CLBT - Earnings call transcript Q2 2024

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Operator

Welcome to the Cellebrite Second Quarter 2024 Financial Results Conference Call. [Operator Instructions] I would now like to turn the call over to your first speaker today, Mr. Andrew Kramer. Mr. Kramer, the floor is yours.

Andrew Kramer

Todd, results everybody conference much, quarter Cellebrite's very financial XXXX call. you and to welcome second Thank I'm joined Gerner, at DC by our offices just Carmil, CEO; outside Cellebrite's and Dana Cellebrite's Yossi CFO. of Washington slide presentation our There is that a prepared accompanies remarks. the the follow our viewer advance Please webcast to in slides commentary.

quarters along the of press to be website stated #X, for recorded and and to We discussion replay and call available transcript out referring on tables of number made This our remarks. information the a copy we the presentation XXXX of slide and financial financial at are GAAP and second Slide the event. Starting website as on a otherwise, XXXX as unless Relations and of done with first financial call only our all slide with the investors.cellebrite.com. XXXX after and including quarter of call well basis the this of XXXX release will financial the be metrics comparisons second Also, available non-GAAP our the quarterly a shortly are historical the provided quarter on our supplemental will and are each our XXXX. recording historical quarter the of will non-GAAP today's reconciliations, metrics second with in is being statements, in outlook financial Investor

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

heading and company XXXX. amended XXXX filed Form does Some on Factors of topics any in discussed on April the provides annual update company's call. And events XX, the on CEO. to that reflect The to with on Cellebrite's circumstances. Slide statements with XX, to we'll turn Carmil, and Risk Yossi elsewhere as cover statements XX-F the forward-looking to report like future or under the the SEC forward-looking today's now are I'd over these call March #X undertake of agenda the said, not

Yossi Carmil

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

We share are highlighted morning pleased and execution EBITDA, including to are revenue across progress our key this on continued and Slide ARR, all X. which metrics,

Our to X,XXX market. growing strong further relentless our healthy, Case the performance a nearly Closure in second results the colleagues quarter appeal validates of our of and platform, tailwinds

of for what quarter do full outlook will In plan QX Dana to as increased review XXXX. enhance to opportunity the expectation justice the leading our for focus position commentary and accelerating I are details company our for platform results, third my Cellebrite's is to long-term the the our Now and we further meantime, our year on taking the steps around world. important the the for the

Turning Slide X. to

Let the to me Cellebrite part government. formation business the with Federal efforts as by our of federal of Solutions expand U.S. begin recent highlighting our

wide range a a U.S. organization. maximize civilian had foreign-owned our to by already While agencies, of constrained ability across as Cellebrite impact status defense pervasive established been had our federal relationship growing and our

customers work our directly months to to Federal U.S. government X position past to our our CyTech, And and we diligently of independent established with unlock federal and acquired we board Solutions programs. Last programs. projects which company and governance. U.S. broader expertise, Cellebrite expand a a order in key range experience and Federal federal immediate participation contribution worked So the support the further brings opportunity, dedicated separate, authorized we as in with over month, better commercial Cellebrite

fields, new overseen company intelligence it years, for be our and unique way, experiences. consolidated a Now this our closely and relevant the and the its participation our is had of law in and gain long-term. by By critical X extremely several launch independent Sachwitz are sales from in accomplished These directors. authorization led SaaS enforcement the highly initiatives fully impact increase significantly and financial is action results federal This to skills past their by business Erik bringing federal will these appointed actions directors corporate reports. This to respective will offerings. in directed newly over for enable who Cellebrite our QX follow the FedRAMP Board

XXXX. customers. meeting authorization serve will and we incremental our well U.S. the requirements, outside of authorization FedRAMP relevant federal this with addressing initiative government's make end deployment drive for authorization first Cellebrite's we believe with by progress full that cloud-based We of of as to security demanding continued U.S. as will for that this accelerate We other anticipate the the And as state standards by customers. by and local proxy the as half certain U.S. the government a of technical offerings

accrue this on from subsequent We in to years. from marketplace and on reflect federal XXXX coming commitment safety the impact public our have summary, expand believe will that weeks with by these share the and the we've and enthusiasm in benefits our U.S. the Federal recent the build And in will begin financial Cellebrite. over Solutions encouraged So the actions both been in marketplace years. business optimism their Cellebrite in associated there to initial about

platform. CXC our to Turning

Our capabilities, first this to to for accelerate innovation AI-powered of integral Investor and nearly it range showcased enable our we of work now our wide a realize an faster. that from our has of AI decade Cellebrite's which is within and customers intelligence a earlier capabilities value At smarter artificial their enable each customers DNA investigations. part embedded been to continue year, substantial them built-in solutions. flagship Day our

