Cellebrite at Bank of America Conference: Strategic Growth and Expansion

On Tuesday, 03 June 2025, Cellebrite (NASDAQ:CLBT) presented at the Bank of America Global Technology Conference 2025, outlining its strategic transition to a subscription model and its expansion into new markets. Despite facing temporary federal policy headwinds, the company remains optimistic about its growth prospects, particularly in defense and intelligence sectors.

Key Takeaways

• Cellebrite is transitioning from perpetual licenses to a subscription-based model, with a focus on cloud solutions.
• The company sees significant growth opportunities in the defense and intelligence sectors, especially in Europe.
• Cellebrite maintains a strong financial position with over $500 million in cash and no debt, supporting its growth and M&A activities.
• The company is targeting a $1 billion valuation through organic growth and strategic acquisitions.

Financial Results

• Tariffs have had minimal impact on Cellebrite’s financials, with this trend expected to continue.
• Federal government accounts for 17% of the company’s business, with a federal ARR growth target of 25%.
• Cellebrite has over $500 million in cash and zero debt, continuously generating cash from operations.
• $130 million remains on the company’s capital base.

Operational Updates

• Cellebrite is actively shifting to a subscription model, enhancing its SaaS offerings.
• The company established the Cellebrite Federal Solution legal entity to engage in larger federal programs.
• Achieved FedRAMP ready status, with DOJ and Repatriz close to full FedRAMP approval.
• Despite a slowdown in Europe due to defense fund shifts, recovery is expected later in the year.
• Cellebrite serves 90% of relevant public safety agencies, with net new logos contributing 2-3% to ARR growth.

Future Outlook

• The company aims for a $1 billion valuation through both organic growth and acquisitions.
• Expanding TAM by introducing new technology and enhancing cloud-based and AI capabilities.
• FedRAMP is expected to facilitate sales to smaller agencies, while CFSI opens new accounts.
• Actively pursuing M&A opportunities to enhance technology and customer reach.

Q&A Highlights

• Market performance driven by company performance and strategic financial moves.
• Growth expected from upgrading legacy products, enhancing add-on modules, and modernizing workflows.

In conclusion, readers are encouraged to refer to the full transcript for a detailed understanding of Cellebrite’s strategic initiatives and financial outlook.

Full transcript - Bank of America Global Technology Conference 2025:

Unidentified speaker, Interviewer: All right. Good morning. I’m joined today by Donna Gerner, CFO of Celebrite and Andy Kramer, Head of IR. Thank you all for attending this presentation. Maybe kicking it off, very high level question.

What is Celebrite? What do you guys do? And maybe if you can take us through the transition of the business over the last few years since you went public.

Donna Gerner, CFO, Celebrite: Sorry? Sure. So Celebrite is a leader provider of investigative solutions to mostly law enforcement agencies, but also within the private sector as well. What we are doing is we are actually providing the right technology and the very advanced technology that help our customers collect digital evidence throughout their investigation. And today, with 90% of the investigations, they are relying on digital evidence to be able to solve the case.

And not only collect the data, but also make sense out of the data, maintain chain of custody, collaborate in hand, and allow both the examiners in digital forensic labs, which are very tech savvy people and require deep technological solution, and the investigators who are, I would say, less layman with technology but still have great challenges. Think about each and every one of your phone and how many text messages, applications, videos, photos, and so forth. How can you take this information from multiple devices in a large case and make sense and build the case narrative and come to be able to actually identify the golden evidences that have been closed the case. So we’ve been doing that in the last fifteen years. Before that, we’ve been working in adjustment business to the mobile operators, which we sold in 2018.

But we’ve been focusing on the law enforcement public sector, specifically since 02/2008. We are also supporting private sector customers, whether our larger enterprises or service provider to enterprises who require very similar technology to collect and analyze data for e discovery purposes and internal investigation. We went public 08/31/2021. We went public with SPAC despite the fact that we could have done an IPO and that was for various reasons. But we’ve been for our entire history very growing our top line very nicely year over year, but also growing our bottom line and very profitable and cash generative business.

We grew Bootstra, very, very unique in the high-tech industry. We never raised cash to build our business and to grow our business. Since we went public, we’ve been concluding our transition from an old business model of perpetual licenses and move their entire installed base of licenses and customers to a subscription model. We’ve introduced some of our portfolio is cloud based and full SaaS native, and we are continuing our penetration globally. I would say that since we have taken a decision to go public, we have tightened dramatically more than ever before our ethical guidance and our decisions on compliance and where to do business.

