Financial Data and Key Metrics Changes - Annual Recurring Revenue (ARR) grew 19% year-over-year to $440 million, with a sequential increase of 5% [23][24] - Third quarter revenue reached $126 million, an 18% increase from the previous year, primarily driven by a 21% growth in subscription revenue [24][25] - Adjusted EBITDA for the third quarter was $37.7 million, up 20% year-over-year, with a margin of 29.9% [25][30] - Free cash flow for the third quarter was $30 million, with a trailing twelve-month free cash flow of $140 million, representing a margin of 31% [27][30] Business Line Data and Key Metrics Changes - Subscription revenue grew 21%, with approximately 89% of total revenue associated with subscription-based software solutions [24][25] - The U.S. State and Local segment and Latin America were highlighted as strong performers, contributing significantly to subscription revenue growth [24][25] - ARR for SaaS and cloud-based solutions grew three times faster than total ARR, with Guardian's customer base more than doubling year-over-year [12][25] Market Data and Key Metrics Changes - The Americas accounted for 55% of total ARR, with EMEA at 33% and Asia Pacific at 12% [24] - The Americas segment grew 21%, driven by strong performance in U.S. State and Local government and Latin America [24] Company Strategy and Development Direction - The company is focused on four core growth vectors: leadership in unlock and access solutions, innovation in AI and digital investigations, resurgence in U.S. Federal sector growth, and the acquisition of Keryllium to expand its total addressable market (TAM) [14][18][19] - The strategic focus on the global defense and intelligence sector is yielding positive results, with increased investments from military and intelligence agencies [13][18] - The upcoming launch of Guardian Investigate is expected to transform the investigation lifecycle and enhance collaboration and insights [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong rebound in 2026, driven by pent-up demand and targeted funding releases [17][20] - The company remains cautious about the fourth quarter due to normal government seasonality and recent shutdowns but anticipates these factors to be transitory [17][20] - The management team emphasized the importance of disciplined spending and margin expansion to maintain profitability and free cash flow [21][30] Other Important Information - The company ended the third quarter with $595 million in cash, cash equivalents, and investments, positioning it well for future growth and potential acquisitions [26][27] - The acquisition of Keryllium is expected to close soon, which will enhance the company's offerings in the defense and intelligence sectors [19][20] Q&A Session Summary Question: Path forward to cloud adoption as a percent of ARR - Management indicated ongoing partnerships with customers transitioning to cloud solutions, with many products already in the cloud [42][44] Question: Insights on Keryllium's pipeline and growth potential - The company has built a significant pipeline for Keryllium, with initial orders processed and expectations for more transactions in Q4 [46][47] Question: 2026 growth prospects and guidance - Management refrained from providing specific numbers for 2026 but expressed confidence in accelerated growth compared to 2025 [50][52] Question: Federal business performance and growth drivers - The federal segment returned to growth in Q3, with significant orders from strategic clients, indicating strong product fit and momentum [58][60] Question: Competitive landscape and market positioning - The company noted high barriers to entry in the market, with no significant new entrants, and expressed confidence in its competitive positioning [91][93]

Core Insights - Cellebrite reported a 19% increase in Annual Recurring Revenue (ARR) to $439.8 million and an 18% increase in revenue to $126.0 million for the third quarter of 2025 [1][6] - The company achieved a net income of $20.2 million, supporting a non-GAAP net income of $36.9 million and an adjusted EBITDA of $37.7 million, resulting in a 29.9% adjusted EBITDA margin [1][6] Financial Performance - Revenue for the third quarter reached $126.0 million, up 18% year-over-year, with subscription revenue at $112.7 million, reflecting a 21% increase [6][27] - The dollar-based net retention rate for recurring revenue was reported at 117% [6] - GAAP gross profit was $105.7 million, with a gross margin of 83.9%, while non-GAAP gross profit was $106.5 million, yielding a gross margin of 84.5% [6][28] Business Highlights - The CEO highlighted the strong performance in the U.S. Federal business, indicating optimism for growth in 2026 as government budgets are expected to increase [2] - Cellebrite's Autumn 2025 Release introduced new capabilities in its Digital Investigation Platform, including the Guardian Investigate solution, set for general availability in early 2026 [6][10] - The company is also enhancing its flagship digital forensics solution, Inseyets, with improved access to Android and iOS devices [6] Leadership Changes - On October 30, 2025, Holly Windham was appointed as General Counsel and Chief Compliance Officer, bringing extensive legal leadership experience [5][7] Financial Outlook - The CFO indicated strong demand in the U.S. state and local segments, projecting a free cash flow margin of approximately 30% for the full year 2025 [10] - For the fourth quarter of 2025, revenue expectations are between $123 million and $128 million, with full-year revenue projected at $470 million to $475 million [10]

Core Insights - Cellebrite announced its Autumn 2025 Release, enhancing its Digital Investigation Platform with new integrations and AI-powered analysis capabilities [1][3] - The addition of Corellium technology through a reseller agreement expands Cellebrite's mobile virtualization offerings, enhancing its digital intelligence solutions [2][3] Product Innovations - The Autumn 2025 Release includes the new Guardian Investigate solution, which utilizes agentic AI to analyze various evidence types and streamline investigative workflows [5] - The Guardian suite has been expanded to include SaaS offerings for digital forensics and investigations, with a focus on collaboration and data residency compliance for EU customers [5] - New deployment options for Pathfinder, Cellebrite's multi-device investigative data analytics solution, are now available in AWS GovCloud, offering cost-optimized configurations [5] Market Impact - Cellebrite's technology is utilized in over 1.5 million investigations annually, serving more than 7,000 customers globally across various sectors including law enforcement and intelligence [3][6] - The integration of Corellium solutions has attracted multiple customers in the defense and intelligence sectors, enhancing mobile vulnerability research and application security testing [5]