of Accelerated, has our have while opening Justice Generative delivered value, Now evolution new embraced. AI we material historic is for the exciting use rapid which frontiers enthusiastically case

investigative speed, function and efficiency in that Our customers increases them AI-powered achieve enable our to leveraging report capabilities effectiveness. step

victims' decrease substantially Cellebrite's external as it takes for advisory leverage we technology to safer overtime public a board. AI analytics Pathfinder Responsible agency the and Intelligence. In customer will example, currently our to the supercharge law an ensure of technology, the to AI costs, work of integrity good safety, the agencies, the our value to supporting And aligning and larger with innovation in the time a the maximize complete tandem this Investigative closure involvement independent are is weeks, what we towards refer with being ethics to months community the and reassure key reasons, can go-to-market will to investigation protecting For that from justice keeping enforcement serve feedback and continue process, agent we technology product, exclusively for with for range this resources associated scale and reduce in effort the with ability loved move a mission to evolve AI-driven controls to better these our internal lower through monetization place. served. creation a help and make assessments, one world and and to and will advance Cellebrite our

ongoing to capital to Cellebrite's creation can for want in market more years You this activity with the progress our cover as recent our value shareholders. gears hear switch further expect over area. I efforts we now briefly with coming to and make associated work drive to quarters

pleased million private broad announce covering warrants. today X.X very First, we're and a program XX warrant public redemption to million

I the of around Now details share this want milestone. but this Dana to briefly highlight significance action, will more

majority to originated value years, to substantial exceptional past a shareholder while enabled take us performance action. create over companies Now SPAC X of have Cellebrite's the has struggled this

of communication. the restricted issuance our has as triggered price structure, the trading outlined and help and XX days complement already past our liquidity combination stock events milestone of important these The healthy financial they and we performance over an capital our the augment support yesterday believe of through and Cellebrite's is in Second, of taken shares steps to of business price agreement. XX% our reporting our adjustment will divesting enhance the X/X simplify we've combination sponsorships, that investors' optimize

Turning to Slide X.

highlights with that really each priorities. This X expansion QX making variety our priority. ARR and meaningful top demonstrated of strategic are We executing progress a progress our good slide against delivered deals

a to these observations like related priorities. quick I'd So few share to

priority our investment customers. our of modern our is first for most market the Our units digital end, our forensic enhance capabilities that the ongoing the paying dividends. to access extend on leadership is lawful smartphones to in To

usage data from year, extract that access more Android also Apple past making both upgrading Inseyets. data the reflects are Over customers devices. and lawfully to Related turning with good iOS our Cellebrite we to and are to customers progress this, to

XX% target. goal XXXX are and that in been on to Inseyets. convert currently to our to this call, is to exceed share As I'm installed our we pace extremely favorable glad have market base of reception the our on noted QX

we what our Our growth second Investigative of customers. the call law IUs and Unit, accelerate enforcement our to within the priority Intelligence is

during Pathfinder potential coming our I say IUs the to second quarter. over IUs about to into cloud-enabled fully penetration continued footprint excited Pathfinder the We becomes accelerate the our grow we quarters. And can as are with that

is who advance help with recently use this, on to providers eDiscovery the is efficiency. with part collection we corporate intended of a evidence mobile with and to primarily priority rely data third business service and our to the Our and in private enterprises expand cases. solutions sector Cellebrite's investigation customers Relativity collect go-to-market exclusive their that our utmost partnership as technology manage digital to and investigations an announced key mutual Related

Conversion a Mobile streamlined integration Cellebrite's Cellebrite Cellebrite Remote which RelativityOne Inspector Relativity only with provider with is and Collection collaborating create We Endpoint eDiscovery in direct Now. are to Mobile and Relativity the and integration with have to Endpoint

with and service mutual partnership We customers are deliver this our value that optimistic accelerate customers growth compelling providers. enterprise to help and our will

to of customers the Our the fourth harness is strategic cloud. priority help power our

generating cloud percentage ARR, ARR the nearly is high-single-digits. our as solutions over overall and now a year doubled the from low-teens has Our from and up past of SaaS-based

customers in to the examiners remarks We along number my Slide terms and a pleased our to data increasing continued SaaS-based storage in over investigators see and solution. with Guardian, case volumes conclude of and to for Guardian of of users like have past X. evidence X doubled has months X The alone would prepared to traction are on number management petabytes. I both grow

the So unique in set CXC our an enabling needs cycle. end-to-end deliver life software throughout view integrated today's us of is investigation digital marketplace, that platform our we solutions customers' support to