We’ve been doing it since day one, but we have introduced more, I would say, structuring processes into the decision making on to whom to set our business and to extend us to more than 40 countries in the last four, five years, you would see that still in some of the churn that we are sharing with the market of our licenses. And we have introduced more governance around it by having our own ethical advisory committee that advised the board on what is the how to actually execute business with such powerful tools that actually access people’s personal data in a very complex world when you have always the tension between public safety and the right for privacy. More points have changed before

Andy Kramer, Head of IR, Celebrite: I think that. I think the only other thing that I’d add is So besides that monumental change, I think the only other thing I’d add is that we’ve gone from being really a point product specialist in digital forensics and a marketing technology leader there, still a lot of growth left in that part of our business, but have really come to market with a full platform end to end. So to support the lifecycle of a digital investigation from the time crime is committed, a device or devices are obtained through to managing that workflow of the intake of the device, storing, sharing all of that digital evidence with investigators and giving the investigators much better tools to drill down into a single device or in the case of a large scale criminal enterprise correlate and synthesize data across multiple devices. And so I think there are new legs, new growth engines attached to that platform. Got it.

A lot of great color.

Unidentified speaker, Interviewer: Hopefully, we can get as much through there as we can in the next thirty minutes. I’m going go over the product, the platform, the portfolio and whatnot. But maybe going to a different avenue first. It feels like you almost can’t have a conversation today without talking about federal tariffs and AI. We’ll talk about the AI with the product and the platform, but you guys are in the public safety market.

What changes in the demand environment are you seeing as it relates to federal policy changes, tariff impacts and whatnot? So maybe I’ll start with

Donna Gerner, CFO, Celebrite: the easiest thing, which is the tariff. Although it’s a very volatile and very fluid current stage, We hardly rely on hardware. Most of our sales are software, the vast majority of them. We do provide with our digital forensics capabilities and software some small adapters. And that is because we are doing it forensics.

We are not we are not a a offensive fiber. A customer needs to get the search warrants involved on a device, whether it’s computer or or mobile phones in order to extract the data and we do it via cables. The impact of tariffs is de minimis. It almost had no impact on our financial statements for twenty five. And based on the last changes that have been shared, almost will be very minimal also in future years.

So not material whatsoever. Those and the changes to the federal government actually did have some impact, which we believe this headwind that has is impacting our business and the federal government is 17% of our total business currency will become in our perspective a tailwind in the end. What Deutsche introduced impacted the people and the confidence of people in spending their budget. We’ve seen the largest agencies that we’ve been working for, whether it’s the FBI, the others have change of directors, change of personnel in the second and third layers, change on the procurement processes and so forth, and also instability about what is going to be their budget. So also delayed decision making.

Nevertheless, if you look at the current bill that is waiting for approval by the senate and you look at the eight nine main spending on a public safety fee, we can we can and we will be integrated almost in each and every one of them. Because the challenges that our customers are facing is not diminishing from their countries growing year over year. And the only way for them to deal with it is to introduce more and more technology into their business. Want to say more?

Andy Kramer, Head of IR, Celebrite: No. Mean, think that just to build on that maybe and add a little bit more color. I think that the timing is uncertain for exactly when the current spending inertia turns into a catalyst for spending, but it is it’s not an if, it’s a when. And the things that are priorities for this current administration, whether it’s border control, whether it’s getting drugs off the streets, whether it’s removing part of the illegal immigrant population that’s here now, whether it’s human trafficking and trying to stop that, those are all those are global issues to a large extent, and we’re seeing that also drive demand across the globe. But I think that within the current legislation, things that aren’t making the headlines, right?

You see Medicaid and tax rates and all of those things dominate the headlines and that’s where there’s a lot of scrutiny. But the things that I think there’s good uniformity around and support for are the earmarks for both Department of Defense and civilian agencies around those priorities. And so I think that provided that there’s good progress on that package that should serve as a very beneficial catalyst for us. Got it.

Unidentified speaker, Interviewer: And I wanted to follow-up on the comment that you made that you said, Matthew, it’s when your 1Q results, your 2Q guidance was a little bit light of expectations. Is there a risk that you mentioned spending doesn’t come back? Or do you think that this is just a matter of, you know, quarter or two delay before the therapy start picking up again?

