Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Cellebrite Announces Second-Quarter 2023 Results By: Cellebrite DI Ltd via GlobeNewswire August 08, 2023 at 07:05 AM EDT Revenues of $76.7 million, 23% year-over-year increase primarily due to 35% growth in subscription revenue; ARR of $273.7 million, up 28% year-over-year; Adjusted EBITDA of $11.1 million, 14.5% Adjusted EBITDA margin; Company increases 2023 outlook for revenue, ARR and adjusted EBITDA TYSONS CORNER, Va. and PETAH TIKVA, Israel, Aug. 08, 2023 (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, 2023. “We delivered an excellent second-quarter performance on all fronts,” said Yossi Carmil, Cellebrite’s CEO. “Overall, our market is healthy, our customer relationships remain strong, and our investment in powerful, customer-driven innovation and go-to-market activities enabled us to continue winning. Our second-quarter 2023 revenue growth demonstrates our ongoing success in expanding the scope of our relationships within the digital forensics units of our existing customers and our progress in extending our reach into their investigative units. The combination of strong revenue growth and disciplined spending enabled us to exceed our Adjusted EBITDA and cash generation targets entering the second quarter. Our increased outlook for 2023 reflect our solid momentum in a healthy market.” Second Quarter 2023 Financial Highlights Revenue of $76.7 million, up 23% year-over-yearSubscription revenue was $67.2 million, up 35% year-over-year Annual Recurring Revenue (ARR) of $273.7 million, up 28% year-over-yearRecurring revenue dollar-based net retention rate of 125%GAAP gross profit and gross margin of $63.7 million and 83.0%, respectively; Non-GAAP gross profit and gross profit margin of $64.1 million and 83.6%, respectivelyGAAP net loss of $(32.3) million; Non-GAAP net income of $10.7 millionGAAP Diluted loss per share of $(0.17); Non-GAAP Diluted EPS of $0.05Adjusted EBITDA and Adjusted EBITDA margin of $11.1 million and 14.5%, respectively Second Quarter 2023 and Recent Digital Intelligence Highlights In a separate announcement today, the Company appointed Thomas E. Hogan, a proven technology leader with a remarkable track record of success, as Executive Chairman of the Board of Directors.Cellebrite closed 25 large deals in the second quarter, each valued at $500,000 or more. Notable second-quarter 2023 deals included: A large North American federal law enforcement agency expanded its Premium footprint along with an initial Pathfinder engagement to accelerate time to resolution on critical cases. Cellebrite’s DI solutions are expected to help the customer centralize its critical digital forensic capabilities at scale and supercharge its investigative capabilities. As a result, Cellebrite’s ARR at this account is expected to triple to nearly $5 million.Cellebrite won a new logo in the Asia-Pacific region in the second quarter when a regional correctional services agency began deploying UFED, Premium as a Service and Pathfinder. This deal is part of the customer’s initiative to build its own in-house digital forensic unit to increase its investigative capabilities rather than outsource these activities to other agencies. This agreement is anticipated to deliver nearly $250,000 in ARR, which is considerably larger than the average new logo win.In two separate second-quarter deals, law enforcement agencies serving mid-sized U.S. cities selected Guardian to transform their evidence management workflows, enabling them to efficiently track sensitive digital evidence as they advance investigations. These deals illustrate Cellebrite’s success in extending its reach into new buying centers by leveraging its strength in digital forensic units. In one of the deals, the combined purchase of Guardian and Premium as a Service is expected to increase the Company’s ARR at this police department by a factor of 10 to over $200,000. In the other deal, ARR from the city’s DA office will more than double to $330,000.In the private sector, Cellebrite’s intensified sales focus on larger, more strategic accounts is yielding tangible results. During the second quarter, a U.S. service provider expanded its use of Cellebrite’s Endpoint Inspector for remote digital data collection from mobile phones, computers and cloud applications as part of its growing forensics practice that supports its corporate clients’ legal, regulatory and compliance activities. As a result, this service provider’s ARR is anticipated to nearly double into the low six-figure range. On June 5, 2023, Cellebrite announced UFED Ultra, the Company’s revolutionary, next-generation Collect & Review solution that expands and accelerates data access, extraction, decoding, and review capabilities for law enforcement agencies around the world to deliver court-ready digital evidence.On July 31, 2023, the Company announced new capabilities for Guardian, Cellebrite’s SaaS-based evidence and workflow management solution for law enforcement agencies of all sizes.Yesterday, Cellebrite announced that the Company won five categories at the 2023 Forensic Focus 4:Cast Awards including DFIR Commercial Tool of the Year and DFIR Team of the Year.On May 22, 2023, Cellebrite announced that four federal forces in a Latin American country expanded their use of Cellebrite’s DI solutions, increasing their annual spending with Cellebrite more than ten-fold. The deal includes wider deployment of Cellebrite’s Collect and Review solutions, adoption of Pathfinder investigative analytics and utilization of cryptocurrency data and insights.On May 16, 2023, the Company announced that it had partnered with The Exodus Road, an international nonprofit organization disrupting human trafficking, to provide DI technology to the National Bureau of Investigations (NBI) Anti-Human Trafficking Division in the Philippines, ensuring access to cutting-edge solutions in order to accelerate justice in cases of exploitation. Supplemental financial information can be found on the Investor Relations section of our website at https://investors.cellebrite.com/financial-information/quarterly-results. Financial Outlook “Based on our results to date and the anticipated trajectory of our business for the second half of this year, we have raised our 2023 targets for revenue, ARR and adjusted EBITDA,” said Dana Gerner, Chief Financial Officer of Cellebrite. “As we deliver accelerated 2023 revenue growth and improved profitability over 2022 levels, we remain committed to continue funding important investments to help us innovate, build stronger customer relationships and further scale our organization. We move forward with a strong financial foundation that we expect will be further fortified with solid cash inflows from operations over the coming quarters.” The Company’s updated 2023 expectations are as follows: Original Expectations Updated Expectations (first issued on February 15,2023) (as of August 8, 2023)2023 Revenue $305 million - $315 million $310 million - $320 millionGrowth over 2022 13% - 16% 15% - 18%December 2023 ARR $300 million - $310 million $303 million - $313 millionGrowth over 2022 21% - 25% 22% - 26%2023 Adjusted EBITDA $35 million - $40 million $39 million - $44 million2023 Adjusted EBITDA margin 11% - 13% 13% - 14% Conference Call InformationCellebrite will host a live conference call and webcast later this morning to review the Company’s financial results for the second quarter of 2023 and discuss its full-year 2023 outlook. Pertinent details include: Date: Tuesday, August 8, 2023Time: 8:30 a.m. ETCall-In Number: 203-518-9848Conference ID: CLBTQ223Event URL: https://investors.cellebrite.com/events/event-details/cellebrite-q2-23-earningsWebcast URL: https://edge.media-server.com/mmc/p/f896bks4 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; andFinancial 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. With 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 Intelligence 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 Intelligence 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 and https://investors.cellebrite.com. Note: References to our website and the websites of third parties mentioned in this press release are inactive textual references only, and information contained therein or connected thereto is not incorporated into this press release. 