Cellebrite DI Ltd. (CLBT): what the price assumes

In the published model solve dated 2026-Q2, anchored at $11.93, Cellebrite DI Ltd. (CLBT) is priced for today's economics sustained for ~8.1 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/CLBT

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 6: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 9.1% cost of capital; growth searched up to the 25% self-funding ceiling.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.1%); the inversion above states its own rate.

Per-Model Detail (n=15)

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• The product is the tooling that gets data off a seized phone and turns it into evidence a court will accept, and the revenue model has finished shifting to recurring: annual recurring revenue reached $493.0 million in the first quarter of 2026, up 21% on the year, with existing customers spending 115% of what they spent twelve months earlier.
• Concentration is the defining risk, not competition: the FY2025 annual report states that sales to public safety agencies "accounted for more than 90% of our revenue in 2023, 2024 and 2025", which makes a budget freeze or a policy decision the variable that moves this business most.
• The next real information is the pace of recurring revenue, with management guiding full-year 2026 annual recurring revenue growth to 18% to 19% and the second-quarter print the first test of whether the new AI products accelerate it.

Bull Case

The moat here is procedural rather than technical. When an investigator pulls data off a seized device, the extraction has to survive a defense attorney, a judge and sometimes an appeals court. That requires documented chain of custody, a repeatable method, operators who have been trained and certified on the specific tool, and a vendor whose process a courtroom has seen before. Agencies do not swap that out because a rival demo looked slick. The retention data shows the effect: recurring customers spent 115% of what they spent a year earlier in the first quarter of 2026, and subscription revenue grew 23% against total revenue growth of 19%. Subscription services already carry about 70% of revenue, with term licences another 20%.

The company is pushing that installed base into more work rather than hunting for new logos. Its FY2025 annual report describes the motion plainly: "We continue to drive growth by converting customers using our legacy digital forensics solution to Inseyets, increasing the adoption of Inseyets with current and prospective customers", and alongside that conversion, "We are also increasing our investment in SaaS and Cloud to address growing demand to use our solutions via these deployment options." Cloud delivery matters more for this buyer than it does for a normal enterprise. In May 2026 the company's government cloud platform cleared FedRAMP High authorization with the Department of Justice as the authorizing agency. That is a procurement gate, and clearing it means a federal agency can buy the cloud version without running its own security assessment first.

Two acquisitions widen what the same salesforce can sell. Corellium virtualizes Arm-based devices, and the annual report notes that "The addition of Corellium further broadens Cellebrite's offerings for both public and private sector customers." The private-sector half of that sentence is the interesting one, because it is the part of the market that is not on a government budget cycle. In March 2026 the company closed its purchase of SCG Canada, a specialist in drone forensics, which it describes as an emerging device category seeing strong global growth across the defense, intelligence, law enforcement and commercial sectors. Every new device class that shows up at a crime scene is a new extraction problem, and the company that already sits in the lab is the natural place to solve it.

What makes the profile genuinely uncommon is doing growth and profit together. BSY earns a 24.0% operating margin on $1.56 billion of revenue but grows 12.2%. AVPT grows 27.1% on $443.7 million of revenue at a 9.6% operating margin. CVLT grows 18.9% at 6.3%, and WK, on $925.6 million of revenue and 20.3% growth, still runs a slightly negative operating margin. Most software companies growing at this rate are buying that growth with operating losses. Cellebrite is not, and it is funding itself while doing it: free cash flow over the trailing twelve months ran to $158.6 million, a 32.0% margin. None of that makes the customer base immune to a spending cycle. It does mean the decision to leave is a harder one than the decision to stay.

Bear Case

The variable with the most leverage over this thesis is not a competitor's roadmap. It is a government's decision, taken for reasons that have nothing to do with product quality. The FY2025 annual report puts the dependence in one line: sales to public safety agencies "accounted for more than 90% of our revenue in 2023, 2024 and 2025". Those buyers do not behave like enterprise customers. The same filing notes that agencies under pressure to reduce spending "may terminate most of these contracts at any time, without cause". A recurring revenue book is a fine thing to own right up to the fiscal year in which a legislature decides digital forensics is discretionary.

The second regulatory edge is who is permitted to buy at all. This is dual-use technology, licensed as such under Israeli export control, and the filing is candid about the failure mode: the company's solutions "could be exported or re-exported to, or eventually be used by, these sanctioned targets due to circumvention of restrictions by customers, resellers or others". Cellebrite also reserves the right to refuse revenue on principle, disclosing that it "may not enter into relationships with potential customers if we consider their activities to be inconsistent with our organizational mission or values." Read that as a shareholder rather than as a citizen and it is a disclosed ceiling on the addressable market, set by a standard the company applies to itself. Political criticism of who uses these tools is a recurring feature of this industry, and it lands on the customer relationship, not on the technology.

Now hold the price against that exposure. At $14.21 the market is capitalising the operating profit reported in the company's most recent annual filing at roughly fifty times. The arithmetic that reaches today's price needs operating profit to compound at the fastest rate the business can fund out of its own cash flow, and to keep doing it for about nine and a half years. The near-term rate is not the stretch, since the company has recently delivered comparable growth. The run is the stretch. Of comparable fast-growers, only about 16% sustained that pace for roughly that long, and the multiple already sits at the very top of its peer distribution, well past the upper quartile. The sensitivity is unforgiving in the other direction too: take one percentage point off the growth rate and the required run lengthens by roughly two more years. If that persistence does not arrive, nothing about the business breaks. The multiple simply reprices toward the methods that value what has already been earned, and those sit at a fraction of today's price.

