Cellebrite DI Ltd.

Cellebrite DI Ltd. is a leading provider of AI-powered digital investigative and intelligence solutions, primarily software and services, for legally sanctioned investigations globally. The company's mission is to protect nations, communities, and businesses by transforming investigative workflows, making digital data more accessible and actionable, and enhancing mobile research and application security. Cellebrite operates in a growing market characterized by increasing digital data volumes and complexity, sophisticated criminals, and heightened public scrutiny on investigations. The company believes that ongoing investment in advanced technology is crucial to address these challenges and close the public safety gap. ⁶

Cellebrite's core business model revolves around generating revenue from subscription services, other non-recurring offerings, and professional services. Subscription revenue, which includes SaaS and on-premise subscriptions, as well as maintenance and support, accounted for 90% ¹⁰ of total revenue in 2025. Other non-recurring revenue comes from hardware sales and usage-based fees, while professional services include certified training, advanced forensic services, and implementation support. The company primarily targets public safety agencies, including law enforcement, defense, and intelligence agencies, which accounted for more than 90% ¹¹ of its revenue in 2023, 2024, and 2025. ⁷

The company's product and service lines are categorized into Digital Forensics Software, Digital Investigations and Analytics, Prevention & Intelligence, and Professional Services. The Inseyets suite of digital forensics software is used to lawfully access and extract digital data from a wide range of sources, including encrypted, deleted, or hidden data from mobile phones, computers, and cloud applications. ⁸ Digital Investigations and Analytics include Guardian Forensics for evidence management, Guardian Collaborate for secure data sharing, and Cellebrite Pathfinder, an AI-powered analytical software solution for examining digital data and surfacing leads. ⁹ The Prevention & Intelligence segment, bolstered by the December 2025 acquisition of Corellium, offers Arm-based Virtualization Software, including Corellium Falcon for mobile vulnerability research and Corellium Viper for mobile application penetration testing. ¹² Professional Services encompass Training and Certification Services, with over 400 classes delivered in 2025 ¹³, and Cellebrite Advanced Services, which provides expert forensic lab support. ¹⁴

For the fiscal year ended December 31, 2025, Cellebrite reported total revenue of $475.675 million ¹⁵, an increase of 19% ¹⁶ from $401.203 million ¹⁷ in 2024. Gross profit for 2025 was $400.503 million ¹⁸, resulting in a total gross margin of 84% ¹⁹, consistent with 2024. Operating income for 2025 was $66.480 million ²⁰. Net income for 2025 was $78.326 million ²¹, a significant improvement from a net loss of $(283.007) million ²² in 2024. Diluted EPS is not explicitly stated in the provided text. The company's Adjusted EBITDA for 2025 was $127.631 million ²³, with an Adjusted EBITDA margin of 27% ²⁴. Free cash flow for 2025 was $160.319 million ²⁵, representing a free cash flow margin of 34% ²⁶. As of December 31, 2025, cash and cash equivalents were $124.5 million ²⁷, short-term deposits were $161.0 million ²⁸, and short-term and long-term marketable securities totaled $249.5 million ²⁹, with no outstanding debt. ³⁰

Comparing 2025 to 2024, subscription revenue increased by $73.975 million ³¹, or 21% ³², driven by continuous adoption of solutions by existing and new customers. Other non-recurring revenue saw a modest increase of $0.486 million ³³, or 3% ³⁴, primarily from hardware sales. Professional services revenue remained consistent. ³⁵ Cost of subscription services increased by $11.457 million ³⁶, or 44% ³⁷, due to higher hosting and personnel expenses. Cost of other non-recurring revenue decreased by $0.583 million ³⁸, or 4% ³⁹, mainly due to lower hardware costs. Cost of professional services increased by $1.618 million ⁴⁰, or 8% ⁴¹, due to increased training expenses. Subscription gross profit increased by $62.431 million ⁴², or 19% ⁴³, though the margin decreased from 92.6% to 91.2% ⁴⁴. Other non-recurring gross profit increased by $1.069 million ⁴⁵, or 99% ⁴⁶, with its margin rising from 6% to 12% ⁴⁷. Professional services gross profit decreased by $1.607 million ⁴⁸, or 15% ⁴⁹, with its margin declining from 34% to 29% ⁵⁰. Operating expenses increased across all categories, with research and development up by $15.462 million ⁵¹ (16% ⁵²), sales and marketing up by $22.425 million ⁵³ (17% ⁵⁴), and general and administrative up by $14.432 million ⁵⁵ (28% ⁵⁶). Financial income (expense), net increased by $357.1 million ⁵⁷, or 107% ⁵⁸, primarily due to the revaluation of derivative warrants, sponsor restricted shares, and price adjustment shares in 2024, which were no longer classified as liabilities in 2025. ⁵⁹ Tax expense increased by $5.3 million ⁶⁰, or 76% ⁶¹, mainly due to profit in the Parent Company. ⁶²

During 2025, Cellebrite completed the acquisition of Corellium, Inc. in December 2025, a leader in virtualization software for Arm processors, for a net payment of $147.5 million ⁶³ in cash, with an additional $20 million ⁶⁴ converted into equity at closing and up to $30 million ⁶⁵ in cash based on performance milestones over the next two years. ⁶⁶ This acquisition is expected to broaden Cellebrite's offerings for both public and private sector customers. ⁶⁷ In February 2026, the company signed an agreement to acquire SCG Canada Inc., a provider of hand-held digital forensics solutions for Unmanned Aerial Vehicles (UAVs), which closed on March 1, 2026, for $17 million ⁶⁸ in cash upon closing and an additional $1 million ⁶⁹ in RSUs. ⁷⁰ The company also announced the patent for its Remote Mobile Collection solution in September 2024. ⁷¹

