Earnings call transcript Q4 2022

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Operator

Good day and thank you for standing by. Welcome to Cellebrite's Fourth Quarter 2022 Financial Results Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Mathews conference with like speaker to now Sabrina today, Investor would hand over the your I Relations. Please go ahead, Sabrina.

Sabrina Mathews

to earnings Thank XXXX Welcome Cellebrite's and quarter you. full financial results call. fourth year

our including Carmil, this Joining me CFO. call made call as this will GAAP website the the statements, release A being is and as of the well CEO; copy fourth available on of on for press Dana and replay non-GAAP as shortly Gerner, be This the website a Cellebrite's recorded, today's recording to supplemental today Investor after call. Cellebrite's are information and as reconciliations Relations presentation Yossi financial are well that financial available accompanies investors.cellebrite.com. at quarter

quarter the quarter the well fourth only, outlook non-GAAP metrics Also, and conference in on our a historical otherwise, XXXX financial with unless will provided will comparisons unless as fourth be discussed otherwise call basis noted. of all that XXXX, today's our as metrics on financial be stated are

please that or that forward-looking They risks constitute historical are facts not during statements made materially forward-looking and/or not matters note cause also other could statements this those the to historical from that results statements. and factors are to uncertainties forecasts. cause call subject differ of and All statements implied to by results could expressed forward-looking occur. addition, statements In actual from

XXXX. provides Factors reflect not or the as any on Risk for XXXX, SEC to Slide under future Some April March call. Form the agenda discussed does with undertake today's forward-looking and number in circumstances. on of filed on the amended company update these statements forward-looking X events annual statements XX, XX-F the heading elsewhere to company's report are The XX,

to Cellebrite's like Carmil, that, the turn Yossi CEO. call over With I'd to

Yossi Carmil

you, Sabrina, us you and all thank joining for today. Thank

XXXX modernize that progress by digitizing we've pleased made our workflows. customers advancing their I'm investigations to mission in help to significant report So our

quarter fourth year and things. the four important in achievements and reflect past throughout results Our the

digital The market investigative the first, for remains healthy. intelligence solutions

is strong. position Second, our leadership

broad remains highly underpenetrated. profitable We in a for a long growth have runway market that

Third, initiatives. And our thanks we and XXXX. progress executed road map to on development well go-to-market our fourth, in

well are XXXX. results strong deliver in positioned We to

cover these our before results KPIs details, that and business. I'd quickly And critical health of of in to area each like and our more QX are I to the review success select

ARR reach US$XXX year-on-year million. our First, grew to XX%

US$X.X XX%. of strengthened largely and with ending QX revenue of Our EBITDA retention quarterly cash was growth million the year net large subscription outstanding no XXX%. delivered We QX closed foundation, of investments debt. quarter. million, attributed than adjusted to deals, and growth US$XXX We million, We $XX $XX.X we our totaling rate to further and million the also XX financial reported revenue greater in X%

healthy the about bit little A environment. market

solutions Cellebrite in customers sectors. customers feedback market and winning a we and positive to increasingly to healthy our upselling are and by Against part through in cross-selling, business large So with of in continue opportunities today this growth with Cellebrite's public technology. implement existing demand new expanding we continue upgrades, significant in backdrop, prospects. thanks strategy of logos both strong growth to attractive with front operate and and private us, industry-leading from

from our are impacting XXXX, as for important, as wide are that are currently pressures broader in Just expected they solutions technology other budgets Digital the to robust range customer a of insulated remain type of macroeconomic sectors. Intelligence generally

U.S., investigative law latest XXXX. evidence-based XXXX. will enforcement digital staffing remain them XXXX funding Americas, intelligence intelligence stay expect agencies revenue, U.S. by of our by overall in historically enforcement geographies current will law spending fiscal incremental time enforcement increased to the anticipate we represents federal this year In In the resources And way, trend additional and for grown in of support have budgets the and solid over XX% that law the which, other all sites with agencies help we and will in practices. continue

reputation which success a in has is trusted intelligence as by built wallet existing market our reflected leader, digital best Now increasing within share a Cellebrite customers. our

years, the leveraged evidence and make Collect traditional by our stronghold to solutions Over in actionable. have accessible, increase units helping within digital them intelligent & our footprint we digital Review forensics more

