[Cellebrite Fourth-Quarter and Full-Year 2023 Financial Results](index=1&type=section&id=Cellebrite%20Fourth-Quarter%20and%20Full-Year%202023%20Financial%20Results) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Cellebrite reported strong Q4 and full-year 2023 financial performance, with Q4 revenue up 26% to $93.0 million and full-year ARR reaching $315.7 million, exceeding 'Rule of 45' status Q4 2023 Financial Highlights | Metric | Q4 2023 | YoY Change | | :--- | :--- | :--- | | Revenue | $93.0 million | +26% | | Subscription Revenue | $78.6 million | +26% | | GAAP Gross Margin | 84.0% | N/A | | Adjusted EBITDA | $22.7 million | N/A | | Adjusted EBITDA Margin | 24.4% | N/A | | GAAP Diluted EPS | $(0.08) | N/A | | Non-GAAP Diluted EPS | $0.11 | N/A | Full-Year 2023 Financial Highlights | Metric | FY 2023 | YoY Change | | :--- | :--- | :--- | | ARR | $315.7 million | +27% | | Total Revenue | $325.1 million | +20% | | Subscription Revenue | $280.4 million | +30% | | Adjusted EBITDA | $61.9 million | N/A | | Adjusted EBITDA Margin | 19.1% | N/A | | GAAP Net Loss | $(81.1) million | N/A | | Non-GAAP Net Income | $60.9 million | N/A | | GAAP Diluted EPS | $(0.43) | N/A | | Non-GAAP Diluted EPS | $0.28 | N/A | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management emphasized outstanding 2023 performance, exceeding targets and achieving 'Rule of 45' status, driven by strategic objectives and strong ARR expansion, positioning the company for continued growth in 2024 - CEO Yossi Carmil stated the company exceeded ambitious 2023 targets, surpassing **'Rule of 45' status** with **27% ARR growth** and **19% adjusted EBITDA margin**[14](index=14&type=chunk) - The company moves into 2024 well-positioned with an expanded Case-to-Closure platform to address end-to-end digital investigative needs[14](index=14&type=chunk) - CFO Dana Gerner highlighted that strong revenue growth, improved gross margins, and disciplined cost management led to higher adjusted EBITDA in 2023[5](index=5&type=chunk) - The company anticipates **52% to 55%** of full-year 2024 revenue to be generated in the second half, consistent with historical trends and momentum from the new Inseyets solution[5](index=5&type=chunk) [Business and Operational Highlights](index=2&type=section&id=Business%20and%20Operational%20Highlights) Cellebrite advanced its strategic initiatives by launching the expanded Case-to-Closure platform, securing a major U.S. police department expansion, and initiating 'Operation Find Them All' to combat crimes against children - Announced the Case-to-Closure (C2C) platform, an end-to-end solution comprising Inseyets (digital forensics), Pathfinder (AI analytics), and Guardian (evidence management)[15](index=15&type=chunk) - One of the **10 largest U.S. police departments** significantly expanded its use of Cellebrite solutions, including advanced digital forensics software and AI-powered Pathfinder analytics[16](index=16&type=chunk) - Launched "Operation Find Them All" in collaboration with organizations like the National Center of Missing and Exploited Children to help reduce crimes against children using its AI-powered solutions[18](index=18&type=chunk) [Financial Outlook](index=3&type=section&id=Financial%20Outlook) Cellebrite projects full-year 2024 ARR between $380 million and $400 million, revenue between $370 million and $380 million, and adjusted EBITDA between $70 million and $80 million 2024 Financial Outlook | | First-Quarter 2024 Expectations | Full Year 2024 Expectations | | :--- | :--- | :--- | | **ARR** | $325 million - $335 million | $380 million - $400 million | | Annual Growth | 24% - 28% | 20% - 27% | | **Revenue** | $83 million - $88 million | $370 million - $380 million | | Annual Growth | 17% - 24% | 14% - 18% | | **Adjusted EBITDA** | $12 million - $15 million | $70 million - $80 million | | Adjusted EBITDA margin | 15% - 17% | 19% - 21% | [Financial Statements](index=8&type=section&id=Financial%20Statements) This section presents Cellebrite's consolidated financial statements, including detailed statements of operations, balance sheets, cash flows, and reconciliations of GAAP to non-GAAP financial measures [Condensed Consolidated Statements of Operations](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Cellebrite's full-year 2023 operations show revenue growth to $325.1 million and increased operating income to $33.2 million, despite reporting a GAAP net loss of $81.1 million due to financial expenses Full Year Statement of Operations Summary (U.S Dollars in thousands) | Metric | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Total Revenue | $325,110 | $270,651 | | Gross Profit | $271,879 | $219,905 | | Operating Income | $33,237 | $1,044 | | Net (Loss) Income | $(81,100) | $120,805 | | Diluted (Loss) Earnings Per Share | $(0.43) | $0.59 | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of December 31, 2023, Cellebrite's balance sheet strengthened with total assets increasing to $532.9 million, driven by a significant rise in cash and cash equivalents to $189.5 million, alongside growth in shareholders' equity Balance Sheet Summary (U.S Dollars in thousands) | Metric | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $189,517 | $87,645 | | Total Assets | $532,885 | $403,293 | | Total Liabilities | $253,824 | $207,777 | | Total Shareholders' Equity | $279,061* | $195,516* | *Calculated as Total Assets - Total Liabilities [Condensed Consolidated Statements of Cash Flow](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) Cellebrite generated substantial cash from operating activities, reaching $102.1 million in 2023, leading to a net increase in cash and cash equivalents of $101.3 million and a year-end balance of $189.5 million Full Year Cash Flow Summary (U.S Dollars in thousands) | Metric | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $102,058 | $20,577 | | Net cash used in investing activities | $(22,540) | $(91,231) | | Net cash provided by financing activities | $21,765 | $13,970 | | Net increase (decrease) in cash | $101,283 | $(56,684) | | Cash and cash equivalents at end of period | $189,517 | $87,645 | [Reconciliation of GAAP to Non-GAAP Financial Information](index=14&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Information) This section details the reconciliation of GAAP to non-GAAP financial measures, adjusting the 2023 GAAP net loss of $81.1 million to a non-GAAP net income of $60.9 million and an adjusted EBITDA of $61.9 million Full Year GAAP Net Loss to Non-GAAP Net Income Reconciliation (U.S Dollars in thousands) | Metric | FY 2023 | | :--- | :--- | | GAAP Net (Loss) Income | $(81,100) | | Finance expense (income) from financial derivatives | $119,348 | | Share based compensation | $18,998 | | Other Adjustments | $(16,320) | | **Non-GAAP Net Income** | **$60,926** | Full Year Adjusted EBITDA Reconciliation (U.S Dollars in thousands) | Metric | FY 2023 | | :--- | :--- | | GAAP Net (Loss) Income | $(81,100) | | Financial expense, net | $108,800 | | Tax expense | $5,537 | | Share based compensation | $18,998 | | Depreciation & Amortization | $10,011 | | Other Adjustments | $(345) | | **Adjusted EBITDA** | **$61,946** | [Other Information](index=4&type=section&id=Other%20Information) This section provides details on upcoming investor events, including a conference call and Investor Day, alongside important disclosures regarding non-GAAP financial measures and forward-looking statements - A conference call was scheduled for February 15, 2024, to discuss financial results[6](index=6&type=chunk)[21](index=21&type=chunk) - An Investor Day event is scheduled for March 27, 2024, in New York City, featuring presentations from the leadership team and product demonstrations[39](index=39&type=chunk) - The press release includes non-GAAP financial measures, which the company believes are helpful to investors for understanding underlying business performance. Reconciliations are provided[8](index=8&type=chunk)[22](index=22&type=chunk) - The document contains forward-looking statements subject to risks and uncertainties, including dependence on law enforcement agencies, competition, and risks associated with operations in Israel[26](index=26&type=chunk)[44](index=44&type=chunk)

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Cellebrite DI Ltd. (CLBT) , which belongs to the Zacks Technology Services industry, could be a great candidate to consider.This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 433.33%.For the last reported quarter, Cellebrite DI Ltd. C ...

Financial Data and Key Metrics Changes - The company reported record Q3 results with an Annual Recurring Revenue (ARR) of $295.2 million, up 27% year-over-year. Total revenue reached $84.2 million, growing 17%, driven by a 32% increase in subscription software revenue [58][97] - The dollar-based Net Revenue Retention (NRR) was 125%, marking the 19th consecutive quarter above 120% [58] - Adjusted EBITDA for Q3 was $20.8 million, representing a 25% margin, with non-GAAP EPS of $0.09 [59][105] - Cash deposits and investments totaled nearly $283 million, an increase of $39 million from Q2 [59][106] Business Line Data and Key Metrics Changes - Subscription revenue grew by 32%, while other non-recurring revenue declined by 43% and professional services revenue decreased by 22% [97] - The Americas accounted for 57% of total revenue, followed by EMEA at 31% and Asia Pacific at 12% [99] - The company has transitioned to a subscription model, with 87% of total quarterly revenue coming from software subscriptions, up from 78% a year ago [99] Market Data and Key Metrics Changes - Revenue performance was led by EMEA with 23% growth, followed by the Americas at 16% and Asia Pacific at 13% [58] - The private sector saw low 20% revenue growth in Q3, reflecting a favorable trend [72] Company Strategy and Development Direction - The company aims to increase leadership in digital forensic units, accelerate growth within investigative units, build business in the private sector, and harness cloud capabilities [73] - The introduction of new SaaS offerings, such as Smart Search and Mobile Now, is part of the strategy to address customer needs and expand market presence [8][81] - The company plans to achieve FedRAMP certification to enhance its position in the U.S. federal market [130] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the healthy market environment and the company's ability to meet strategic goals despite macroeconomic challenges [18][90] - The company anticipates continued growth in 2024, driven by healthy budgets and increased allocation towards Digital Intelligence solutions [90] - Management noted that the ongoing conflict in the Middle East has not significantly impacted business operations [94] Other Important Information - The company has updated its 2023 revenue outlook, raising the midpoint of its guidance range due to strong performance and a robust sales pipeline [88][109] - The company is on track to exceed 1,000 employees by the end of 2023, reflecting growth in operational capacity [107] Q&A Session Summary Question: Impact of FedRAMP on local and state customers - Management confirmed that FedRAMP certification would benefit local and state customers by providing a shortcut for due diligence and validation [5] Question: Federal spending trends in Q3 - Management reported no challenges in federal budgets during Q3, indicating a healthy environment compared to previous years [13] Question: Differences in targeting public vs. private sector - Management highlighted the potential in the private sector, especially with a strong public sector background [7] Question: Clarification on hedging policy - The hedging policy primarily protects expenses in Israeli shekels, with a rolling coverage strategy [11] Question: Expectations for Q4 revenue - Management indicated that Q4 revenue is expected to be in the range of $83 million to $88 million, anchored by strong subscription growth [109] Question: OpEx expectations for Q4 - Management noted that Q4 operating costs would increase due to marketing activities and higher incentive compensation [111] Question: Pricing strategy for new products - Management emphasized that the new UFED Ultra offering would not just be a price increase but a re-packaging of capabilities with added value [128][129]

Cellebrite DI Ltd. (NASDAQ:CLBT) Q2 2023 Results Conference Call August 8, 2023 8:30 AM ET Company Participants Andrew Kramer - Vice President-Investor Relations Yossi Carmil - Chief Executive Officer Dana Gerner - Chief Financial Officer Conference Call Participants Jeff Van Rhee - Craig Hallum Jamie Shelton - Deutsche Bank Tomer Zilberman - Bank of America Louie DiPalma - William Blair Mike Cikos - Needham and Company Operator Welcome to the Cellebrite's Second Quarter 2023 Financial Results Conference Ca ...

