Cellebrite DI Ltd.

Please stand by. Your program is about to begin. If you need assistance during your conference today, please press star zero. Welcome to the Celebrite fourth quarter and full year 2023 financial results conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. So others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star 0. I would now like to turn the call over to your first speaker today, Mr. Andrew Kramer. Mr. Kramer, the floor is yours.

Thank you very much, Angela, and good morning, everybody. Joining me today from Washington, D.C., are Yossi Carmel, Celebrite's CEO, and Donna Gerner, Celebrite's CFO. Tom Hogan, Celebrite's Executive Chairman, is also with us today and will be available to participate in the Q&A portion of our call. There is a slide presentation that accompanies our prepared remarks. Please advance the slides and the webcast viewer to follow our commentary. We will call out the slide number we're referring to in our remarks. This call is being recorded and a replay of this recording will be made available on our website shortly after the call. Starting with slide number two, a copy of today's press release and financial statements, including GAAP to non-GAAP reconciliations, this slide presentation, and the quarterly financial tables and supplemental historical financial information for each quarter of 2023 and 2022, as well as 2021 data, are available on the Investor Relations website at investors.celebrate.com. Also, unless otherwise stated, our discussion of our fourth quarter and full year 2023 financial metrics, as well as the financial metrics provided in our outlook on today's conference call, will be done on a non-GAAP basis only, and all historical comparisons with the fourth quarter of 2022 or the full year 2022, unless otherwise noted. In addition, please note that statements made during this call that are not statements of historical facts constitute forward-looking statements. All forward-looking statements are subject to risks and 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 annual report on Form 20F filed with the SEC on April 27, 2023. The company does not undertake any obligation to update any forward-looking statements to reflect future events or circumstances. Slide number three provides the agenda for today's call. As you will hear, we close 2023 with another strong quarter. As a result of our accomplishments today and the near-term opportunities we see, we are excited about our prospects to build on our momentum in 2024, which is reflected in our financial expectations. With that said, I'll now turn the call over to Yossi Carmel, Celebrite's CEO.

Thank you, Andy, and thank you all for joining us today. So Celebrite delivered an outstanding performance in 2023, and we closed the year with another strong quarter. Our team did a great job executing on our plans throughout the year. We delivered impactful customer-centric innovation. We extended our customers' relationships, built our brand, and thoughtfully managed all aspects of our operation. Our accomplishments and strategic progress enabled us to exceed our original and upgraded 2023 financial targets. We also surpassed rule of 45 status in 2023 with ARR growth of 27%. and adjusted EBITDA margins of 19%. We move into 2024 as an even stronger market and technology leader. Now, we began 2024 by announcing Cellebrite expanded case to closure our C2C software platform. Our C2C platform is trusted by thousands of public and private sector customers in support of their efforts to close more cases faster. Now, every day, Our customers see that Cellebrite solutions deliver on our brand promise of justice accelerated throughout the entire digital investigation lifecycle. Our solutions play an important role in helping our customers transform their investigative workflows and make digital evidence more accessible, more intelligent, and more actionable. And as a result, we have built a strong foundation for us to continue thriving as a market and technology leader going forward. Before I dive into the details, I want to say that it is definitely an exciting time for Celebrite and Celebrite shareholders. We want to share more about how exciting our development is. Over the past years, we've taken important steps to upgrade our investors' communication, and we are building on this effort in two additional important ways. I'm happy to inform that we'll be holding our first ever Investors Day next month, which will be a great opportunity for us to share more about our healthy growing market, about our value proposition that is resonating with customers, about our attractive opportunities for strong growth, and our very bright future. And second, as of this quarter, we are providing quarterly guidance as a complement to the annual outlook that we have always offered. Now, while I plan to share more about opportunities that lie ahead of Celebrite in a moment, I would like to turn now to slide four to recap our Q4 performance and selected KPIs. And more specifically, ARR grew 27% to $315.7 million. Total revenue of $93 million increased 26%. on the strength of a 26 increase in subscription software revenue. We delivered adjusted EBITDA of 22.27 million, or 24% on a margin base, and non-GAAP EPS of 11 cents. And lastly, we ended 2023 with cash, deposits, and investments totaling approximately 332 million, an increase of 62% since the end of 2022. Now, looking at our full-year performance, Celebrite exceeded its targets and rule of 45 status. We achieved record ARR and revenue, mainly due to our success in expanding existing customers' relationship and nearly doubled our adjusted EBITDA margins. We aim to build on these results going forward by delivering a balance mix of strong ARR growth and healthy profitability in 2024. Now, there are a number of factors that reinforce our confidence about our prospects for continued success in 2024. Let's move to slide five to cover this.