of game Enterprise changers Now physical With ongoing continues the Premium we review leading and & Review of our our the buying are & Pathfinder, continue the in solutions Collect like unlocking Service and cases. that our and use operations we investments a addition analyzer to a and centers for growing are investigative Collect in Premium address believe range be supporting to customers' new newest offering analytics as fields. investigative of customers, expansion tool the Review neutral new true

of our the is success the strategy. base installed large which and Now and than XXth NRR deals XXX greater we our deals this quarter XXX%. in reflected we is in and we XX our bringing very of retention value higher of closed total Furthermore, rate rates, are into upselling XXX%, best in go-to-market was than power XX% to proud best-in-class in our our large QX, XXXX. retention cross-selling demonstrate the our XXXX consecutive and This QX reported net in

customers the winning will Cellebrite's well growth continue expect future. We into existing more to business that with fuel

execution. bit about little go-to-market product development the and A

analytics securely. as a strengths state evidence manage adding version by solution. Service offering in features, analyze was our fortify During solutions, that Collect & It and points see took is longstanding investigative – helped local have our functionality enhanced effort our of our solution. offering in our Guardian major rolled were pain government the out important efficiently our SaaS success customers reach necessary further us data capabilities scale like we the that our management our year to the efforts advance help while and infrastructure extend and to of & and offering address development to to cloud U.S. Premium portfolio earlier also customers in XXXX, We like the new newest and our pleased Review, in and case agencies. underpin Review, and and and into we adjacent for steps Collect to this With investing our filter, extract,

Now With this and strategic and Europe, marked made progress. an meaningful emphasis global to also solid improve sales in U.S. investment year management expand effectiveness on our the force. to account past our in we

roles Our sales us NRR, resources our organization infusion right and grew to best right targets. the large helped serve deliver This talent on the by of deal XX% we put as in customers. to ARR,

customers, now in gained in secure a traction see local from growth Now of and which and ability investigative of and U.S. market we associated simple, the during greater broader law realize infrastructure, solution budgets, range – modernize benefiting we And the our appeals Europe. to operation, in the Guardian staff cloud-based solutions. with state need confidence for evidence the enforcement their new we management. SaaS on-prem IT is the excellent solutions, scalable in enforcement growth is lack but digital potential results which hundreds QX to delivered and see to for continued our with who users and ahead often gaining

customer Let's success. talk about little a the bit

helping deals, all technology like operation, expanding briefly their here wallet is these while share. our of which customers of to I'd how our demonstrates modernize some So QX highlight Cellebrite

into So a accelerate our deploying with who field broadly agency, in regional is premium law our now solution enforcement the to investigations. Asia Pacific relationship more help region, enterprise their we the longstanding grew them

more As further the this for will result, to million by stage customer and from a set nearly expansion. ARR our grow than US$X XX% help

leverage selected deal their XX% agency infrastructure enterprise solution large federal premium capability ARR of this the the a by In move field nearly private the This AWS and operate from U.S., our cloud account UFED our augment labs use operation. increases regional to of US$X and more million. almost to to mode into at

customers Pathfinder, new us earlier investigative Now, analytics modernize buying and their the workflows. investigative enabling unlock they solution, I mentioned support centers our digital is that as to

So, enforcement other, over in two one multi-year state figure mid figure one with QX, million Pathfinder the deal agencies example, year. deal six Europe to local law agency that in a eight in we of which triples police for our national US$X.X the with a U.S. Western closed low and large ARR largest And the per was of deals

Pathfinder's value by in surface connections sifting helping more collaborate and mountains law to enforcement deals evidence, digital accelerate investigations professionals of unique efficiently. showed data through both the discover Now most relevant

finally, in two notable and And we private closed Fortune with deals, four sector, customers. provider service the two partners corporate XXX with

to collecting here customers transformation XXXX over Inspector it closing, vast all the improve trying data from purchased efficiency Now of enabled time-consuming execution reached market all and is upgrading thereby and approaches. In industries, XX further remotely costly, to by us devices months substantially mobile our to computers, the on capitalize Digital these overall enter solid past clearly legacy has operational opportunity. has stay. to Endpoint

agencies public scrutiny businesses, they operational rising regardless of around the accountability customers, Our sector investigative cycle. and of pressure how volume handled increased or local ethics throughout its are private greater is the digital regional whether inefficiencies complex and sector in of of are data, modernize national, workflows their to face life under increasingly or evidence

our And address an those role customers in Cellebrite to enabling important challenges. is playing

from financial execute and programs that people the targets. where deliver XXXX the we we confident on I'm to today, the our products, stand Now needed and have

performance, even for that improved invest a We fundamental model future. established have scalable will support as the we

our fortify leadership, in to capture priorities market clear. mobilize are this market further our and a we As year demand healthy

