Q2 FY2026
Filed Aug 13, 2026Cellebrite reports second-quarter 2026 revenue growth of 16% year-over-year, misses its ARR target, lowers full-year ARR and revenue outlook, and raises its adjusted EBITDA target.
Revenue grew 16% year-over-year and ARR grew 21%, but management said ARR was below expectations amid longer sales cycles and lower-than-anticipated Inseyets expansion. The company reduced FY26 ARR and revenue expectations while increasing its adjusted EBITDA outlook.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total Annual Recurring Revenue (ARR)other | $507.8 million | – | up 21% year-over-year |
| Recurring revenue dollar-based net retention rateother | 117% | up 2 pts. over Q1 | – |
| RevenueGAAP | $131.1 million | – | up 16% year-over-year |
| Subscription revenueGAAP | $119.5 million | – | a year-over-year increase of 16% |
| Subscription services revenueGAAP | $97,685 (U.S. Dollars in thousands) | – | – |
| Term-license revenueGAAP | $21,805 (U.S. Dollars in thousands) | – | – |
| Other non-recurring revenueGAAP | $3,912 (U.S. Dollars in thousands) | – | – |
| Professional services revenueGAAP | $7,736 (U.S. Dollars in thousands) | – | – |
| Gross profitGAAP | $105.9 million | – | – |
| Gross marginGAAP | 80.8% | – | – |
| Gross profitnon-GAAP | $112.1 million | – | – |
| Gross profit marginnon-GAAP | 85.5% | – | – |
| Operating expensesGAAP | $98,982 (U.S. Dollars in thousands) | – | – |
| Research and development, netGAAP | $35,961 (U.S. Dollars in thousands) | – | – |
| Sales and marketingGAAP | $43,753 (U.S. Dollars in thousands) | – | – |
| General and administrativeGAAP | $19,268 (U.S. Dollars in thousands) | – | – |
| Operating incomeGAAP | $6,949 (U.S. Dollars in thousands) | – | – |
| Operating marginGAAP | 5.3% | – | – |
| Operating incomenon-GAAP | $29,805 (U.S. Dollars in thousands) | – | – |
| Operating marginnon-GAAP | 22.7% | – | – |
| Net incomeGAAP | $6.4 million | – | – |
| Net incomenon-GAAP | $29.7 million | – | – |
| Diluted earnings per shareGAAP | $0.02 | – | – |
| Diluted earnings per sharenon-GAAP | $0.11 | – | – |
| Adjusted EBITDAnon-GAAP | $31.8 million | – | – |
| Adjusted EBITDA marginnon-GAAP | 24.2% | – | – |
| Cash flow from operating activitiesGAAP | $17,589 (U.S. Dollars in thousands) | – | – |
| Free cash flownon-GAAP | $14,521 (U.S. Dollars in thousands) | – | – |
| Free cash flow marginnon-GAAP | 11.1% | – | – |
| Free cash flow for the trailing twelve monthsnon-GAAP | $144.2 million | – | – |
| Free cash flow margin for the trailing twelve monthsnon-GAAP | 28.0% | – | – |
| Six-month revenueGAAP | $259,439 (U.S. Dollars in thousands) | – | – |
| Six-month gross marginGAAP | 81.6% | – | – |
| Six-month operating incomeGAAP | $16,068 (U.S. Dollars in thousands) | – | – |
| Six-month net incomeGAAP | $17,309 (U.S. Dollars in thousands) | – | – |
| Six-month adjusted EBITDAnon-GAAP | $62,407 (U.S. Dollars in thousands) | – | – |
| Six-month free cash flownon-GAAP | $31,365 (U.S. Dollars in thousands) | – | – |
Third-Quarter 2026 and Full-Year 2026 Expectations (as of 08/13/26) outlook
- RevenueThird-Quarter 2026: $145M – $148M; Full-Year 2026: $555M – $561M
- NoteARR: Third-Quarter 2026 $524M – $528M; Full-Year 2026 $550M – $560M
- NoteARR annual growth: Third-Quarter 2026 19% – 20%; Full-Year 2026 14% – 16%
- NoteRevenue annual growth: Third-Quarter 2026 15% – 17%; Full-Year 2026 17% – 18%
- NoteAdjusted EBITDA: Third-Quarter 2026 $42M – $45M; Full-Year 2026 $153M – $159M
- NoteAdjusted EBITDA margin: Third-Quarter 2026 29% – 30%; Full-Year 2026 ~28%
What drove it
- Management cited healthy second-quarter growth in Asia-Pacific, EMEA and U.S. Federal.
