Cellebrite DI Q3 Earnings Call Highlights

Key Points

• Third-quarter results exceeded guidance: Revenue rose 18% to $149 million and ARR increased 20% to $528.5 million, supported by international growth and stronger U.S. federal demand. Adjusted EBITDA climbed 42% to $53.6 million.
• Outlook was reaffirmed and profitability guidance raised: Cellebrite kept its full-year ARR forecast at $550 million to $560 million and lifted its adjusted EBITDA forecast to $163 million to $166 million. Management noted uncertainty around the timing of larger cloud and AI deals.
• Genesis is off to a strong start, while Corellium remains a challenge: The AI investigation product reached $2 million in ARR in its first full quarter, with an on-premise version planned before year-end. Corellium faced limited new sales and higher churn, partly tied to customer concerns about foreign ownership.

Cellebrite DI NASDAQ: CLBT reported third-quarter revenue and annual recurring revenue growth of 18% and 20%, respectively, as international sales and improving U.S. federal demand helped the digital forensics company exceed its guidance.

The company reaffirmed its full-year annual recurring revenue, or ARR, outlook and raised its adjusted EBITDA forecast after stronger third-quarter profitability. Chief Financial Officer David Barter said Cellebrite has greater confidence in the lower end of its ARR range, citing seasonal factors, expiring agreements and uncertainty around the timing of larger cloud and artificial intelligence deals.

Chief Executive Officer Shiv Ramji said the company executed better after a weaker second quarter, but cautioned that the latest results were “a step in the right direction” rather than the finish line.

International Growth and Federal Demand

Third-quarter ARR reached $528.5 million, while revenue rose to $149 million. Subscription revenue accounted for $134.9 million, or 91% of the total. Unless otherwise stated, the financial metrics discussed on the call were non-GAAP.

Adjusted EBITDA increased 42% to $53.6 million. Cellebrite reported operating income of $51.5 million and net income of $45.6 million, or $0.17 per diluted share. Free cash flow was $52 million for the quarter, and the company ended September with $593 million in cash equivalents and investments.

By region, ARR grew 17% in the Americas, 22% in Europe, the Middle East and Africa, and 31% in Asia-Pacific. U.S. federal ARR grew 18%, up from the mid-teens in the prior quarter, Barter said.

Ramji said two of Cellebrite’s largest U.S. federal customers each increased spending by more than 20% year over year. The company also closed its first large FedRAMP deal for its Guardian product, which he described as the largest Guardian win to date.

Genesis Adoption and Product Plans

Cellebrite’s Genesis product ended its first full quarter with $2 million in ARR. Barter called it the strongest start of any product the company has launched.

Ramji said customers had reprioritized spending to fund Genesis, which uses AI to help investigators analyze evidence. In response to an analyst’s question, he said the examples seen in the latest quarter represented incremental funding for Cellebrite, but that it was too early to establish a broader trend.

The company plans to introduce an on-premise version of Genesis before year-end for customers that cannot use cloud services, including those working in air-gapped environments. Ramji said Cellebrite is working with early design partners on the offering.

In 2027, Cellebrite plans to evolve Genesis into a broader AI-native platform spanning evidence collection, sharing, analysis and investigative workflows. Ramji said pricing will be tiered based on customers’ needs and expected use of data, computing capacity and tokens.

Chief Revenue Officer Marcus Jewell said consumption pricing is relatively new to law enforcement customers and that a pure token-based model can be difficult to procure. Cellebrite offers customers tools to monitor usage and estimate the cost of a search before running it, he said.

Guidance and Corellium Challenges

Cellebrite reaffirmed its full-year ARR forecast of $550 million to $560 million. It projected full-year revenue of $553 million to $558 million, representing growth of 16% to 17%, and raised its adjusted EBITDA outlook to $163 million to $166 million.

For the fourth quarter, the company expects revenue of $145 million to $150 million and adjusted EBITDA of $47 million to $50 million. Barter said the revenue outlook reflects more revenue recognized over time and less hardware revenue compared with the third quarter. He said deals involving more cloud and AI products are increasing the share of revenue recognized ratably.

Ramji said Cellebrite was disappointed by limited new sales and higher-than-expected customer churn at Corellium. Jewell attributed the difficulties in part to sensitive customers’ concerns about the company’s foreign ownership, while saying conversations improved after Cellebrite announced plans to redomicile in the United States.

Barter said Corellium’s contribution to ARR growth would be at the lower end of the previously discussed range of one to two percentage points. He said Cellebrite is targeting completion of its redomiciliation in the first half of 2027, subject to shareholder and regulatory approvals.

About Cellebrite DI (NASDAQ:CLBT)

Cellebrite DI Ltd. develops digital intelligence software and services that help organizations access, collect, preserve and analyze digital evidence. Its tools are used to investigate information from mobile devices, computers, cloud sources and other digital systems. The company's offerings include its UFED platform for extracting data from digital devices, Physical Analyzer for examining and interpreting evidence, and analytics and case-management tools such as Pathfinder and Guardian. Customers include law enforcement, public safety, intelligence and defense agencies, as well as organizations in the private sector.

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