the aggregate amount of NIS 89 million (approximately $24 million), not including an amount of NIS 101 million (approximately $28 million) related to expenses that will be deductible in future years, with respect to the 2020 tax year (these amounts include interest and indexation).
In addition, the ITA has issued a tax assessment for the 2020 tax year in which it demanded the payment of additional taxes in the aggregate amount of NIS 94 million (approximately $28 million), not including an amount of NIS 106 million (approximately $31 million) related to expenses that will be deductible in future years, with respect to the 2020 tax year (these amounts include interest and indexation up to the tax settlement’s payment date, i.e. 31 July 2025).
For example, we regularly face attempts by others to gain unauthorized access, or to introduce malicious software to our information technology systems. Additionally, malicious hackers have attempted and in the future likely will attempt to gain unauthorized access to, or sabotage, take control of or otherwise corrupt, our information technology systems, networks, processes, products and services.
Additionally, malicious hackers have attempted and in the future likely will attempt to gain unauthorized access to, or sabotage, take control of or otherwise corrupt, our information technology systems, networks, processes, products and services.
We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets Because we incorporate encryption technology into our products, certain of our products are subject to U.S. export controls and may be exported outside the U.S. only with the required export license or through an export license exception.
Any litigation of this sort in the future could result in substantial costs and a diversion of management’s attention and resources. 13 We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets Because we incorporate encryption technology into our products, certain of our products are subject to U.S. export controls and may be exported outside the U.S. only with the required export license or through an export license exception.
Such risks could become exacerbated to the extent such suppliers and subcontractors are materially disrupted by quarantines, factory slowdowns or shutdowns and border closings, as well as travel restrictions such as those experienced in 2020 and 2021 due to the COVID-19 pandemic.
Such risks could become exacerbated to the extent such suppliers and subcontractors are materially disrupted by quarantines, factory slowdowns or shutdowns and border closings, as well as travel restrictions.
Further, we must continuously improve our products to protect our customers’ data and networks from evolving security threats. 6 Our future results of operations will depend upon our ability to enhance our current products and to develop and introduce new products on a timely basis; to address the increasingly sophisticated needs of our customers; and to keep pace with technological developments, new competitive product offerings, and emerging industry standards.
Our future results of operations will depend upon our ability to enhance our current products and to develop and introduce new products on a timely basis; to address the increasingly sophisticated needs of our customers; and to keep pace with technological developments, new competitive product offerings, and emerging industry standards.
Continued growth of this market will depend, in large part, upon: • the continued expansion of internet usage and the number of organizations adopting or expanding intranets; • the continued adoption of “cloud” infrastructure by organizations; • the ability of the infrastructures implemented by organizations to support an increasing number of users and services; • the continued development of new and improved services for implementation across the internet and between the internet and intranets; • the adoption of data security measures as it pertains to data encryption and data loss prevention technologies; • continued access to mobile APIs, APPs and application stores with Apple, Google and Microsoft; • government regulation of the internet and governmental and non-governmental requirements and standards with respect to data security privacy and data protection; and • economic, social, or political conditions, including conditions resulting from a decline in the macroeconomic environment, rising interest rates, exchange rate fluctuations, inflation, global pandemics such as the COVID-19 pandemic, global supply chain disruptions and conditions resulting from geopolitical uncertainty and instability or war, including the war and hostilities between Israel and Hamas, Hezbollah, Iran and Yemen, and the Russia-Ukraine armed conflict and the tension between China and Taiwan.
Continued growth of this market will depend, in large part, upon: • the continued expansion of internet usage and the number of organizations adopting or expanding intranets; • the continued adoption of “cloud” infrastructure by organizations; • the ability of the infrastructures implemented by organizations to support an increasing number of users and services; • the continued development of new and improved services for implementation across the internet and between the internet and intranets; • the adoption of data security measures as it pertains to data encryption and data loss prevention technologies; • continued access to mobile APIs, APPs and application stores with Apple, Google and Microsoft; • government regulation of the internet and governmental and non-governmental requirements and standards with respect to data security privacy and data protection; and • economic, social, or political conditions, including conditions resulting from a decline in the macroeconomic environment, rising interest rates, exchange rate fluctuations, inflation, global pandemics , global supply chain disruptions and conditions resulting from geopolitical uncertainty and instability or war, including the war between Israel, the U.S. and Iran and its effects on the delivery of goods through the Strait of Hormuz, and the ongoing hostilities between Israel and Hezbollah, Hamas and Yemen, and the Russia-Ukraine armed conflict and the tension between China and Taiwan. 5 In the last few years, global and regional economies around the world and financial markets have remained volatile largely as a result of economic and political uncertainty, the war and hostilities between Israel, the U.S. and Iran, and the ongoing hostilities between Israel and Hezbollah, Hamas and Yemen, rising interest rates, inflation, terrorist groups in Yemen, which limited the movement of marine shipments to Israel through the Red Sea, the war in Ukraine, terrorism, governmental instability and other factors.
The U.S. government and the current administration have made public statements and taken certain actions indicating significant changes in U.S. trade policy, including imposing new or increased tariffs on certain goods imported into the United States from Canada, Mexico and China.
Changes in government trade policies and international trade disputes that result in tariffs and other protectionist measures could adversely affect our business in the future The U.S. government and the current administration have made public statements and taken certain actions indicating significant changes in U.S. trade policy, including imposing new or increased tariffs on certain goods imported into the United States from Canada, Mexico and China.
In addition, continuing compliance with Section 404 of the Sarbanes-Oxley Act of 2002 and the related regulations regarding our required assessment of our internal control over financial reporting requires the commitment of significant financial and managerial resources and the report of an independent registered public accounting firm on the Company’s internal control over financial reporting.
This could result in continuing uncertainty regarding compliance matters and higher costs of compliance as a result of ongoing revisions to such governance standards. 19 In addition, continuing compliance with Section 404 of the Sarbanes-Oxley Act of 2002 and the related regulations regarding our required assessment of our internal control over financial reporting requires the commitment of significant financial and managerial resources and the report of an independent registered public accounting firm on the Company’s internal control over financial reporting.
In addition, following the Russia-Ukraine armed conflict, the United States and other countries imposed economic sanctions and severe export control restrictions against Russia and Belarus, and the United States and other countries could impose wider sanctions and export restrictions and take other actions should the conflict further escalate, which affect our exports or sales into Russia and Belarus and create difficulties in business planning and forecasting due to the uncertainty of the impact of the war on aspects of our business, such as on our distributors, resellers and end-customers.
To the extent any of the foregoing causes disruptions or result in delays or cancellations of customer orders, our research and development efforts or the deployment of our products, our business and results of operations would be materially and adversely affected. 7 In addition, following the Russia-Ukraine armed conflict, the United States and other countries imposed economic sanctions and severe export control restrictions against Russia and Belarus, and the United States and other countries could impose wider sanctions and export restrictions and take other actions should the conflict further escalate, which affect our exports or sales into Russia and Belarus and create difficulties in business planning and forecasting due to the uncertainty of the impact of the war on aspects of our business, such as on our distributors, resellers and end-customers.
Risks Related to Our Business and Our Market • If the market for information and network security solutions does not continue to grow, our business will be adversely affected. • We may not be able to successfully compete, which could adversely affect our business and results of operations. • If we fail to enhance our existing products, develop or acquire new and more technologically advanced products, or fail to successfully commercialize these products, our business and results of operations will suffer. • We may need to change our pricing models to compete successfully. • Our business, results of operations and financial condition are subject to, have been and may continue to be adversely affected by the risks of earthquakes, fire, floods, pandemics such as the COVID-19 pandemic and other natural events, as well as manmade problems such as power disruptions or terrorism or war, such as the war and hostilities between Israel and Hamas, Hezbollah, Iran and Yemen. • Prolonged economic uncertainties or downturns, globally or in certain regions or industries, could materially adversely affect our business. • If our products fail to protect against attacks and our customers experience security breaches, our reputation and business could be harmed. • Product defects may increase our costs and impair the market acceptance of our products and technology. • We are subject to risks relating to acquisitions. • We are dependent on a limited number of product families. • Competition for highly skilled personnel is intense.
