Cellebrite DI .(CLBT) - 2023 Q4 - Annual Report

Cellebrite Fourth-Quarter and Full-Year 2023 Financial Results Financial Highlights 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 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] - The company moves into 2024 well-positioned with an expanded Case-to-Closure platform to address end-to-end digital investigative needs[14] - CFO Dana Gerner highlighted that strong revenue growth, improved gross margins, and disciplined cost management led to higher adjusted EBITDA in 2023[5] - 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] Business and Operational Highlights 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] - 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] - 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] Financial Outlook 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 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 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 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 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 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 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][21] - An Investor Day event is scheduled for March 27, 2024, in New York City, featuring presentations from the leadership team and product demonstrations[39] - 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][22] - 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][44]