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 but are not limited to, the following: estimated financial information for fiscal year 2023, including certain statements supporting our 2023 outlook such as our solid momentum in a healthy market; the anticipated trajectory of our business for the second half of 2023; our plans to deliver accelerated 2023 revenue growth and improved profitability over 2022 levels while remaining committed to continue funding important investments to help us innovate, build stronger customer relationships and further scale our organization; and the expectation for solid cash inflows from operations over the coming quarters. Such forward-looking statements, including those with respect to 2023 revenue and annual recurring revenue, profitability and earnings 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 DI 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; risks associated with the regulatory constraints to which Cellebrite is subject; 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 April 27, 2023 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 Relationsinvestors@cellebrite.com+1 973.206.7760 Media Victor CooperSr. Director of Corporate Communications + Content OperationsVictor.cooper@cellebrite.com+1 404.804.5910 Cellebrite DI Ltd. Second Quarter 2023 Results Summary(U.S Dollars in thousands) For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Revenue76,684 62,573 147,918 124,958 Gross profit63,653 49,475 122,481 100,877 Gross margin83.0% 79.1% 82.8% 80.7% Operating income (loss)4,623 (5,599) 4,759 (7,545) Operating margin6.0% (8.9)% 3.2% (6.0)% Net (loss) income(32,348) 33,197 (72,953) 88,635 Cash flow from operating activities16,576 (4,073) 29,052 (14,610) Non-GAAP Financial Data: Operating income (loss)9,395 (936) 15,048 1,698 Operating margin12.3% (1.5)% 10.2% 1.4% Net income (loss)10,715 (25) 17,614 1,395 Adjusted EBITDA11,124 657 18,428 4,739 Adjusted EBITDA margin14.5% 1.0% 12.5% 3.8% Cellebrite DI Ltd. Condensed Consolidated Balance Sheets(U.S. Dollars in thousands) June 30, December 31, 2023 2022 (Unaudited) (Audited)Assets Current assets Cash and cash equivalents$110,502 $87,645 Short-term deposits 69,151 51,335 Marketable securities 57,605 44,643 Trade receivables (net of allowance for doubtful accounts of $840 and $1,904 as of June 30, 2023 and December 31, 2022, respectively) 61,194 78,761 Prepaid expenses and other current assets 22,185 17,085 Contract acquisition costs 5,946 6,286 Inventories 10,822 10,176 Total current assets 337,405 295,931 Non-current assets Other non-current assets 2,792 1,731 Marketable securities 7,297 22,125 Deferred tax assets, net 11,997 12,511 Property and equipment, net 15,810 17,259 Intangible assets, net 9,618 11,254 Goodwill 26,829 26,829 Operating lease right-of-use assets, net 14,145 15,653 Total non-current assets 88,488 107,362 Total assets$425,893 $403,293 Liabilities and shareholders’ equity Current Liabilities Trade payables$4,991 $4,612 Other accounts payable and accrued expenses 35,618 45,453 Deferred revenues 158,942 152,709 Operating lease liabilities 4,955 5,003 Total current liabilities 204,506 207,777 Long-term liabilities Other long-term liabilities 5,047 5,394 Deferred revenues 47,469 42,173 Restricted Sponsor Shares liability 37,625 17,532 Price Adjustment Shares liability 62,781 26,184 Warrant liability 42,278 20,015 Operating lease liabilities 8,631 10,353 Total long-term liabilities 203,831 121,651 Total liabilities$408,337 $329,428 Shareholders’ equity Share capital* - *) Additional paid-in capital (108,166) (125,624)Treasury share, NIS 0.00001 par value; 41,776 ordinary shares (85) (85)Accumulated other comprehensive (loss) income (483) 331 Retained earnings 126,290 199,243 Total shareholders’ equity 17,556 73,865 Total liabilities and shareholders’ equity $425,893 $403,293 *) Less than 1 USD Cellebrite DI Ltd. Condensed Consolidated Statements of (Loss) Income(U.S Dollars in thousands, except share and per share data) For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Revenue: Subscription services$50,512 $36,446 $97,879 $70,387 Term-license 16,694 13,395 30,609 27,653 Total subscription 67,206 49,841 128,488 98,040 Other non-recurring 1,972 4,200 4,890 10,300 Professional services 7,506 8,532 14,540 16,618 Total revenue 76,684 62,573 147,918 124,958 Cost of revenue: Subscription services 4,946 4,576 9,438 8,112 Term-license — 178 2 368 Total subscription 4,946 4,754 9,440 8,480 Other non-recurring 2,926 3,256 5,907 5,498 Professional services 5,159 5,088 10,090 10,103 Total cost of revenue 13,031 13,098 25,437 24,081 Gross profit$63,653 $49,475 $122,481 $100,877 Operating expenses: Research and development 21,053 19,675 42,184 39,251 Sales and marketing 26,745 24,892 54,346 48,151 General and administrative 11,232 10,507 21,192 21,020 Total operating expenses$59,030 $55,074 $117,722 $108,422 Operating income (loss)$4,623 $(5,599) $4,759 $(7,545)Financial (expense) income, net (36,051) 38,466 (74,826) 94,866 (Loss) Income before tax (31,428) 32,867 (70,067) 87,321 Tax expense (income) 920 (330) 2,886 (1,314)Net (loss) income$(32,348) $33,197 $(72,953) $88,635 (Loss) earnings per share Basic$(0.17) $0.18 $(0.37) $0.47 Diluted$(0.17) $0.17 $(0.37) $0.44 Weighted average shares outstanding Basic 188,130,294 181,907,435 187,239,136 181,217,005 Diluted 199,704,722 192,133,157 199,820,166 194,355,966 Other comprehensive (loss) income: Unrealized income (loss) on hedging transactions 70 (1,757) 26 (2,907)Unrealized (loss) income on marketable securities (51) (237) 126 (286)Currency translation adjustments (368) 410 (966) 812 Total other comprehensive loss, net of tax (349) (1,584) (814) (2,381)Total other comprehensive (loss) income $(32,697) $31,613 $(73,767) $86,254 Cellebrite DI Ltd.Condensed Consolidated Statements of Cash Flow(U.S Dollars in thousands, except share and per share data) For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Cash flow from operating activities: Net (loss) income$(32,348) $33,197 $(72,953) $88,635 Adjustments to reconcile net income to net cash provided by operating activities: Share based compensation and RSUs 4,600 3,605 9,057 6,463 Amortization of premium, discount and