my around Board the our swiftly XX customer Every move Cellebrite the our stop bad turn, also the for leadership, half technology has and was of this We to customers solutions take to cases, support to success. And of to and recently extended and now technology appointed adjusted that contributions our her around actors positioned and well earlier first-ever ARR globe, a trust I Chief CIO. fortifying executive in And great expanded Dana. of we baseline customers responsive the Troy EBITDA our they that Directors. And opportunity for really our of in how protect delivered safer. I'll market of needs and in appointed look Sigalit for thrilled with XXXX. turn impact deliver customers as It Overall, We team its community call an continued We've an second We continued lives, indicate ahead, technology we Rule commitment team leveraging solutions. In justice. to our is month. first to see Board our like keep done its investment support as to address on relationship would and performance the job world. enhanced rewarding our look hundreds to that successfully their decisively accelerate our results. leadership as and the place strong our enabling thousands said, to the makes the time-sensitive Officer, forward contributions high-value thank we over and save their customers also integrate ongoing to expectations quarter, of and our updated to outsized ability are to accomplished growth year. and colleagues our scale Information has Shavit for are further our Richardson, Cellebrite exceed our technology and to straight We're XXXX

Dana Gerner

the cost helped and expansion, Well, underpin structure Yossi. excellent you, results of produced guidance. of the top-line updated another of combination XXXX management sound quarter our our solid Thank

X. let's of review So our Slide starting with on begin a results QX by our with growth ARR

ARR expansion The gross period. which began ARR installed million $XXX again the Our the of XX% for with growth our our XX% June year-on-year building of ARR The customer was share for at end grew by block retention, driven once lion's growth to was base. XXXX. within

was represented installed and largest Americas bank followed product into level of ARR XX contribution, within all regions and with base new growth geography the growth. June and make major at and Looking above through months fuel centers Pathfinder. Geographically, rates same with increasing by continues our XX, at reach our for Pacific adoption ended Inseyets XX%, our Pacific to the XXXX we Asia XX% geographical XX% time, prior quarters. progress both extending continue the at sub-logos At to ARR our The growing or enjoy to XX% XX% Americas mix XX% the ARR total, Asia consistent EMEA continue XX%. the up EMEA Guardian

of revenue on subscription year-on-year increase to primarily driven quarter XX. reported million. revenue software Slide turning We XX%. to This a XX% revenue was in $XX.X Now growth second by increase

top-line into benefited to the the half modestly second and from favorable we agreements multi-year this continue mix and Our product performance of year. expect

modest in revenue to coming non-GAAP XX% operating quarters. Slide a in it our details and historical over that amortization increase our In largely hardware will gross terms sales range services revenue, non-recurring non-GAAP compensation, Subscription acquisition-related revenue. mid-to-high-XX% non-recurring other we the continue share-based the exclude was and the for expect of margins expenses, revenue and of which trend expenses. intangible by XX professional total revenue our assets represented trends within offset of decline the within

our margin and Our was gross generally the from prior expectations XX.X% and up slightly consistent year. with QX was

costs areas. operating of XX% XXX personnel-related to expenses, last sales We quarter year. and same and marketing by X,XXX quarter employees, with the research the costs In $XX.X reflected ended terms Higher costs QX and up development from increased operating these and from in and headcount first QX increased XX% million.

in invest ambitions X,XXX to of with end this roughly by year. increase talents recruiting to to the new headcount continue our We employees

XX% operating Now reported EBITDA and or strong million margin exceeded a ago. $XX.X profitability healthy entering We resulted combination of The adjusted our costs basis margin the that to QX a turning gross in XX. year on our Slide X revenue versus quarter. growth, XX% increase plans performance moderate of in

of flow for the cash a provided intangible increase primarily non-GAAP and operating Our $XXX investments, equivalents million quarter and expenditure quarter, reflected less the was same last basis. purchase strong in a quarter from quarter $XX.X for million flow $XX.X capital $X.XX the closed with define $XX.X or Free QX net second cash by sequential was the than income of on basis $XX.X net assets cash diluted second which non-GAAP higher the operations. million $XXX activities We million as income year. The sequential up with fully on and million we cash operating million. cash,

the our of third transaction $X terms $X outflow paid than little to approximately in XXXX. with of to acquisition this our anticipated related In cash mid-July statement CyTech, you of be in million see million flow cash will more a quarter

sponsor shares after soon next result the anticipate consists all majority and warrants. warrants announced ultimately The less We it structure quarterly adjustment And recent forecast, to nearly if securities company's of that to and announcement a retiring Cellebrite million upcoming an move million would of million optimizing add the public redemption, fully reduce regarding This vesting revaluation basis. quickly mentioned the and our month. private Yossi's which of comments capital the our convert our warrants XX supports is on more specifically, which simplifying common million million warrant will remaining the the X of exercised I capital million the adjustment financial reporting. of Before like the outlining X X.X eliminate into warrants, redemption warrants impact I'd of improving objectives were of issue X market the from price and with previously quarterly that development. financial issuance redemption recent restricted to liquidity, unvested these warrants to the results cashless sponsor and the and earlier associated the plan trading price, dilutive recent this shares date shares. outstanding restricted million At non-cash to price today cash. We public in of Since redeeming long-standing warrants it the exercised all revaluation shares. and XX private would the for vast approximately is will XX% X than be of

