Cellebrite DI Ltd.

Good day, ladies and gentlemen, and welcome to the Celebrate Q3 2021 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require operator assistance, please press star, then zero on your touchtone telephone. As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Annette Aaron, Hillborn, VP Investor Relations for Celebrite. You may begin.

Thank you, Justin. Welcome to Celebrite's third quarter 2021 financial results earnings call. Joining me today are Yosa Carmel, Celebrite's Chief Executive Officer, and Dana Gerner, Celebrite's Chief Financial Officer. This call is being recorded and a replay of this recording, as well as a copy of the presentation that accompanies this call, will be made available on our website shortly after the call. A copy of today's press release and financial statements, including gap to non-gap reconciliations, as well as supplemental financial information for the third quarter, are available on the Investor Relations website at investors.celebrite.com. Statements made during this call that are not statements of historical facts constitute forward-looking statements. All forward-looking statements are subject to risks, uncertainties, and other factors that could cause matters expressed or implied by those forward-looking statements not to occur. They could also cause the actual results to differ materially from historical results and or from forecasts. Some of these forward-looking statements are discussed under the heading risk factors and elsewhere in the company's registration statement on form F1 declared effective by the SEC on October 6, 2021. The company does not undertake to update any forward-looking statements to reflect future events or circumstances. Please note that in the coming weeks, management will participate in a number of investor conferences as detailed in today's press release. Please visit the events section of the investor website to access webcasts of our presentations at these conferences where applicable. With that, I'd like to turn the call over to Yossi Cormier, Celebrite CEO. Yossi, please go ahead.