R&D to will technology investigation investment supports plan will infrastructure in modernize and on-prem we SaaS that in innovation solutions require their state-of-the-art paired deliver the help workflow. First, entire This with customers offerings ongoing portfolio digital sustained our across through that it.

focus in and that third, advancing cases. a in by labs by will analytics units solution, UFED management investigative accelerating our reach complex our forensic helps high-value faster premium are the collaborate Collect on our broadening extending And and digital resolve we to move extensively stronghold which securely labs. Review investigative are by leadership solutions progress Second, time-sensitive we with case used beyond & our our and

our operation improved rate, profitability we strong by expect executing these deliver in from XXXX. high-level cash Now and generate against revenue growth to accelerate priorities, flow

the direction the would what to work we and hard our helping front Cellebrite in short, of ever, make ahead. in continued the And to investigation lies in to public I safer. team. in like excited to for I'm for our the and commitment safety thank our capitalize confident opportunity and my at strategic our XXXX colleagues committed more remain our use and to opportunities And attractive gap. world in ability our modernize on I'm close customers

the And I turn with will Dana. that, call to

Dana Gerner

you, Yossi. Thank

Yossi year-on-year, XXXX. licensing. subscription through million being reaching fronts of success This for growth continued biggest number mentioned existing the earlier, with $XXX reflects customers a grew driver our As on with ARR XX% expansion

perpetual traditional licensing. made past convert to the we tangible customers several quarter years, to every from Over progress subscription a have incremental model

this As is result, as enter largely complete a XXXX. transition now we

year. revenue of and revenue strong last last million. of of the generating subscription our quarter X% year our a same for in primarily the believe the up fourth from quarter services subscription substantial fourth period which from This growth in quarter subscription-based business total reached will up XX%. we was With XXXX same two services ago apparent. XX% was model $XX Total in and increasingly by software of revenue, subscription will revenue power services be XX% quarterly XX% came of from years year the majority driven now that become a the

sales, cost rose compared subscription lower last which year, from the XX% from margins XX% gross Our quarter of portion the sold. as carry a goods increased fourth of benefiting to QX of in

excluding expenses, compensation, of and In operating terms expenses non-GAAP intangible expenses. acquisition-related discuss basis, these share-based of will on a assets, amortization I onetime

non-GAAP quarter. the were QX million operating $XX.X in XXXX expenses

carrying and Clues. public the recall, quarter fourth full by cost of was impacted the XXXX costs the was may quarter of Digital you from company the As acquisition further first

annual Our prudent lower-than-anticipated costs with well totaling EBITDA approximately compensation $X fourth and aligned deliver quarter costs commitment as quarterly spending to incentives variable improvement sustainable XXXX million. operating reflect our as

X,XXX teams to with ahead We XX% now of of challenges ended the with fly level year address have end consistent the end up in at appropriate We third in XXXX. month the opportunities and last place we quarter. from the to December and the employees, believe the December the of

Adjusted XX% on EBITDA was million basis. in a the margin quarter $XX.X or

in position. while our in revenues gross Our adjusted contributed subscription to strong the our efficiencies, supported quarter, higher EBITDA the of cost maintaining which technological QX result reflects investment performance and market continuing strong margins by the

with prudent Moving forward, in growth accelerated is we expected leverage. deliver EBITDA growth XXXX revenue an coupled levels as produce operating to rate, expect spending to

earnings net in was million, Non-GAAP and QX $X.XX. fully was income $XX.X non-GAAP per diluted share

quarter generated strong We performance. cash I'm in quarterly the we to of the of operations pleased a fourth that in position. report $XX million, year cash result a operating ended from strong a

operations. of million reported investments of We December the For inflows at approximately ended $XXX the million $XXX XXXX. versus month from cash, $XX.X end with of cash and of the we million equivalents cash year, full

by I XXXX will additional conclude outlook. my context providing our remarks around some

our We and last of end XX% $XXX years, higher from the new will of to existing by a ARR expansions with grow expect XX% majority prior contribution million logos our to we anticipate million that between XXXX. $XXX to with the than from fuel growth, Consistent year. customers

are net with We expect XX% retention pipeline target. other our full growth rate, $XXX XXXX revenue ending $XXX represents XX% dollar these from reasonably achievable. line that targets a of represents When ARR which to combined XX% believe XX% assumptions $XXX revenue range XXXX words, XXXX we to year healthy around and our million top million to In of over to XXXX. million,

trends, year. the expect the in the year These revenue in quarterly most rates will of full historical as end. year first license September versus growth the be the accounts deals second with year associated federal December perpetual typical the second and half line dynamics be higher will we year-end and half, activities half towards revenue U.S. and In of spending primarily our weighted customers wind-down with of the other reflect the

