Revenue of $95.7 million, 25% year-over-year increase primarily due to27% growth in subscription revenue;ARR of $345.9 million, up 26% year-over-year;Adjusted EBITDA of $21.6 million, 22.6% adjusted EBITDA margin;Company increases 2024 outlook for revenue and adjusted EBITDA, and raises midpoint for ARR TYSONS CORNER, Va. and PETAH TIKVA, Israel, Aug. 15, 2024 (GLOBE NEWSWIRE) -- Cellebrite (NASDAQ:CLBT), a global leader in Digital Intelligence ("DI") solutions for the public and private sectors, today announced financial results for the three and six months ending June 30, 2024. "Our outstanding second-quarter 2024 performance was highlighted by significant strategic progress and strong growth in ARR, revenue and adjusted EBITDA," said Yossi Carmil, Cellebrite's CEO. "During the past several months, we delivered against our top strategic priorities while advancing important initiatives to expand our relationship with the U.S. federal government, drive AI-powered innovation across our Case to Closure platform, and improve our capital structure and trading liquidity. We are pleased to see that our Case to Closure platform is resonating with both public sector agencies and corporations around the world, enabling us to deliver on our brand promise of Justice Accelerated and, in the process, help make our world a better, safer place. As a result of our first-half 2024 financial performance and the opportunities we see over the next two quarters, we have increased our full-year 2024 outlook and believe that we are positioned to deliver an ARR growth rate and an adjusted EBITDA margin that will achieve or surpass ‘Rule of 45' for the second straight year." Second-Quarter 2024 Financial Highlights Revenue of $95.7 million, up 25% year-over-year Subscription revenue was $85.4 million, up 27% year-over-year Annual Recurring Revenue (ARR) of $345.9 million, up 26% year-over-year Recurring revenue dollar-based net retention rate of 124% GAAP gross profit and gross margin of $79.5 million and 83.0%, respectively; Non-GAAP gross profit and gross profit margin of $80.1 million and 83.7%, respectively GAAP net loss of $23.8 million; Non-GAAP net income of $22.9 million GAAP diluted loss per share of $(0.12); Non-GAAP diluted EPS of $0.10 Adjusted EBITDA and adjusted EBITDA margin of $21.6 million and 22.6%, respectively Second-Quarter 2024 and Recent Business & Operational Highlights TAM Expansion – U.S. Federal Marketplace On July 17, 2024, Cellebrite formed Cellebrite Federal Solutions and acquired Cyber Technology Services, Inc. These are key steps in the Company's plans to broaden and elevate its relationships with the U.S. federal government. These actions complement and augment an ongoing investment to achieve FedRAMP authorization for Cellebrite's software-as-a-service offerings. As a result, Cellebrite moves forward better positioned to directly participate in a broader range of new programs and projects with U.S. federal customers over the longer term. Innovation and Go-to-Market On July 30, 2024, Cellebrite and Relativity jointly announced a strategic technology and go-to-market partnership that delivers cutting-edge solutions for mobile device collection, processing and review. The new solutions drastically increase efficiency by streamlining workflow while improving accessibility and usability of mobile evidence in legal data use cases. The collaboration focuses on the development and offering of a RelativityOne and Cellebrite Remote Mobile Collection and Conversion, in which Relativity is the only e-discovery provider to have direct integrations with Cellebrite Endpoint Inspector and Cellebrite Endpoint Mobile Now. Go-to-Market On June 26, 2024, Cellebrite announced that Endpoint Inspector SaaS, the Company's real-time, consent-based data access, collection and analysis solution, is now available on Amazon Web Services (AWS) Marketplace. As a result, AWS customers can quickly and easily deploy Endpoint Inspector SaaS, through the AWS Marketplace Management Portal. The AWS Marketplace also allows customers to automate billing and track payments through AWS. Team On August 14, 2024, Cellebrite announced that Troy Richardson had joined its board of directors, effective August 13, 2024. Mr. Richardson is a seasoned technology executive with more than 30 years of experience in leading, scaling and transforming global organizations. With the appointment of Troy Richardson, Cellebrite's Board of Directors now consists of 10 directors. On August 1, 2024, Cellebrite announced that Sigalit Shavit has joined the Company as Chief Information Officer, bringing more than 30 years of experience to Cellebrite's information