Thank you, Anat, and thank you for joining our call today. This is our first earning call as a public company, but many of you have been following our progress since the beginning of the going public process back in April, and I firstly would like to thank you for your interest and support. We are thrilled to start our journey as a public company by delivering progress on our strategy and all that together with the strong financial results. Just to refresh, our strategy is to lead the digital transformation of our customers' investigative units and becoming a one-stop shop digital intelligence leading vendor. In Q3, we continue to see a momentum with large and multi-solution deals, which we had highlighted earlier in the year. we are pleased to report this quarter 25 deals larger than half a million US dollars compared with 15 such deals in Q3 last year, including our largest deal ever of approximately 10 million US dollars with a US federal account. In the first nine months of this year, we had 58 such deals, reflecting a growth of 76% compared to the same period last year. The large deals reflect a successful upsell of additional licenses or new solutions to existing customers, as well as the increase in multi-year term-based deals. This momentum is a reflection of the success we have had within the public safety sector as part of the digital transformation process of strategic accounts and the success in transitioning these customers to the term-based model from their prior preference for one-time perpetual license, given their budgetary structure. We're excited to see APSEL driven this year by PREMIUM, our high-end collection review solution with new license sales in Q3 to customers such as two federal agencies and one state police force in the United States, a European Ministry of Interior Affairs, and a municipal police force in the Near East. We also successfully launched the PREMIUM Enterprise solution, and began deployment of the orders made even before solution availability, while receiving new orders from customers such as a county police force in the UK, two county sheriff's offices in the USA, a customs authority, and others. As a reminder, Premium is our advanced collect and review solution, providing unlock and extract capabilities for leading iOS and Android devices. it is typically installed in a central location that can meet our strict security requirements. Now, the new solution, the Premium Enterprise, is designed to decentralize our advanced capabilities while maintaining the strict security requirements found in Premium. The Premium Enterprise allows remote connectivity to UFEDs, the most widely adopted prime collect and review solution, and this enables our special capabilities on every UFED and improving significantly customers' investigative mode of operation. Let me share with you two win stories, which provide some color on demand drivers for our solutions. So typical demand factor and growth driver for Cellebrite is backlog of devices that needs to be investigated. For example, one of the large wins in the quarter was with the National Correction Facilities Network in one of our large markets. Historically, these customers spent between 100,000 to 200,000 US dollars with us annually. While the network includes multiple correction facilities, the facilities were all working with one lab and a small team. Now, this lab was unable to keep up with the numbers of mobile devices that were smuggled into prisons. Engaging with a senior government officer and conducting an extensive proof of concept we secured a seven-digit order, which includes distributing responders our simplified field solution in the correction facilities and also using Commander, our license management solution, in order to automate the generating of data on their usage. In addition, the deal includes services to bolster the customers' lab capabilities, train the teams, and implement best practices. Despite the fact that the customer booked this quarter approximately 10 times its previous year's spend with us, we believe there is additional upsell potential within this customer in the future. A second example is the European Country National Police Force that purchased multiple solutions including UFED and Physical Analyzer, Pathfinder, Premium, UFED Cloud Seeker, Inspector and Digital Collector, as well as training in a multi-million three years deal. This police force will now be able to collect and review data from mobile, from computer, video, and the cloud, and analyze their findings across numerous investigation units throughout the country and not only so far in central police stations. This customer is adopting a highly progressive approach to investigations, aspiring to expand the adoption of digital intelligence in the police force to overcome bottlenecks and increase efficiency. We expect this approach to become more widespread as part of global trend to digitize multiple aspects of the police force. This win was achieved through close engagement with senior level at the agency and a flexible approach that enabled tailoring the deployment to the agency's strategy and specific needs. Now these two examples I shared help explain how we constantly and successfully generate best-in-class net retention rate which was 139% for the 12 months ending September 30th, 2021. Furthermore, we believe the spending potential of our existing customer base is significant, and we are very focused on capturing this additional opportunity. Our vision of a comprehensive digital intelligence platform that allows users in agency to collect, review, analyze and manage digital data is a significant step forward from today's siloed manual and backlog process. The discussions of such a step forward are held at the agency's executive level, and in Q3, for example, we engaged with the most senior officers of the police forces at three of the largest 20 cities in the United States to discuss our end-to-end digital intelligence platform. Now, having such discussions, is first and foremost a testament to the quality of our sales force. We invested in high caliber account executives and by that upgraded our ability to manage strategic accounts. And second, we view such discussions as a positive sign in the continued interest of major law enforcement organizations to educate themselves and adopt leading digital intelligence tools. Now, of course, such a step forward will also take time. The processes involved in digital transformation are complex because it requires not only our solutions, but also investments in infrastructure and personnel on the agency side. This complexity is one of the reasons we expanded our service offering as I elaborated on our previous call. The consulting services and training we offer assist customers in this transition. Now, in the past few months, We continue to enhance and expand our digital intelligence platform to make the investigative process smarter, faster, and efficient, and pursue our vision of digitizing the entire investigative lifecycle. Starting with organic development, in Q3, we introduced a new version of Guardian, our digital evidence management solution, and the industry's first remote mobile collection. Let me start with the Guardian. Now, we view the Guardian solution we introduced as an important and strategic component in our digital intelligence platform. The world of digital evidence management is evolving quickly as public safety agencies are very challenged by the need to manage an increasing amount of digital evidence while at the same time maintaining the chain of evidence, ensuring compliance, protecting privacy and meeting an increasing number of accountability requirements. Now most agencies today are still managing data manually And most of the alternatives to that manual process are digital evidence management solution that specializes in operational data, which is generated by agencies themselves. For example, from in-car, body-worn cameras, or CAD-slash-RMS systems. While such solutions are transforming agencies' operational ecosystem, Celebrite Guardian is a digital evidence management solution that specializes in the investigative ecosystem. It is linked to actual investigative data generation through our collect and review offering. This enables an holistic approach toward data, evidence workflow, and case management, including elements of storing, sharing, and review through the investigation process in order to make investigations faster and more efficient. Now, all this now is offered in a SaaS solution, further enhancing efficiency and cost effectiveness. And this is our first SaaS solution, which is another dimension of strategic importance. We believe that readiness of the public safety sector for SaaS solutions is on the rise, and we are committed to enhance and expand our offering in this space. Regarding remote mobile collection, the remote mobile collection is an important capability for the private sector, where corporate investigations, e-discovery, and incident response often require collecting information from a distributed workforce. Now with constant based automated remote collections from both computer and mobile devices, the disruption to the workforce is minimized. Celebrite is the first to market with this capability due to our domain expertise on the mobile collection. Let's discuss the inorganic portfolio expansion. We recently announced the acquisition of Digital Clues. We are obviously excited about this acquisition as we see open source intelligence as an expansion of our digital intelligence offering, upgrading Cellebrite's competitive differentiation as an end-to-end digital intelligence platform provider. Open source intelligence is the collection and analysis of data from many publicly available sources including the surface web, deep web and dark web. Agencies are all engaged in such activities in a simple and manual manner. This can be as basic as checking a suspect's Facebook profile, but we use an automated solution as part of their investigative workflow. The addition of this OSINT capability to our digital intelligence platform is a natural expansion. It enables quick information gathering in early stages of the investigation, and as such, fits our value proposition of making investigations smarter, faster, and more efficient. Our extensive footprint and strong customer base provide a significant cross-selling opportunity here, and as such, adds almost another billion dollars to our time. Now reaching this scale will require delivering the strong digital cloud-based technology as an integrated solution so that open source intelligence is fused into Pathfinder, our analytics solution, as another layer of data that enriches Pathfinder's analytics capabilities. This will require some investment in R&D, and it will require time. We are excited about this new offering that expands our addressable market, and we welcome the Digital Clues team, which will join us in the coming days after the upcoming closing of the acquisition. So in summary, we are very pleased with our performance in the third quarter and with the continued success we have had in executing on our strategy. We are excited also that our top customers remain committed to leveraging our suite of solutions to improve their efficiency and outcomes. We continue to innovate our portfolio by increasing the scope of our offerings as we focus on helping our customers apply their digital transformation initiatives in the investigative workflow. Now, combined with a healthy spending environment and budget availability of law enforcement organizations, we have a tremendous market opportunity and we are confident in our ability to execute as more organizations recognize the vast potential of our digital intelligence platform. And above all, we remain committed to our mission to accelerate justice, protect and save lives, and preserve privacy. And I'm proud of our team's success in this quarter. Now with that, I will turn the call over to Dana to discuss the financials.