[Second Quarter 2023 Results Announcement](index=1&type=section&id=Cellebrite%20Announces%20Second-Quarter%202023%20Results) Cellebrite announced strong Q2 2023 financial results, raising its full-year outlook and highlighting significant business and operational achievements [Second Quarter 2023 Financial Highlights](index=1&type=section&id=Second%20Quarter%202023%20Financial%20Highlights) Cellebrite reported strong Q2 2023 financial performance with 23% revenue growth and 28% ARR increase, leading to a raised full-year outlook Q2 2023 Key Financial Metrics (U.S. Dollars in millions) | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | **Revenue** | $76.7 million | 23% Increase | | **Subscription Revenue** | $67.2 million | 35% Increase | | **Annual Recurring Revenue (ARR)** | $273.7 million | 28% Increase | | **Adjusted EBITDA** | $11.1 million | - | | **Adjusted EBITDA Margin** | 14.5% | - | | **Non-GAAP Net Income** | $10.7 million | - | | **Non-GAAP Diluted EPS** | $0.05 | - | - The company has **increased its 2023 outlook** for revenue, ARR, and adjusted EBITDA, reflecting solid momentum in a healthy market[1](index=1&type=chunk)[2](index=2&type=chunk) - The recurring revenue dollar-based net retention rate was **125%**, indicating strong customer retention and expansion[2](index=2&type=chunk) [Business and Operational Highlights](index=2&type=section&id=Second%20Quarter%202023%20and%20Recent%20Digital%20Intelligence%20Highlights) Cellebrite demonstrated strong Q2 2023 business momentum, closing 25 large deals, expanding key customer engagements, and launching new product capabilities - Appointed Thomas E. Hogan as Executive Chairman of the Board of Directors[11](index=11&type=chunk) - Closed **25 large deals**, each valued at **$500,000 or more**, in Q2 2023[11](index=11&type=chunk) - A large North American federal law enforcement agency expanded its engagement, expected to **triple its ARR** with Cellebrite to nearly **$5 million**[8](index=8&type=chunk) - Four federal forces in a Latin American country increased their annual spending with Cellebrite by **more than tenfold**[10](index=10&type=chunk) - Announced **UFED Ultra**, a next-generation Collect & Review solution, and new capabilities for **Guardian**, a SaaS-based evidence management solution[9](index=9&type=chunk)[12](index=12&type=chunk) - Won **five categories** at the 2023 Forensic Focus 4:Cast Awards, including DFIR Commercial Tool of the Year and DFIR Team of the Year[32](index=32&type=chunk) [Financial Outlook](index=3&type=section&id=Financial%20Outlook) Cellebrite raised its full-year 2023 financial guidance, projecting revenue between $310 million and $320 million and ARR between $303 million and $313 million Updated 2023 Financial Outlook (as of August 8, 2023, U.S. Dollars in millions) | Metric | Original Expectations | Updated Expectations | | :--- | :--- | :--- | | **2023 Revenue** | $305M - $315M | $310M - $320M | | **Growth over 2022** | 13% - 16% | 15% - 18% | | **December 2023 ARR** | $300M - $310M | $303M - $313M | | **Growth over 2022** | 21% - 25% | 22% - 26% | | **2023 Adjusted EBITDA** | $35M - $40M | $39M - $44M | | **2023 Adjusted EBITDA Margin** | 11% - 13% | 13% - 14% | - The CFO stated the company remains committed to funding investments in innovation, customer relationships, and organizational scaling while delivering accelerated growth and improved profitability[34](index=34&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) This section presents Cellebrite's condensed consolidated financial statements, including income, balance sheets, cash flows, and GAAP to non-GAAP reconciliations [Condensed Consolidated Statements of (Loss) Income](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20%28Loss%29%20Income) Cellebrite's Q2 2023 revenue grew to $76.7 million, achieving operating income, but a significant financial expense resulted in a GAAP net loss of $32.3 million Consolidated Statements of (Loss) Income (U.S. Dollars in thousands) | Metric | Q2 2023 (Unaudited) | Q2 2022 (Unaudited) | H1 2023 (Unaudited) | H1 2022 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $76,684 | $62,573 | $147,918 | $124,958 | | **Gross Profit** | $63,653 | $49,475 | $122,481 | $100,877 | | **Operating Income (Loss)** | $4,623 | $(5,599) | $4,759 | $(7,545) | | **Net (Loss) Income** | $(32,348) | $33,197 | $(72,953) | $88,635 | | **Diluted (Loss) EPS** | $(0.17) | $0.17 | $(0.37) | $0.44 | Revenue Breakdown (U.S. Dollars in thousands) | Revenue Type | Q2 2023 (Unaudited) | Q2 2022 (Unaudited) | | :--- | :--- | :--- | | **Total Subscription** | $67,206 | $49,841 | | **Other Non-recurring** | $1,972 | $4,200 | | **Professional Services** | $7,506 | $8,532 | | **Total Revenue** | **$76,684** | **$62,573** | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2023, Cellebrite's total assets increased to $425.9 million, while total liabilities rose to $408.3 million, decreasing shareholders' equity Key Balance Sheet Items (U.S. Dollars in thousands) | Metric | June 30, 2023 (Unaudited) | Dec 31, 2022 (Audited) | | :--- | :--- | :--- | | **Total Current Assets** | $337,405 | $295,931 | | **Total Assets** | $425,893 | $403,293 | | **Total Current Liabilities** | $204,506 | $207,777 | | **Total Liabilities** | $408,337 | $329,428 | | **Total Shareholders' Equity** | $17,556 | $73,865 | - The increase in total liabilities was primarily driven by a rise in long-term liabilities from **$121.7 million** to **$203.8 million**, largely due to remeasurement of Warrant, Restricted Sponsor Shares, and Price Adjustment Shares liabilities[51](index=51&type=chunk) [Condensed Consolidated Statements of Cash Flow](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) For H1 2023, Cellebrite generated **$29.1 million** in operating cash flow, a significant improvement, with cash and cash equivalents reaching **$110.5 million** Consolidated Statements of Cash Flow (U.S. Dollars in thousands) | Metric | H1 2023 (Unaudited) | H1 2022 (Unaudited) | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $29,052 | $(14,610) | | **Net cash used in investing activities** | $(14,806) | $(41,992) | | **Net cash provided by financing activities** | $8,419 | $4,688 | | **Cash and cash equivalents at end of period** | $110,502 | $91,685 | - The positive shift in operating cash flow was aided by non-cash adjustments, including remeasurement of warrant and share liabilities, and a significant decrease in trade receivables[25](index=25&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Information](index=13&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Information) Cellebrite reconciles GAAP to non-GAAP metrics, adjusting Q2 2023 GAAP operating income of $4.6 million to $9.4 million non-GAAP, and a GAAP net loss of $32.3 million to a non-GAAP net income of $10.7 million Reconciliation of GAAP to Non-GAAP Operating Income (Loss) (U.S. Dollars in thousands) | Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | **GAAP Operating Income (Loss)** | $4,623 | $(5,599) | $4,759 | $(7,545) | | **Share based compensation** | $4,600 | $3,605 | $9,057 | $6,463 | | **Amortization of intangible assets** | $840 | $664 | $1,636 | $1,328 | | **Non-GAAP Operating Income (Loss)** | $9,395 | $(936) | $15,048 | $1,698 | Reconciliation of GAAP Net (Loss) Income to Non-GAAP Net Income (Loss) (U.S. Dollars in thousands) | Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | **GAAP Net (Loss) Income** | $(32,348) | $33,197 | $(72,953) | $88,635 | | **Finance expense (income) from financial derivatives** | $38,160 | $(38,391) | $78,953 | $(94,739) | | **Share based compensation** | $4,600 | $3,605 | $9,057 | $6,463 | | **Non-GAAP Net Income (Loss)** | $10,715 | $(25) | $17,614 | $1,395 | [Other Information](index=4&type=section&id=Other%20Information) This section details Cellebrite's use of non-GAAP financial measures and KPIs, alongside cautionary statements regarding forward-looking information [Non-GAAP Financial Measures and Key Performance Indicators](index=4&type=section&id=Non-GAAP%20Financial%20Information%20and%20Key%20Performance%20Indicators) Cellebrite uses non-GAAP financial measures and KPIs like ARR and NRR to supplement GAAP results, offering clearer insights into operational performance - The company uses non-GAAP measures to offer investors and management greater visibility to the underlying performance of its business[15](index=15&type=chunk)[35](index=35&type=chunk) - Annual Recurring Revenue (ARR) is defined as the annualized value of active term-based subscription license contracts and maintenance contracts in effect at the end of a period[17](index=17&type=chunk) - Dollar-based Net Retention Rate (NRR) is calculated by dividing the recurring revenue from a base set of customers in the current period by the recurring revenue from the same customers in the prior period[40](index=40&type=chunk) [Caution Regarding Forward-Looking Statements](index=6&type=section&id=Caution%20Regarding%20Forward-Looking%20Statements) This report contains forward-looking statements regarding the company's 2023 financial outlook and future performance, subject to significant risks and uncertainties detailed in SEC filings - Forward-looking statements in the report include the **2023 financial outlook**, anticipated business trajectory, and plans for revenue growth and profitability[43](index=43&type=chunk) - These statements are subject to numerous risks and uncertainties, including technological changes, dependence on government agencies, and competition. The company directs investors to its Form 20-F for a full list of risk factors[43](index=43&type=chunk)

Cellebrite DI Ltd. (NASDAQ:CLBT) Q1 2023 Earnings Conference Call May 10, 2023 8:30 AM ET Company Participants Andrew Kramer - Vice President-Investor Relations Yossi Carmil - Chief Executive Officer Dana Gerner - Chief Financial Officer Conference Call Participants Jonathan Ho - William Blair Shaul Eyal - TD Cowen Tal Liani - Bank of America Doug Bruehl - JPMorgan Jamie Shelton - Deutsche Bank Louie DiPalma - William Blair Operator Welcome to the Cellebrite's First Quarter 2023 Financial Results Conference ...