Now our we details that full the expectations. and X the the ARR the bit for over of we XXXX have let's Based provide our XX, raised ahead our we we opportunities to have our the targets Where delivered at strive raised second third realistic have of Slide results ambitious increased on assessment which straight yet quarters, midpoint move to outlook this update financial second date given to marks quarter lie coming fiscal and our for a XXXX our revenue outlook of year More quarter. year, start and expectations. the and year the increased any year. specifically,

impact to of results the the revenue form reflects more revenue product that increased Cellebrite making start mix commitments long-term Our at associated the more range agreements the and subscription. multi-year in with upfront customer in of recognized

As during into improving we sales the the year, to of half the the the contribution half year investments stronger move made first our from anticipate we we second force. seasonally quota-carrying of expand

Our strong performance EBITDA adjusted first half several reflects other for outlook a updated XXXX and factors.

second expect we continue with revenue year. solid XX% year XX% revenue our trajectory First, in to of of our full half the anticipated the to

the which year than margins. our from organization we investment customer range XX% and XX%, timing originally gross of post-sale margins now our expect hardware to in is due our Second, will in full improvements success higher to anticipated

low-single-digit half of half anticipate expense year growth to we first level. second the the mid-single-digit the Finally, versus in

Federal costs Solutions associated to top-line half services The we EBITDA factors, second governance into been and terms resources new this outlook adjusted Cellebrite XXXX. business. our of revenue the with updated CyTech minimis and the acquisition, anticipate during operational CyTech and the incremental In of a our integrated de contribution have

the million or quarter $XXX of anticipate ARR expectations, period. $XXX the the currently at over of terms XX% growth to XX-month third we range to XX% in Now million prior

a revenue We to million $XXX XX% million. growth expect of of QX XX% to support $XXX to range

and our ARR outlook in with revenue U.S. fiscal reflects the conjunction QX Our September. year of their spending end for by our federal agency healthy expectation customers in

hires by gross of as fall will of expect between to anticipate gross new and year absorb operating a fully of our rate percentage further margins QX to QX to our expand We over on We XX% the levels updated increase continue range QX cost XX%. we cost XXXX team. target basis margin run our the the low-single-digits

range As $XX a XX% margin QX anticipate EBITDA to adjusted on million $XX or to XX% we of in million result, a basis. the

of of expect we share terms average In weighted events. diluted modeling and to count, our share diluted year the mentioned a count In count, event. will warrants third rate and by fully due our XXXX increase approximately second previously the of we redemption modest comparison approximately X% with the our a previously increase in quarter that anticipate by average percentage count, will share triggering point quarter mentioned increase full X.X diluted as the primarily result share

with summary, outlined, as Now of direction strategic the very Yossi had we overall business. the pleased in already are

progress our enabling enhance is We fronts, proposition, value us fortify of liquidity. and our to important combination customer are which trading multiple making on the broaden relationships our

operator adjusted a concludes a baseline a in above are our our strong back growth my and to rates remarks, and XXXX XX great for with call of the deliver we prepared target. That turn EBITDA Rule Q&A. our As I'll ARR result, to margins position

Operator

come from Brad Bank. Deutsche question first Instructions] with Our will Zelnick [Operator

Brad Zelnick

of number you are installed XX% to to year. or Inseyets #X, price XX% goal? to the secondly, it's you that's just us Yossi, migrate a the hear base seeing just a track of uplift And great Two for if to this about customer roughly that. XX% as expected? you questions goal can dollar-based you're confirm on

Yossi Carmil

start in of state I So thanks was first the maybe like -- conversion solid is the the with question. terms really that of Inseyets, it a for there would QX.

the I base is XX% are because be the about It's we our can currently on number XXXX. to also now pace our and also confident on that to goal I'm installed high. way, that also here a simple, about of say said, XXXX And Inseyets in we to is upgrade it's improvement the will productivity we during next in ability exceed much that vast I the the planned to targets and to upgraded dollars of Inseyets of offers licenses. By majority so. our we that stated very installed by the XX% XX%. very of And significant a our long-term interest say X As base customers. expect are And we upgrade to said over very years. the do pretty efficiency we pleased that

In And separated our deliver it terms far. of so legacy our didn't again, more Inseyets does than models value the pricing, do. stuff offering that

XX% cloud than offers Now XX% and deck. it value extraction we to can the the validation them are Inseyets. successfully are of which combining price point comparable advanced We extraction obviously value is other higher that And customers capabilities. legacy higher and I higher holding faster spoke and upgrade, and great when say it's the commands price this about we obviously solutions. And a proposition of