XX%, non-GAAP XX% expected to From to to operating with of million a margins the million. be costs to grow expect gross between between we to $XXX $XXX range XX% profitability perspective, to X% in non-GAAP

of total EBITDA XX% million to $XX We in revenue. $XX or of currently anticipate XX% range to adjusted the million

in when higher in anticipate profitability year most of each second will quarter of believe the XXXX, operating incremental will occur the significant we gains revenue the we half While higher drive leverage.

original advance making and development road believe to product keep target returns initiatives further expansion margin track on support or reach We yield of and will that to maps us EBITDA XXXX we greater. are long-term in our investments that the our XX% attractive go-to-market

Yossi's new In closing, Cellebrite about I would the excitement and what bring. echo will like to year

increase a are translates win to large a innovative around base, This efforts by accounts market new market. targeting into the expansive ongoing globe. leader our penetration We to global opportunities solutions with addressable installed growing customer complemented into

customers expect with our to accelerate With we lifting much heavy the rate licenses associated line top XXXX of labels. to from converting subscription our behind growth us,

the are better months, forward stronger shared to into improved positioned create to build thanks a notable, ago. doing half out year went everything that appreciation to last the gain made a make storage look substantial We as and our for is Just company organization, to Cellebrite we progress helping when we as flow. convert investments to value cash targets we we revenue year over investors towards coming the tangible and long-term free well public the profitability

that, the With to would the turn open I operator the to Session. Q&A call

Operator

Blair. And Instructions] Thank you. [Operator Ho with comes from first our question William Jonathan

line Your is now open.

Jonathan Ho

maybe or guidance. I Hi, just start strong Could of morning. results. a around the each to how revenue couple categories? to you the to questions XXXX guidance quantify would help I and on specific about growth the congratulations those little wanted is more contribute for maybe helpful a ARR of think for with going understand be guidance. unpack your bit us out it maybe current the think good to And how to us in

Dana Gerner

I'll for it, take sure. Yes, Yossi.

from revenue second reduction and in XXXX, you remember, if seen continuous the onetime year. licenses, our perpetual in of half the towards we've a So especially

XXXX this also a a marginal down percentage winding lower in expect revenue. We to very continuous of at weakness to very business of see

the are part onetime came very or, or line, services growth say, are expectation talking such, about around our take activity comparing onetime I And consideration the financials, top would business if with XX% our whether marginal. XX% from you licenses. when they associated on be into The we of our perpetual XXXX as will

business. most sorry. In of growth – the So, will subscription from come okay, principle

Jonathan Ho

and it. to should the think products, basis growth Pathfinder, I opposed the rates a how is what along premium contribution the Got as more Like revenue the question Yes, on core of about the my mix? collect think lines product either from is review? we

Dana Gerner

XXXX came review. from collection most the in the from revenue So, of subscription

around collection of I So say came from would the subscription from review. revenue XX% plus

to We is but very and the XXXX good very expect the Service. grow compared This standalone and also investigative a solution in in through percentage premium of as half of that from pie expect premium, review and business because with marginally good We XXXX. potential enterprise a second this only collection grow acceptance the be been and the XXXX. Premium capabilities similar to analytics a very in we management to are as do have is a collection attraction subscription our seeing the huge distributed XXXX in advanced not

Jonathan Ho

Great. help more the And that in most guess, investments follow-up. what maybe And confidence growth can I the what's will about just you XXXX then XXXX you changed optimistic what is as understand Thank XXXX? opportunity? us versus a that you. made giving make to in accelerate you or you've

Dana Gerner

to said weighted I comparing growth it to very was perpetuals. to presented XXXX such, difficult and of through as pears ARR because growth revenue, Yes. And the heavily mainly the recognition comparing was was that growth. to apples through revenue XXXX was the XXXX show always so true itself actually true onetime

