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    CLBT
    Earnings call· Jun 2026(Q2 FY26)

    Cellebrite DI Q2 FY26 earnings call CLBT

    Aug 13, 2026 Source

    Executive summary

    Cellebrite Q2 FY26 — Leadership Transition Amidst Missed ARR Targets and Strong AI Product Launch

    Cellebrite announced a planned CEO transition, appointing Shiven Ramji, amidst a challenging Q2 that saw missed ARR and revenue targets due to deal slippage and lower-than-expected Insights monetization. The company is implementing stricter sales execution and forecasting discipline, while highlighting strong performance in U.S. federal and Defense & Intelligence segments, and promising early adoption of new AI-powered products like Genesis.

    Highlights

    5

    • Defense and Intelligence ARR grew 25% in Q2 FY26.

    • U.S. federal business had a solid Q2, with growth accelerating into the mid-teens.

    • Genesis, an AI-powered consumption product launched late in Q2, secured $400,000 in ARR in final weeks of June, pushing $1 million ARR post-quarter.

    • Secured first major FedRAMP deal for Guardian, a multi-product multimillion dollar deal with an initial 7-figure order for Guardian alone, 35x higher than average SLG spend.

    • Full-year FY26 adjusted EBITDA target raised to $153 million to $159 million, representing a 28% margin.

    Concerns

    5

    • Missed Q2 ARR and revenue performance, with ARR increasing 21% to $508 million but below guidance.

    • Full-year FY26 ARR guidance lowered to $550 million to $560 million, a $15 million reduction at the midpoint.

    • Full-year FY26 revenue range reduced to $555 million to $561 million.

    • Slippage in large transactions due to new administrative and procurement requirements related to foreign entity status, particularly with U.S. federal and European government customers, causing approximately 6 weeks of sales cycle elongation.

    • Insights ARR uplift from pricing and footprint expansion was lower than expected, particularly in the U.S. state and local government sector, impacting growth to just below 20%.

    Guidance & targets

    15
    CategoryTargetConfidence
    Full-year 2026 ARR
    $550M-$560M
    high materiality
    High
    Full-year 2026 ARR Growth
    14%-16%
    high materiality
    High
    Full-year 2026 Revenue
    $555M-$561M
    high materiality
    High
    Full-year 2026 Revenue Growth
    17%-18%
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $153M-$159M
    high materiality
    High
    Full-year 2026 Adjusted EBITDA Margin
    28%
    high materiality
    High
    Full-year 2026 Free Cash Flow Margin
    30%
    high materiality
    High
    Q3 ARR
    $524M-$528M
    medium materiality
    High
    Q3 Revenue
    $145M-$148M
    medium materiality
    High
    Q3 Adjusted EBITDA
    $42M-$45M
    medium materiality
    High
    Q3 Adjusted EBITDA Margin
    29%-30%
    medium materiality
    High
    Insights Contribution to Growth
    mid-single digits
    medium materiality
    Medium
    Guardian, Pathfinder, Genesis Contribution to Growth
    mid-single digits
    medium materiality
    Medium
    Corillium Contribution to Growth
    1-2 percentage points
    low materiality
    Medium
    Gross Revenue Retention Rate
    at least 1 point improvement
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Americas
    U.S. Federal growth accelerated into the mid-teens. U.S. State and Local Government (SLG) growth was just below 20%, down from mid-20s last year, but would have been mid-teens without new offerings.
    % of total ARR: 53%
    		—19%——
    EMEA
    Experienced slippage in cloud deals due to new EU Freedom of Information requirements, but 4 slipped cloud deals have since closed.
    % of total ARR: 34%
    		—23%——
    APAC
    Stood out as a strong performer in terms of growth.
    % of total ARR: 13%
    		—29%——
    Defense and Intelligence
    Outgrowing the rest of the company. Delays are less in this segment compared to civilian federal.
    		—25%——

    Operational metrics

    16
    ARR
    $508Mup 21% YoY
    Q2 FY26

    Missed the bottom end of guidance range.

    Subscription Revenue
    $119.5Mup 16% YoY
    Q2 FY26
    Total Revenue
    $131Mup 16% YoY
    Q2 FY26
    Gross Profit
    $112Mup 16%
    Q2 FY26
    Gross Margin
    86%
    Q2 FY26
    Adjusted EBITDA
    $31.8M
    Q2 FY26
    Headcount
    1,287flat with end of FY25
    end of June
    Net Income
    $29.7M
    Q2 FY26
    Diluted EPS
    $0.11
    Q2 FY26
    Cash and investments balance
    $546M
    end of Q2 FY26
    Growth products contribution to sequential ARR increase
    25%vs 18% last quarter
    Q2 FY26
    Genesis ARR
    $400,000pushing $1M of ARR post-quarter
    final weeks of June

    Secured in the final weeks of June after launch on June 10.

    Guardian average annual spend
    $50,000
    annual
    FX headwinds (ILS)
    3 points
    FY26

    Impact on adjusted EBITDA target.

    Slipped deals closed post-quarter
    $4M
    post Q2 FY26

    Of the business that slipped in Q2, this amount has now closed and booked.

    Sales cycle elongation due to procurement
    6 weeks
    Q2 FY26

    Approximate elongation for deals impacted by new administrative requirements.