Brad Zelnick

with down to that great think NRR Dana, seems ticked hoping about that how forward? can curious, in think the the of Yossi it to great it not make impact it's increase for existing slightly, all given it just just the of correct. just Dana. drivers that's uptake presentation, going And the a And hear. rates expansion just said like and follow-up I you Inseyets? things about why That's customers. I should sure want lower and to

Dana Gerner

year. performance for of first, And we're our to a we with year. pleased and pipeline growth very the Well, half are trajectory this QX the the great in the of seeing business support second

represents around our of you we And raised ARR the customers growth. net we growth support new contribution enforcement ARR. pleased The agency joining law NRR very are the long-term usually the I've X% the our already X of midpoint below vast sharing, as serving and is Cellebrite retention rate we logos As -- of been the XXX% it. of the globally. majority with actually It are points and new have largest

in of carriers first to second -- quota the our year. in We the the half have added meaningfully half

the half it contribute in especially Americas further, second XXXX. into EMEA expect in and going We and the to

Operator

question with Company. Our next from Cikos Mike Needham & comes

Michael Cikos

their of Cikos it's that line back stand commitments, the think to these does where Dana's I the on validation Maybe help think Inseyets? today? And But us right? broader to newer commitments. making on would this of as a multi-year some circle contract to duration commentary we be Cellebrite, actually it the a there Mike duration. to expect Yes, contract that to commitment Can here. or curious, you wanted is multi-year of customers great is I are a customers it's about something trend? migrate Anything phenomenon should part fact persist helpful on that

Dana Gerner

actually and past, of contract with the In of Americas. we with XX% market, it XX% around mainly had shared to the multi-year the agreements, the we outside

We customers. part transition customers other to certain been both of with before. a as are trends they've ready And the Inseyets, that commit within seeing and Americas longer the for are periods going, also with than more

where of as We are selling, uptick APAC, regions see all said, and multi-year EMEA percentage in slight Americas, deals. and in this this I motion, are we a the seeing we of

Yossi Carmil

to thanks that especially solutions. today, comes our and to CXC Cellebrite, of basically the to we, in can our also the Inseyets am and one Maybe the top And obviously, suite multi-year -- when I deals. commitments it element investigative review stickiness accounts, our on the that, are clearly, embracing accounts collect platform. am fact I work, on of our add, sides. are our federal both daily large -- to It secures our contribute sticky And and large strategic accounts, of to the of we

to ability the interest of collect increasing. and the However, but from covering into when work Cellebrite to to vendor you the ability add end-to-end life and investigation, review, is effect the get than entire and a equation long-term just cycle with the the commit long-term more

Michael Cikos

this Understood. you anticipates quota-carrying earlier And this improving again, raise guidance remarks, force. just from said the prepared of coming Dana, had year, specifically part back contribution sales the I investments some maybe to to the think, made

a So here. it's a bit of X-parter

as reps the to seeing this this tease of then ramp scale better far the hiring trying expected contribution what out first, potentially guys The you how seen reps than just faster trending a actually expected earlier guess, or I'm than secondly, from to you we've was those as are year? historically? hires rate at year. are I out, sales play And

Dana Gerner

calls So on year, we in that the sales earliest investment beginning by of the organization year. of plans our actually the at the and COO we EMEA following our have spoke are led our double we and set Americas the about new

We have regions. are major consideration into a full time. investment And new X the in takes that a those carriers of taking quota contribution sales we

And so so in contributing more fully in whoever much QX will be us joined and forth. QX

investment in QX, fruits heavy this when So and step that mainly QX QX done bearing expect into we've to in XXXX. start QX and we we do and

Operator

from come question Lake will Martinuzzi next Our Eric with Street.

Eric Martinuzzi

Yes.

or earnings that's of QX outlook QX, revenue Just a wise? point Is impacting clarification deal. on the of acquisition that here, CyTech there any the part

Dana Gerner

Solutions the said, minimis now compliance of introduced Federal in services in Cellebrite part organization. The it's impact investment business and introduction de forecast. and contribution to EBITDA governance we total our is as as have the introduced almost I the this some as of support So mainly is to

Eric Martinuzzi

the then it's like perspective, getting And -- the going that there the with from be federal government, that Cellebrite are to we company our federal total It sounds will a maybe traction there? Okay. the we be investment? Federal reporting. of incorporated measuring -- is into Solutions success But the how breakout