accrued interest on marketable securities (290) (55) (461) (38)Depreciation and amortization 2,569 2,257 5,016 4,369 Interest income from short term deposits (1,713) (137) (2,397) (199)Deferred income taxes (98) (918) 462 (1,842)Remeasurement of warrant liability 12,454 (13,938) 22,263 (31,021)Remeasurement of Restricted Sponsor Shares 9,051 (8,606) 20,093 (22,112)Remeasurement of Price Adjustment Shares liabilities 16,655 (15,847) 36,597 (41,606)Decrease (increase) in trade receivables 8,490 (7,765) 18,117 (750)Increase in deferred revenue 87 7,858 10,555 1,942 (Increase) decrease in other non-current assets (135) 166 (1,062) 133 (Increase) decrease in in prepaid expenses and other current assets (1,987) 180 (5,624) 930 Changes in operating lease assets 1,333 — 2,700 — Changes in operating lease liability (1,400) — (2,962) — Decrease (Increase) in inventories 583 (274) (642) (1,621)Increase (decrease) in trade payables 117 (5,421) 381 (5,773)(Decrease) increase in other accounts payable and accrued expenses (862) 1,922 (9,741) (9,163)Decrease in other long-term liabilities (530) (297) (347) (2,957)Net cash provided by (used in) operating activities 16,576 (4,073) 29,052 (14,610) Cash flows from investing activities: Purchases of property and equipment (825) (1,571) (1,889) (3,876)Investment in marketable securities (10,653) (31,409) (27,005) (60,685)Proceeds from maturity of marketable securities 13,434 5,172 29,507 5,172 Investment in short term deposits (38,000) (18,000) (54,000) (25,000)Redemption of zshort-term deposits 25,302 17,216 38,581 42,397 Net cash used in investing activities (10,742) (28,592) (14,806) (41,992) Cash flows from financing activities: Exercise of options to shares 5,079 1,055 7,185 4,683 Exercise of public warrants — 5 — 5 Proceeds from Employee Share Purchase Plan, net 610 — 1,234 — Net cash provided by financing activities 5,689 1,060 8,419 4,688 Net increase (decrease) in cash and cash equivalents 11,523 (31,605) 22,665 (51,914)Net effect of Currency Translation on cash and cash equivalents 7 (2,429) 192 (2,374)Cash and cash equivalents at beginning of period 98,972 125,719 87,645 145,973 Cash and cash equivalents at end of period$110,502 $91,685 $110,502 $91,685 Supplemental cash flow information: Income taxes paid$4,902 $2,602 $8,527 $3,889 Non-cash activities: Purchase of property and equipment$— $88 $— $221 Cellebrite DI Ltd. Reconciliation of GAAP to Non-GAAP Financial Information(U.S Dollars in thousands, except share and per share data) For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Cost of revenues$13,031 $13,098 $25,437 $24,081 Less: Share based compensation 414 339 800 585 Acquisition related costs 14 — 27 — Non-GAAP cost of revenues$12,603 $12,759 $24,610 $23,496 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Gross profit$63,653 $49,475 $122,481 $100,877 Share based compensation 414 339 800 585 Acquisition related costs 14 — 27 — Non-GAAP gross profit$64,081 $49,814 $123,308 $101,462 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Operating expenses$59,030 $55,074 $117,722 $108,422 Less: Issuance expenses (345) — (345) — Share based compensation 4,186 3,266 8,257 5,878 Amortization of intangible assets 840 664 1,636 1,328 Acquisition related costs (337) 394 (86) 1,452 Non-GAAP operating expenses$54,686 $50,750 $108,260 $99,764 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Operating income (loss)$4,623 $(5,599) $4,759 $(7,545)Issuance expenses (345) — (345) — Share based compensation 4,600 3,605 9,057 6,463 Amortization of intangible assets 840 664 1,636 1,328 Acquisition related costs (323) 394 (59) 1,452 Non-GAAP operating income (loss)$9,395 $(936) $15,048 $1,698 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Net (loss) income$(32,348) $33,197 $(72,953) $88,635 Issuance expenses (345) — (345) — One time tax income — — — (1,825)Share based compensation 4,600 3,605 9,057 6,463 Amortization of intangible assets 840 664 1,636 1,328 Acquisition related costs (323) 394 (59) 1,452 Tax expense (income) 131 506 1,325 81 Finance expense (income) from financial derivatives 38,160 (38,391) 78,953 (94,739)Non-GAAP net income (loss)$10,715 $(25) $17,614 $1,395 Non-GAAP Earnings per share: Basic$0.05 $(0.0001) $0.09 $0.01 Diluted$0.05 $(0.0001) $0.08 $0.01 Weighted average shares outstanding: Basic 188,130,294 181,907,435 187,239,136 181,217,005 Diluted 199,704,722 192,133,157 199,820,166 194,355,966 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Net (loss) income$(32,348) $33,197 $(72,953) $88,635 Issuance expenses (345) — (345) — Financial expense (income), net 36,051 (38,466) 74,826 (94,866)Tax expense (income) 920 (330) 2,886 (1,314)Share based compensation 4,600 3,605 9,057 6,463 Amortization of intangible assets 840 664 1,636 1,328 Acquisition related costs (323) 394 (59) 1,452 Depreciation expenses 1,729 1,593 3,380 3,041 Adjusted EBITDA$11,124 $657 $18,428 $4,739 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Cellebrite Announces Second-Quarter 2023 Results By: Cellebrite DI Ltd via GlobeNewswire August 08, 2023 at 07:05 AM EDT Revenues of $76.7 million, 23% year-over-year increase primarily due to 35% growth in subscription revenue; ARR of $273.7 million, up 28% year-over-year; Adjusted EBITDA of $11.1 million, 14.5% Adjusted EBITDA margin; Company increases 2023 outlook for revenue, ARR and adjusted EBITDA TYSONS CORNER, Va. and PETAH TIKVA, Israel, Aug. 08, 2023 (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, 2023. “We delivered an excellent second-quarter performance on all fronts,” said Yossi Carmil, Cellebrite’s CEO. “Overall, our market is healthy, our customer relationships remain strong, and our investment in powerful, customer-driven innovation and go-to-market activities enabled us to continue winning. Our second-quarter 2023 revenue growth demonstrates our ongoing success in expanding the scope of our relationships within the digital forensics units of our existing customers and our progress in extending our reach into their investigative units. The combination of strong revenue growth and disciplined spending enabled us to exceed our Adjusted EBITDA and cash generation targets entering the second quarter. Our increased outlook for 2023 reflect our solid momentum in a healthy market.” Second Quarter 2023 Financial Highlights Revenue of $76.7 million, up 23% year-over-yearSubscription revenue was $67.2 million, up 35% year-over-year Annual Recurring Revenue (ARR) of $273.7 million, up 28% year-over-yearRecurring revenue dollar-based net retention rate of 125%GAAP gross profit and gross margin of $63.7 million and 83.0%, respectively; Non-GAAP gross profit and gross profit margin of $64.1 million and 83.6%, respectivelyGAAP net loss of $(32.3) million; Non-GAAP net income of $10.7 millionGAAP Diluted loss per share of $(0.17); Non-GAAP Diluted EPS of $0.05Adjusted EBITDA and Adjusted EBITDA margin of $11.1 million and 14.5%, respectively Second Quarter 2023 and Recent Digital Intelligence Highlights In a separate announcement today, the Company appointed Thomas E. Hogan, a proven technology leader with a remarkable track record of success, as Executive Chairman of the Board of Directors.Cellebrite closed 25 large deals in the second quarter, each valued at $500,000 or more. Notable second-quarter 