Donna Gerner, CFO, Celebrite: Well, we cannot commit on behalf of the current government. Right? But we can say what we see. And what we are seeing aside for that bill is we are seeing our larger customers preparing for the money to come. So if we look on our opportunities and backups that we had when we released our q four twenty four financials mid February, And what we’ve been when we’re ready for q one financials in mid May, we are seeing more programs and larger programs than we’ve seen before entering entered into our pipeline and into our opportunity management, which means that our customers expect to receive their money and they already started reallocating it to projects and programs that we can participate.

We’ve taken strides with the federal government in the past year and a half and heavily invested in the potential growth of that regardless to any administration. We’ve introduced our Celebrate Federal Solution legal entity, which allows us to work and be part and around the table with larger programs and projects that requires clearance, which we couldn’t do before. We could sell through system integrators, but we weren’t around the table. And we weren’t able to provide them services. And we are really the last manager for approval of this proxy like company.

We are invested heavily in introducing FedRAMP to our SaaS solutions, and we have been announced FedRAMP ready few months ago. And with DOJ and Repatriz, our ability to close the sponsor in the last ninety days that required to launch and get the FedRAMP approval. It will come. We are very close to that. So we have great belief in the ability to monetize more around federal government, not only in The US, but also globally.

If you think about what’s happening in Europe, I mean, the challenges that European have with border control, who entering here. Right? There is a lot of immigration that European countries, especially the Western European countries, would prefer to avoid. Right? If you think about gang related crime, think about what happened to Sweden.

I don’t know if you know, but it’s it’s bitten by organized crime coming from Eastern Europe. If you think about Ukraine, Russian War and the impact on the safe the the feeling of safety and as such, we see more and more funds are actually being allocated to intelligence and defense organizations, government organization in Europe as well. All that we are doing in the federal with the federal government in The US will we expect, replicate itself also in Europe because it actually answers the same problems and challenges.

Unidentified speaker, Interviewer: Got it. Maybe right before we go to Europe, just to touch back again on federal. As much as you can put it into numbers, you talked about FedRAMP certification, you talked about the new federal separate entity. What are your goals there? You talked before that federal entity gives you TAM expansion and if we can size that out.

And I think before you’ve discussed federal ARR growth of 25%. How are we tracking within that whole?

Donna Gerner, CFO, Celebrite: So I would say that with regards to the FedRAMP, most of our current customers in the federal government are working offline for the because this is a mode of operation. But we want to be able, one, to support the smaller agencies second, to support the field offices of those larger agencies and actually to be able to continue presenting and allowing federal government agencies who do choose to subscribe into our SaaS platform to enjoy the really advanced AI capabilities that we introduced there. We don’t assume we didn’t assume any business in 2025. We assume every small business, if at all, in 2026 because we know that it requires them to change their model for question. But we believe that it will allow us to, in the future, continue to introduce more solutions to the federal government.

The CFSI, the proxy company, does open new accounts. As I said, it opens our ability to provide both software and services to programs as well as we couldn’t do before. Most of the, I would say, almost the entire sales that we are doing business we are doing now with the federal government is to the digital forensics lab and our digital forensic solution. We did not almost extend it to our investigative solutions. Being the proxy company and the processes around ATO approval test operational on trans solution and enterprise solution is much easier in this type of form, and we do believe that it will expand substantially the spending.

If we would have stayed only with digital forensic tuning and digital forensic solution, it would be hard to continue growing the federal government in the face of the average of the company. With the investments that we are doing now, we do believe that we will be

Unidentified speaker, Interviewer: able to maintain this pattern. Got it. Maybe one last question on the topic. 90% of your business is public sector. Earlier, you sized out federal 17%.

Is there any downstream impact to the remaining portion of the public sector, state and local?

Andy Kramer, Head of IR, Celebrite: Yes. Mean, so The U. S. Is roughly 50% America is 54% of the ARR mix. And so state and local is a very meaningful component within that mix with federal being 17.

We have not seen any meaningful deterioration or weakness within state and local. There has been and continues to be incremental funding made available by the federal government to support state and local within the current legislation. There is $05,000,000,000 of incremental funds that will support state and local for their support on things like border control. So we aren’t seeing that impact the strength of our state and local business, which continues to perform very well.

Unidentified speaker, Interviewer: Same question now on EMEA. Last quarter, you talked about some weakness there. What were the trends you saw in that region of the world? And now that we’re in June, what are you seeing in that region now?

Donna Gerner, CFO, Celebrite: So as as I mentioned before, we do the we did take the decision to invest in the defense and intelligence market in Europe as we have done it very intentionally in in The US because we’ve seen funds moving away from other use cases into the defensive intelligence part of it also on account of the law enforcement. If you think about the medical east in The UK, they are expected to cut around 80% of their headcount in the coming year or so. So that means that, especially the Northern countries and the Eastern countries, they’re moving more and more funds into defense and intelligence. And, you know, salespeople, we are moving certain money, but this we don’t leave it sporadically for the sales organization and management. We are doing it very strategically.