Moving see what mix expected is standing where the to the to from of into also business the be revenue side. of especially right XXXX we actually rates on QX and to growth revenue will QX be mainly and QX of from XXXX, types, we are comparing of onwards, XXXX, the XXXX able

Yossi Carmil

in, we QX would the acceptance say, and they and of and how level of also was QX market the There resonates into that solutions XXXX I the grow. brought how

in products of will logos, that say, become we and but mix the existing growing know, look and identify logos, and state especially I is existing much something government. to tail at, long adding thousands I what clearly additional you of centers look if which always then the U.S. local stronger, new at if which customers sector call, I with, have we markets As of within the buying we would the

– the pretty strong accepted enterprise, well Service and that about are are equipped connected growing. also points and I'm now a engine enterprise or in say, to the we see premium which investigative rates business growing for solid success the the analytics Premium comfortable would on as when relying the premium pretty go-to-market Adoption fact right were it with as of it in very focused, QX a XXXX. The comes QX. lying very feel a and of end number QX. much of more We to confident due I

So within the second centers confident, it amounts guidance the target the of targeted collection rate year, our the we we combine with logos half the combine the are adoption feel very comfortable we and confident with so basically gave. new that far the existing, of buying in well-identified aiming, that and of review the

Jonathan Ho

you. Thank helpful. very That’s

Operator

One you. next our with for question the question. Cikos moment of line next Needham Thank our Mike & comes And from Company.

now Your open. line is

Mike Cikos

Hey the for guys. Thanks questions taking here.

you've been budgets continuing with to hear you, and that with can for really, first is and agencies agencies Can in how enforcement believe law curious helps them conversations you've remarks is in enforcement to your calendar it of around in what macro your and in Yossi's confidence really gone your Americas bit law Americas I'm various XXXX. in I are scope, was opening to And in the how give question continued that communicating discuss budgets, guess, that growth I these that a had how grow and more grow. little budgets you to The agencies historically deep ensure you I more? continue the demonstrated their have customers

I it's second the for sales grew had you more in the respect XXXX. guys headcount but XX% organization said that sales is question, probably growth. know I calendar then to the with that And year-to-year think, Dana,

guys I to spoken a think you based that EBITDA part in of you've about. is the are leverage XXXX margin these reason why talking improvement on

you place what growing headcount to thinking XXXX? much. very that sales organization, about But organization Thank needs as more in to investment take us calendar about we guys in how can you you help think that are look

Yossi Carmil

I You conversations well. me we've The hope that sector customers. got And you X,XXX in are X,XXX more today agencies, hear you question. public agencies, X,XXX thank for the can than welcome. And only the – alone

an was of dedicated And meetings let's that accounts I number manage we think worldwide XX,XXX customer that about done, a engagement talking account presale glad I'm something success. between very I'm that and we we post-COVID here a XX,XXX with and, those meetings customers. the only executive, to with visit had that with have with say,

that INI, decision-makers Unit presale, of are also levels there can and sales DFU, I is those with the a dedicated management we directly different good hundreds and even say and are, force a dialogue Intelligence Digital on managing very few accounts in level, on And that we Forensic also level. on level commissioner on on Investigative

all you can specific if meaning our industry of dialogues, but thing, the something or we read correlates much way, intelligence general. within we of section budget overblown to the is not digital that terms in survey digital the anticipated It's analogue you same In pretty that that, it of we by and that expected, in those published funding. critical allocation data we in way most survey, more hear the clearly because investigations haven't the see the investigations with our of customer

mobile, to digital is other any the glad say source. almost tool also that than go-to the in but aim I'm percentage of double

clear to digital, see meaning the in in the it's by we're than last motion, it the basically, are by about years, and of pretty basically the we budget if investigations, three So digital more also investigations data that ourselves. comes that confident XX% grows when increase

that So this I I hope and is help. to that,

in with say, shared force, said We And federal on and that manage QX are making maybe force, have that continue we sales side. the already market which hand we we also last in the of multiple plan for we sure recovering. the As saying force, the or in we what in a a we well side, over of just I that get, had call equipped. climb. especially on the is motion, QX Southern that will during And I'll and number mix with would are that SNG accounts which new Dana, directly fluctuation the sales coming HX business the but to sales We from recurring before year. we respectable long-tail

to Dana, would on force? add the you like something sales

Dana Gerner

sales the grow expect deals half the I And in people any able members in by of they the when that be bringing that we second perspective, joined the to them well substantially think right to place. we boarded. We team XXXX. we for are or we that team very getting a And that quality the number proud do from this their we not was the year. monetize right say about and to now it are in really means are experience generate fully expect revenue expect right manner, to by the equipped,

Operator

next Thank Liani Bank of question from you. comes And [Operator America. our Instructions] with Tal

Your line is now open.