2023 deals included: A large North American federal law enforcement agency expanded its Premium footprint along with an initial Pathfinder engagement to accelerate time to resolution on critical cases. Cellebrite’s DI solutions are expected to help the customer centralize its critical digital forensic capabilities at scale and supercharge its investigative capabilities. As a result, Cellebrite’s ARR at this account is expected to triple to nearly $5 million.Cellebrite won a new logo in the Asia-Pacific region in the second quarter when a regional correctional services agency began deploying UFED, Premium as a Service and Pathfinder. This deal is part of the customer’s initiative to build its own in-house digital forensic unit to increase its investigative capabilities rather than outsource these activities to other agencies. This agreement is anticipated to deliver nearly $250,000 in ARR, which is considerably larger than the average new logo win.In two separate second-quarter deals, law enforcement agencies serving mid-sized U.S. cities selected Guardian to transform their evidence management workflows, enabling them to efficiently track sensitive digital evidence as they advance investigations. These deals illustrate Cellebrite’s success in extending its reach into new buying centers by leveraging its strength in digital forensic units. In one of the deals, the combined purchase of Guardian and Premium as a Service is expected to increase the Company’s ARR at this police department by a factor of 10 to over $200,000. In the other deal, ARR from the city’s DA office will more than double to $330,000.In the private sector, Cellebrite’s intensified sales focus on larger, more strategic accounts is yielding tangible results. During the second quarter, a U.S. service provider expanded its use of Cellebrite’s Endpoint Inspector for remote digital data collection from mobile phones, computers and cloud applications as part of its growing forensics practice that supports its corporate clients’ legal, regulatory and compliance activities. As a result, this service provider’s ARR is anticipated to nearly double into the low six-figure range. On June 5, 2023, Cellebrite announced UFED Ultra, the Company’s revolutionary, next-generation Collect & Review solution that expands and accelerates data access, extraction, decoding, and review capabilities for law enforcement agencies around the world to deliver court-ready digital evidence.On July 31, 2023, the Company announced new capabilities for Guardian, Cellebrite’s SaaS-based evidence and workflow management solution for law enforcement agencies of all sizes.Yesterday, Cellebrite announced that the Company won five categories at the 2023 Forensic Focus 4:Cast Awards including DFIR Commercial Tool of the Year and DFIR Team of the Year.On May 22, 2023, Cellebrite announced that four federal forces in a Latin American country expanded their use of Cellebrite’s DI solutions, increasing their annual spending with Cellebrite more than ten-fold. The deal includes wider deployment of Cellebrite’s Collect and Review solutions, adoption of Pathfinder investigative analytics and utilization of cryptocurrency data and insights.On May 16, 2023, the Company announced that it had partnered with The Exodus Road, an international nonprofit organization disrupting human trafficking, to provide DI technology to the National Bureau of Investigations (NBI) Anti-Human Trafficking Division in the Philippines, ensuring access to cutting-edge solutions in order to accelerate justice in cases of exploitation. Supplemental financial information can be found on the Investor Relations section of our website at https://investors.cellebrite.com/financial-information/quarterly-results. Financial Outlook “Based on our results to date and the anticipated trajectory of our business for the second half of this year, we have raised our 2023 targets for revenue, ARR and adjusted EBITDA,” said Dana Gerner, Chief Financial Officer of Cellebrite. “As we deliver accelerated 2023 revenue growth and improved profitability over 2022 levels, we remain committed to continue funding important investments to help us innovate, build stronger customer relationships and further scale our organization. We move forward with a strong financial foundation that we expect will be further fortified with solid cash inflows from operations over the coming quarters.” The Company’s updated 2023 expectations are as follows: Original Expectations Updated Expectations (first issued on February 15,2023) (as of August 8, 2023)2023 Revenue $305 million - $315 million $310 million - $320 millionGrowth over 2022 13% - 16% 15% - 18%December 2023 ARR $300 million - $310 million $303 million - $313 millionGrowth over 2022 21% - 25% 22% - 26%2023 Adjusted EBITDA $35 million - $40 million $39 million - $44 million2023 Adjusted EBITDA margin 11% - 13% 13% - 14% Conference Call InformationCellebrite will host a live conference call and webcast later this morning to review the Company’s financial results for the second quarter of 2023 and discuss its full-year 2023 outlook. Pertinent details include: Date: Tuesday, August 8, 2023Time: 8:30 a.m. ETCall-In Number: 203-518-9848Conference ID: CLBTQ223Event URL: https://investors.cellebrite.com/events/event-details/cellebrite-q2-23-earningsWebcast URL: https://edge.media-server.com/mmc/p/f896bks4 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; andFinancial 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. With 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 Intelligence 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 Intelligence 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 and https://investors.cellebrite.com. Note: References to our website and the websites of third parties mentioned in this press release are inactive textual references only, and information contained therein or connected thereto is not incorporated into this press release. 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 but are not limited to, the following: estimated financial information for fiscal year 2023, including certain statements supporting our 2023 outlook such as our solid momentum in a healthy market; the anticipated trajectory of our business for the second half of 2023; our plans to deliver accelerated 2023 revenue growth and improved profitability over 2022 levels while remaining committed to continue funding important investments to help us innovate, build stronger customer relationships and further scale our organization; and the expectation for solid cash inflows from operations over the coming quarters. Such forward-looking statements, including those with respect to 2023 revenue and annual recurring revenue, profitability and earnings 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 DI 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; risks associated with the regulatory constraints to which Cellebrite is subject; 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 April 27, 2023 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 Relationsinvestors@cellebrite.com+1 973.206.7760 Media Victor CooperSr. Director of Corporate Communications + Content OperationsVictor.cooper@cellebrite.com+1 404.804.5910 Cellebrite DI Ltd. Second Quarter 