technology and security team. Shavit will focus on ensuring that Cellebrite's information technology and security organizations continue supporting the day-to-day needs of the business, respond decisively to ever-evolving cyber threats, leverage AI and accelerate innovation. Capital Markets Cellebrite's efforts to drive value creation for shareholders underpinned two major milestones: Cellebrite announced today that it is calling for redemption all of the Company's outstanding warrants to purchase ordinary shares, comprising 20.0 million public warrants (NASDAQ:CLBTW) and approximately 9.7 million private warrants after the last reported sale price of the Company's ordinary shares was equal to or greater than $10.00 per share for 20 days within a 30 trading-day period. Earlier today, Cellebrite also disclosed that 5.0 million Price Adjustment Shares will be issued and 3.0 million Restricted Sponsored Shares vested after the dollar volume-weighted average price of the Company's ordinary shares was greater than or equal to $12.50 per share for the 20th trading day within a 30 trading-day period. Supplemental financial information can be found on the Investor Relations section of our website at https://investors.cellebrite.com/financial-information/quarterly-results. Financial OutlookDana Gerner, Cellebrite's CFO, stated, "Cellebrite's strong top-line results in the second quarter of 2024 primarily reflect our ongoing success in increasing our wallet share with existing customers. Our Q224 revenue growth and disciplined management of our cost structure supported another quarter of increased profitability. We expect to build on our first-half 2024 performance as we move into the seasonally stronger second half of our fiscal year. Accordingly, we have updated our 2024 outlook, increasing Cellebrite's full-year revenue and adjusted EBITDA targets and raising the mid-point of our full-year ARR expectations. In addition, we believe that today's separate announcement to redeem nearly 30 million outstanding warrants, combined with the upcoming issuance of 5 million Price Adjustment Shares and recent vesting of 3 million Restricted Sponsor Shares, further validates our strategic and financial progress over the past 18 months and advances our long-standing objectives of supporting healthy trading liquidity, optimizing our capital structure and simplifying our financial reporting." The Company's updated 2024 expectations are as follows:     Third-Quarter 2024 Expectations (as of 8/15/24)   Full-Year 2024 Expectations (as of 8/15/24) ARR   $366 million - $374 million   $388 million - $400 million Annual Growth   24% - 27%   23% - 27% Revenue   $100 million - $104 million   $390 million - $398 million Annual Growth   19% - 24%   20% - 22% Adjusted EBITDA   $25 million - $29 million   $90 million - $95 million Adjusted EBITDA margin   25% - 28%   23% - 24%           Conference Call InformationCellebrite will host a live conference call and webcast later this morning to review the Company's financial second-quarter 2024 results and discuss its full-year 2024 outlook. Pertinent details include: Date:   Thursday, August 15, 2024 Time:   8:30 a.m. ET Call-In Number:   203-518-9708 Conference ID:   CLBTQ224 Event URL:   https://investors.cellebrite.com/events/event-details/cellebrite-q2-2024-financial-results-investor-call-webcast Webcast URL:   https://edge.media-server.com/mmc/p/gwesq4xv       In conjunction with the conference call and webcast, historical financial tables and supplemental data will be available on the quarterly results section of Company's investor relations website at https://investors.cellebrite.com/financial-information/quarterly-results. A transcript of the call will be added to this page along with access to the replay of the call later in the day. Non-GAAP Financial Information and Key Performance Indicators This press release includes non-GAAP financial measures. Cellebrite believes that the use of non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP EPS and Adjusted EBITDA is helpful to investors. These measures, which the Company refers to as our non-GAAP financial measures, are not prepared in accordance with GAAP. The Company believes that the non-GAAP financial measures provide a more meaningful comparison of its operational performance from period to period, and offer investors and management greater visibility to the underlying performance of its business. Mainly: Share-based compensation expenses utilize varying available valuation methodologies, subjective assumptions and a variety of equity instruments that can impact a company's non-cash expenses; Acquired intangible assets are