    Industry KPIs

    9
    MetricValueDetails
    Revenue growth$131MUSD
    Arr net new arr$508MUSD
    Bookings billings$508MUSD
    Pricing model mixconsumption
    Large deal new logo metrics7-figure orderUSD
    Gross retention renewal rateup several points
    Multi product platform attach5 products
    Operating FCF margin rule of 4024%%
    Ai product adoption monetization$400,000USD

    Orderbook & backlog

    1
    Ending ARR$508MQ2 FY26

    up 21% YoY

    Annual Recurring Revenue (ARR)

    Product announcements

    6
    ProductTypeDetails
    Genesislaunch
    Guardian Investigatemilestone
    Advanced Unlocksmilestone
    Drone Forensicsmilestone
    Shared Cellebrite AI layerroadmap
    Carilliumroadmap

    Deals & partnerships

    2
    U.S. federal customerMulti-product, multi-million dollar FedRAMP deal for Guardianmulti-million dollar

    First major FedRAMP deal for Guardian with a long-standing U.S. federal customer.

    Anchor customerAgreement for Genesis airgap offering

    Secured an agreement with an anchor customer for an airgap offering, bringing Genesis capability into high security and on-premise environments.

    Risks & headwinds

    3
    Slippage in large transactions due to administrative and procurement requirementsQ2 FY26, ongoing impact on deal cycles

    Caused Q2 ARR and revenue miss; approximately 6 weeks elongation of sales cycles; $4 million of slipped business has since closed.

    Mitigation: Implementing stricter sales execution and forecasting discipline; secured a master Foreign Entity Permit (FEP) for U.S. federal cloud technology; improved understanding of EU Freedom of Information requirements for cloud deals.

    Lower-than-expected ARR uplift from Insights conversionsQ2 FY26, ongoing

    Impacted full-year ARR outlook; particularly evident in U.S. state and local government (SLG) sector, where growth is now just below 20% (vs mid-20s last year).

    Mitigation: Focusing on new product introductions like Genesis to drive growth and monetization, especially in the SLG sector.

    Challenging FX environmentFY26

    Nearly 3 points of FX headwinds from the ILS impacting the full-year adjusted EBITDA target.

    Mitigation: Expect FX headwinds to subside in 2027; continued discipline in managing the business and prioritizing investments.

    What to watch in Q3 FY26

    5

    Sales execution and forecasting discipline

    Next quarter (Q3 FY26) and beyond
    CurrentMissed Q2 ARR and revenue targets due to deal slippage and forecasting issues.
    TargetImproved execution, earlier risk identification, and greater precision in forecasting.

    Why it matters

    Directly impacts the company's ability to meet guidance and rebuild investor confidence, especially after the Q2 miss.

    We need to execute these opportunities better, identify risks earlier and forecasted business with greater precision.

    Q&A highlights

    7

    What gives management confidence in the business's long-term growth potential given the Q2 performance shortfall?

    Management expressed confidence based on early positive signals from new products, larger deal sizes, and successful platform orders, including a 5-product platform order for a leading agency. They noted that 4 slipped cloud deals in EMEA have already closed, and they now understand new EU Freedom of Information requirements.

    “I mean when you put the quarter in context, we signed and took down orders probably well north of 1,000. In the end, it kind of came down to 4, and it was 4 that across the line, and it was 4 that involve cloud.”

    asked by Shaul Eyal · answered by David Barter

    2 min read6 chapters

    Detailed Narrative

    01

    CEO Transition and Strategic Direction

    Adam Clammer announced Shiven Ramji as the new CEO, effective immediately, as part of a planned transition accelerated by the need for a product-centric leader focused on scalable, cloud-native platforms and AI. Ramji emphasized compressing the investigative lifecycle and building a broader investigative intelligence platform with a shared Cellebrite AI layer, combining forensic context with evidence-grade controls for provenance, verification, and auditability.

    02

    Q2 Performance Shortfall and Sales Execution

    The company missed Q2 ARR and revenue expectations, primarily due to large transactions with U.S. federal and European government customers encountering new administrative and procurement requirements related to Cellebrite's foreign entity status. Management is implementing stricter sales execution and forecasting discipline, placing greater weight on observable customer actions and explicitly accounting for large government deals to improve precision.

    03

    Insights Monetization Challenges

    While customer conversion to Insights reached nearly 65% of the installed base by Q2, the ARR uplift from pricing and footprint expansion was lower than expected, particularly in the U.S. state and local government (SLG) sector. This moderation in incremental price capture at the time of conversion impacted the full-year outlook, with SLG growth now just below 20% compared to mid-20s last year.

    04

    Strength in Federal and New Product Adoption

    The U.S. federal business had a solid Q2, with Defense and Intelligence ARR growing 25%. New offerings like Guardian Investigate, Advanced Unlocks, and Drone Forensics saw important adoption, with Guardian securing a multi-product, multi-million dollar FedRAMP deal. Genesis, an AI-powered consumption product launched late in Q2, generated $400,000 in ARR in its first weeks and is expanding globally.

    05

    Financial Outlook and Profitability

    Despite lowering full-year ARR and revenue guidance, Cellebrite raised its full-year adjusted EBITDA target to $153 million to $159 million, reflecting continued discipline and prioritization of investments. The company anticipates delivering 30% free cash flow margins in 2026 and expects a step-up in profitability and FCF in 2027, driven by stable headcount, subsiding FX headwinds🌐, and scaling new products.

    06

    Addressing Procurement Delays

    Management acknowledged unforeseen procurement challenges, particularly for cloud and AI deals with government agencies, including a 'foreign entity permit' requirement for U.S. federal cloud technology. They have since secured a master FEP and are applying rigorous logic to future deals to prevent similar delays, noting that no deals were lost, and $4 million of slipped business has already closed post-quarter.

    AI-generated summary of the company’s earnings call. Not investment advice.