Yossi Carmil

your federal and with what the Cellebrite growth integrators, project the even drive engage initial in creation say if that are planning One Cellebrite part was we to the look take it. of, would get ARR X an associated in created boost. The even Federal already very X do company. size think significant basically expect directly was to sense in a a I Solutions, federal from and perspective, it. XX% of And a XX%. basically and call activity in sector And and it which to I understand would system the that the much meaningful XXXX that of upgraded size growing deployments. the of long-term maybe frame I So CyTech that of will earlier should this And of relevant successful that our doubling the us or in obviously, in say, and I'll about of also the enables and now. the we I segment CFS, need process the with agencies, we might successful is acquisition financial benefits years customers

Operator

Our next Cowen. TD come with from will Eyal question Shaul

Shaul Eyal

the Yossi, some congrats to I strong Day, back ongoing Dana, of the go Andy, to performance. Analyst Dana, your time. provided the you've at on want metrics

assume this that $XXX customers actually just $XXX mentioned to run have the this it. of spent don't of case. public cloud what you the revenue was ago? metric coming cases X months I ARR about than Maybe indicated you number quarter? the a calculation, that. sector a example, per I I have mix was an thinking probably missed For Well, housekeeping, have might higher Can is about bit average,

Dana Gerner

Can very you your repeat broken was question? here. It last

Shaul Eyal

the have if might cloud this Just revenue mix. disclosed quarter. I missed that you that

Dana Gerner

Okay.

first... So

Yossi Carmil

take take and You I'll that cloud. the

Dana Gerner

Okay.

in investigation. to investigation of tried what solutions. the is did number with that total we we spend in agency processed very enforcement law yes, based on on their in have solutions spend And to seeing Cellebrite are allude well, our Day being Investor So comparison to we Shaul, small Cellebrite of

are unit that actually on expansion, And that expansion the Guardian growth as you basis, being on and basis. done with solutions. measuring to result. investigative it that in see fact ARR further are I that our actually But We Pathfinder not our investigations and an more supports think using annual do alluded Cellebrite growth quarterly a

to as the We will measure end we the year regard it again. With Yossi? cloud,

Yossi Carmil

would and say, we ability in it to larger way, to all, CXC general ARR revenue trends, the I compelling is of I cloud related ARR is, cloud to in That's Q Cloud cloud-based the a platform, said for grow. say, solution, on and thank opportunities for the that percentage in represents offer, of much XXXX, percentage showing of I to by solution tremendous first say low-double-digits what are glad which AI-driven. And revenue say And you It's would respect. that quarters pretty coming the with as question. I years. differentiated The and I'm customers appetite see something and representing continued that based this would over ARR. really our and And Shaul, in revenue cloud-driven expect Cellebrite. of the that. we to a and

Shaul Eyal

I we about if of And and Magnet competitive may, Yossi, you're landscape specifically thinking the be what should how seeing out Forensics?

Yossi Carmil

was Question some issues competitive have about -- we here. quality

about landscape? was competitive it the So

Shaul Eyal

the competitive About Exactly. Forensics Magnet landscape, specifically.

Yossi Carmil

seen, that's -- the while I'm piece, would an of on are look, and that as major our about multi-vendor the is with statement. say, comes marketing context certain position. our know, have future. an spoke our quarter. a it industry we platform advantage and in if environment, way, our end-to-end And competitors Android on about if happy landscape strategic into we there makes I say, giving basically material can the leadership not playing that is By emulates industry competitive arrogant, the talking is specifically, the top who the about produce messaging, all iOS which -- first this our review And solution. this I deliver me direction to an to growth, with last no more relative about and to here. leader are literally there placing we industry. market as of we I end-to-end. To the talking confident in DFU, So would changes of competitive competitors also can orientation have which leading the and the we we are that say And credible market we and and by specific in the we collect the this we side-by-side clear is continue In and And the because a are the portfolio. limited end-to-end competitor, this leader competitors on is we've leader, answer itself quarter. number only and today today the

seen level not to focusing only from was sees. by also increase maybe a by historical a that that us, Magnet mid-single-digit And do. increase market say, I some generally was And we this -- shown as have and and say about would price that but that. I what an moderate the so of that's consistent, are would by competitors, with price we there is others. add-on, What more we

Operator

Van Jeff from come with will question next Rhee Our Craig-Hallum.