Also, we’re trying to better understand, can we tailor made our capabilities to their use cases, which are slightly different than the enforcement use cases. So enforcement, you have a case, you open a case, you start collecting evidence, you have search warrants, etcetera. In defense and intelligence, you say think about border control. The first the only thing you want to know if somebody is coming to a border is where did they come from, what you can identify it by geolocation on the phone, the languages, and maybe is he is he or she in terms of contact with people of interest from a public safety perspective. That’s all.

So the use cases are slightly different than we will be able to adjust our solutions to tailor made it to their use cases. For that reason, we’ve seen some slowdown in Europe. We start seeing the ability to close deals on the defense and intelligence already in q two. We believe that we’ll be able to catch up more in the second half of the year and receive some recovery in our business results.

Unidentified speaker, Interviewer: Got it. Shifting gears a little bit, we talked about 90% of your business is public sector. Of that, you already sell to 90% of relevant agencies. You didn’t disclose before that within your ARR growth, usually net new logo land is between 2% or 3% of that growth. Where is the opportunity to grow?

If you can give us more of a practical example when you think about the opportunities with your various agencies.

Andy Kramer, Head of IR, Celebrite: You understand? Sure. So when I think about the growth dynamics for this business, you’re right. The vast majority of our growth each and every quarter comes from doing more with the installed base. And so why is that, right?

There are three big challenges that they have as it relates to the public safety gap. And the public safety gap is largely look, prime isn’t going down unfortunately. Technologically, is increased sophistication of criminals who use just like everybody here who has a cell phone. You do a lineup of potential suspects. They all have cell phones.

And so you combine that with budgetary pressures, budgets don’t grow much and headcount is not growing. And so that leads to a couple of different knock on effects. One, data volumes and complexity are increasing. Two, operational inefficiency is way too high. And three, ethics accountability matter.

Think about all of the different issues where the public wants more confidence in how law enforcement does their job. And so, as you think about that overlay, what that means for us is our customers need better tools, better technology to work through the backlogs they have not only in cases, but in devices. They need better tools to as the phones themselves, security increases, they need better tools for access. They need to extract all of the data off the phone, not just what’s on the operating system. And so then they need more efficiency in terms of how they all collaborate together.

And so what we see is there are multiple transitions underway. We covered some of them at the outset, but we’re seeing our customers upgrade from legacy product to our newest solutions. We’re seeing higher attach rates for more powerful add on modules that help them with access and automation. We’re seeing cross sell and upsell for storing, sharing and collaborating and for the analytic piece. And so as you think about the impacts of that, I think the end result is much more of a modernization or a transformation of their workflows around the investigation.

What used to start dusting for fingerprints and putting yellow tape around the crime scene, it still happens, but that’s a very costly and it’s time consuming process. And so we’re seeing more and more of the investigation start digitally and advance digitally.

Unidentified speaker, Interviewer: Right. Maybe also to add and to also add, you know, outside of the opportunity of just upgrading and going more sophisticated solutions, I think you also have an opportunity to grow within, say, any three letter agency. You mentioned before going from the digital forensics units to the investigative units. Can you describe more what that means and what that entails? If we take any agency, can you grow are you growing just from one unit to another or also the number of offices that you participate in that agency?

Donna Gerner, CFO, Celebrite: I think, you know, in our Investor Day, year and a half ago, we had a a someone from the DA that came and speak to some of investors. And the DA has around 40 field offices. They have set up our solutions and they have digital forensics labs in less than 20. They are going to continue introducing more forensic lab into their entire field offices because they cannot afford not to think about what happened with the second assassination of Trump. You’re right to tell us.

If I just tell you better than me.

Andy Kramer, Head of IR, Celebrite: Yes. So it was the first point. And yes, found it’s actually think about the challenge there. They pick up the phone in Butler, Pennsylvania. It’s taken to the nearest field office in Pittsburgh.

They have some of our technology, but not all of our advanced capability. They can’t open that phone. The phone gets shipped a few hours away to a different lab that had all of our most advanced technology. They open that phone in forty minutes. So I think that when it comes to the opportunities, there’s multiple dimensions upon which we can expand, whether it’s helping like the city of Chicago, which two years ago didn’t have a single digital forensic lab, today they have two.