Risks Related to Our Business and Our Market • If the market for information and network security solutions does not continue to grow, our business will be adversely affected. • We may not be able to successfully compete, which could adversely affect our business and results of operations. • If we fail to enhance our existing products, develop or acquire new and more technologically advanced products, or fail to successfully commercialize these products, our business and results of operations will suffer. • We may need to change our pricing models to compete successfully. • Our business, results of operations and financial condition are subject to, have been and may continue to be adversely affected by the risks of earthquakes, fire, floods, pandemics and other natural events, as well as manmade problems such as power disruptions or terrorism or war, such as the war between Israel, the U.S. and Iran and the ongoing hostilities between Israel and Hezbollah, Hamas and Yemen. • Prolonged economic uncertainties or downturns, globally or in certain regions or industries, could materially adversely affect our business. • If our products fail to protect against attacks and our customers experience security breaches, our reputation and business could be harmed. • Product defects may increase our costs and impair the market acceptance of our products and technology. • We are subject to risks relating to acquisitions. • We are dependent on a limited number of product families. • Competition for highly skilled personnel is intense. • Issues in the development and deployment of AI may results in reputational harm and legal liability and could adversely affect our results of operations. 3 Risks Related to Our Dependence on Third-Parties • We are dependent on a small number of distributors. • We purchase several key components and finished products from limited sources, and we are increasingly dependent on contract manufacturers for our hardware products. • We incorporate third-party technology in our products, which may make us dependent on the providers of these technologies and expose us to potential intellectual property claims. • Failures of the third party technology, third-party servers, cloud service providers, such as Amazon Web Services (“AWS”), and other third-party hardware, software and infrastructure on which we rely could adversely affect our business.
These changes may have an impact on some of our expenses which are paid in local currencies (non-US dollar), as well as an impact on our non-US customers which have their financials in non-US dollar currencies.
Changes in foreign exchange rates around the globe, could have an adverse impact on our business and results of operations. These changes may have an impact on some of our expenses which are paid in local currencies (non-US dollar), as well as an impact on our non-US customers which have their financials in non-US dollar currencies.
The base erosion and profit shifting (“BEPS”) project undertaken by the OECD may have adverse consequences to our tax liabilities. The first pillar of BEPS’s project is focused on the allocation of taxing rights between countries for in-scope large multinational enterprises that sell goods and services into countries with minor or no local physical presence.
The first pillar of BEPS’s project is focused on the allocation of taxing rights between countries for in-scope large multinational enterprises that sell goods and services into countries with minor or no local physical presence.
Mimecast Limited, Microsoft Corp., Wiz Ltd., Netskope, Inc. and Abnormal Security Corp., with respect to specific products that we offer. In addition, there are hundreds of small and large companies that offer security products and services that we may compete with from time to time.
In addition, there are hundreds of small and large companies that offer security products and services that we may compete with from time to time.
In addition, some of these companies can invest relatively large resources on very specific technologies or customer segments. The effect of these companies’ activities in the market may result in price reductions, reduced gross margins and loss of market share, any of which will materially adversely affect our business, results of operations and financial condition.
The effect of these companies’ activities in the market may result in price reductions, reduced gross margins and loss of market share, any of which will materially adversely affect our business, results of operations and financial condition.
If foreign exchange markets continue to be volatile, such fluctuations in foreign exchange rates could materially and adversely affect our profit margins and results of operations in future periods. Also, the volatility in the foreign exchange markets may make it difficult to hedge our foreign currency exposures effectively.
Additionally, our hedging activities may also generate losses as a result of volatility in foreign currency markets. If foreign exchange markets continue to be volatile, such fluctuations in foreign exchange rates could materially and adversely affect our profit margins and results of operations in future periods.
Any material supply chain disruption could negatively impact our business, financial condition and results of operations. Although we have been successful in the past, replacing suppliers may be difficult and it is possible it could result in an inability or delay in producing designated hardware products.
Although we have been successful in the past, replacing suppliers may be difficult and it is possible it could result in an inability or delay in producing designated hardware products.
The Tax Act also limited the deduction for net operating losses carried forward from taxable years beginning after December 31, 2017 to 80% of current year taxable income, In addition, California recently enacted a temporary suspension on the use of California net operating loss carryforwards under certain conditions in the taxable years beginning in 2024, 2025 and 2026, and other state tax limitations may apply.
In addition, California recently enacted a temporary suspension on the use of California net operating loss carryforwards under certain conditions in the taxable years beginning in 2024, 2025 and 2026, and other state tax limitations may apply.
Any of the following could have a material effect on our overall effective tax rate: • Some programs may be discontinued, • We may be unable to meet the requirements for continuing to qualify for some programs, • These programs and tax benefits may be unavailable at their current levels, or • We may be required to refund previously recognized tax benefits if we are found to be in violation of the stipulated conditions. 20 Additional details are provided in “Item 5 – Operating and Financial Review and Prospects” under the caption “Taxes on income”, in “Item 10 – Additional Information” under the caption “Israeli taxation, foreign exchange regulation and investment programs” and in Note 11 to our Consolidated Financial Statements.
Any of the following could have a material effect on our overall effective tax rate: • Some programs may be discontinued, • We may be unable to meet the requirements for continuing to qualify for some programs, • These programs and tax benefits may be unavailable at their current levels, or • We may be required to refund previously recognized tax benefits if we are found to be in violation of the stipulated conditions.
Our distributors may choose not to offer our products exclusively or at all. Our failure to establish and maintain successful relationships with distributors would likely materially adversely affect our business, results of operations and financial condition. We purchase several key components and finished products from limited sources, and we are increasingly dependent on contract manufacturers for our hardware products.
Our distributors may choose not to offer our products exclusively or at all. Our failure to establish and maintain successful relationships with distributors would likely materially adversely affect our business, results of operations and financial condition.
We must also continually change our products in response to changes in network infrastructure requirements, including the expanding use of cloud computing.
We must also continually change our products in response to changes in network infrastructure requirements, including the expanding use of cloud computing. Further, we must continuously improve our products to protect our customers’ data and networks from evolving security threats.
We also have incorporated machine learning and other artificial intelligence technologies into aspects of our products, services, and business, and may continue to incorporate additional artificial technologies into our products and services and otherwise in our business and operations in the future.
Additionally, with many of our employees continuing to work remotely, we face an increased risk of attempted security breaches and incidents. 21 We also have incorporated machine learning and other artificial intelligence technologies into aspects of our products, services, and business, and may continue to incorporate additional artificial technologies into our products and services and otherwise in our business and operations in the future.
Any decreased use of our products or limitation on our ability to export to or sell our products in international markets would likely adversely affect our business, financial condition, and results of operations. 12 Changes in government trade policies and international trade disputes that result in tariffs and other protectionist measures could adversely affect our business in the future.
Any decreased use of our products or limitation on our ability to export to or sell our products in international markets would likely adversely affect our business, financial condition, and results of operations.
These measures generally aim at securing taxation rights of the jurisdiction for the revenues/profits generated by the transnational e-commerce activities with customers who are resident in this specific jurisdiction.
Indirect taxes, including digital service tax (“DST”) measures as unilaterally adopted by certain jurisdiction, could also adversely affect our tax obligations. These measures generally aim at securing taxation rights of the jurisdiction for the revenues/profits generated by the transnational e-commerce activities with customers who are resident in this specific jurisdiction.
The imposition of exchange or price controls or other restrictions on the conversion of foreign currencies could also have a material adverse effect on our business, results of operations and financial condition. Changes in foreign exchange rates around the globe, could have an adverse impact on our business and results of operations.
Also, the volatility in the foreign exchange markets may make it difficult to hedge our foreign currency exposures effectively. The imposition of exchange or price controls or other restrictions on the conversion of foreign currencies could also have a material adverse effect on our business, results of operations and financial condition.
Our tax expenses and the resulting effective tax rate reflected in our financial statements may increase over time as a result of changes in corporate income tax rates, other changes in the tax laws of the countries in which we operate or changes in the mix of countries where we generate profit.
Our income tax and the effective tax rate reflected in our financial statements increased beginning 2026 as a result of the recently enacted new corporate minimum tax law of 15% in Israel and other changes in the tax laws of the countries in which we operate or changes in the mix of countries where we generate profit.