Jeff Van Rhee

Really my add I'll congrats. nice numbers here.

progress terms the of penetration new in the premium On potentially in Inseyets into rollout, base of platform accelerating capabilities? I'm of terms what of and you've premium the impacts made the had those curious that has the adoption

Yossi Carmil

lawful Look, let's what that regarding we way, premium the all solutions we access. call it, -- the of Cellebrite it this offers and I call it -- let's suite put call

QX premium which the other mid-XXs to We we had are collect access review and that, the lawful advanced with And we that to the across good points high-XXs family progress continue access the from are continue will at I level years. to level, that several end say very in the solutions strong maybe increased optimistic of we our coming of satisfied of I very Inseyets say that confident within in of customers add rate the that adoption Q the can in XXXX. models to and percentage modules lawful to the see the of the advanced and parts general. access can lawful make progress

Jeff Van Rhee

Yes, of that most that's is at of the Day the one of AI. the seen in I I've then the demo obviously, progress. think great terms Analyst did conversational AI, value-add And compelling you on

next through ARPU less uplift to of X? or You AI product have over it instances itself importantly, meaningful show introductions be if the the meaningful map are going if this of where talked you're have and new in year the road wondering does of revenue integrating -- that's introductions, I'm more throughout gradual, though impact. about terms and How that AI product play you it's namely, platform. than there

Yossi Carmil

specifically through we I need customers the say, our past. we all, capabilities of brought value in to first understand that So AI high area, that the would in place, into market

XXXX leveraging effectiveness. increases. them As here AI we Customers talking way, we by And really function home-made report we about there step capabilities. are talk they said, the to with grown makes AI achieve we've that when and been them, since speed, efficiency

and about activity, our and media would concrete, bit think is audio I be and is analysis of you think unlocking, can to will about AI. element and because there say, more is planning upgraded entire the on innovation say, and is go to critical with be are We little platform There which investigative CXC where if you also key about the a There text I the a activity to advance if insight it, technologies our that would market, align, massively focus related about activity analytics. and from further. visual content AI and to maybe and products

currency ability text-based decoding So and prime of I case, comes text cyber to and by crypto it a traditional bypass when misuse looking at accelerate and is specifically would to also crime, maybe then persona, and identifying there our elements the evidence. And and the and the element cases. a in say,

what our throughout attention So across basically, in have expand CXC if you and that area just I it's think platform. said, portfolio. the And about clear to entire invest we to

Operator

Our with next question will come JPMorgan. from Brian Essex

Brian Essex

I for migrate to to toward What look on of for them? what efficiency half what question maybe customers rate decision year? it to they budget want your address conversion Can around the give the tends them how And on for you insight up is Jeff. Brad, percentage of And to follow-up be process renewal better that to back come an from does to renewal? offers? like platform for difficult -- the Inseyets -- can the a Inseyets to technology in us customers

Dana Gerner

customers I in is to around generated customers. one of are -- of Thank the mentioned year, business licenses in than year by you it's large and second the the event not a QX base that is for XX% they of the question. and XX% year large of comparison the much the the very fact our they financial annual actually count before, end base the larger have installed that customer to powered QX because of smaller for a half federal necessarily is XX% number installed of holding, would the Well, the customers. I the federal as

towards So I of our would larger follow-up say due much how renewal seasonality the fact from customers think about the that the And a is of to half the it's percentage installed at be we really year, of the second renewed I than the perspective itself. up that looking actually customer. are base to business the

So of generated of second XX% to also the is business XX% in half renewal the year. the it's

and these Inseyets around being to is seeing Inseyets issue are interest are they make we that now We really for required next year. by customers sales can are they in budgets whether preparing all great The the place approaching. for upgraded

installed the upgraded conversion we second are by seeing we opportunities this base, XX% or supported half. said, our expectation is Yossi conversion our to of As increased and the that from XX% for actually

Brian Essex

And maybe partnership? the helpful. about talk on you Relativity, significant that the That's do with overlap incentives economics you And have the look for Great. What them? like do can across partnership?

Yossi Carmil

question? the Relativity, about it Was

Brian Essex

overlap might Yes, correct. for look And understanding economics of them? customer with the the with Yes, What incentives have how just much looking an you Relativity partnership. like?

Yossi Carmil

partnership a increase. substantial say, has, Relativity about ARR. in terms of I talking So potential would I'm business

between introduction talking X leading here about product are players We basically.

We and standards a to that, platform are the with computer obviously, workloads. our really RelativityOne coming their from remote And combination mobile eDiscovery of of is the platform. to of mobile and customer collection eDiscovery a leading Relativity improves

with we over our with segment. much Solutions and base For a leverage clearly, larger education there. leadership, activities, marketing and Enterprise us, reach position joint we it that market thought means improve installed can can And basically

the partnership We beginning the this are at at of moment.

the sector. need execute level that Just to the that to it's when any on But comes we the can to side us a take really other carrier make like meaningful partnership, it something different private those and sure programs. and to alignment quota solid

or it confidence case, comes giving meet the this us sector way, in our beyond. confidence 'XX help put the can it Let's us, private gives in targets when us that to it we any the and

Operator

William Our Blair. from Louie next with question DiPalma come will

Louie Dipalma

in CXC? feedback driving CXC but for the early only What January, released adoption? been has know it is I Pathfinder was