- Cellebrite achieved early monetization for Genesis in the second quarter after its official launch on June 10th.
- Management reported customer adoption for Guardian Investigate, CFID for drone forensics and Advanced Unlocks.
- The company signed its first significant FedRAMP deal for Guardian, its SaaS-based evidence management solution delivered through the Cellebrite Government Cloud.
- Newer products contributed more meaningfully to net new ARR than a year ago, according to the CFO.
Concerns
- ARR came in below management’s expectations.
- Management cited longer sales cycles and less expansion from Inseyets conversions than anticipated.
- GAAP gross margin was 80.8%, compared with 84.4% in the prior-year quarter.
- GAAP operating income was $6,949 (U.S. Dollars in thousands), compared with $14,417 (U.S. Dollars in thousands) in the prior-year quarter.
- Free cash flow was $14,521 (U.S. Dollars in thousands), compared with $28,975 (U.S. Dollars in thousands) in the prior-year quarter.
- The company lowered FY26 ARR and revenue outlook.
What to watch
- Execution actions intended to address longer sales cycles and Inseyets expansion.
- Genesis adoption, product enhancements and further monetization since the start of the third quarter.
- The near-term contribution from newer products, given elongated sales cycles and additional product introductions anticipated for later this year.
- The expected stronger second-half free cash flow performance.
- Delivery against third-quarter ARR of $524M – $528M, revenue of $145M – $148M and adjusted EBITDA of $42M – $45M.
Balance sheet and cash flow
- Cash and cash equivalents: $141,250 (U.S. Dollars in thousands) as of June 30, 2026; $124,457 (U.S. Dollars in thousands) as of December 31, 2025.
- Short-term deposits: $146,759 (U.S. Dollars in thousands) as of June 30, 2026; $161,049 (U.S. Dollars in thousands) as of December 31, 2025.
- Marketable securities: $154,522 (U.S. Dollars in thousands) current and $103,185 (U.S. Dollars in thousands) non-current as of June 30, 2026.
- Total assets: $994,311 (U.S. Dollars in thousands) as of June 30, 2026.
- Total liabilities: $456,214 (U.S. Dollars in thousands) as of June 30, 2026.
- Total shareholders’ equity: $538,097 (U.S. Dollars in thousands) as of June 30, 2026.
- Net cash provided by operating activities: $17,589 (U.S. Dollars in thousands) for the three months ended June 30, 2026; $37,474 (U.S. Dollars in thousands) for the six months ended June 30, 2026.
- Capital expenditures: $(3,068) (U.S. Dollars in thousands) for the three months ended June 30, 2026; $(6,109) (U.S. Dollars in thousands) for the six months ended June 30, 2026.
- Cash paid in conjunction with acquisitions, net of acquired cash: $(15,278) (U.S. Dollars in thousands) for the six months ended June 30, 2026.
- Purchase of Intangible assets: $(8,560) (U.S. Dollars in thousands) for the three months ended June 30, 2026; $(15,619) (U.S. Dollars in thousands) for the six months ended June 30, 2026.