Tal Liani

Hi guys.

versus say quarters. First, to quarter two better you previous tone much I on on this I never congratulate it want calls, but

weak. was ask you around And was like I to million. so the guidance you XQ beating million. Last the And on reduced now about you're foreign change. XQ $X by $X for the and mixed would quarter, XQ numbers by exchange,

the it changed before? foreign was I year know Can environment of Thanks. just gave, basically about last by $X from How you beating reduction last you're was the million companies. and delta that previous what that numbers $X Israeli a the you – tailwind the So guidance for exchange? versus quarter? from million the much it talk

Dana Gerner

under QX words. currencies we And for devaluation very reduced when assume the currencies, was remain end it trend kind year. or Israeli And much of guidance dollar the our had on said currency you the with the continue. until during our some that to impact this the call. we first, we'll And Well, the earnings the European Sure, of the thank be unfortunately our the that we forecast. will pretty whatever indeed, QX much or mixed the same end, very Luckily Tal. that was, mix

the and lower such, the of meet even targets been our end as to targets. And exceed able have we

we we the might As end of said, be QX. in

from we of Service, mainly line perspective, result being solution. a because revenue expected. better acceptance was well what of ARR, contributed as we've our which of direct So lesser slightly a to on it a been very top the ARR, SaaS This the a our the to Premium than

And we caution execute towards and as compensation said a the hard to the look some year results into adjustments have expenses, initial I variable to approach the on our including and true-up targets. took OpEx very script, my compared beginning our tried of we actual OpEx, of a to

Tal Liani

And Two difference how do I think in about trends? things. the

First, can that Just ago? so in repeat years targets it long-term have gave – X.X you of your them, we targets you your it repeat front us?

And do second, XX%. grew the the about you ARR are Revenues difference in I trends in in ARR, between XXXX, trends think revenues? the accelerating. how and about

the You're guiding trends? so to about in difference X,XXX basis points below that, it's decelerating. the What's

Dana Gerner

trending our What later is while the transition long-term And first we'll and were see So during ARR targets the plus. revenue see revenue to and perpetual growth same. in from revenue. the we have targets XX% in were ARR term, said mid-long XX%, XX% we'll out that of ARR memory, to this the our for the coming subscription,

on XXXX. – reflect next basically it plus is; for revenue the growth are XX% is growth the of ARR our from which will revenue, we end in end of the growth be We to target revenue reason, the expecting mostly getting the perspective the that a to subscription. closer So would this towards year see

Tal Liani

you. Great. Thank

Dana Gerner

Welcome.

Operator

with Douglas Thank Morgan our you. from Chase. the Instructions] comes Bruehl question of line next [Operator J.P. And

open. now is line Your

Douglas Bruehl

maybe about my quarter-over-quarter, on thanks drivers Since of and question. expansion operating biggest margin had the cuts? commentary timing some points for Good for can you morning Hey. those taking about XX and you OpEx talk

Dana Gerner

heard I question? sure wasn't the I repeat you Can you properly.

Douglas Bruehl

Yes.

points some operating you the behind you talk Can biggest and So cuts? maybe timing those of for quarter-over-quarter. OpEx commentary about had margin that XX on the about drivers expansion

Dana Gerner

are QX, believe we and mere count QX we've we've two as said did In of one earnings QX. right not meet that of We've between to end targets year would of company was the there XXXX. end when also fact the the to it in we we of our OpEx, number OpEx, our control. by drivers the say, head XXXX biggest the grow So – start I that we people done to of as call, the QX the reached said, to

$X with the of the line our results which actual year, realize the – end compensation And and bonuses to million of the relating of compensation of company. variable reduction costs, and some of variable bottom top second reduction was final quarter. We've line one-time commissions aligned cost the generating results, in the towards the the

Douglas Bruehl

you. Thank Great. Okay.

Dana Gerner

Welcome.