In recent years, the industry has experienced record growth and activity and as a result, the high-tech industry in Israel has experienced significant levels of employee attrition and is currently facing a shortage of skilled human capital. Similar competition for highly skilled personnel exists in the U.S. and in other markets in which we operate.
In recent years, the industry has experienced record growth and activity and as a result, the high-tech industry in Israel has experienced significant levels of employee attrition and is currently facing a shortage of skilled human capital including in the areas of AI and machine learning.
We may also be subject to increasing risks in connection with geopolitical events and conflicts, such as the Russia-Ukraine and the war and hostilities between Israel and Hamas, Hezbollah, Iran and Yemen, including risks of a security breach or incident, ransomware, destructive malware, and distributed denial-of-service attacks, as well as fraud, spam and fake accounts, cyber attacks or other threats or illegal activity.
We may also be subject to increasing risks in connection with geopolitical events and conflicts, such as the war that began on February 28, 2026 between Israel, the United Stated and Iran resulting in Iran launching thousands of ballistic missiles and drones against civilian targets in Israel and against U.S. military bases and other civilian targets in several countries in the Persian Gulf, and Hezbollah, a terrorist organization based in Lebanon, launching hundreds of missiles and drones Israeli military sites and civilian targets in Northern Israel, the Russia-Ukraine and the war and hostilities between Israel and Hezbollah, Hamas and Yemen, including risks of a security breach or incident, ransomware, destructive malware, and distributed denial-of-service attacks, as well as fraud, spam and fake accounts, cyber attacks or other threats or illegal activity.
Other General Risks and Risks Related to the Ownership of Our Ordinary Shares • We are exposed to various legal, business, political, economic, health-related and other risks associated with our international operations; these risks could increase our costs, reduce future growth opportunities and affect our results of operations. • Our actual or perceived failure to adequately protect personal data or customer data, or otherwise comply with data privacy and protection laws and regulations, could subject us to sanctions and damages and could harm our reputation and business. • Issues relating to our use of artificial intelligence and machine learning technologies, combined with an uncertain legal and regulatory environment, could materially and adversely affect our business, financial condition and results of operations. • Compliance with new and changing corporate governance and public disclosure requirements adds uncertainty to our compliance policies and increases our costs of compliance. • A small number of shareholders own a substantial portion of our ordinary shares, and they may make decisions with which you or others may disagree. • Our cash balances and investment portfolio have been, and may continue to be, adversely affected by market conditions and interest rates. • Currency fluctuations may affect the results of our operations or financial condition. • Our information technology systems, networks and products and services have been, and may continue to be, subject to various security threats and cyber security incidents. • We depend on our executive officers and other key employees, and the loss of one or more of these employees or an inability to attract and retain other highly skilled employees could adversely affect our business, and we may not be able to successfully navigate the recent leadership changes while maintaining key aspects of our culture, which could have a significant negative effect on our existing business and our ability to pursue future plans. • We may not be able to successfully navigate the recent leadership changes while maintaining key aspects of our culture, which could have a significant negative effect on our existing business and our ability to pursue future plans. 4 Risks Related to Our Operations in Israel • The ongoing war and hostilities and other potential political, economic and military instability in Israel, where our principal executive offices and our principal research and development facilities are located, may adversely affect our results of operations. • Our operations may be disrupted by the obligations of our personnel to perform military service. • The tax benefits available to us require us to meet several conditions, and may be terminated or reduced in the future, which would increase our taxes. • Shareholder rights and responsibilities are, and will continue to be, governed by Israeli law which differs in some material respects from the rights and responsibilities of shareholders of U.S. companies. • Provisions of Israeli law and our articles of association may delay, prevent or make difficult an acquisition of us, prevent a change of control, and negatively impact our share price. • As a foreign private issuer we are not subject to the provisions of Regulation FD or U.S. proxy rules and are exempt from filing certain Exchange Act reports. • As a foreign private issuer whose shares are listed on the Nasdaq Global Select Market (“Nasdaq”), we may follow certain home country corporate governance practices instead of certain Nasdaq requirements.
Other General Risks and Risks Related to Capitalization and Ownership of Our Ordinary Shares • We are exposed to various legal, business, political, economic, health-related and other risks associated with our international operations; these risks could increase our costs, reduce future growth opportunities and affect our results of operations. • Our actual or perceived failure to adequately protect personal data or customer data, or otherwise comply with data privacy and protection laws and regulations or other technology related regulations, could subject us to sanctions and damages and could harm our reputation and business. • Issues relating to our use of artificial intelligence and machine learning technologies, combined with an uncertain legal and regulatory environment, could materially and adversely affect our business, financial condition and results of operations. • Repaying and servicing our existing and future debt, including our outstanding convertible notes may require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our indebtedness. • Our Convertible Notes may impact our financial results, result in the dilution of existing shareholders and create downward pressure on the price of our ordinary shares. • Our ability to pay cash upon conversion or repurchase of our outstanding Convertible Notes may be limited. • Our capped call transactions may affect the value of our ordinary shares. • We are subject to counterparty risk with respect to the capped call transactions. • Compliance with new and changing corporate governance and public disclosure requirements adds uncertainty to our compliance policies and increases our costs of compliance. 4 • A small number of shareholders own a substantial portion of our ordinary shares, and they may make decisions with which you or others may disagree. • Our cash balances and investment portfolio have been, and may continue to be, adversely affected by market conditions and interest rates. • Currency fluctuations may affect the results of our operations or financial condition. • Our information technology systems, networks and products and services have been, and may continue to be, subject to various security threats and cyber security incidents. • We depend on our executive officers and other key employees, and the loss of one or more of these employees or an inability to attract and retain other highly skilled employees could adversely affect our business, and we may not be able to successfully navigate the recent leadership changes while maintaining key aspects of our culture, which could have a significant negative effect on our existing business and our ability to pursue future plans.
For example, global supply chain disruptions in the first half of 2022 impacted the availability of raw products and resulted in prolonged shipping and delivery times. Availability of specific components continues to impact the global supply chain, mainly influencing on lead times. Demand is increasing supply requirements and the fast growing technology innovation can impact the availability and manufacturers’ capacity.
Availability of specific components continues to impact the global supply chain, mainly impacting lead times. Demand is increasing supply requirements and the fast growing technology innovation can impact the availability and manufacturers’ capacity.
In addition, this concentration of ownership may delay, prevent or deter a change in control, or deprive a shareholder of a possible premium for its ordinary shares as part of a sale of our company. 16 Our cash balances and investment portfolio have been, and may continue to be, adversely affected by market conditions and interest rates We maintain substantial balances of cash and liquid investments, for purposes of general corporate purposes, which may include acquisitions, share repurchases and other purposes.
Our cash balances and investment portfolio have been, and may continue to be, adversely affected by market conditions and interest rates We maintain substantial balances of cash and liquid investments, for purposes of general corporate purposes, which may include acquisitions, share repurchases and other purposes.
We are subject to risks relating to acquisitions We have made acquisitions in the past, including the acquisitions of Cyberint in 2024, Perimeter 81, Atmosec and rmsource in 2023, Spectral in 2022 and Avanan in 2021, and we may make additional acquisitions in the future.
Cyberint Technologies Ltd. in 2024, Perimeter 81 Ltd., Atmosec Ltd. and rmsource, Inc. in 2023, Spectral Cyber Technologies Ltd in 2022 and Avanan, Inc. in 2021, and we may make additional acquisitions in the future.
In particular, we are exempt from the rules and regulations under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
In particular, we are exempt from the rules and regulations under the Exchange Act related to the furnishing and content of proxy statements.
Moreover, even if we do obtain benefits from acquisitions in the form of increased sales and earnings, there may be a delay between the time when the expenses associated with an acquisition are incurred and the time when we recognize such benefits.
Moreover, even if we do obtain benefits from acquisitions in the form of increased sales and earnings, there may be a delay between the time when the expenses associated with an acquisition are incurred and the time when we recognize such benefits. 9 We are dependent on a limited number of product families Currently, we derive the majority of our revenues from sales of integrated appliances and internet security products, as well as related revenues from security subscriptions and from software updates and maintenance.