2023 Results Summary(U.S Dollars in thousands) For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Revenue76,684 62,573 147,918 124,958 Gross profit63,653 49,475 122,481 100,877 Gross margin83.0% 79.1% 82.8% 80.7% Operating income (loss)4,623 (5,599) 4,759 (7,545) Operating margin6.0% (8.9)% 3.2% (6.0)% Net (loss) income(32,348) 33,197 (72,953) 88,635 Cash flow from operating activities16,576 (4,073) 29,052 (14,610) Non-GAAP Financial Data: Operating income (loss)9,395 (936) 15,048 1,698 Operating margin12.3% (1.5)% 10.2% 1.4% Net income (loss)10,715 (25) 17,614 1,395 Adjusted EBITDA11,124 657 18,428 4,739 Adjusted EBITDA margin14.5% 1.0% 12.5% 3.8% Cellebrite DI Ltd. Condensed Consolidated Balance Sheets(U.S. Dollars in thousands) June 30, December 31, 2023 2022 (Unaudited) (Audited)Assets Current assets Cash and cash equivalents$110,502 $87,645 Short-term deposits 69,151 51,335 Marketable securities 57,605 44,643 Trade receivables (net of allowance for doubtful accounts of $840 and $1,904 as of June 30, 2023 and December 31, 2022, respectively) 61,194 78,761 Prepaid expenses and other current assets 22,185 17,085 Contract acquisition costs 5,946 6,286 Inventories 10,822 10,176 Total current assets 337,405 295,931 Non-current assets Other non-current assets 2,792 1,731 Marketable securities 7,297 22,125 Deferred tax assets, net 11,997 12,511 Property and equipment, net 15,810 17,259 Intangible assets, net 9,618 11,254 Goodwill 26,829 26,829 Operating lease right-of-use assets, net 14,145 15,653 Total non-current assets 88,488 107,362 Total assets$425,893 $403,293 Liabilities and shareholders’ equity Current Liabilities Trade payables$4,991 $4,612 Other accounts payable and accrued expenses 35,618 45,453 Deferred revenues 158,942 152,709 Operating lease liabilities 4,955 5,003 Total current liabilities 204,506 207,777 Long-term liabilities Other long-term liabilities 5,047 5,394 Deferred revenues 47,469 42,173 Restricted Sponsor Shares liability 37,625 17,532 Price Adjustment Shares liability 62,781 26,184 Warrant liability 42,278 20,015 Operating lease liabilities 8,631 10,353 Total long-term liabilities 203,831 121,651 Total liabilities$408,337 $329,428 Shareholders’ equity Share capital* - *) Additional paid-in capital (108,166) (125,624)Treasury share, NIS 0.00001 par value; 41,776 ordinary shares (85) (85)Accumulated other comprehensive (loss) income (483) 331 Retained earnings 126,290 199,243 Total shareholders’ equity 17,556 73,865 Total liabilities and shareholders’ equity $425,893 $403,293 *) Less than 1 USD Cellebrite DI Ltd. Condensed Consolidated Statements of (Loss) Income(U.S Dollars in thousands, except share and per share data) For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Revenue: Subscription services$50,512 $36,446 $97,879 $70,387 Term-license 16,694 13,395 30,609 27,653 Total subscription 67,206 49,841 128,488 98,040 Other non-recurring 1,972 4,200 4,890 10,300 Professional services 7,506 8,532 14,540 16,618 Total revenue 76,684 62,573 147,918 124,958 Cost of revenue: Subscription services 4,946 4,576 9,438 8,112 Term-license — 178 2 368 Total subscription 4,946 4,754 9,440 8,480 Other non-recurring 2,926 3,256 5,907 5,498 Professional services 5,159 5,088 10,090 10,103 Total cost of revenue 13,031 13,098 25,437 24,081 Gross profit$63,653 $49,475 $122,481 $100,877 Operating expenses: Research and development 21,053 19,675 42,184 39,251 Sales and marketing 26,745 24,892 54,346 48,151 General and administrative 11,232 10,507 21,192 21,020 Total operating expenses$59,030 $55,074 $117,722 $108,422 Operating income (loss)$4,623 $(5,599) $4,759 $(7,545)Financial (expense) income, net (36,051) 38,466 (74,826) 94,866 (Loss) Income before tax (31,428) 32,867 (70,067) 87,321 Tax expense (income) 920 (330) 2,886 (1,314)Net (loss) income$(32,348) $33,197 $(72,953) $88,635 (Loss) earnings per share Basic$(0.17) $0.18 $(0.37) $0.47 Diluted$(0.17) $0.17 $(0.37) $0.44 Weighted average shares outstanding Basic 188,130,294 181,907,435 187,239,136 181,217,005 Diluted 199,704,722 192,133,157 199,820,166 194,355,966 Other comprehensive (loss) income: Unrealized income (loss) on hedging transactions 70 (1,757) 26 (2,907)Unrealized (loss) income on marketable securities (51) (237) 126 (286)Currency translation adjustments (368) 410 (966) 812 Total other comprehensive loss, net of tax (349) (1,584) (814) (2,381)Total other comprehensive (loss) income $(32,697) $31,613 $(73,767) $86,254 Cellebrite DI Ltd.Condensed Consolidated Statements of Cash Flow(U.S Dollars in thousands, except share and per share data) For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Cash flow from operating activities: Net (loss) income$(32,348) $33,197 $(72,953) $88,635 Adjustments to reconcile net income to net cash provided by operating activities: Share based compensation and RSUs 4,600 3,605 9,057 6,463 Amortization of premium, discount and accrued interest on marketable securities (290) (55) (461) (38)Depreciation and amortization 2,569 2,257 5,016 4,369 Interest income from short term deposits (1,713) (137) (2,397) (199)Deferred income taxes (98) (918) 462 (1,842)Remeasurement of warrant liability 12,454 (13,938) 22,263 (31,021)Remeasurement of Restricted Sponsor Shares 9,051 (8,606) 20,093 (22,112)Remeasurement of Price Adjustment Shares liabilities 16,655 (15,847) 36,597 (41,606)Decrease (increase) in trade receivables 8,490 (7,765) 18,117 (750)Increase in deferred revenue 87 7,858 10,555 1,942 (Increase) decrease in other non-current assets (135) 166 (1,062) 133 (Increase) decrease in in prepaid expenses and other current assets (1,987) 180 (5,624) 930 Changes in operating lease assets 1,333 — 2,700 — Changes in operating lease liability (1,400) — (2,962) — Decrease (Increase) in inventories 583 (274) (642) (1,621)Increase (decrease) in trade payables 117 (5,421) 381 (5,773)(Decrease) increase in other accounts payable and accrued expenses (862) 1,922 (9,741) (9,163)Decrease in other long-term liabilities (530) (297) (347) (2,957)Net cash provided by (used in) operating activities 16,576 (4,073) 29,052 (14,610) Cash flows from investing activities: Purchases of property and equipment (825) (1,571) (1,889) (3,876)Investment in marketable securities (10,653) (31,409) (27,005) (60,685)Proceeds from maturity of marketable securities 13,434 5,172 29,507 5,172 Investment in short term deposits (38,000) (18,000) (54,000) (25,000)Redemption of zshort-term deposits 25,302 17,216 38,581 42,397 Net cash used in investing activities (10,742) (28,592) (14,806) (41,992) Cash flows from financing activities: Exercise of options to shares 5,079 1,055 7,185 4,683 Exercise of public warrants — 5 — 5 Proceeds from Employee Share Purchase Plan, net 610 — 1,234 — Net cash provided by financing activities 5,689 1,060 8,419 4,688 Net increase (decrease) in cash and cash equivalents 11,523 (31,605) 22,665 (51,914)Net effect of Currency Translation on cash and cash equivalents 7 (2,429) 192 (2,374)Cash and cash equivalents at beginning of period 98,972 125,719 87,645 145,973 Cash and cash equivalents at end of period$110,502 $91,685 $110,502 $91,685 Supplemental cash flow information: Income taxes paid$4,902 $2,602 $8,527 $3,889 Non-cash activities: Purchase of property and equipment$— $88 $— $221 Cellebrite DI