valued at the time of acquisition and are amortized over an estimated useful life after the acquisition, and acquisition-related expenses are unrelated to current operations and neither are comparable to the prior period nor predictive of future results; To the extent that the above adjustments have an effect on tax (income) expense, such an effect is excluded in the non-GAAP adjustment to net income; Tax expense, depreciation and amortization expense vary for many reasons that are often unrelated to our underlying performance and make period-to-period comparisons more challenging; and Financial instruments are remeasured according to GAAP and vary for many reasons that are often unrelated to the Company's current operations and affect financial income. Each of our non-GAAP financial measures is an important tool for financial and operational decision making and for evaluating our own operating results over different periods of time. The non-GAAP financial measures do not represent our financial performance under U.S. GAAP and should not be considered as alternatives to operating income or net income or any other performance measures derived in accordance with GAAP. Non-GAAP measures should not be considered in isolated from, or as an alternative to, financial measures determined in accordance with GAAP. Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, and exclude expenses that may have a material impact on our reported financial results. Further, share-based compensation expense has been, and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of the compensation provided to our employees. In addition, the amortization of intangible assets is expected recurring expense over the estimated useful life of the underlying intangible asset and acquisition-related expenses will be incurred to the extent acquisitions are made in the future. Furthermore, foreign exchange rates may fluctuate from one period to another, and the Company does not estimate movements in foreign currencies. A reconciliation of each of these non-GAAP financial measures to their most comparable GAAP measure is set forth in a table included at the end of this press release, which is also available on our website at https://investors.cellebrite.com. In regard to forward-looking non-GAAP guidance, we are not able to reconcile the forward-looking Adjusted EBITDA measure to the closest corresponding GAAP measure without unreasonable efforts because we are unable to predict the ultimate outcome of certain significant items including, but not limited to, fair value movements, share-based payments for future awards, tax expense, depreciation and amortization expense, and certain financing and tax items. Key Performance Indicators This press release also includes key performance indicators, including annual recurring revenue and dollar-based retention rate. Annual recurring revenue ("ARR") is defined as the annualized value of active term-based subscription license contracts and maintenance contracts related to perpetual licenses in effect at the end of that period. Subscription license contracts and maintenance contracts for perpetual licenses are annualized by multiplying the revenue of the last month of the period by 12. The annualized value of contracts is a legal and contractual determination made by assessing the contractual terms with our customers. The annualized value of maintenance contracts is not determined by reference to historical revenue, deferred revenue or any other GAAP financial measure over any period. ARR is not a forecast of future revenues, which can be impacted by contract start and end dates and renewal rates. Dollar-based net retention rate ("NRR") is calculated by dividing customer recurring revenue by base revenue. We define base revenue as recurring revenue we recognized from all customers with a valid license at the last quarter of the previous year period, during the four quarters ended one year prior to the date of measurement. We define our customer revenue as the recurring revenue we recognized during the four quarters ended on the date of measurement from the same customer base included in our measure of base revenue, including recurring revenue resulting from additional sales to those customers. About Cellebrite Cellebrite's (NASDAQ:CLBT) mission is to enable its customers to protect and save lives, accelerate justice and preserve privacy in communities around the world. We are a global leader in Digital Investigative solutions for the public and private sectors, empowering organizations in mastering the complexities of legally sanctioned digital investigations by streamlining intelligence processes. Trusted