| --- | --- | --- | --- | --- | |-------|---------------|-------|-------|-------| | | | | | | | | | | | | | | :: Cellebrite | | | | This prosental ion has been propared by Gallebrite DI Ltd. (the "Company") solely for informational purposes. N is not, and should not be assumed to be, complete. This pre is it a solicitation of an offer to buy securities. This presentation is not directed at, or intended for distribution to or use by, any person or entity that is a citizen jursdiction where such distribution, ...

Financial Performance - Revenue for Q1 2023 was $71.2 million, representing a 14% year-over-year increase, driven primarily by a 27% growth in subscription revenue[2] - Annual Recurring Revenue (ARR) reached $261.3 million, up 30% year-over-year, with a dollar-based net retention rate (NRR) of 128%[3][9] - GAAP net loss for Q1 2023 was $40.6 million, while Non-GAAP net income was $6.9 million, resulting in a Non-GAAP diluted EPS of $0.03[3][9] - Adjusted EBITDA for Q1 2023 was $7.3 million, reflecting a 10.3% adjusted EBITDA margin[9] - Total revenue for Q1 2023 was $71.234 million, compared to $62.385 million in Q1 2022, reflecting a year-over-year increase of approximately 14%[45] - Subscription services revenue for Q1 2023 was $47.367 million, up from $36.361 million in Q1 2022, indicating a growth of about 30%[45] - The company reported a net loss of $40.605 million for Q1 2023, compared to a net income of $55.438 million in Q1 2022[49] - Adjusted EBITDA for Q1 2023 was $7.304 million, an increase from $4.082 million in Q1 2022[49] - Operating income for Q1 2023 was $136,000, a significant improvement from an operating loss of $1.946 million in Q1 2022[45] - Non-GAAP net income improved to $6.899 million in March 2023 from $1.420 million in March 2022[57] - Gross profit for March 2023 was $58.828 million, up from $51.402 million in March 2022, reflecting a growth of 14.8%[54] - Operating expenses increased to $58.692 million in March 2023 from $53.348 million in March 2022, a rise of 10.4%[54] - Non-GAAP operating income for March 2023 was $5.653 million, compared to $2.634 million in March 2022, showing a significant increase[54] Future Projections - Full year 2023 revenue is projected to be between $305 million and $315 million, representing a 13-16% year-over-year growth[13] - Full year 2023 adjusted EBITDA is expected to be between $35 million and $40 million, with an expected margin of 11-13%[14] - December 2023 ARR is expected to be between $300 million and $310 million, representing 21-25% year-over-year growth[34] Customer and Market Insights - The company closed 21 large deals in Q1, each valued at $500,000 or more, indicating strong demand for its solutions[4] - A large national agency in Latin America increased its ARR by 13x to $1.6 million after expanding its licensing with Cellebrite[10] - The dollar-based net retention rate (NRR) is a key performance indicator that reflects customer recurring revenue growth[37][38] - The company anticipates continued success in increasing wallet share from existing customers and expanding its global customer base[33] Awards and Recognition - The company received Frost & Sullivan's 2022 North American Customer Value Leadership Award for its digital intelligence solutions[5] Financial Position - Total assets increased to $412.689 million in March 2023 from $403.293 million in December 2022, representing a growth of 2.4%[50] - Total liabilities rose to $373.332 million in March 2023, up from $329.428 million in December 2022, indicating an increase of 13.3%[50] - Cash and cash equivalents rose to $98.972 million in March 2023 from $87.645 million in December 2022, an increase of 12.6%[50] - Deferred revenues increased to $157.903 million in March 2023 from $152.709 million in December 2022, a growth of 3.4%[50] Research and Development - Research and development expenses for Q1 2023 were $21.131 million, compared to $19.576 million in Q1 2022, showing an increase of about 8%[45] Guidance and Confidence - The company reiterates its full-year 2023 guidance, indicating confidence in achieving its financial targets[33]

PART I [ITEM 3. KEY INFORMATION](index=11&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section outlines significant business, industry, and securities risks, including technological obsolescence, government contract dependence, and geopolitical factors [Risk Factors](index=12&type=section&id=D.%20Risk%20Factors) The company faces substantial risks including technological development, government sales dependence, intense competition, and personnel retention - The company's success is **highly dependent on its ability to continuously develop solutions** compatible with new products from OEMs and evolving security/encryption strategies[223](index=223&type=chunk)[265](index=265&type=chunk) - Sales to law enforcement and government agencies accounted for **approximately 90% of revenue** in 2020, 2021, and 2022, making the company materially dependent on this sector[266](index=266&type=chunk)[363](index=363&type=chunk) - The company faces **intense competition** from larger competitors with greater resources, industry consolidation, and potential new entrants[67](index=67&type=chunk)[273](index=273&type=chunk) - The company's **subscription-based revenue model** means a decline in new or renewed agreements may not be immediately reflected in revenue but would negatively affect future periods[216](index=216&type=chunk)[217](index=217&type=chunk) - The business is **highly dependent on key personnel**, particularly CEO Yossi Carmil, with loss or inability to retain staff potentially harming operations and growth[162](index=162&type=chunk)[163](index=163&type=chunk)[218](index=218&type=chunk) - As a **foreign private issuer incorporated in Israel**, the company is subject to **geopolitical risks** in the region, and its governance may differ from U.S. standards[400](index=400&type=chunk)[467](index=467&type=chunk)[442](index=442&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=53&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section provides a comprehensive overview of Cellebrite's Digital Intelligence (DI) solutions, history, core products, and growth strategies [History and Development](index=54&type=section&id=A.