Risks Related to Our Dependence on Third-Parties • We are dependent on a small number of distributors. • We purchase several key components and finished products from limited sources, and we are increasingly dependent on contract manufacturers for our hardware products. • We incorporate third-party technology in our products, which may make us dependent on the providers of these technologies and expose us to potential intellectual property claims. • Failures of the third party technology, third-party servers, cloud service providers and other third-party hardware, software and infrastructure on which we rely could adversely affect our business. 3 Risks Related to Tax, Legal and Regulatory Matters • We are the defendants in various lawsuits and have been subject to tax disputes and governmental proceedings, which could adversely affect our business, results of operations and financial condition. • Uncertainties in the interpretation and application of worldwide tax reforms, complex tax laws and regulations could materially affect our tax obligations and effective tax rate. • Class action litigation due to stock price volatility or other factors could cause us to incur substantial costs and divert our management’s attention and resources. • We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets.
Risks Related to Tax, Legal and Regulatory Matters • We are the defendants in various lawsuits and have been subject to tax disputes and governmental proceedings, which could adversely affect our business, results of operations and financial condition. • Uncertainties in the interpretation and application of worldwide tax reforms, complex tax laws and regulations could materially affect our tax obligations and effective tax rate. • Class action litigation due to stock price volatility or other factors could cause us to incur substantial costs and divert our management’s attention and resources. • We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets. • Changes in government trade policies and international trade disputes that result in tariffs and other protectionist measures could adversely affect our business in the future.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

43 edited+163 added−9 removed26 unchanged
We may experience future fluctuations or declines in operating margins from historical levels due to several factors, as described above in “Item 3 – Key Information” under the caption “Risk Factors – Risks Related to Our Business and Our Market”. 39 Financial Income, Net Net financial income consists primarily of interest earned on cash equivalents, short-term deposits and marketable securities.
We may experience future fluctuations or declines in operating margins from historical levels due to several factors, as described above in “Item 3 – Key Information” under the caption “Risk Factors – Risks Related to Our Business and Our Market”. Financial Income, Net Net financial income consists primarily of interest earned on cash equivalents, short-term deposits and marketable securities.
Therefore, we identify a contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to each performance obligation in the contract and recognize revenues when (or as) we satisfy a performance obligation. 35 We recognize revenues from sales of products and licenses, under Topic 606, upon shipment when control of the promised goods is transferred to the customer, or upon electronic transfer of the Certificate Key to the customer.
Therefore, we identify a contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to each performance obligation in the contract and recognize revenues when (or as) we satisfy a performance obligation. 37 We recognize revenues from sales of products and licenses, under Topic 606, upon shipment when control of the promised goods is transferred to the customer, or upon electronic transfer of the Certificate Key to the customer.
We believe that these sources of liquidity will be sufficient to meet our normal operating requirements during the next 12 months and the foreseeable future and to fund capital expenditures. 40 Research and Development, Patents and Licenses, etc. Additional details are provided in this Item 5, under the caption “Results of Operations”.
We believe that these sources of liquidity will be sufficient to meet our normal operating requirements during the next 12 months and the foreseeable future and to fund capital expenditures. 42 Research and Development, Patents and Licenses, etc. Additional details are provided in this Item 5, under the caption “Results of Operations”.
Information concerning the effect of governmental regulation on our business is provided in “Item 5 – Operating and Financial Review and Prospects” under the caption “Taxes on income” and in “Item 10 – Additional Information” under the caption “Israeli taxation, foreign exchange regulation and investment programs”. 34 We derive our sales primarily through indirect channels.
Information concerning the effect of governmental regulation on our business is provided in “Item 5 – Operating and Financial Review and Prospects” under the caption “Taxes on income” and in “Item 10 – Additional Information” under the caption “Israeli taxation, foreign exchange regulation and investment programs”. 36 We derive our sales primarily through indirect channels.
The following table presents the percentage of total consolidated revenues that we derive from sales in each of the regions shown: Year Ended December 31, 2024 2023 2022 Region: Americas, principally U.S. 42% 43% 43% Europe, Middle East and Africa 47% 46% 45% Asia-Pacific 11% 11% 12% For information on the impact of foreign currency fluctuations, please refer to “Item 11 – Quantitative and Qualitative Disclosures about Market Risk – Foreign Currency Risk”.
The following table presents the percentage of total consolidated revenues that we derive from sales in each of the regions shown: Year Ended December 31, 2025 2024 2023 Region: Americas, principally U.S. 42 % 42 % 43 % Europe, Middle East and Africa 46 % 47 % 46 % Asia-Pacific 12 % 11 % 11 % For information on the impact of foreign currency fluctuations, please refer to “Item 11 – Quantitative and Qualitative Disclosures about Market Risk – Foreign Currency Risk”.
Trend Information Additional details are provided in this Item 5, under the caption “Results of Operations”.
Trend Information Additional details are provided in this Item 5, under the caption “Results of Operations”. ITEM 6 .
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS For discussion related to our financial condition, changes in financial condition, and the results of operations for 2023 compared to 2022, refer to Part I, Item 5.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS For discussion related to our financial condition, changes in financial condition, and the results of operations for 2024 compared to 2023, refer to Part I, Item 5.
The accounting policies that reflect our more significant estimates, judgments and assumptions and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results, include the following: • Revenue recognition; • Accounting for income taxes; • Impairment of marketable securities; and • Business combination.
The accounting policies that reflect our more significant estimates, judgments and assumptions and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results, include the following: • Revenue recognition; • Accounting for income taxes; and • Business combination.
Our cost of security subscriptions is comprised of costs paid to third parties, hosting and infrastructure costs and cost of customer support related to these services. Our cost of software updates and maintenance include mainly the cost of post-sale customer support. Cost of products and licenses was $98 million in 2024 and $99 million in 2023.
Our cost of security subscriptions is comprised of costs paid to third parties, hosting and infrastructure costs and cost of customer support related to these services. Our cost of software updates and maintenance include mainly the cost of post-sale customer support. Cost of products and licenses was $106 million in 2025 and $98 million in 2024.
Net financial income was $96 million in 2024 and $77 million in 2023. As we generally hold debt securities until maturity, our current portfolio’s yield is derived primarily from interest rates and the yield on securities at time of purchase.
Net financial income was $114 million in 2025 and $96 million in 2024. As we generally hold debt securities until maturity, our current portfolio’s yield is derived primarily from interest rates and the yield on securities at time of purchase.
We recognize revenues from security subscriptions and software updates and maintenance ratably over the term of the agreement due to the continuous transfer of control to the customer over the period.
We recognize revenues from security subscriptions and software updates and maintenance ratably over the term of the agreement due to the continuous transfer of control to the customer over the period and upon the transfer of services to the customers.
General and Administrative General and administrative expenses consist primarily of salaries and other related expenses for personnel, professional fees, insurance costs, legal and other expenses. General and administrative expenses were $112 million in 2024 and $117 million in 2023, which represented 4% of revenues in 2024 and 5% of revenues in 2023.
General and Administrative General and administrative expenses consist primarily of salaries and other related expenses for personnel, professional fees, insurance costs, legal and other expenses. General and administrative expenses were $129 million in 2025 and $112 million in 2024 , which represented 5% of revenues in 2025 and 4% of revenues in 2024.
Our long-term interest bearing investments were $1,412 million as of December 31, 2024 and $1,430 million as of December 31, 2023. The majority of our financial assets are held and managed through the parent company in Israel and our subsidiaries in Singapore, Canada and the U.S.
Our long-term interest bearing investments were $1,327 million as of December 31, 2025 and $1,412 million as of December 31,2024. The majority of our financial assets are held and managed through the parent company in Israel and our subsidiaries in Canada and the U.S.
During each of 2024, 2023 and 2022, we derived approximately 56%, 56%, and 59%, respectively, of our sales from our ten largest channel partners. In 2024, 2023 and 2022, our three largest distributors accounted for approximately 39%, 40% and 40% respectively, of our sales.
During each of 2025, 2024 and 2023, we derived approximately 57%, 56%, and 56%, respectively, of our sales from our ten largest channel partners. In 2025, 2024 and 2023, our three largest distributors accounted for approximately 39%, 39% and 40% respectively, of our sales.