Ltd. Reconciliation of GAAP to Non-GAAP Financial Information(U.S Dollars in thousands, except share and per share data) For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Cost of revenues$13,031 $13,098 $25,437 $24,081 Less: Share based compensation 414 339 800 585 Acquisition related costs 14 — 27 — Non-GAAP cost of revenues$12,603 $12,759 $24,610 $23,496 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Gross profit$63,653 $49,475 $122,481 $100,877 Share based compensation 414 339 800 585 Acquisition related costs 14 — 27 — Non-GAAP gross profit$64,081 $49,814 $123,308 $101,462 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Operating expenses$59,030 $55,074 $117,722 $108,422 Less: Issuance expenses (345) — (345) — Share based compensation 4,186 3,266 8,257 5,878 Amortization of intangible assets 840 664 1,636 1,328 Acquisition related costs (337) 394 (86) 1,452 Non-GAAP operating expenses$54,686 $50,750 $108,260 $99,764 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Operating income (loss)$4,623 $(5,599) $4,759 $(7,545)Issuance expenses (345) — (345) — Share based compensation 4,600 3,605 9,057 6,463 Amortization of intangible assets 840 664 1,636 1,328 Acquisition related costs (323) 394 (59) 1,452 Non-GAAP operating income (loss)$9,395 $(936) $15,048 $1,698 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Net (loss) income$(32,348) $33,197 $(72,953) $88,635 Issuance expenses (345) — (345) — One time tax income — — — (1,825)Share based compensation 4,600 3,605 9,057 6,463 Amortization of intangible assets 840 664 1,636 1,328 Acquisition related costs (323) 394 (59) 1,452 Tax expense (income) 131 506 1,325 81 Finance expense (income) from financial derivatives 38,160 (38,391) 78,953 (94,739)Non-GAAP net income (loss)$10,715 $(25) $17,614 $1,395 Non-GAAP Earnings per share: Basic$0.05 $(0.0001) $0.09 $0.01 Diluted$0.05 $(0.0001) $0.08 $0.01 Weighted average shares outstanding: Basic 188,130,294 181,907,435 187,239,136 181,217,005 Diluted 199,704,722 192,133,157 199,820,166 194,355,966 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Net (loss) income$(32,348) $33,197 $(72,953) $88,635 Issuance expenses (345) — (345) — Financial expense (income), net 36,051 (38,466) 74,826 (94,866)Tax expense (income) 920 (330) 2,886 (1,314)Share based compensation 4,600 3,605 9,057 6,463 Amortization of intangible assets 840 664 1,636 1,328 Acquisition related costs (323) 394 (59) 1,452 Depreciation expenses 1,729 1,593 3,380 3,041 Adjusted EBITDA$11,124 $657 $18,428 $4,739
Revenues of $76.7 million, 23% year-over-year increase primarily due to 35% growth in subscription revenue; ARR of $273.7 million, up 28% year-over-year; Adjusted EBITDA of $11.1 million, 14.5% Adjusted EBITDA margin; Company increases 2023 outlook for revenue, ARR and adjusted EBITDA TYSONS CORNER, Va. and PETAH TIKVA, Israel, Aug. 08, 2023 (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, 2023. “We delivered an excellent second-quarter performance on all fronts,” said Yossi Carmil, Cellebrite’s CEO. “Overall, our market is healthy, our customer relationships remain strong, and our investment in powerful, customer-driven innovation and go-to-market activities enabled us to continue winning. Our second-quarter 2023 revenue growth demonstrates our ongoing success in expanding the scope of our relationships within the digital forensics units of our existing customers and our progress in extending our reach into their investigative units. The combination of strong revenue growth and disciplined spending enabled us to exceed our Adjusted EBITDA and cash generation targets entering the second quarter. Our increased outlook for 2023 reflect our solid momentum in a healthy market.” Second Quarter 2023 Financial Highlights Revenue of $76.7 million, up 23% year-over-yearSubscription revenue was $67.2 million, up 35% year-over-year Annual Recurring Revenue (ARR) of $273.7 million, up 28% year-over-yearRecurring revenue dollar-based net retention rate of 125%GAAP gross profit and gross margin of $63.7 million and 83.0%, respectively; Non-GAAP gross profit and gross profit margin of $64.1 million and 83.6%, respectivelyGAAP net loss of $(32.3) million; Non-GAAP net income of $10.7 millionGAAP Diluted loss per share of $(0.17); Non-GAAP Diluted EPS of $0.05Adjusted EBITDA and Adjusted EBITDA margin of $11.1 million and 14.5%, respectively Second Quarter 2023 and Recent Digital Intelligence Highlights In a separate announcement today, the Company appointed Thomas E. Hogan, a proven technology leader with a remarkable track record of success, as Executive Chairman of the Board of Directors.Cellebrite closed 25 large deals in the second quarter, each valued at $500,000 or more. Notable second-quarter 2023 deals included: A large North American federal law enforcement agency expanded its Premium footprint along with an initial Pathfinder engagement to accelerate time to resolution on critical cases. Cellebrite’s DI solutions are expected to help the customer centralize its critical digital forensic capabilities at scale and supercharge its investigative capabilities. As a result, Cellebrite’s ARR at this account is expected to triple to nearly $5 million.Cellebrite won a new logo in the Asia-Pacific region in the second quarter when a regional correctional services agency began deploying UFED, Premium as a Service and Pathfinder. This deal is part of the customer’s initiative to build its own in-house digital forensic unit to increase its investigative capabilities rather than outsource these activities to other agencies. This agreement is anticipated to deliver nearly $250,000 in ARR, which is considerably larger than the average new logo win.In two separate second-quarter deals, law enforcement agencies serving mid-sized U.S. cities selected Guardian to transform their evidence management workflows, enabling them to efficiently track sensitive digital evidence as they advance investigations. These deals illustrate Cellebrite’s success in extending its reach into new buying centers by leveraging its strength in digital forensic units. In one of the deals, the combined purchase of Guardian and Premium as a Service is expected to increase the Company’s ARR at this police department by a factor of 10 to over $200,000. In the other deal, ARR from the city’s DA office will more than double to $330,000.In the private sector, Cellebrite’s intensified sales focus on larger, more strategic accounts is yielding tangible results. During the second quarter, a U.S. service provider expanded its use of Cellebrite’s Endpoint Inspector for remote digital data collection from mobile phones, computers and cloud applications as part of its growing forensics practice that supports its corporate clients’ legal, regulatory and compliance activities. As a result, this service provider’s ARR is anticipated to nearly double into the low six-figure range. On June 5, 2023, Cellebrite announced UFED Ultra, the Company’s revolutionary, next-generation Collect & Review solution that expands and accelerates data access, extraction, decoding, and review capabilities for law enforcement agencies around the world to deliver court-ready digital evidence.On July 31, 2023, the Company announced new capabilities for Guardian, Cellebrite’s SaaS-based evidence