%20HISTORY%20AND%20DEVELOPMENT%20OF%20THE%20COMPANY) Cellebrite DI Ltd. was incorporated in Israel in 1999, became publicly traded on Nasdaq in 2021, and details capital expenditures - The company was **incorporated in Israel in 1999** and became a **publicly traded company on Nasdaq on August 30, 2021**, via a merger with a SPAC[499](index=499&type=chunk) Capital Expenditures (2020-2022) | Fiscal Year | Capital Expenditures (in millions) | | :--- | :--- | | 2022 | $6.9 | | 2021 | $5.1 | | 2020 | $6.2 | [Business Overview](index=54&type=section&id=B.%20BUSINESS%20OVERVIEW) Cellebrite provides Digital Intelligence (DI) solutions for investigations, serving 7,000 customers with a comprehensive suite - Cellebrite provides a Digital Intelligence (DI) suite of solutions to **approximately 7,000 customers**, including government agencies and enterprise companies, for legally sanctioned investigations[533](index=533&type=chunk)[564](index=564&type=chunk) - The company's core offerings are structured around the investigation lifecycle: **Collect & Review** (data extraction), **Investigative Analytics** (AI-based insights), and **Investigative Management Solutions** (workflow and collaboration)[564](index=564&type=chunk) - Key competitive strengths include a large, entrenched install base with a **130% recurring revenue dollar-based net retention rate** as of Dec 31, 2022, and deep vertical expertise with **~9% of employees** having prior government agency experience[546](index=546&type=chunk)[17](index=17&type=chunk)[577](index=577&type=chunk) - The company's growth strategy focuses on **increasing penetration within its existing public sector customer base**, **developing innovative new solutions** including SaaS offerings, and **growing its private sector business**[579](index=579&type=chunk)[20](index=20&type=chunk)[581](index=581&type=chunk)[551](index=551&type=chunk) - The company faces **competition from various point solutions and consolidated providers** in both the public and private sectors, including Exterro, Magnet Forensics, MSAB, Nuix, and OpenText[57](index=57&type=chunk)[27](index=27&type=chunk) [Organizational Structure](index=68&type=section&id=C.%20ORGANIZATIONAL%20STRUCTURE) Cellebrite DI Ltd. is an Israeli company with wholly-owned or majority-owned subsidiaries located globally - Cellebrite DI Ltd. is the parent company with **subsidiaries located globally**, including in the U.S., Germany, Singapore, U.K., Japan, and Australia[622](index=622&type=chunk)[592](index=592&type=chunk) [Property, Plants and Equipment](index=68&type=section&id=D.%20PROPERTY,%20PLANTS%20AND%20EQUIPMENT) The company leases its main offices and a hardware factory in Israel, maintaining additional offices globally - Cellebrite's principal executive offices are **leased in Petah-Tikva, Israel**, and it operates a **leased hardware factory in Kiryat Malachi, Israel**, also maintaining offices globally[623](index=623&type=chunk)[560](index=560&type=chunk) [ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=68&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section details the company's financial performance, including revenue growth, net income, liquidity, and key accounting estimates [Operating Results](index=69&type=section&id=A.%20OPERATING%20RESULTS) Revenue increased 10% in 2022 driven by subscription growth, while operating income declined and net income rose significantly Key Financial Results (2021 vs. 2022) | Metric | 2022 ($ in millions) | 2021 ($ in millions) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $270.7 | $246.2 | +10% | | Subscription Revenue | $216.0 | $183.3 | +18% | | Gross Profit | $219.9 | $203.7 | +8% | | Operating Income | $1.0 | $13.8 | -93% | | Net Income | $120.8 | $71.4 | +69% | | Adjusted EBITDA | $25.9 | $47.9 | -46% | - The **10% revenue growth** in 2022 was primarily driven by an **18% increase in subscription revenue**, reflecting the company's transition to a subscription-based model[54](index=54&type=chunk)[35](index=35&type=chunk) - **Operating expenses increased by 15% to $218.9 million** in 2022, with a **23% rise in R&D** and a **27% rise in Sales & Marketing**, reflecting investments in product development[675](index=675&type=chunk)[650](index=650&type=chunk)[676](index=676&type=chunk) - The **significant increase in net income to $120.8 million** was primarily due to **$119.7 million in net financial income**, mainly from the fair value remeasurement of warrant liabilities and other shares[36](index=36&type=chunk)[677](index=677&type=chunk) [Liquidity and Capital Resources](index=82&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company's liquidity as of December 31, 2022, included $206 million in cash and equivalents, with operating cash flow decreasing Cash Flow Summary (2021 vs. 2022) | Cash Flow Activity | 2022 ($ in thousands) | 2021 ($ in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $20,577 | $36,052 | | Net cash (used in) provided by investing activities | $(91,231) | $45,226 | | Net cash provided by (used in) financing activities | $13,970 | $(68,397) | - **Cash from operating activities decreased to $20.6 million** in 2022, primarily due to an increase in inventories and prepaid expenses, and a decrease in trade payables[94](index=94&type=chunk) - The company had **total commitments of $20.9 million** as of December 31, 2022, related to office and car lease arrangements[682](index=682&type=chunk)[657](index=657&type=chunk) [Research and Development, Patents and Licenses](index=85&type=section&id=C.%20RESEARCH%20AND%20DEVELOPMENT,%20PATENTS%20AND%20LICENSES,%20ETC.) The company's research and development spending consistently increased from 2020 to 2022, reflecting growing investment R&D Spending (2020-2022) | Year | R&D Spending ($ in millions) | | :--- | :--- | | 2022 | $80.6 | | 2021 | $65.5 | | 2020 | $54.4 | [Critical Accounting Estimates](index=85&type=section&id=E.