It could be expanding alongside of the DEA. It could be moving from the lab out into the field. Donna mentioned earlier, the use case at the border and making sure that people are coming from where they say they’re coming from, especially when they don’t have all their paperwork. And so I think that those are different examples of just digital forensic growth. And then when think about how there was an unfortunate murder of some coeds in Idaho, Moscow, Idaho, maybe eighteen, twenty four months ago, right.

The nearest FBI field office was a nine hour drive away. So a product like Guardian, which allows for think down in the Florida Keys, how do you get digital pickup drop off a phone? Couple days later, you need to pick up the digital evidence and the digital evidence report on a USB drive, you’re going to take two to three hours out of your day to do that commute. And so Guardian provides for a much more efficient replacement of conventional physical storage in a way that actually strengthens the chain of custody and provides the investigator. And for every user in the lab, there are dozens of downstream consumers of that information, analysts, investigators, prosecutors, defense attorneys.

And the ability to use the analytics inside of Guardian to slice and dice that information to support the investigation is incredibly valuable to the investigator. And then with a crime of scale, you could spend hours, if not days, looking at the average phone, 60,000 text messages, 30,000 photos, 1,000 videos. How do you manually review all that data when you’ve collected a dozen or more phones at a nightclub shooting, for example.

Donna Gerner, CFO, Celebrite: I think I think what we are trying to say is that the only way to close the safety gap is to provide technology. And more technology that is more efficient, more sophisticated, and in a way also streamline the entire process. Because crime is gonna rise, unfortunately. Here, we are seeing maybe less home invasion or car theft, but homicide, human trafficking. Think about what’s going to happen in The US next year with the World Cup.

You know how the the authorities here are preparing to try to hold back on human trafficking that is going to flag The US? It’s it’s an enormous effort. Right? Think and and today’s slavery is at the highest peak of tens of millions of people are being being in space in today’s world. Number of police officers is not going since COVID.

Actually, it went down. You need to be able to to to do something with that. And this is why we feel so confident because when you are focused on your customers and you have such good relationship with them and you work with employers, you know where they need help. And you know what technology will have the most impact on their what they this is where Sutter might play the biggest game.

Unidentified speaker, Interviewer: Got it. We only have a few minutes left. I have enough questions here to take us to the next hour. So maybe opening it up to the room and see if we have any questions in the last minute or two. Okay.

Like, we can continue on. Your stock had a massive performance last year. Where do you think Celebrate goes from here? Where is the next stage of growth for the company?

Donna Gerner, CFO, Celebrite: Well, don’t want to speak about the show performance. We just can think about company performance and then the investors and market decline how we show performance. I would say that what what impacted substantially last year’s performance on top of the company’s performance is that we shed out shed away all remark all marks for being discussed. We redeemed our

Unidentified speaker, Interviewer: Markets. We

Donna Gerner, CFO, Celebrite: made the we priced the channel and Sorry. Adjustment criteria, and we took away most of except for $130, we actually cleaned our capital base. And I think this was very much appreciated by the market and the board. Company is looking for us. We work and we prepare ourselves to be a $1,000,000,000 company.

This is our target. We’ll do it organically and we’ll do it through acquisitions. We have a very solid balance sheet. We have more than $500,000,000 in cash. We have zero debt.

We continue generating cash from operating activities quarter after quarter, so we can continue to invest back in the company both on the organic growth, but also on the nonorganic. We have a very, I would say, passionate and and and and intense efforts around M and A. So both on the management level and the board level, we have a board strategy and technology committee. Have shadowing management strategy and technology committee. We have a finite number of targets in our market, and we don’t want to stay behind.

And so we work very diligently to continue expanding our TAM, our reach to our customer base with newer technology and innovations, and to enhance our current technology and reach out faster and stronger on the cloud based and AI capabilities with providing solutions to our customers. So we are very, very intense on our intention to grow.

Andy Kramer, Head of IR, Celebrite: Yes. No, and I think that the opportunities in front of the business today are very tangible, very I’m more optimistic and encouraged by what’s in front of the business. Yes, there is some near term uncertainty, I think some of those clouds are starting to brighten and lift. And I think that if we’re thoughtful about how we deploy our capital to augment the organic growth that is still very robust, This is a very compelling growth opportunity in a cycle that is still very early innings.

Unidentified speaker, Interviewer: Got it. We’re out of time. Donna and Andy, thank you for your time. We’ll bring you back next year for the other set of questions.

Donna Gerner, CFO, Celebrite: Thank you.

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