Operating and Financial Review and Prospects, in our Annual Report on Form 20-F for the fiscal year ended December 31, 2023, which was filed with the U.S. Securities and Exchange Commission on April 2, 2024 and which is hereby incorporated by reference .
Operating and Financial Review and Prospects, in our Annual Report on Form 20-F for the fiscal year ended December 31, 2024, which was filed with the U.S. Securities and Exchange Commission on March 17, 2025 and which is hereby incorporated by reference .
Our principal sources of liquidity consist of our cash and cash equivalents, short-term bank deposits and marketable securities (which aggregated $2,784 million as of December 31, 2024) and our cash flow from operations.
Our principal sources of liquidity consist of our cash and cash equivalents, short-term bank deposits and marketable securities (which aggregated $4,342 million as of December 31, 2025) and our cash flow from operations.
Research and Development Research and development expenses were $395 million in 2024 and $369 million in 2023, and represented 15% of revenues in each of the years 2024 and 2023. Research and development expenses consist primarily of salaries and other related expenses for personnel as well as the cost of our cloud infrastructure expenses.
Research and Development Research and development expenses were $457 million in 2025 and $395 million in 2024, and represented 17% of revenues in 2025 and 15% of revenues in 2024. Research and development expenses consist primarily of salaries and other related expenses for personnel as well as the cost of our cloud infrastructure expenses.
The Financial income related to the instrument during 2024 was insignificant. Business combination We apply the provisions of ASC 805, Business Combinations and allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed or incurred, and intangible assets acquired based on their estimated fair values.
Business combination We apply the provisions of ASC 805, Business Combinations and allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed or incurred, and intangible assets acquired based on their estimated fair values.
Operating Income Margin In 2024, our operating margin was 34% compared to 37% in 2023. The decrease in our operating margin was primarily due to an increase in our workforce related expenses, cloud expenses and amortization of intangibles expenses in related to our acquisitions.
Operating Income Margin In 2025, our operating margin was 30% compared to 34% in 2024. The decrease in our operating margin was primarily due to an increase in our workforce related expenses, cloud expenses, stock-based compensation expenses and amortization of intangibles expenses in related to our acquisitions.
Net Income Net income increased by $6 million to $846 million in 2024 compared to $840 million in 2023. Liquidity and Capital Resources During 2024 and 2023, we financed our operations through cash generated from operations.
Net Income Net income increased by $211 million to $1,057 million in 2025 compared to $846 million in 2024. Liquidity and Capital Resources During 2025 and 2024, we financed our operations through cash generated from operations.
Cost of security subscriptions was $73 million in 2024 and $57 million in 2023. Cost of software updates and maintenance was $124 million in 2024 and $112 million in 2023. In 2024, amortization of technology was $25 million compared to $14 million in 2023. The increase in 2024 is attributed to the acquisitions made during 2024 and 2023.
Cost of security subscriptions was $91 million in 2025 and $73 million in 2024. Cost of software updates and maintenance was $133 million in 2025 and $124 million in 2024. In 2025, amortization of technology was $33 million compared to $25 million in 2024. The increase in 2025 is attributed to the acquisitions made during 2025 and 2024.
Our revenues were $2,565 million in 2024 and $2,415 million in 2023. Total revenues in 2024 increased by 6% compared to 2023. Product and license revenues were $508 million in 2024 and $497 million in 2023.
Our revenues were $2,725 million in 2025 and $2,565 million in 2024. Total revenues in 2025 increased by 6% compared to 2024. Product and license revenues were $548 million in 2025 and $508 million in 2024.
Our total cash and cash equivalents, short-term investments and long-term interest bearing investments, were $2,784 million as of December 31, 2024 and $2,960 million as of December 31, 2023. Our cash and cash equivalents and short-term investments were $1,372 million as of December 31, 2024 and $1,530 million as of December 31, 2023.
Our total cash and cash equivalents, short-term investments and long-term interest bearing investments, were $4,342 million as of December 31, 2025 and $2,784 million as of December 31, 2024. Our cash and cash equivalents and short-term investments were $3,015 million as of December 31, 2025 and $1,372 million as of December 31, 2024.
Cost of revenues includes cost of product and licenses, cost of security subscriptions and cost of software updates and maintenance and amortization of technology. Our cost of products and licenses includes mainly cost of software and hardware production, packaging and shipping.
Cost of Revenues Total cost of revenues was $362 million in 2025 and $319 million in 2024. Cost of revenues includes cost of product and licenses, cost of security subscriptions and cost of software updates and maintenance and amortization of technology. Our cost of products and licenses includes mainly cost of software and hardware production, packaging and shipping.
To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made. Significant judgment is also required in determining any valuation allowance recorded against deferred tax assets.
To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made.
This rise was partially offset by a $3 million benefit related to currency exchange and hedging. Our selling and marketing expenses worldwide are paid in local currencies and are reported in U.S. dollars. Therefore, changes to the exchange rates between the local currencies and the U.S. dollar have affected, and may in the future affect, our expense level.
Our selling and marketing expenses worldwide are paid in local currencies and are reported in U.S. dollars. Therefore, changes to the exchange rates between the local currencies and the U.S. dollar have affected, and may in the future affect, our expense level.
Also, if the financial system or the credit markets deteriorate or remain volatile, our investment portfolio may be impacted and the values and liquidity of our investments could be adversely affected.
Our liquidity could be negatively affected by a decrease in demand for our products and services, or increase in employment costs. Also, if the financial system or the credit markets deteriorate or remain volatile, our investment portfolio may be impacted and the values and liquidity of our investments could be adversely affected.
Since most of our investments are U.S. dollars denominated securities, our net financial income is heavily dependent on prevailing U.S. interest rates changes and the market expectations to such changes. The increase in net financial income in 2024 was primarily due to higher interest rates and yield on marketable securities, short-term deposits and cash equivalents.
Since most of our investments are U.S. dollars denominated securities, our net financial income is heavily dependent on prevailing U.S. interest rates changes and the market expectations to such changes. The higher financial income is mainly due to higher reinvestment yield in our investment portfolios in 2025, as well as additional interest income on operational cash.
When determining the fair values of assets acquired and liabilities assumed or incurred, management makes significant estimates and assumptions, especially with respect to intangible assets. 36 Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired technology, and customer relationships from a market participant perspective, useful lives and discount rates.
Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired technology, and customer relationships from a market participant perspective, useful lives and discount rates.
We re-issued the repurchased shares to settle exercises of options and restricted share unit awards to our employees and directors. Proceeds from such activities were $259 million and $134 million in 2024 and 2023, respectively. Our investments in marketable securities are classified as AFS.
We repurchased ordinary shares in the amount of $1,400 million in 2025 and $1,300 million in 2024. We re-issued the repurchased shares to settle exercises of options and restricted share unit awards to our employees and directors. Proceeds from such activities were $393 million and $259 million in 2025 and 2024, respectively.
Taxes on Income Total taxes on income were $126 million in 2024 and $135 million in 2023. Our effective tax rate was 13% in 2024 and 14% in 2023. See Note 11 to our consolidated financial statements for further information on our statutory rates.
Our effective tax rate was (12)% in 2025 and 13% in 2024. See Note 12 to our consolidated financial statements for further information on our statutory rates.
In 2024 and 2023 no impairment in our marketable securities was recorded. For further risk related to our portfolio see also Item 3, “Risk Factors – Risks Related to Our Business and Our Market – Our cash balances and investment portfolio have been, and may continue to be, adversely affected by market conditions and interest rates”.
For further risk related to our portfolio see also Item 3, “Risk Factors – Risks Related to Our Business and Our Market – Our cash balances and investment portfolio have been, and may continue to be, adversely affected by market conditions and interest rates”. 41 Taxes on Income (tax benefit) Total taxes on income (tax benefit) were $(112) million in 2025 and $126 million in 2024.
Under the repurchase programs, we may purchase our ordinary shares from time to time, depending on market conditions, share price, trading volume and other factors. We repurchased ordinary shares in the amount of $1,300 million in 2024 and $1,288 million in 2023.
Net cash used in financing activities in 2025 and 2024 was also attributed to the repurchase of ordinary shares. Under the repurchase programs, we may purchase our ordinary shares from time to time, depending on market conditions, share price, trading volume and other factors.