%20CRITICAL%20ACCOUNTING%20ESTIMATES) This section outlines significant accounting judgments and estimates, including revenue recognition, share-based compensation, and fair value - Key accounting estimates involve **revenue recognition** (allocating transaction price based on standalone selling price), valuation of **share-based compensation**, **fair value of assets from business combinations**, and **income taxes**[687](index=687&type=chunk)[561](index=561&type=chunk) - For share-based compensation, the company uses the **Black-Scholes-Merton model** for options, with key assumptions including expected volatility and expected term[663](index=663&type=chunk)[104](index=104&type=chunk) - Warrants, restricted sponsor shares, and price adjustment shares are **classified as liabilities** and are **re-measured at fair value** at each balance sheet date, with changes recognized in earnings[106](index=106&type=chunk)[169](index=169&type=chunk)[667](index=667&type=chunk) [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=88&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the company's leadership, compensation, board structure, and employee base, including executive officers and equity plans [Directors and Senior Management](index=89&type=section&id=A.%20DIRECTORS%20AND%20SENIOR%20MANAGEMENT) This subsection lists the company's executive officers and directors as of April 27, 2023, with their professional biographies Key Management and Directors | Name | Position | | :--- | :--- | | Yossi Carmil | Chief Executive Officer, Director | | Dana Gerner | Chief Financial Officer | | Ronnen Armon | Chief Products & Technologies Officer | | Haim Shani | Chairman of the Board | | Ryusuke Utsumi | Director | | Adam H. Clammer | Director | [Compensation](index=94&type=section&id=B.%20COMPENSATION) Aggregate compensation for executive officers and directors was approximately $10.0 million in 2022, detailed with equity plans - Aggregate compensation for executive officers and directors for the year ended December 31, 2022, was **approximately $10.0 million**, including salaries, benefits, and share-based compensation[177](index=177&type=chunk) 2022 Compensation for Covered Executives (Salary & Social Benefits) | Executive | Position | Salary Expenses ($ thousands) | Social Benefits ($ thousands) | | :--- | :--- | :--- | :--- | | Yossi Carmil | CEO | $490 | $209 | | Dana Gerner | CFO | $321 | $110 | | Leeor Ben-Peretz | CSO | $248 | $110 | | Arthur Veinstein | President, International | $352 | $15 | | Marque Teegardin | President, Americas | $315 | $84 | - The company maintains **several equity incentive plans** (2008, 2019, 2021) to grant options and RSUs, with significant options outstanding under the 2008 and 2019 Plans as of Dec 31, 2022[182](index=182&type=chunk)[741](index=741&type=chunk) - The **2021 Share Incentive Plan** is the current active plan, with **22,789,113 ordinary shares available** for future grant as of December 31, 2022[748](index=748&type=chunk) [Board Practices](index=109&type=section&id=C.%20BOARD%20PRACTICES) The company's board consists of nine directors with staggered terms, adhering to Nasdaq and Israeli corporate governance rules - The board of directors is comprised of **nine members**, divided into **three classes with staggered three-year terms**, and a **majority of the directors are independent** as defined by Nasdaq rules[201](index=201&type=chunk)[205](index=205&type=chunk) - The company has an **Audit Committee**, **Compensation Committee**, and **Nominating and Governance Committee**, with charters consistent with Israeli law and Nasdaq rules[791](index=791&type=chunk)[825](index=825&type=chunk)[864](index=864&type=chunk) - As an Israeli company, it is required to have **at least two external directors**, who must meet specific independence and qualification criteria under Israeli Companies Law[208](index=208&type=chunk)[209](index=209&type=chunk) - The company has adopted a **compensation policy compliant with Israeli law**, governing terms for office holders and requiring approval by committees and shareholders[802](index=802&type=chunk)[830](index=830&type=chunk) [Employees](index=127&type=section&id=D.%20EMPLOYEES) As of December 31, 2022, Cellebrite had 1,005 full-time employees globally, with many having prior government agency experience Employee Headcount by Function (as of Dec 31, 2022) | Function | Number of Employees | | :--- | :--- | | Research and Development | 357 | | Sales and Marketing | 301 | | General and Administrative | 191 | | Operations and Services | 156 | | **Total** | **1,005** | - **Approximately 9.2% of the company's employees** have previously worked for police, military, or intelligence agencies, providing deep domain expertise[877](index=877&type=chunk) [ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=127&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details the company's ownership structure, with SUNCORPORATION as the largest shareholder, and related transactions Major Shareholders (as of early 2023) | Shareholder | Beneficial Ownership % | | :--- | :--- | | SUNCORPORATION | 49.10% | | IGP Saferworld, Limited Partnership | 16.76% | | True Wind Capital Management | 6.88% | - **SUNCORPORATION**, a Japanese public company, is the **principal shareholder** with significant influence over corporate matters[427](index=427&type=chunk)[454](index=454&type=chunk) - The company has a **distribution agreement with its major shareholder, SUNCORPORATION**, for the promotion and sale of its mobile solutions in Japan[887](index=887&type=chunk)[857](index=857&type=chunk) [ITEM 8. FINANCIAL INFORMATION](index=131&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section covers legal proceedings and the company's dividend policy, noting no material legal issues and no future dividends - The company is **not currently a party to any legal proceedings** that would have a material adverse effect on its business or financial condition[591](index=591&type=chunk)[915](index=915&type=chunk) - Cellebrite **does not anticipate paying cash dividends** in the foreseeable future and plans to retain earnings for operations and expansion, with distributions also limited by Israeli law[861](index=861&type=chunk)[915](index=915&type=chunk) [ITEM 10. ADDITIONAL INFORMATION](index=132&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section provides supplementary details, primarily focusing on material U.S. and Israeli tax considerations [Taxation](index=134&type=section&id=E.