and workflow management solution for law enforcement agencies of all sizes.Yesterday, Cellebrite announced that the Company won five categories at the 2023 Forensic Focus 4:Cast Awards including DFIR Commercial Tool of the Year and DFIR Team of the Year.On May 22, 2023, Cellebrite announced that four federal forces in a Latin American country expanded their use of Cellebrite’s DI solutions, increasing their annual spending with Cellebrite more than ten-fold. The deal includes wider deployment of Cellebrite’s Collect and Review solutions, adoption of Pathfinder investigative analytics and utilization of cryptocurrency data and insights.On May 16, 2023, the Company announced that it had partnered with The Exodus Road, an international nonprofit organization disrupting human trafficking, to provide DI technology to the National Bureau of Investigations (NBI) Anti-Human Trafficking Division in the Philippines, ensuring access to cutting-edge solutions in order to accelerate justice in cases of exploitation. Supplemental financial information can be found on the Investor Relations section of our website at https://investors.cellebrite.com/financial-information/quarterly-results. Financial Outlook “Based on our results to date and the anticipated trajectory of our business for the second half of this year, we have raised our 2023 targets for revenue, ARR and adjusted EBITDA,” said Dana Gerner, Chief Financial Officer of Cellebrite. “As we deliver accelerated 2023 revenue growth and improved profitability over 2022 levels, we remain committed to continue funding important investments to help us innovate, build stronger customer relationships and further scale our organization. We move forward with a strong financial foundation that we expect will be further fortified with solid cash inflows from operations over the coming quarters.” The Company’s updated 2023 expectations are as follows: Original Expectations Updated Expectations (first issued on February 15,2023) (as of August 8, 2023)2023 Revenue $305 million - $315 million $310 million - $320 millionGrowth over 2022 13% - 16% 15% - 18%December 2023 ARR $300 million - $310 million $303 million - $313 millionGrowth over 2022 21% - 25% 22% - 26%2023 Adjusted EBITDA $35 million - $40 million $39 million - $44 million2023 Adjusted EBITDA margin 11% - 13% 13% - 14% Conference Call InformationCellebrite will host a live conference call and webcast later this morning to review the Company’s financial results for the second quarter of 2023 and discuss its full-year 2023 outlook. Pertinent details include: Date: Tuesday, August 8, 2023Time: 8:30 a.m. ETCall-In Number: 203-518-9848Conference ID: CLBTQ223Event URL: https://investors.cellebrite.com/events/event-details/cellebrite-q2-23-earningsWebcast URL: https://edge.media-server.com/mmc/p/f896bks4 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; andFinancial 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. With 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 Intelligence 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 Intelligence 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 and https://investors.cellebrite.com. Note: References to our website and the websites of third parties mentioned in this press release are inactive textual references only, and information contained therein or connected thereto is not incorporated into this press release. 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 but are not limited to, the following: estimated financial information for fiscal year 2023, including certain statements supporting our 2023 outlook such as our solid momentum in a healthy market; the anticipated trajectory of our business for the second half of 2023; our plans to deliver accelerated 2023 revenue growth and improved profitability over 2022 levels while remaining committed to continue funding important investments to help us innovate, build stronger customer relationships and further scale our organization; and the expectation for solid cash inflows from operations over the coming quarters. Such forward-looking statements, including those with respect to 2023 revenue and annual recurring revenue, profitability and earnings 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 DI 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; risks associated with the regulatory constraints to which Cellebrite is subject; 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 April 27, 2023 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 Relationsinvestors@cellebrite.com+1 973.206.7760 Media Victor CooperSr. Director of Corporate Communications + Content OperationsVictor.cooper@cellebrite.com+1 404.804.5910 Cellebrite DI Ltd. Second Quarter 2023 Results Summary(U.S Dollars in thousands) For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Revenue76,684 62,573 147,918 124,958 Gross profit63,653 49,475 122,481 100,877 Gross margin83.0% 79.1% 82.8% 80.7% Operating income (loss)4,623 (5,599) 4,759 (7,545) Operating margin6.0% (8.9)% 3.2% (6.0)% Net (loss) income(32,348) 33,197 (72,953) 88,635 Cash flow from operating activities16,576 (4,073) 29,052 (14,610) Non-GAAP Financial Data: Operating income (loss)9,395 (936) 15,048 1,698 Operating margin12.3% (1.5)% 10.2% 1.4% Net income (loss)10,715 (25) 17,614 1,395 Adjusted EBITDA11,124 657 18,428 4,739 Adjusted EBITDA margin14.5% 1.0% 12.5% 3.8% Cellebrite DI Ltd. Condensed Consolidated Balance Sheets(U.S. Dollars in thousands) June 30, December 31, 2023 2022 (Unaudited) (Audited)Assets Current assets Cash and cash equivalents$110,502 $87,645 Short-term deposits 69,151 51,335 Marketable securities 57,605 44,643 Trade receivables (net of allowance for doubtful accounts of $840 and $1,904 as of June 30, 2023 and December 31, 2022, respectively) 61,194 78,761 Prepaid expenses and other current assets 22,185 17,085 Contract acquisition costs 5,946 6,286 Inventories 10,822 10,176 Total current assets 337,405 295,931 Non-current assets Other non-current assets 2,792 1,731 Marketable securities 7,297 22,125 Deferred tax assets, net 11,997 12,511 Property and equipment, net 15,810 17,259 Intangible assets, net 9,618 11,254 Goodwill 26,829 26,829 Operating lease right-of-use assets, net 14,145 15,653 Total non-current assets 88,488 107,362 Total assets$425,893 $403,293 Liabilities and shareholders’ equity Current Liabilities Trade payables$4,991 $4,612 Other accounts payable and accrued expenses 35,618 45,453 Deferred revenues 158,942 152,709 Operating lease liabilities 4,955 5,003 Total current liabilities 204,506 207,777 Long-term liabilities Other long-term liabilities 5,047 5,394 Deferred revenues 47,469 42,173 Restricted Sponsor Shares liability 37,625 17,532 Price Adjustment Shares liability 62,781 26,184 Warrant liability 42,278 20,015 Operating lease liabilities 8,631 10,353 Total long-term liabilities 203,831 121,651 Total liabilities$408,337 $329,428 Shareholders’ equity Share capital* - *) Additional paid-in capital (108,166) (125,624)Treasury share, NIS 0.00001 par value; 41,776 ordinary shares (85) (85)Accumulated other comprehensive (loss) income (483) 331 Retained earnings 126,290 199,243 Total shareholders’ equity 17,556 73,865 Total liabilities and shareholders’ equity $425,893 $403,293 *) Less than 1 USD Cellebrite