Operator

question And from Thank Shelton our Deutsche with next Jamie comes you. Instructions] [Operator Bank.

now is open. line Your

Jamie Shelton

thanks Forensics morning to does my the What Thank you. landscape combination taking Cellebrite by from perspective? your and for Bravo. Thoma Good view competitive on for I mean wanted and GrayShift question. Magnet of this a potential get

Yossi Carmil

the following. say would I

of collectively I probably basically would our that market. I clear would a companies clear in would say is Thoma market I highlight a basically combination mark think and a of basically the the in $X is all, say statement two which company, potential sign the them or that two attractiveness larger businesses, actually to than should is gives currently First I again, merge, valued We and attractive, opportunity say, Bravo of and these a the first that billion, or sector. foremost. took it a as

So this first. is

the us own would rationale extraction it this context to from add, that is capability, strengthens our the we now. we mobile let's our one good. because is And I remain meaningful say surprised. have, about have In say merger map. explained, we them competition, from that how that position something own how for have, is that for for We our way even would and ways, concept, say But fact by a as the there would of the is our for reason, a the path many strong the look, collaborated way not The the good own and companies it was and I or years was mobile which shows are the road several was basically I basically that we mobile. which rationale, two

stage, together. as we one I a are that I bring opportunity. us players strategic at these as it like define combine now in that vendor, the this if a offering even they we to rare look would right say house at two And And

We investigators more plan and Analytics Investigative have clear a with to to just and solutions. as in is And house offering, solution OSINT. our continue we in firmly analyst, extended provider, invest our which our and continue

And outside terms can the which footprint of last built the thing, expenses already our in and us least expand side, more talking are And create, about matured, positioning expansion U.S. also we the to at also relating We've market. maybe our efficiencies. business an on would that that, the to in of say in I I'm international something the U.S.

I So because embrace move say our we the good all all, our direction. in but it is assume with for industry,

Jamie Shelton

Thanks much. very

Operator

you. Thank

the will question come from of DiPalma. line Louie Our last

line with Your is now open Blair. William

Louie DiPalma

morning. Yossi, Dana good [ph] Andy and

Yossi Carmil

afternoon or Good morning good Louie.

Louie DiPalma

more as deals enterprise including sizes deal large XX deal like announced general, fourth pipeline large premium that increasing And in in you analytics deals look Yossi, other Indeed. quarter, agency does for are your the adopt the services? with your the in investigative Singapore. customers and $XX in million What your XXXX?

Yossi Carmil

will that there the Dana, it, kind maybe a I can mix, that think you data some I is take answer. in of and

growing of is First on the focuses – which reflection of It's areas go-to-market all, increasing larger we Louie, is size you Cellebrite, for existing deal This the the this focused to a larger number what is the question. size basically to grow, continue is within the mainly share and wallet of or and or the them local of accounts. government, digital of strategic resonates, we and see is and thank more growing each will the the of and we suite more the of and one total budgets, larger call solution, over the intelligence federal nurturing the more, as to account, accounts solution within basically it as the offer there, state And the related expanding side. deals. on it

will call because X,XXX is again it here stating the what there new also again, dual element within So that we're we would long-tail. there is effort I the more expansion related, say a of Nevertheless, doing to grow. logos,

reasonable are, well And shorter on sales of there still review small, rather say and amount facing cycle. pretty are effort, much the larger We our deals have is that them fits a would and I collection with And large accounts, review, I there with the say identified. transactional business within a collection side-by-side, we dual over a go-to-market would okay. relying rather which

to then And transactional environment. we because that basically few we way, and good, opportunities, are having that on customers, on-site deals few that not expansion, ability of solid risks by a on base. in in is we on Large this Cellebrite balance the have and large not the spread the dependent dependent are

something add would regarding... like you to Dana,

Dana Gerner

principle, Louie. a increase – deals, above the from see $XXX,XXX, are in yes, perspective the mix Hi, do two, are some the that at three looking larger those average who deals. those of we which in quarters last In dollar above

So we do. certainly,

Louie DiPalma

Excellent. everyone. Thanks

Dana Gerner

Thank you.

Operator

would I for hand Mr. the Carmil to comments. closing conference Yossi time, back this like At you. Thank over to

Yossi Carmil

So I all, say both and thank participating, are thank would and you like of efforts for we first Cellebrite all like the and committed you to value and the XXXX, for questions. serve. we in all obviously and creation thank results Again, you of of interest to shareholder for to employees to the the you. I'd the for thank the industry the again

Operator

conference concludes Thank you today's your call. for participation. This

You now may Everyone, have a day. wonderful disconnect.

Cellebrite DI (CLBT) 15 Feb 232022 Q4 Earnings call transcript