Cellebrite Posts 18% Revenue Growth, Raises EBITDA Outlook

Cellebrite DI (NASDAQ:CLBT) grew third-quarter revenue 18% and annual recurring revenue 20% year over year, beating its own guidance on stronger international sales and a pickup in U.S. federal demand. The company reaffirmed its full-year ARR (annual recurring revenue, the predictable subscription-based revenue base) outlook and raised its adjusted EBITDA forecast after a stronger-than-expected quarter on profitability.

CEO Shiv Ramji said the company executed better after a weaker second quarter, but framed the print cautiously. The results were "a step in the right direction" rather than the finish line, he said.

What drove the numbers?

Third-quarter ARR reached $528.5 million, while revenue rose to $149 million. Subscription revenue accounted for $134.9 million, or 91% of the total. Unless otherwise stated, figures discussed on the call were non-GAAP.

• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) climbed 42% to $53.6 million.
• Operating income came in at $51.5 million; net income was $45.6 million, or $0.17 per diluted share.
• Free cash flow hit $52 million for the quarter.
• Cellebrite ended September with $593 million in cash equivalents and investments.

By region, ARR grew 17% in the Americas, 22% across Europe, the Middle East and Africa, and 31% in Asia-Pacific. U.S. federal ARR grew 18%, accelerating from mid-teens growth in the prior quarter, CFO David Barter said.

Two of Cellebrite's largest U.S. federal customers each increased spending by more than 20% year over year, Ramji said. The company also closed its first large FedRAMP deal (the U.S. government's cloud security certification program) for its Guardian product — the largest Guardian win to date, he added.

In short: profitability grew nearly three times faster than revenue, and the federal business reaccelerated.

How is the Genesis AI product performing?

Genesis, which uses artificial intelligence to help investigators analyze evidence, ended its first full quarter with $2 million in ARR. Barter called it the strongest start of any product Cellebrite has launched.

Ramji said customers reprioritized spending to fund Genesis. Asked by an analyst, he acknowledged the latest examples represented incremental funding for the company, but said it's too early to call a broader trend.

The roadmap is moving fast:

• An on-premise version of Genesis arrives before year-end, aimed at customers that can't use cloud services, including air-gapped environments. Cellebrite is working with early design partners on the offering.
• In 2027, Genesis evolves into a broader AI-native platform spanning evidence collection, sharing, analysis and investigative workflows, with tiered pricing based on data use, computing capacity and tokens.

Chief Revenue Officer Marcus Jewell said consumption pricing is relatively new to law enforcement buyers, and a pure token-based model can be difficult to procure. Cellebrite gives customers tools to monitor usage and estimate the cost of a search before running it.

What did the company guide for?

Cellebrite reaffirmed full-year ARR guidance of $550 million to $560 million. It projected full-year revenue of $553 million to $558 million, implying 16% to 17% growth, and raised its adjusted EBITDA outlook to $163 million to $166 million.

For the fourth quarter, management expects revenue of $145 million to $150 million and adjusted EBITDA of $47 million to $50 million. Barter said the outlook reflects more revenue recognized over time and less hardware revenue versus Q3, as cloud and AI deals increase the share of revenue recognized ratably.

He added that Cellebrite has greater confidence in the lower end of the ARR range, citing seasonal factors, expiring agreements and uncertainty around the timing of larger cloud and AI deals.

Where does Corellium stand?

Ramji said Cellebrite was disappointed by limited new sales and higher-than-expected customer churn at Corellium. Jewell attributed part of the difficulty to sensitive customers' concerns about the company's foreign ownership, though conversations improved after Cellebrite announced plans to redomicile in the United States.

Barter said Corellium's contribution to ARR growth will land at the lower end of the previously discussed one-to-two-percentage-point range. The company targets completing redomiciliation in the first half of 2027, subject to shareholder and regulatory approvals.

The takeaway: profits are compounding faster than sales, but management is keeping full-year expectations pinned to the conservative end.