DI Ltd. Condensed Consolidated Statements of (Loss) Income(U.S Dollars in thousands, except share and per share data) For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Revenue: Subscription services$50,512 $36,446 $97,879 $70,387 Term-license 16,694 13,395 30,609 27,653 Total subscription 67,206 49,841 128,488 98,040 Other non-recurring 1,972 4,200 4,890 10,300 Professional services 7,506 8,532 14,540 16,618 Total revenue 76,684 62,573 147,918 124,958 Cost of revenue: Subscription services 4,946 4,576 9,438 8,112 Term-license — 178 2 368 Total subscription 4,946 4,754 9,440 8,480 Other non-recurring 2,926 3,256 5,907 5,498 Professional services 5,159 5,088 10,090 10,103 Total cost of revenue 13,031 13,098 25,437 24,081 Gross profit$63,653 $49,475 $122,481 $100,877 Operating expenses: Research and development 21,053 19,675 42,184 39,251 Sales and marketing 26,745 24,892 54,346 48,151 General and administrative 11,232 10,507 21,192 21,020 Total operating expenses$59,030 $55,074 $117,722 $108,422 Operating income (loss)$4,623 $(5,599) $4,759 $(7,545)Financial (expense) income, net (36,051) 38,466 (74,826) 94,866 (Loss) Income before tax (31,428) 32,867 (70,067) 87,321 Tax expense (income) 920 (330) 2,886 (1,314)Net (loss) income$(32,348) $33,197 $(72,953) $88,635 (Loss) earnings per share Basic$(0.17) $0.18 $(0.37) $0.47 Diluted$(0.17) $0.17 $(0.37) $0.44 Weighted average shares outstanding Basic 188,130,294 181,907,435 187,239,136 181,217,005 Diluted 199,704,722 192,133,157 199,820,166 194,355,966 Other comprehensive (loss) income: Unrealized income (loss) on hedging transactions 70 (1,757) 26 (2,907)Unrealized (loss) income on marketable securities (51) (237) 126 (286)Currency translation adjustments (368) 410 (966) 812 Total other comprehensive loss, net of tax (349) (1,584) (814) (2,381)Total other comprehensive (loss) income $(32,697) $31,613 $(73,767) $86,254 Cellebrite DI Ltd.Condensed Consolidated Statements of Cash Flow(U.S Dollars in thousands, except share and per share data) For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Cash flow from operating activities: Net (loss) income$(32,348) $33,197 $(72,953) $88,635 Adjustments to reconcile net income to net cash provided by operating activities: Share based compensation and RSUs 4,600 3,605 9,057 6,463 Amortization of premium, discount and accrued interest on marketable securities (290) (55) (461) (38)Depreciation and amortization 2,569 2,257 5,016 4,369 Interest income from short term deposits (1,713) (137) (2,397) (199)Deferred income taxes (98) (918) 462 (1,842)Remeasurement of warrant liability 12,454 (13,938) 22,263 (31,021)Remeasurement of Restricted Sponsor Shares 9,051 (8,606) 20,093 (22,112)Remeasurement of Price Adjustment Shares liabilities 16,655 (15,847) 36,597 (41,606)Decrease (increase) in trade receivables 8,490 (7,765) 18,117 (750)Increase in deferred revenue 87 7,858 10,555 1,942 (Increase) decrease in other non-current assets (135) 166 (1,062) 133 (Increase) decrease in in prepaid expenses and other current assets (1,987) 180 (5,624) 930 Changes in operating lease assets 1,333 — 2,700 — Changes in operating lease liability (1,400) — (2,962) — Decrease (Increase) in inventories 583 (274) (642) (1,621)Increase (decrease) in trade payables 117 (5,421) 381 (5,773)(Decrease) increase in other accounts payable and accrued expenses (862) 1,922 (9,741) (9,163)Decrease in other long-term liabilities (530) (297) (347) (2,957)Net cash provided by (used in) operating activities 16,576 (4,073) 29,052 (14,610) Cash flows from investing activities: Purchases of property and equipment (825) (1,571) (1,889) (3,876)Investment in marketable securities (10,653) (31,409) (27,005) (60,685)Proceeds from maturity of marketable securities 13,434 5,172 29,507 5,172 Investment in short term deposits (38,000) (18,000) (54,000) (25,000)Redemption of zshort-term deposits 25,302 17,216 38,581 42,397 Net cash used in investing activities (10,742) (28,592) (14,806) (41,992) Cash flows from financing activities: Exercise of options to shares 5,079 1,055 7,185 4,683 Exercise of public warrants — 5 — 5 Proceeds from Employee Share Purchase Plan, net 610 — 1,234 — Net cash provided by financing activities 5,689 1,060 8,419 4,688 Net increase (decrease) in cash and cash equivalents 11,523 (31,605) 22,665 (51,914)Net effect of Currency Translation on cash and cash equivalents 7 (2,429) 192 (2,374)Cash and cash equivalents at beginning of period 98,972 125,719 87,645 145,973 Cash and cash equivalents at end of period$110,502 $91,685 $110,502 $91,685 Supplemental cash flow information: Income taxes paid$4,902 $2,602 $8,527 $3,889 Non-cash activities: Purchase of property and equipment$— $88 $— $221 Cellebrite DI Ltd. Reconciliation of GAAP to Non-GAAP Financial Information(U.S Dollars in thousands, except share and per share data) For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Cost of revenues$13,031 $13,098 $25,437 $24,081 Less: Share based compensation 414 339 800 585 Acquisition related costs 14 — 27 — Non-GAAP cost of revenues$12,603 $12,759 $24,610 $23,496 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Gross profit$63,653 $49,475 $122,481 $100,877 Share based compensation 414 339 800 585 Acquisition related costs 14 — 27 — Non-GAAP gross profit$64,081 $49,814 $123,308 $101,462 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Operating expenses$59,030 $55,074 $117,722 $108,422 Less: Issuance expenses (345) — (345) — Share based compensation 4,186 3,266 8,257 5,878 Amortization of intangible assets 840 664 1,636 1,328 Acquisition related costs (337) 394 (86) 1,452 Non-GAAP operating expenses$54,686 $50,750 $108,260 $99,764 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Operating income (loss)$4,623 $(5,599) $4,759 $(7,545)Issuance expenses (345) — (345) — Share based compensation 4,600 3,605 9,057 6,463 Amortization of intangible assets 840 664 1,636 1,328 Acquisition related costs (323) 394 (59) 1,452 Non-GAAP operating income (loss)$9,395 $(936) $15,048 $1,698 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Net (loss) income$(32,348) $33,197 $(72,953) $88,635 Issuance expenses (345) — (345) — One time tax income — — — (1,825)Share based compensation 4,600 3,605 9,057 6,463 Amortization of intangible assets 840 664 1,636 1,328 Acquisition related costs (323) 394 (59) 1,452 Tax expense (income) 131 506 1,325 81 Finance expense (income) from financial derivatives 38,160 (38,391) 78,953 (94,739)Non-GAAP net income (loss)$10,715 $(25) $17,614 $1,395 Non-GAAP Earnings per share: Basic$0.05 $(0.0001) $0.09 $0.01 Diluted$0.05 $(0.0001) $0.08 $0.01 Weighted average shares outstanding: Basic 188,130,294 181,907,435 187,239,136 181,217,005 Diluted 199,704,722 192,133,157 199,820,166 194,355,966 For the three months ended For the six months ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Net (loss) income$(32,348) $33,197 $(72,953) $88,635 Issuance expenses (345) — (345) — Financial expense (income), net 36,051 (38,466) 74,826 (94,866)Tax expense (income) 920 (330) 2,886 (1,314)Share based compensation 4,600 3,605 9,057 6,463 Amortization of intangible assets 840 664 1,636 1,328 Acquisition related costs (323) 394 (59) 1,452 Depreciation expenses 1,729 1,593 3,380 3,041 Adjusted EBITDA$11,124 $657 $18,428 $4,739