%20TAXATION) The company's tax considerations involve complex U.S. and Israeli regulations, including foreign corporation status and tax benefits - For U.S. tax purposes, the company is **not expected to be treated as a U.S. corporation under Section 7874** following its 2021 merger, though this is subject to complex rules and potential IRS challenge[474](index=474&type=chunk)[944](index=944&type=chunk) - The company believes it was **not a Passive Foreign Investment Company (PFIC)** for the 2022 taxable year but notes this is an annual factual determination and cannot be guaranteed for future years[963](index=963&type=chunk)[907](index=907&type=chunk) - In Israel, the company is **eligible for tax benefits as a 'Preferred Technological Enterprise'** under the Law for the Encouragement of Capital Investments, resulting in a **reduced corporate tax rate of 12%** on its 'Preferred Technology Income'[818](index=818&type=chunk)[1257](index=1257&type=chunk) - Dividends paid to non-Israeli residents are generally subject to a **25% withholding tax** (or 30% for a 'substantial shareholder'), which may be reduced by an applicable tax treaty[767](index=767&type=chunk) [ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=84&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to market risks, primarily from foreign currency exchange rate fluctuations and interest rate changes - The company's primary market risk is **foreign currency exchange risk**, as a significant portion of its operating costs are denominated in ILS while revenues are primarily in USD[99](index=99&type=chunk) - Cellebrite has established a **hedging program** using foreign currency forward contracts and options to reduce the impact of foreign exchange volatility on future cash flows[131](index=131&type=chunk)[99](index=99&type=chunk) - The company is exposed to **interest rate risk** on its cash, cash equivalents, and short-term investments, with a hypothetical 10% change impacting financial income by **$0.4 million** for 2022[100](index=100&type=chunk)[685](index=685&type=chunk) PART II [ITEM 15. CONTROLS AND PROCEDURES](index=158&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) This section addresses the company's internal controls, with management concluding effectiveness of disclosure and financial reporting - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2022[814](index=814&type=chunk) - Based on an evaluation using the COSO framework, management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2022[998](index=998&type=chunk)[1026](index=1026&type=chunk) - As an emerging growth company, this annual report **does not include an attestation report** from the independent registered public accounting firm regarding internal control over financial reporting[1027](index=1027&type=chunk) [ITEM 16. CORPORATE GOVERNANCE AND OTHER DISCLOSURES](index=159&type=section&id=ITEM%2016.%20CORPORATE%20GOVERNANCE%20AND%20OTHER%20DISCLOSURES) This section covers corporate governance, including the audit committee financial expert, auditor change, and foreign private issuer practices - The Board of Directors has identified **Dafna Gruber** as an **'audit committee financial expert'** as defined by U.S. federal securities laws[1001](index=1001&type=chunk) - The company **changed its independent registered public accounting firm**, appointing Kost Forer Gabbay & Kasierer (a member of **Ernst & Young**) on April 14, 2022, following KPMG's decision not to stand for re-appointment[1049](index=1049&type=chunk) - As a **foreign private issuer**, Cellebrite **relies on home country (Israel) practices** for shareholder meeting quorum requirements and report distribution, which differ from Nasdaq's requirements[1037](index=1037&type=chunk) PART III [ITEM 18. FINANCIAL STATEMENTS](index=163&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section contains the company's audited consolidated financial statements for 2020-2022, prepared under U.S. GAAP Consolidated Balance Sheet Highlights (as of Dec 31) | Account ($ in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash, cash equivalents, and short-term deposits | $138,980 | $181,565 | | Total Current Assets | $295,931 | $273,212 | | Goodwill & Intangible Assets, net | $38,083 | $38,057 | | **Total Assets** | **$403,293** | **$339,783** | | **Liabilities & Equity** | | | | Deferred Revenues (Current & Long-term) | $194,882 | $159,409 | | Warrant, Sponsor & Price Adj. Shares Liability | $63,731 | $180,594 | | **Total Liabilities** | **$329,428** | **$413,130** | | **Total Shareholders' Equity (Deficiency)** | **$73,865** | **$(73,347)** | Consolidated Statement of Income Highlights (Year Ended Dec 31) | Account ($ in thousands) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total Revenue | $270,651 | $246,246 | $194,913 | | Gross Profit | $219,905 | $203,689 | $157,034 | | Operating Income | $1,044 | $13,822 | $9,218 | | Financial Income, net | $119,716 | $68,483 | $2,179 | | Net Income | $120,805 | $71,396 | $5,781 |

Cellebrite DI Ltd. (NASDAQ:CLBT) Q4 2022 Earnings Conference Call February 15, 2023 8:30 AM ET Company Participants Sabrina Mathews – Investor Relations Yossi Carmil – Chief Executive Officer Dana Gerner – Chief Financial Officer Conference Call Participants Jonathan Ho – William Blair Mike Cikos – Needham & Company Tal Liani – Bank of America Douglas Bruehl – J.P. Morgan Chase Jamie Shelton – Deutsche Bank Louie DiPalma – William Blair Operator Good day and thank you for standing by. Welcome to Cellebrite' ...