Cellebrite DI Ltd. Q3 FY2025 earnings call

Key Points

• CEO Thomas E. Hogan noted third - quarter results were solid and balanced. ARR grew 19% over twelve - month period, subscription revenue grew 21%, adjusted EBITDA exceeded expectations.
• U.S. Federal segment showed year - to - year growth in the third quarter, with plans for resurgence in 2026.
• Approximately 47% of installed digital forensics license base converted to insights offering, on track to meet 2025 target of 50% conversions.
• SaaS and cloud - based solutions ARR grew three times faster than total ARR, Guardian users more than doubled year over year and ARR grew triple digits for fifth consecutive quarter.
• Global defense and intelligence sector business expanded with multiple agencies increasing investment.

Core Growth Vectors

• Focus on asserting leadership in unlock and access solutions across OEM phone providers and operating systems, with unlock offerings attached to over 45% of Insights and legacy forensics installed base.
• Accelerating innovation in AI and digital investigations with upcoming launch of Guardian Investigate.
• Expect resurgence of growth in U.S. federal sector in 2026, with factors like targeted funding release, FedRAMP authorization, and Keryllium asset fit.
• Pending close of Keryllium, which is expected to expand TAM and value proposition across global defense, intelligence agencies, and private sector.

ARR grew 19% to $440 million. Third - quarter revenue was $126 million, increasing 18% from the prior year. Subscription revenue grew 21%, with approximately 89% of total revenue associated with subscription - based software solutions. Gross profit was $106.5 million, representing a gross margin of 84.5%. Adjusted EBITDA for the third quarter was $37.7 million, increasing 20% over the prior year and margin expanding to 29.9%. The Americas represented 55% of total ARR, EMEA 33%, and Asia Pacific 12%. The Americas grew 21% with the U.S. State and local government and Latin America teams leading the way.

Fourth Quarter and Full - Year 2025

• Anticipate fourth - quarter ARR to grow sequentially in the mid - single digit.
• Full - year revenue outlook is $470 to $475 million, representing growth of 17 to 18%.
• Full - year adjusted EBITDA range is $124 million to $127 million.

2026 Planning

• Initial 2026 outlook to be prudent, grounded in historic seasonality, RPO, contractual backlog up for renewal, and near - term opportunities with existing customers.
• Multiple growth drivers for ARR growth in 2026 including winning new logos and increasing price/mix, expansion for Incyte, growth of Guardian and Pathfinder, and contribution from Keryllium solutions once transaction closes.

• CFIUS approval risk for Keryllium acquisition, though management has high confidence but nothing is 100% certain.
• Uncertainty in U.S. federal government spending timing and magnitude, which can impact business growth.
• Competitive landscape risks, though management believes Cellebrite DI Ltd. has strong competitive positioning.

Q: Jonathan Ho asked about insights conversions and future ARR and upsell.

A: Marcus Jewell said it means expanding cross - sale opportunity, with potential for expansion into Guardian and Pathfinder platforms and TAM expansion in DNI.