Yossi Carmil

-- Let's say the I following. would to maybe like

it CXC say very glad the end-to-end the our comes First well resonates is to general of I'm all, perception of one and in to that item. This when customer base. the

consistent customers, pretty transformation And As an sector. with you platform. to the that of brought public is need perception of of and the know, are digital in much in especially the because operation a end-to-end broader modernize the of we trend early mode our Louie, the the very days we CXC

we investigative cloud it of we from more adopt to still end-to-end about may our other need So lot today implement further quite bring percentage enablement. hand, trends about mentioning, small. that cloud the to early since the But CXC spoke in side. On customers the solutions of such the lot top and expect, the in said, make digital we're on we days, be customers the data life as I is easier transform cycle the more since CXC integrate we more will road that And very let's part more, which CXC our obviously, it the map, interest the that, said, would to we say, within a flowing, value by worth deploy, CXC let's even as great not will the into the that forget And especially, them investing the solutions progress of enable ingestion as as our a optimistic say, of we customers. forensic investigations, Cellebrite are And I side will of multiple platform. as customers are of into for future. will a

Louie Dipalma

makes for you've full That year Analyst leverage And provided recent with the Are with EBITDA the there major outlook the of? you long-term margin or could to you margin about any we there? are margin Day thus at your be margin margins? operating year, products this like that acquisitions strength sense. be any raised that lower Are guidance it large by should aware there should that conservative. that we And dilutive relative How far strong with your headwinds profile the think horizon on XX%. profiles considering your Great. Dana, seems long-term

Dana Gerner

could delivered what we our Well, changing long-term happy own. model. we that are exceed fact are with the we've at not this far even I very thus would we our that expectations first, on say and stage,

our our are our look EBITDA will now actually support and year. which our fact performance modeling our the with one to revenue growth top-line XXXX, the in market margin. a gradually most the consistently supported are we is the When OpEx growing we be shared the efforts We that margins, that early and this nice of of at favorable next with EBITDA gross

said, this the to changes stage. I at As models no

an early We will necessary, revisit next if year. update,

Operator

will Our Bank America. Zilberman Tomer come next of from with question

Tomer Zilberman

I ask a maybe about ARR wanted trends. and to revenue broader picture more

revenue your ARR solidly the modest. whereas raise pretty above guidance guidance You little was a expectations, more bit raised

the and So I guidance guidance ask difference raise? driving difference. the wanted the the to between in What's raise revenue the ARR magnitude

Dana Gerner

first, line is ARR journey the in of with very expectations of really market. how And and what we multi-year we We half generated actually and much are the we the and plan how The line year, also cloud towards Well, associated to is some enjoyed the with to multi-year in improved we revenue mix higher usually compared planned pleased at the with slightly first it didn't the performance a is which half with more we our on-prem deal is It actually the performance. much we deals. is look compared than multi-year year. as forecasted. to what of deals the revenue deals have of product of the to our second a deal communicated X-year in is product the

customer to we progress broadening solutions its ability So its base. of its that that a fact believe and and the the I do meeting is growth great continue sign selling and continuously ARR the target are company's within our offering

I think that...

Yossi Carmil

profitable is for, and key here. you would durable well answer And Cellebrite, I about when is is I And Cellebrite growth growth? positioned the think say, the clearly think yes.

which ARR for going the if back even great And the mentioned look, target as XXXX. we and XX% quarter. higher raised to midpoint is long-term midpoint We our the Investor Day, than we of said, here, place Dana was As it. the

So that place. we're a I think great in

Tomer Zilberman

I Relativity previous And is the which maybe a private of partnership. going still expand the back sector think follow-up for the business? as XX% on your expectations it. Got just around question that on Does contribution,

Yossi Carmil

us say to will that do. it's targets that As help us we confidence at we stage, more meet the give anticipate I to that will said, it the this

and meet like to coming a the a are -- any as leader review We on with to we will other forces of in we culture And to targets. are partnership, will to a will sides. us be leader, So executing that we a about just we together. start combining collection while update both new accelerate, remote be need phase. we see It's And properly if glad also are targets. element then enable update from that companies are able working

Operator

back session. the call and will to I will This Yossi turn today's CEO, conclude Carmil. answer question now

Yossi Carmil

you much. very Thank

to trust we and gave what you So so that are everybody far, all the executed for look, pretty I interest. on our about based first and of all, in about. the But emphasize we upgraded for are much the targets the you the road ability of you just XXXX. and we joining that want middle we to for thank thank updated had meet sure

thank You can and from very strong expect at us. would all you use and thank opportunity the really to quarter employees participating. I like things last the you great to a again the for -- all Cellebrite about

Operator

financial second Thank conference you. This XXXX quarter results concludes the call. Cellebrite

line disconnect wonderful may You have your this at a day. time, and

Cellebrite DI (CLBT) 15 Aug 242024 Q2 Earnings call transcript