by thousands of leading agencies and companies worldwide, Cellebrite's Digital Investigation platform and solutions transform how customers collect, review, analyze and manage data in legally sanctioned investigations. To learn more visit us at www.cellebrite.com, https://investors.cellebrite.com, or follow us on Twitter at Caution Regarding Forward Looking Statements This document includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward looking statements may be identified by the use of words such as "forecast," "intend," "seek," "target," "anticipate," "will," "appear," "approximate," "foresee," "might," "possible," "potential," "believe," "could," "predict," "should," "could," "continue," "expect," "estimate," "may," "plan," "outlook," "future" and "project" and other similar expressions that predict, project or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include estimated financial information for the third quarter of 2024 and full year 2024 and certain statements related to increasing our full-year 2024 outlook and being positioned to deliver an ARR growth rate and an adjusted EBITDA margin that will achieve or surpass ‘Rule of 45' for the second straight year; our expectation to build on our first-half 2024 performance as we move into the seasonally stronger second half of our fiscal year; and we have updated our 2024 outlook, increasing Cellebrite's full-year revenue and adjusted EBITDA targets and raising the mid-point of our full-year ARR expectations. Such forward-looking statements including those with respect to 2024 third-quarter and full year revenue, annual recurring revenue (ARR) and adjusted EBITDA, as well as commentary associated with future performance, strategies, prospects, and other aspects of Cellebrite's business are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to: Cellebrite's ability to keep pace with technological advances and evolving industry standards; Cellebrite's material dependence on the purchase, acceptance and use of its solutions by law enforcement and government agencies; real or perceived errors, failures, defects or bugs in Cellebrite's solutions; Cellebrite's failure to maintain the productivity of sales and marketing personnel, including relating to hiring, integrating and retaining personnel; intense competition in all of Cellebrite's markets; the inadvertent or deliberate misuse of Cellebrite's solutions; failure to manage its growth effectively; Cellebrite's ability to introduce new solutions and add-ons; its dependency on its customers renewing their subscriptions; the low volume of business Cellebrite conducts via e-commerce; risks associated with the use of artificial intelligence; the risk of requiring additional capital to support the growth of its business; risks associated with higher costs or unavailability of materials used to create its hardware product components; fluctuations in foreign currency exchange rates; lengthy sales cycle for some of Cellebrite's solutions; near term declines in new or renewed agreements; risks associated with inability to retain qualified personnel and senior management; the security of Cellebrite's operations and the integrity of its software solutions; risks associated with the negative publicity related to Cellebrite's business and use of its products; risks related to Cellebrite's intellectual property; the regulatory constraints to which Cellebrite is subject; risks associated with Cellebrite's operations in Israel, including the ongoing Israel-Hamas war and the risk of a greater regional conflict; risks associated with different corporate governance requirements applicable to Israeli companies and risks associated with being a foreign private issuer and an emerging growth company; market volatility in the price of Cellebrite's shares; changing tax laws and regulations; risks associated with joint ventures, partnerships and strategic initiatives; risks associated with Cellebrite's significant international operations; risks associated with Cellebrite's failure to comply with anti-corruption, trade compliance, anti-money-laundering and economic sanctions laws and regulations; risks relating to the adequacy of Cellebrite's existing systems, processes, policies, procedures, internal controls and personnel for Cellebrite's current and future operations and reporting needs; and other factors, risks and uncertainties set forth in the section titled "Risk Factors" in Cellebrite's annual report on Form 20-F filed with the SEC on March 21, 2024 and as amended on April 12, 2024, and in other documents filed by Cellebrite with the U.S. Securities and Exchange Commission ("SEC"), which are available free of charge at www.sec.gov. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, in this communication or elsewhere. Cellebrite undertakes no obligation to update its forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. Contacts: Investors RelationsAndrew KramerVice President, Investor 973.206.7760 Media Victor CooperSr. Director of Corporate Communications + Content 404.804.5910 Cellebrite DI Ltd.Second Quarter 2024 Results Summary(U.S Dollars in thousands)     For the three months ended   For the six months ended   June 30,   June 30,   2024   2023   2024   2023   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) Revenue 95,714     76,684     185,296     147,918   Gross profit 79,453     63,653     155,771     122,481   Gross margin 83.0 %   83.0 %   84.1 %   82.8 % Operating income 12,487     4,623     21,734     4,759   Operating margin 13.0 %   6.0 %   11.7 %   3.2 % Net loss (23,811 )   (32,348 )   (95,183 )   (72,953 ) Cash flow from operating activities 14,513     16,576     24,554     29,052                   Non-GAAP Financial Data:               Operating income 19,806     9,395     35,685     15,048   Operating margin 20.7 %   12.3 %   19.3 %   10.2 % Net income 22,925     10,715     39,791     17,614   Adjusted EBITDA 21,618     11,124     39,250     18,428   Adjusted EBITDA margin 22.6 %   14.5 %   21.2 %   12.5 %                         Cellebrite DI Ltd. Condensed Consolidated Balance Sheets(U.S. Dollars in thousands)       June 30,   December 31,     2024   2023     (Unaudited)   (Audited) Assets         Current assets         Cash and cash equivalents   $ 106,956     $ 189,517   Short-term deposits     126,723       74,713   Marketable securities     71,630       38,693   Trade receivables (net of allowance for credit losses of $2,019 and $1,583 as of June 30, 2024 and December 31, 2023, respectively)     70,699       77,269   Prepaid expenses and other current assets     24,443       26,400   Contract acquisition costs     5,516       5,550   Inventories     8,784       9,940   Total current assets     414,751       422,082             Non-current assets         Other non-current assets     8,224       7,341   Marketable securities     60,652       28,859   Deferred tax assets, net     8,806       7,024   Property and equipment, net     15,806       15,896   Intangible assets, net     9,807       10,594   Goodwill     26,829       26,829   Operating lease right-of-use assets, net     11,708       14,260   Total non-current assets     141,832       110,803             Total assets   $ 556,583     $ 532,885             Liabilities and shareholders' (deficiency) equity                   Current Liabilities         Trade payables   $ 6,510     $ 8,282   Other accounts payable and accrued expenses     42,259       44,845   Deferred revenues     183,938       195,725   Operating lease liabilities     4,521       4,972   Total current liabilities     237,228       253,824             Long-term liabilities         Other long term liabilities     6,492       5,515   Deferred revenues     42,369       47,098   Restricted Sponsor Shares liability     75,230       47,247   Price Adjustment Shares liability     134,758       81,715   Warrant liability     93,510       54,117   Operating lease liabilities     7,155       9,157   Total long-term liabilities     359,514       244,849             Total liabilities   $ 596,742     $ 498,673             Shareholders' (deficiency) equity         Share capital     *)       *)   Additional paid-in capital     (64,284 )     (84,896 ) Treasury share, NIS 0.00001 par value; 41,776 ordinary shares     (85 )     (85 ) Accumulated other comprehensive income     1,250       1,050   Retained earnings     22,960       118,143   Total shareholders' (deficiency) equity     (40,159 )     34,212             Total liabilities and shareholders' (deficiency) equity   $ 556,583     $ 532,885             *) Less than 1 USD                   Cellebrite DI Ltd. Condensed Consolidated Statements of Income(U.S Dollars in thousands, except share and per share data)       For the three months ended June   For the six months ended June     June 30,   June 30,     2024   2023   2024   2023     (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) Revenue:                 Subscription services   $ 65,738     $ 50,512     $ 127,841     $ 97,879   Term-license     19,630       16,694       36,749       30,609   Total subscription     85,368       67,206       164,590       128,488   Other non-recurring     3,486       1,972       7,054       4,890   Professional services     6,860       7,506       13,652       14,540   Total revenue     95,714       76,684       185,296