Cellebrite DI Ltd. — FY2022 Form 20-F Summary
Reporting period: Fiscal year ended December 31, 2022; U.S. GAAP, U.S. dollars. This annual filing does not provide standalone 2022 Q4 results. Cellebrite supplies digital-intelligence software and services for legally sanctioned investigations, serving approximately 7,000 customers. Government agencies generated about 90% of revenue.
Key financial results
| Metric | FY2022 | FY2021 | Change |
|---|---|---|---|
| Revenue | $270.7 million | $246.2 million | +10% |
| Gross profit / margin | $219.9 million / 81% | $203.7 million / 83% | Profit +8%; margin down 2 points |
| Operating income | $1.0 million | $13.8 million | Down $12.8 million |
| Net income | $120.8 million | $71.4 million | +$49.4 million |
| Adjusted EBITDA / margin | $25.9 million / 10% | $47.9 million / 20% | Down $22.0 million |
| Cash from operations | $20.6 million | $36.1 million | Down $15.5 million |
Revenue mix shifted further toward subscriptions: total subscription revenue rose 18% to $216.0 million, including subscription services up 27% to $153.5 million; term-license revenue was essentially flat at $62.5 million. Perpetual license and other revenue fell 37% to $21.4 million, mainly as customers moved to term-based licensing. Professional services revenue rose 16% to $33.3 million.
Subscription gross margin was 92% versus 94%; perpetual license and other margin fell to 39% from 71%, reflecting lower perpetual revenue and a greater hardware mix. Professional services margin improved to 39% from 27%, attributed to training revenue and operating leverage. Operating expenses increased 15% to $218.9 million, led by R&D (+23%) and sales and marketing (+27%); general and administrative expense decreased 15%.
Cash, liquidity, debt and balance sheet
At December 31, 2022, cash and cash equivalents were $87.6 million, short-term deposits $51.3 million, and marketable securities $66.8 million, for approximately $205.7 million in these liquid resources. The company reported no credit facilities. Total liabilities were $329.4 million, including $194.9 million of deferred revenue and fair-value liabilities for warrants, restricted sponsor shares and price-adjustment shares; the filing does not identify conventional borrowings as a material funding source.
Operating cash flow was $20.6 million. Investing activities used $91.2 million, primarily reflecting net purchases of marketable securities and short-term deposits, as well as $6.9 million of capital expenditures. Financing activities provided $14.0 million, mainly from option exercises and the employee share purchase plan. Management said existing liquidity and operating cash flows should fund operations and capital expenditures for at least 12 months. Lease commitments were $20.9 million at year-end.
Material changes and unusual items
- Net income substantially exceeded operating income: $119.7 million of net financial income included $116.9 million from remeasurement of liability instruments. These fair-value gains were a principal reason net income rose; they do not represent comparable growth in operating performance.
- Adjusted EBITDA declined to $25.9 million from $47.9 million, with management citing investment in R&D and go-to-market activities. Share-based compensation increased to $13.7 million from $6.5 million.
- ARR increased 33% to $249 million. Recurring-revenue dollar-based net retention was 130%, compared with 137% in 2021.
- Deferred revenue rose to $194.9 million from $159.4 million, and remaining performance obligations increased to $276.4 million from $231.7 million. The company expected to recognize the majority of remaining obligations in 2023.
- Cash and cash equivalents decreased from $146.0 million to $87.6 million, while marketable securities and deposits formed a larger share of reported liquidity.
Outlook, management commentary and principal risks
The filing gives no specific numerical revenue or earnings guidance. Management’s stated priorities include expanding sales within existing customers, adding public- and private-sector customers, continued R&D investment, and expanding cloud/SaaS offerings. It anticipates continued investment in R&D and go-to-market activities and expects capital expenditures over the next 12 months to support similar needs as in 2022.
Material risks include dependence on government and law-enforcement customers and their budgets and procurement cycles; product and technology changes, competition and subscription renewals; privacy, human-rights and reputational concerns over possible customer misuse; cybersecurity and data-protection exposure; export controls and sanctions; foreign-exchange exposure, particularly Israeli shekel costs; and political and operating risks in Israel. The company also highlights AI-related, regulatory, supply-chain, personnel and acquisition risks. SUNCORPORATION held approximately 49.5% of ordinary shares at December 31, 2022, giving it significant shareholder influence.
The company reported that its disclosure controls and internal control over financial reporting were effective as of year-end, based on management’s assessment; the auditor did not attest to internal-control effectiveness. The 2022 financial statements received an unmodified audit opinion. No legal proceeding requiring accrual was reported at year-end, and the company said it did not expect to pay cash dividends in the foreseeable future.
Investor facts to verify
- How much of reported net income depends on non-operating fair-value gains, and how operating income and Adjusted EBITDA trend independently.
- Whether subscription growth, ARR and retention sustain momentum, and how much revenue conversion is supported by deferred revenue and remaining performance obligations.
- The composition and accessibility of liquid resources, operating cash generation, and the effect of ongoing investment and lease commitments on liquidity.
- Exposure to government spending: government customers represent about 90% of revenue, U.S. federal customers 21%, and the top 25 customers 24%.
- Potential dilution and balance-sheet effects from outstanding warrants, share-based awards, restricted sponsor shares and price-adjustment shares.
- Developments in privacy, human-rights, export-control and Israeli regulatory matters, as well as currency and geopolitical risks.