Results of Operations The following table presents information concerning our results of operations in 2024 and 2023: Year Ended December 31, 2024 2023 (in millions) Revenues: Products and licenses $ 507.9 $ 497.4 Security subscriptions 1,104.2 981.2 Software updates and maintenance 952.9 936.1 Total revenues 2,565.0 2,414.7 Operating expenses (*): Cost of products and licenses 97.8 99.3 Cost of security subscriptions 72.6 57.0 Cost of software updates and maintenance 123.9 112.3 Amortization of technology 25.0 14.0 Total cost of revenues 319.3 282.6 Research and development 394.9 368.9 Selling and marketing 862.9 747.1 General and administrative 111.9 117.0 Total operating expenses 1,689.0 1,515.6 Operating income 876.0 899.1 Financial income, net 96.1 76.5 Income before taxes on income 972.1 975.6 Taxes on income 126.4 135.3 Net income $ 845.7 $ 840.3 37 (*) Including pre-tax charges for stock-based compensation, amortization of intangible assets and acquisition related expenses in the following items: Year Ended December 31, 2024 2023 (in millions) Amortization of intangible assets and acquisition related expenses Amortization of technology $ 25.0 $ 14.0 Research and development 6.5 7.0 Selling and marketing 40.3 13.7 Total amortization of intangible assets and acquisition related expenses $ 71.8 $ 34.7 Stock-based compensation Cost of products and licenses $ 0.4 $ 0.4 Cost of software updates and maintenance 8.2 7.3 Research and development 53.1 48.7 Selling and marketing 58.2 56.3 General and administrative 29.8 32.6 Total stock-based compensation $ 149.7 $ 145.3 The following table presents information concerning our results of operations as a percentage of revenues for the periods indicated: Year Ended December 31, 2024 2023 Revenues: Products and licenses 20 % 20 % Security subscriptions 43 41 Software updates and maintenance 37 39 Total revenues 100 % 100 % Operating expenses: Cost of products and licenses 4 4 Cost of security subscriptions 3 2 Cost of software updates and maintenance 5 5 Amortization of technology 1 1 Total cost of revenues 13 12 Research and development 15 15 Selling and marketing 34 31 General and administrative 4 5 Total operating expenses 66 63 Operating income 34 37 Financial income, net 4 3 Income before taxes on income 38 40 Taxes on income 5 5 Net income 33 % 35 % Revenues We derive our revenues mainly from the sale of products and licenses, security subscriptions and software updates and maintenance.
Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. 38 Results of Operations The following table presents information concerning our results of operations in 2025 and 2024: Year Ended December 31, 2025 2024 (in millions) Revenues: Products and licenses $ 548.2 $ 507.9 Security subscriptions 1,219.0 1,104.2 Software updates and maintenance 958.2 952.9 Total revenues 2,725.4 2,565.0 Operating expenses (*): Cost of products and licenses 105.8 97.8 Cost of security subscriptions 90.9 72.6 Cost of software updates and maintenance 132.6 123.9 Amortization of technology 32.5 25.0 Total cost of revenues 361.8 319.3 Research and development 456.7 394.9 Selling and marketing 947.0 862.9 General and administrative 128.8 111.9 Total operating expenses 1,894.3 1,689.0 Operating income 831.1 876.0 Financial income, net 114.0 96.1 Income before taxes on income (tax benefit) 945.1 972.1 Taxes on income (tax benefit) (111.8 ) 126.4 Net income $ 1,056.9 $ 845.7 39 (*) Including pre-tax charges for stock-based compensation, amortization of intangible assets and acquisition related expenses in the following items: Year Ended December 31, 2025 2024 (in millions) Amortization of intangible assets and acquisition related expenses Amortization of technology $ 32.5 $ 25.0 Research and development 4.6 6.5 Selling and marketing 40.1 40.3 Total amortization of intangible assets and acquisition related expenses $ 77.2 $ 71.8 Stock-based compensation Cost of products and licenses $ 0.6 $ 0.4 Cost of software updates and maintenance 13.5 8.2 Research and development 76.3 53.1 Selling and marketing 79.8 58.2 General and administrative 35.4 29.8 Total stock-based compensation $ 205.6 $ 149.7 The following table presents information concerning our results of operations as a percentage of revenues for the periods indicated: Year Ended December 31, 2025 2024 Revenues: Products and licenses 20 % 20 % Security subscriptions 45 43 Software updates and maintenance 35 37 Total revenues 100 % 100 % Operating expenses: Cost of products and licenses 4 4 Cost of security subscriptions 3 3 Cost of software updates and maintenance 5 5 Amortization of technology 1 1 Total cost of revenues 13 13 Research and development 17 15 Selling and marketing 35 34 General and administrative 5 4 Total operating expenses 70 66 Operating income 30 34 Financial income, net 5 4 Income before taxes on income (tax benefit) 35 38 Taxes on income (tax benefit) (4 ) 5 Net income 39 % 33 % 40 Revenues We derive our revenues mainly from the sale of products and licenses, security subscriptions and software updates and maintenance.
The $26 million increase in 2024 is primarily a result of an increase in compensation and related expenses for personnel and in our cloud infrastructure expenses. The gross increase was partially offset by a $9 million benefit related to currency exchange and hedging.
The $62 million increase in 2025 is primarily a result of an increase in compensation and related expenses for personnel , cloud infrastructure expenses and a $7 million expense related to currency exchange and hedging.
AFS securities are carried at fair value, with the unrealized gains and losses, net of tax, recorded in other comprehensive income (loss). Amortization of premium, discount and interest is recorded in our statements of income. Our liquidity could be negatively affected by a decrease in demand for our products and services, or increase in employment costs.
Our investments in marketable securities are classified as AFS. AFS securities are carried at fair value, with the unrealized gains and losses, net of tax, recorded in other comprehensive income (loss). Amortization of premium, discount and interest is recorded in our consolidated statements of income.
Software updates and maintenance revenues increased by $17 million, or 2%, from $936 million in 2023 to $953 million in 2024, primarily as a result of renewals of existing and sales of new maintenance contracts and professional services. 38 Cost of Revenues Total cost of revenues was $319 million in 2024 and $283 million in 2023.
As a result, security subscription revenues increased by $115 million, or 10%, from $1,104 million in 2024 to $1,219 million in 2025. Software updates and maintenance revenues increased by $5 million, or 1%, from $953 million in 2024 to $958 million in 2025, primarily as a result of renewals of existing and sales of new maintenance contracts and professional services.
Selling and marketing expenses were $863 million in 2024 and $747 million in 2023, which represented 34% of revenues in 2024 and 31% of revenues in 2023. The net increase of $116 million in selling and marketing costs in 2024 primarily stems from rises in compensation expenses for personnel and marketing activities.
Selling and marketing expenses were $947 million in 2025 and $863 million in 2024, which represented 35% of revenues in 2025 and 34% of revenues in 2024. The net increase of $84 million in selling and marketing costs in 2025 primarily stems from significant investments in partners and marketing programs.
The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.
The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed or incurred, management makes significant estimates and assumptions, especially with respect to intangible assets.
Our capital expenditures amounted to $24 million in 2024 and $19 million in 2023, and consisted primarily of computer equipment, software and leasehold improvements. Net cash used in financing activities was $1,060 million in 2024 and $1,165 million in 2023. In 2024 and 2023, net cash used in financing activities was attributed primarily to the repurchase of ordinary shares.
Our net cash paid for acquisitions amounted to $273 million in 2025 and $186 million in 2024. Our capital expenditures amounted to $27 million in 2025 and $24 million in 2024, and consisted primarily of computer equipment, software and leasehold improvements.
We generated net cash from operations of $1,052 million in 2024 and $1,038 million in 2023. Net cash from operations for 2024 and 2023 consisted primarily of net income adjusted for non-cash activity. The increase in our cash from operations was derived mostly from the increase in our deferred revenues compared to last year.
We generated net cash from operations of $1,199 million in 2025 and $1,052 million in 2024. Net cash from operations for 2025 and 2024 consisted primarily of net income adjusted for non-cash activity. The increase in our cash from operations includes benefit from balance sheet hedging transaction of $51 million, offset by one-time tax settlement payment of $66 million.
