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Background Note: The following announcement shares the 3Q2022 financial results for a global leader in Digital Intelligence, Cellebrite, and may be of interest to legal, business, and information technology professionals operating or investing in the eDiscovery ecosystem. Additionally, a recent post (August 2022) by Tomasz Tunguz, a venture capitalist with Redpoint, provides an interesting consideration that may be of relevance regarding the value of public software companies. The post, titled Growth is No Longer the Best Predictor of a Software Company’s Value, notes that profitability has surged as the most significant correlate and predictor of a public software company’s value. 

Press Announcement Extract (November 17, 2022)

Cellebrite Announces Third Quarter 2022 Results

  • ARR of $232 million, up 35% year-over-year
  • Third Quarter revenue of $71.7 million, Increase 9% year-over-year

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 nine months ending September 30, 2022.

“We are pleased to report a solid third quarter, delivering strong ARR growth as we continue to execute on our full-year targets set forth last quarter. The demand we are seeing in the market demonstrates that our innovative solutions are highly relevant as public safety organizations and private enterprises recognize the need to modernize their investigative workflow in the face of the ever-growing digital sophistication of crimes and evidence. We are particularly proud of our best-in-class retention rates which prove that our go-to-market strategy is bearing fruit,” said Yossi Carmil, Cellebrite’s CEO. “We have made progress on the initiatives we outlined last quarter, and we remain excited about the opportunity in front of us as we pursue our mission to protect and save lives, accelerate justice, and preserve privacy.”

Third Quarter Financial Highlights

  • Revenue of $71.7 million, up 9% year-over-year, of which subscription revenue was $55.6 million, up 8% year-over-year
  • Annual Recurring Revenue (ARR) of $232 million, up 35% year-over-year
  • Recurring revenue dollar-based net retention rate of 129%
  • GAAP gross profit and gross margin of $57.1 million and 79.7%, respectively
  • GAAP net income of $25.1 million; Non-GAAP net income of $3.0 million
  • GAAP Diluted EPS of $0.13; Non-GAAP Diluted EPS of $0.01
  • Adjusted EBITDA and Adjusted EBITDA margin of $5.1 million and 7.0%, respectively

Third Quarter and Recent Digital Intelligence Highlights

  • Closed 25 key deals, each valued at $500,000 or more.
  • Released the next generation of Cellebrite Guardian which provides critical features aiding law enforcement in handling digital evidence in an ethical way, including storing, managing, and sharing evidence, with unmatched instant review of digital evidence. Additional enhancements create increased flexibility for law enforcement and help them secure privacy to address key pain points in the investigative workflow, including physical duplication, transportation of evidence, and time-consuming evidence review.
  • Enhanced Collect & Review offerings by launching an automated and secure system that enables investigative analytics stakeholders to rapidly collect, review, and analyze data in an integrated workflow. By streamlining the transfer of data to the investigative team, customers shave hours off the workflow to bring evidence to prosecutors faster.
  • Announced Sandline Global as first private sector customer for Cellebrite Guardian. This multi-year investment is expected to enhance Sandline’s in-house investigative and evidence management operations.
  • Won all categories for which the company was nominated at the 2022 Forensic Focus 4:cast awards, including DFIR Commercial Tool of the Year and the Investigator of the Year for the third year in a row, proving our continual leadership in digital forensics

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

“We are proud to deliver ARR growth of 35% year-on-year during the third quarter reflecting a strong demand market for our Digital Intelligence solutions. However, given the strengthening of the USD to the European and other currencies we expect to finish FYE 2022 at the lower end of our guidance” said Dana Gerner, Chief Financial Officer of Cellebrite.

“We remain focused on efficiently investing in our innovations and solutions to deliver on our targets for the year we outlined last quarter,” Gerner concluded.

Read the original announcement.


Complete Investor Presentation (PDF) – Mouseover to Scroll

Q3 22 Earnings Call Presentation – Cellebrite


Complete Announcement with Tables (PDF) – Mouseover to Scroll

Cellebrite Announces Third Quarter 2022 Results


Additional Reading

Source: ComplexDiscovery

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