Analysis
Cellebrite delivered $131.1 million of second-quarter revenue, up 16% year-over-year, and ARR of $507.8 million, up 21% year-over-year. Recurring revenue dollar-based net retention was 117%, up 2 pts. over Q1. Management identified healthy growth in Asia-Pacific, EMEA and U.S. Federal, while newer products contributed more meaningfully to net new ARR than a year earlier.
The central issue was ARR execution. Management said ARR fell below its expectation because sales cycles were longer and Inseyets conversions generated less expansion than anticipated. The company also adopted a more measured near-term view of contributions from newer products because of elongated sales cycles and the timing of additional product launches later in the year. These factors drove a reduction to the FY26 ARR and revenue outlook.
Profitability showed a material GAAP decline versus the prior-year quarter. GAAP gross margin was 80.8%, versus 84.4%, while GAAP operating income was $6,949 (U.S. Dollars in thousands), versus $14,417 (U.S. Dollars in thousands), and GAAP net income was $6,371 (U.S. Dollars in thousands), versus $19,476 (U.S. Dollars in thousands). Non-GAAP operating income increased to $29,805 (U.S. Dollars in thousands) from $26,224 (U.S. Dollars in thousands), although non-GAAP operating margin was 22.7%, compared with 23.2%. Adjusted EBITDA rose to $31,790 (U.S. Dollars in thousands) from $27,885 (U.S. Dollars in thousands), with margin at 24.2%.
Cash generation softened in the quarter. Operating cash flow was $17,589 (U.S. Dollars in thousands), compared with $32,583 (U.S. Dollars in thousands), and free cash flow was $14,521 (U.S. Dollars in thousands), compared with $28,975 (U.S. Dollars in thousands). The company ended June 30 with $141,250 (U.S. Dollars in thousands) of cash and cash equivalents, $146,759 (U.S. Dollars in thousands) of short-term deposits, and marketable securities of $154,522 (U.S. Dollars in thousands) current and $103,185 (U.S. Dollars in thousands) non-current.
For Q3, Cellebrite expects ARR of $524M – $528M, revenue of $145M – $148M, and adjusted EBITDA of $42M – $45M. FY26 expectations call for ARR of $550M – $560M and revenue of $555M – $561M, alongside adjusted EBITDA of $153M – $159M and an adjusted EBITDA margin of ~28%. Management characterized the outlook change as a reset to a more appropriate execution foundation, while stating that operating discipline enabled a higher adjusted EBITDA target and that it anticipates stronger second-half free cash flow.
Management, verbatim
We delivered healthy second-quarter growth in Asia-Pacific, EMEA and U.S. Federal. However, ARR came in below our expectations. We saw longer sales cycles and less expansion from Inseyets conversions than anticipated. We are taking action to improve execution going forward.
Shiv Ramji, CEO
Given these dynamics, in combination with the pace and magnitude of Inseyets expansions, we have lowered our FY26 ARR and revenue outlook. We believe resetting expectations now is the responsible approach and provides a more appropriate foundation from which to execute. At the same time, continued operating discipline has enabled us to raise our FY26 adjusted EBITDA target.
Shiv Ramji, CEO
Although we didn’t deliver against our second-quarter 2026 ARR target, we have continued to make tangible progress in executing Cellebrite’s product strategy, with newer products contributing more meaningfully to net new ARR than a year ago, and we expect that momentum to continue into the second half of the year.
David Barter, CFO
Not in the filing
stated, not guessed- Prior-quarter total revenue, gross profit, gross margin, operating income, operating margin, net income, EPS, adjusted EBITDA and adjusted EBITDA margin were not provided.
- Prior-year ARR and recurring revenue dollar-based net retention rate were not provided.
- GAAP and non-GAAP tax rates were not provided.
- Debt balance was not provided.
- Share repurchases and dividends were not provided.
- Operating segments and segment revenue were not provided.
- Prior outlook was not provided, so comparisons of reported results versus prior guidance cannot be made.
- Full-year and third-quarter gross-margin, operating-expense and tax-rate guidance were not provided.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.