We continued to deliver increasingly more of our latest security offerings as subscriptions resulting in increased sales of our security subscription packages, including advance threat protection, Infinity CloudGuard, and Harmony. As a result, security subscription revenues increased by $123 million, or 13%, from $981 million in 2023 to $1,104 million in 2024.
We continued to deliver increasingly more of our latest security offerings as subscriptions resulting in increased sales of our security subscription packages, including considerable demand for our emerging products portfolio and across all 3 pillars: Hybrid Mesh, Workspace and CTEM .
Net cash used in investing activities was $24 million in 2024 compared to net cash generated from investing activities of $469 million in 2023.
Net cash used in investing activities was $680 million in 2025 compared to $24 million in 2024. In 2025, net cash used in investing activities increased compared to 2024, primarily due to higher investment in short term deposit and lease prepayment paid during 2025.
Removed
In assessing the need for a valuation allowance, we consider all available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies.
Added
Additionally, in December, 2025, we completed a $2,000 million Convertible Senior Note issuance, while the net cash received during the last month of the year contributed additional interest income.
Removed
In the event that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. Impairment of marketable securities We classify all of our debt securities as available-for-sale (“AFS”).
Added
In December 2025, we issued and sold $2.0 billion aggregate principal amount of 0.00% Convertible Senior Notes due 2030 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act (all of which were outstanding as of December 31, 2025).
Removed
AFS debt securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in accumulated other comprehensive income (loss) in shareholders’ equity. Realized gains and losses on sale of investments are included in financial income, net and are derived using the specific identification method for determining the cost of securities sold.
Added
Net cash provided by financing activities was $752 million in 2025 and net cash used in financing activities was $1,060 million in 2024 . In 2025, net cash provided by financing activities was attributed primarily to the issuance of convertible senior notes in the amount of $1,780 net of issuance costs and net of purchased capped call.
Removed
Each reporting period, we evaluate whether declines in fair value below amortized cost are due to expected credit losses, as well as our ability and intent to hold the investment until a forecasted recovery occurs.
Added
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES Directors and Senior Management Our directors and executive officers as of March 15, 2026, were as follows: Name Position Independent Director (1) Outside Director (2) Member of Audit Committee Member of Compensation Committee Member of NSCG Committee Gil Shwed Executive Chair of the Board of Directors Nadav Zafrir Chief Executive Officer and Director Nataly Kremer Chief Product Officer and Head of Research and Development Roei Golan Chief Financial Officer Itai Greenberg Chief Revenue Officer Yoav Chelouche (3) Lead Independent Director X X X X Dafna Gruber Director X X X X Tzipi Ozer-Armon Director X X X X Ray Rothrock Director X X X X Tal Shavit Shenhav Director X X Jill Smith Director X X Jerry Ungerman Director X (1) “Independent Director” under the Nasdaq regulations and the Israeli Companies Law (see explanation below).
Removed
Allowance for credit losses on AFS debt securities are recognized in our consolidated statements of income, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in stockholders’ equity. We measure our money market funds and marketable securities at fair value. Money market funds are classified within Level 1.
Added
(2) “Outside Director” as required by the Israeli Companies Law (see explanation below). (3) “Financial expert” as required by the Israeli Companies Law and Nasdaq requirements with respect to membership on the audit committee (see “Item 16A – Audit Committee Financial Expert”). 43 Gil Shwed is the founder of Check Point and Executive Chair of the Board of Directors. Mr.
Removed
Marketable securities are classified within Level 2 or Level 3. This is because these assets are mostly valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs, or based on unobservable inputs.
Added
Shwed served as the Chief Executive Officer from Check Point’s inception through December 2024, and Mr. Shwed previously served as Chairman of our board of directors until September 2015. Mr. Shwed is considered the inventor of the modern firewall and authored several patents, such as the company’s Stateful Inspection technology. Mr.
Removed
Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The Level 3 Corporate debt security was structured and issued by a global financial institution and valued based on issuer risk, sovereign credit risk and interest rates.
Added
Shwed has received numerous accolades for his individual achievements and industry contributions, including an honorary Doctor of Science from the Technion – Israel Institute of Technology, an honorary Doctor of Science from Tel Aviv University, the World Economic Forum’s Global Leader for Tomorrow for his commitment to public affairs and leadership in areas beyond immediate professional interests, and the Academy of Achievement’s Golden Plate Award for his innovative contribution to business and technology.
Removed
Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Added
Mr. Shwed is the Chairman of the Board of Trustees of the Youth University of Tel Aviv University. Mr. Shwed is a Tel Aviv University Governor and founder of the University’s Check Point Institute for Information Security.
Removed
In 2024, net cash provided by investing activities decreased compared to 2023, primarily due to decrease in proceeds from sale of marketable securities offset by cash paid in conjunction with acquisitions, net of acquired cash, and higher investment in short term deposit. Our net cash paid for acquisitions amounted to $186 million in 2024 and $459 million in 2023.
Added
He is also Chairman of the Board of Directors of Yeholot Association Founded by the Rashi Foundation whose charter is, among other things, to reduce the dropout rates in high schools. In 2018, Gil was awarded the prestigious Israel Prize for his contributions to the Israeli technology industry.
Added
Nadav Zafrir, Chief Executive Officer of Check Point since December 2024, brings thirty years of experience in management, leadership, and technology innovation, Mr.
Added
Zafrir was previously the co-founder and Managing Partner of Team8 Labs Ltd., a global venture group that builds and backs technology companies at the intersection of artificial intelligence, cyber security, data, fin-tech, enterprise software, and infrastructure, since 2014. Prior to founding Team8, Nadav spent 20 years in the Israel Defense Forces.
Added
He served as Commander of Unit 8200, Israel’s elite military technology unit, where he established the Israel Defense Forces Cyber Command. Mr. Zafrir was a director of SolarEdge Technologies, Inc. from 2019 until 2025.
Added
He holds an LLB from the Interdisciplinary Center Herzliya (IDC) and an Executive MBA from the Kellogg – Recanati program of the Kellogg Graduate School of Business at Northwestern University in Chicago and the Recanati School of Business at Tel Aviv University.
Added
Nataly Kremer, Chief Product Officer and Head of Research and Development since March 2023, oversees all product and technology units and uses her proficiency in delivering network, security, and cloud technologies for large enterprises to meet customer needs. Ms. Kremer brings extensive R&D and leadership experience to Check Point. Ms. Kremer joined the company after 12 years with AT&T Inc.
Added
(“AT&T”), where she led its Software and Delivery organization and AT&T’s center in Israel. She holds an MBA and BSc in Computer Sciences and Management from Tel Aviv University. Ms.
Added
Kremer is a board member of IBI Investment House Ltd. and a board member of Israel Advanced Technology Industries (“IATI”), where she also holds the role of Head of the ITAI Diversity and Inclusion Group.
Added
Roei Golan, has been serving as Chief Financial Officer of Check Point since 2023, as Acting Chief Financial Officer from October 2022 until May 2023, and as VP Finance from 2021 until November 2022. Mr. Golan oversees Check Point's finance operations, including accounting, business analysis, investor relations, legal, tax and treasury. Mr. Golan has over 15 years of financial experience.
Added
Prior to joining Check Point in 2021, Mr. Golan worked at EY for 11 years, where he held the role of Managing Director in the Technology practice. Mr. Golan holds a B.A. in Economics and Accounting and an M.B.A in Finance Management. Mr. Golan is a certified public accountant.
Added
Itai Greenberg , has been serving as Chief Revenue Officer of Check Point since January 2025. Prior to transitioning to his current role, Mr. Greenberg held the roles of Chief Strategy Officer and Head of the Cloud and SASE Businesses, VP Product Management and VP Product Marketing. Mr.
Added
Greenberg joined Check Point in 2010, after serving as VP of Product and R&D at EyeClick Ltd. Previously, he held key leadership roles at Microsoft in Windows Security and Mobile divisions. Mr. Greenberg holds a B.Sc. in Information Systems from the Ben-Gurion University. Yoav Z.