Cellebrite's growth strategy for 2026 is underpinned by an ongoing commitment to fund innovation and execute go-to-market initiatives aimed at expanding existing customer relationships and acquiring new customers. The company expects to further expand its business through new logos, upgrades, and annual price increases, continuing to broaden its customer base and evolve its offering mix. ⁷²

A major growth area is Digital Forensics, where Cellebrite plans to drive growth by converting customers from legacy digital forensics solutions to Inseyets, increasing Inseyets adoption with current and prospective customers, and extending its reach into new user groups within its installed customer base by selling advanced unlock solutions and automation offerings. ⁷³

Another significant growth vector is the greater adoption of Cellebrite's Digital Investigation and Analytics offerings. The company seeks to expand the number of customers using its Guardian Forensics solution, planning to make it available to U.S. Federal agencies by achieving FedRAMP authority to operate, and extending into other select international markets. A private sector version of Guardian Forensics will also be sold to enterprise customers. The Guardian Investigate solution is expected to be generally available in early 2026. ⁷⁴

Operationally, Cellebrite continues to invest across its go-to-market organization in people, processes, and systems, and to evolve its pricing and packaging to support improved retention rates by minimizing churn. ⁷⁵ The company's ongoing investment in research and development is focused on enhancing existing offerings with new features, functionality, and capabilities, as well as developing new products to address evolving customer needs. This includes considerable investment in mobile research to advance access, extraction, and decoding capabilities, and expanding investment in artificial intelligence, particularly in generative and agentic AI, to deliver deeper insights, greater automation, and improved decision support. Cellebrite is also cloud-enabling more solutions and capabilities. ⁷⁶ The company works with Amazon Web Services (AWS) to develop and scale its Cellebrite Cloud Platform and plans to continue investments to further scale this infrastructure, aiming for compliance with various technical program requirements, standards, and certifications for deployment at scale by federal and state government customers in different regions. ⁷⁷

Regarding capital allocation, Cellebrite's business has historically generated strong cash flow from operations and has been minimally capital intensive. As of December 31, 2025, the company reported total cash and cash equivalents, cash deposits, short-term marketable securities, and long-term marketable securities of $535.0 million ⁷⁸ with no outstanding debt. The company believes its existing cash and cash equivalents, short-term investments, and cash flows from operations will be sufficient to fund organic operations and capital expenditures for at least the next 12 months. Capital expenditures for the next 12 months are expected to relate to property and equipment and software. The company's growth strategy also includes disciplined pursuit and evaluation of acquisition candidates to accelerate innovation and expand its total addressable market. ⁷⁹

Management has explicitly flagged structural headwinds and execution risks, including the potential for the Israeli Minister of Defense's new order, effective March 18, 2026, to subject some of Cellebrite's exports to new licensing requirements under the Israeli Defense Export Control Law, 5767-2007, and the Import and Export Order (Export Control over Dual Use Goods, Services and Technology), 5766-2006. This could necessitate adapting licensing, marketing, and export practices, increasing expenses, and causing sales delays or customer loss. ⁸⁰ Geopolitical factors, such as the ongoing conflict between Israel and Hamas and tensions in the Middle East, including the direct military conflict between Israel and Iran in 2026, may adversely affect operations, disrupt supply chains, and lead to increased costs and risks to employee safety. ⁸¹

Cellebrite faces several material risks. Geopolitical instability, particularly the ongoing conflict between Israel and Hamas and the escalated direct military conflict between Israel and Iran in 2026, poses significant threats to operations, supply chains, employee safety, and could lead to increased costs and potential financial losses, as commercial insurance does not cover war and terrorism-related events. ⁸¹ Regulatory risks include the new Israeli encryption control regime, effective March 18, 2026, which may subject some of Cellebrite's exports to new licensing requirements, potentially increasing expenses, causing sales delays, and leading to customer loss. ⁸⁰ The company is also subject to complex and evolving U.S. and non-U.S. laws regarding privacy, data protection, and AI, such as the EU AI Act, which imposes administrative fines up to the higher of 7% ⁸² of worldwide annual turnover or €35,000,000 ⁸³ for prohibited AI restrictions, and up to the higher of 3% ⁸⁴ annual worldwide turnover or €15,000,000 ⁸⁵ for other violations. ⁸⁶ Operational risks include the potential for real or perceived errors, failures, defects, or bugs in solutions, which could adversely affect reputation, customer willingness to buy, and market acceptance. ⁸⁷ The company's reliance on third-party technology licenses also presents a risk, as inability to maintain these licenses could harm its business. ⁸⁸ Furthermore, the sales cycle for some solutions can be lengthy, particularly for larger transactions, potentially delaying revenue. ⁸⁹

Management's message to shareholders emphasizes an ongoing commitment to innovation and strategic go-to-market initiatives to expand existing customer relationships and acquire new customers. The company plans to drive growth through new logos, upgrades, and annual price increases, while also focusing on converting customers to its Inseyets digital forensics solution and increasing adoption of its Digital Investigation and Analytics offerings, including Guardian Forensics and the upcoming Guardian Investigate solution in early 2026. ⁷⁴ A key strategic priority is leveraging global go-to-market capabilities to sell Corellium solutions into defense, intelligence, and enterprise verticals. Management also highlights continued investment in people, processes, and systems, as well as evolving pricing and packaging, to improve retention rates. The company's strong financial foundation, with $535.0 million ⁷⁸ in cash, cash equivalents, short-term deposits, and marketable securities and no outstanding debt as of December 31, 2025 ⁷⁹, supports a growth strategy that includes disciplined pursuit of acquisition candidates to accelerate innovation and expand its total addressable market.