Added
Chelouche has served on our board of directors since 2006 and as our Lead Independent Director since December 2024. Mr. Chelouche has also served as one of our outside directors under the Israeli Companies Law since 2006. Mr. Chelouche has been Managing Partner of Aviv Venture Capital (“Aviv”) since August 2000. Before joining Aviv, Mr.
Added
Chelouche served as a President and Chief Executive Officer of Scitex Corporation (“Scitex”), a world leader in digital imaging and printing systems, from December 1994 until July 2000. Prior to that, Mr. Chelouche held various managerial positions with Scitex, including VP Strategy and Business Development, VP Marketing and VP Finance for Europe. Mr.
Added
Chelouche is a member of the board of directors of a number of private companies. He was also a board member and, until 2015, Co-Chairman of IATI-Israel Advanced Technology Industries, an Israeli nonprofit organization that researches, develops and advocates policies that promote Israel’s high tech ecosystem through activities in training, tuition, business development, public relations and public policy advocacy. Mr.
Added
Chelouche is a board member of Tower Semiconductor Ltd., Malam Team Ltd., and until February 2024 served as an external director of the Tel Aviv Stock Exchange (TASE). Mr. Chelouche earned a B.A. in Economics and Statistics from Tel Aviv University, and an M.B.A. from INSEAD University in Fontainebleau, France.
Added
Dafna Gruber has served on our board of directors since 2024 and as one of our outside directors under the Israeli Companies Law. From 2007 to 2015, Ms.
Added
Gruber served as Chief Financial Officer of NICE Ltd., a publicly traded company listed on Nasdaq and TASE, where she was responsible, inter alia, for finance, operations, MIS and IT, legal affairs, and investor relations. From 1996 to 2007, Ms.
Added
Gruber held various senior finance roles at Alvarion Ltd., then a publicly traded company listed on Nasdaq and TASE, primarily serving as Chief Financial Officer. From 2016 to 2024, Ms. Gruber served as Chief Financial Officer of several private companies, including Netafim Ltd., Aqua Security Ltd., and Clal Industries Ltd. Ms.
Added
Gruber currently serves as an Independent or External Director at ICL Group Ltd. and Cellebrite DI Ltd., and previously served as a board member of several publicly traded technology companies. Ms.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

1 edited+12 added−3 removed2 unchanged
According to our transfer agent, as of December 31, 2024, there were 99 holders of record of our ordinary shares in the United States, representing approximately 80.99% of our outstanding shares.
The address for Massachusetts Financial Services Company is 111 Huntington Avenue, Boston, Massachusetts 02199. 54 According to our transfer agent, as of December 31, 2025, there were 84 holders of record of our ordinary shares in the United States, representing approximately 79.82% of our outstanding shares.
Removed
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS The following table shows information as of December 31, 2024, 2023 and 2022, for each person who, to the best of our knowledge, beneficially owned more than 5% of our outstanding ordinary shares as December 31, 2024: Name of Five Percent Shareholders No. of shares beneficially held (1)(3) % of class of shares (2) No. of shares beneficially held (1) % of class of shares (2) No. of shares beneficially held (1) % of class of shares (2) December 31, 2024 December 31, 2023 December 31, 2022 Gil Shwed 28,797,215 25.6% (3) 29,744,539 25.3% 29,149,766 23.3% (1) The amount includes ordinary shares owned by each of the individuals, directly or indirectly, and options immediately exercisable or that are exercisable within 60 days from December 31 st , of each of the years shown in this table.
Added
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS The following table sets forth information with respect to the beneficial ownership of our shares as of February 28, 2026 by: • each person or entity known by us to own beneficially more than 5% of our outstanding shares; • each of our directors and executive officers individually; and • all of our executive officers and directors as a group. 53 The beneficial ownership of ordinary shares is determined in accordance with the rules of the SEC and generally includes any ordinary shares over which a person exercises sole or shared voting or investment power, or the right to receive the economic benefit of ownership.
Removed
(2) If a shareholder has the right to acquire ordinary shares by exercising stock options exercisable within 60 days from December 31 st , of each of the years shown in this table, these ordinary shares are deemed outstanding for the purpose of computing the percentage owned by the specific shareholder (that is, they are included in both the numerator and the denominator), but they are disregarded for the purpose of computing the percentage owned by any other shareholder.
Added
The percentage of shares beneficially owned is based on 104,232,799 ordinary shares outstanding as of February 28, 2026.
Removed
(3) The share amount and holding percentage includes the unexercised stock options. Without such unexercised stock options, the 24,877,215 issued ordinary shares held by Gil Shwed represented 23.0% of the outstanding ordinary shares and voting rights as of December 31, 2024. 52 Our major shareholders do not have different voting rights from other shareholders with respect to our ordinary shares.
Added
We have deemed our ordinary shares subject to stock options that are currently exercisable or exercisable within 60 days of February 28, 2026 or issuable pursuant to RSUs and PSUs that are subject to vesting and performance conditions expected to be satisfied within 60 days of February 28, 2026 to be outstanding and to be beneficially owned by the person holding the stock option, RSU or PSU for the purpose of computing the percentage ownership of that person.
Added
We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. All of our shareholders, including the shareholders listed below, have the same voting rights attached to their ordinary shares. See Exhibit 2.1 of the Annual Report.
Added
None of our principal shareholders nor our directors and executive officers have different or special voting rights with respect to their ordinary shares. Unless otherwise noted below, each shareholder’s address is Check Point Technologies Ltd., 5 Shlomo Kaplan Street, Tel Aviv 6789159, Israel.
Added
Name of Beneficial Owner Number of Shares Beneficially Held Percentage of Class Directors and Executive Officers: Gil Shwed (1) 26,492,908 25.03 % Nadav Zafrir (2) 44,288 * Yoav Chelouche (3) 86,116 * Dafna Gruber (4) 9,430 * Tzipi Ozer- Armon (5) 34,832 * Tal Shavit (6) 86,116 * Ray A Rothrock (7) 60,284 * Jerry Ungerman (8) 98,666 * Jill D Smith (9) 22,382 * Roei Golan 5,559 * Nataly Kremer 4,552 * Itai Greenberg (10) 85,205 * All executive officers and directors as a group (12 persons) 27,030,338 25.43 % Other 5% Shareholder: Massachusetts Financial Services Company (11) 7,937,229 7.61 % __________ * Less than 1%.
Added
(1) Shares beneficially owned consist of 24,870,408 shares and outstanding options to purchase 1,622,500 shares that are exercisable within 60 days of February 28, 2026. Without such unexercised stock options, the 24,870,408 issued ordinary shares held by Mr. Shwed represented 23.86% of the outstanding ordinary shares and voting rights as of February 28, 2026.
Added
(2) Shares beneficially owned consist of 13,315 shares and 30,973 shares issuable pursuant to outstanding options that are exercisable within 60 days of February 28, 2026. (3) Shares beneficially owned consist of 3,225 shares and 82,891 shares issuable pursuant to outstanding options that are exercisable within 60 days of February 28, 2026.
Added
(4) Shares beneficially owned consist of 289 shares and 9,141 shares issuable pursuant to outstanding options that are exercisable within 60 days of February 28, 2026. (5) Shares beneficially owned consist of 3,191 shares and 31,641 shares issuable pursuant to outstanding options that are exercisable within 60 days of February 28, 2026.
Added
(6) Shares beneficially owned consist of 3,225 shares and 82,891 shares issuable pursuant to outstanding options that are exercisable within 60 days of February 28, 2026. (7) Shares beneficially owned consist of 2,393 shares and 57,891 shares issuable pursuant to outstanding options that are exercisable within 60 days of February 28, 2026.
Added
(8) Shares beneficially owned consist of 15,775 shares and 82,891 shares issuable pursuant to outstanding options that are exercisable within 60 days of February 28, 2026. (9) Shares beneficially owned consist of 1,991 shares and 20,391 shares issuable pursuant to outstanding options that are exercisable within 60 days of February 28, 2026.
Added
(10) Shares beneficially owned consist of 49,407 shares and 35,798 shares issuable pursuant to outstanding options that are exercisable within 60 days of February 28, 2026. (11) As of December 31, 2025, based on information contained in a Schedule 13G/A filed by Massachusetts Financial Services Company with the Securities and Exchange Commission on January 28, 2026.

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