There is also a quieter drain on the holder. Ordinary shares outstanding compounded at about 11.5% a year over the four years to the end of 2025. Part of that was the mechanics of the 2021 listing and the warrants that came with it, which the annual report confirms had all been exercised by December 31, 2025. The rest is stock compensation, and the same filing puts unrecognised expense on unvested options and restricted stock at roughly 89.7 million dollars as of that date. Growth in operating profit has to clear that issuance before any of it reaches the person holding the shares, and a bull case built on a decade of compounding has to fund a decade of compensation alongside it.

Valuation

Start with what today's price has to be right about. At $14.21 the market is capitalising the operating profit Cellebrite reported in its latest annual filing at roughly fifty times. Getting from that reported profit to that price requires operating profit to grow at the fastest pace the business can fund from its own cash flow, then to keep doing so for about nine and a half years. The rate is not the difficult part. The duration is.

Measured against the company's own recent record, that pace is unremarkable, which is precisely why the bet is about persistence rather than acceleration. Measured against a wider history it is demanding: only about 16% of comparable fast-growers held that pace for roughly that long. The multiple sits at the very top of the software peer distribution, past the upper quartile.

The methods split cleanly, and the split is the information. The approaches that credit future growth reach the price. A discounted cash-flow build gets there by projecting recent growth forward and holding today's cash-flow multiple unchanged all the way out to the final projected year, and a forward revenue-multiple approach lands close as well. The peer-multiple methods sit modestly under, with the price about 1.25 times where they land. The methods that value what has already been demonstrated are nowhere near: the price sits about 3.5 times where the earnings-power methods land and about 3.9 times where the asset-value methods land. In plain terms, this price is a durability premium. It is not carried by what the company has earned. It is carried by an assumption about how long it keeps earning more.

Worth knowing how those two ends get their answers, because neither is a forecast. The earnings-power lens averages five years of operating profit, credits no growth at all, and capitalises the result. That is a deliberately severe test, and it is severe here because five years ago this was a much smaller company, so the average drags the recent year down. The forward lens assumes the multiple a buyer pays today is the multiple a buyer pays in year six. One test asks what the business is worth if it stops improving; the other asks what it is worth if the market never changes its mind. The distance between them is the premium, and it is most of the price.

The balance sheet is the part of this that is not a bet. Cellebrite carries no funded debt, and the FY2025 annual report records "cash and cash equivalents, cash deposits, short-term marketable securities and long-term marketable securities totalin g $535.0 million" as of December 31, 2025, against total shareholders' equity of $484.3 million. A business generating $158.6 million of trailing free cash flow does not need to ask anyone for money. What the balance sheet does not bound is dilution: the share count compounded about 11.5% a year over the four years to the end of 2025, so more of the growth is being shared out than the operating figures alone suggest.

One practical caution on reading the quarters. The annual report notes that "we generate the majority of our revenue in the second half of our fiscal year with 54%, 54% and 54% of total annual revenue occurring in the second half of 2025, 2024 and 2023, respectively", which is a government procurement pattern rather than a demand signal. Annualising a first-quarter figure understates the year, and reading a soft first quarter as a trend break usually misreads the calendar. Against the cohort, the position is unusual in a way that resists an easy call: BSY earns a 24.0% operating margin but grows 12.2%; AVPT grows 27.1% at a 9.6% margin; APPN grows 20.4% at 0.6%. Cellebrite is priced for the top of that group on both axes at the same time, and for the better part of a decade.

Catalysts

The first quarter of 2026 landed as a solid rather than spectacular print. Revenue reached $128.3 million, up 19% year over year, with subscription revenue of $117.9 million up 23%. Annual recurring revenue reached $493.0 million, up 21%, and the dollar-based net retention rate on recurring revenue was 115%. Trailing twelve-month free cash flow was $158.6 million, a 32.0% margin. Management's framing of the quarter was that recurring revenue growth showed sequential stability while the company prepared a large slate of new products for release, with the CFO stating that the company was positioned to accelerate that growth in the second quarter.

Three product and platform events sit behind that expectation. Cellebrite Genesis, an agentic AI product for analysing extractions, call detail records and multimedia, entered beta. Guardian Investigate, a case-collaboration workspace for digital evidence, reached worldwide general availability. The Spring 2026 release expanded device access, including support for iPhone 17 and iOS 26, which matters more than a version number suggests in a business where the newest handset is the one investigators cannot open. Separately, the government cloud platform received FedRAMP High authorization with the Department of Justice as the authorizing agency, opening federal procurement without agency-by-agency security review.

On the deal side, the acquisition of SCG Canada closed on March 1, 2026, adding hand-held drone forensics covering more than 80 common unmanned aerial vehicles. Guidance issued the same day sets second-quarter 2026 annual recurring revenue at a range of $510 million to $513 million and revenue at a range of $130 million to $133 million, with full-year 2026 annual recurring revenue at a range of $567 million to $573 million and revenue at a range of $565 million to $571 million, representing 19% to 20% annual revenue growth. The second-quarter report is the next scheduled read on whether the new products convert into the recurring revenue acceleration management has pointed to.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• WK (WORKIVA INC)
• FY2025 10-K: …ecosystem with integrations, and develop new solutions. We focus on customer engagement to envision the future of our platform to bring about new capabilities and versions of existing solutions to market quickly in order to remain competitive in the marketplace. Customers More than 6,600 organizations across the…
• FY2025 10-K: …affect customer demand and have a material adverse effect on our business, financial condition and results of operations. Our solutions face intense competition in the marketplace. The market for our solutions is increasingly competitive, rapidly evolving and fragmented, and is subject to changing technology and…
• AVPT (AvePoint, Inc.)
• FY2025 10-K: …increase in both GAAP and non-GAAP operating margins was attributable to the Company ' s revenue growth (in part benefitting from the continued scaling of the Company ' s channel partner strategy) as well as to the Company 's continued focus on expense management, while GAAP operating margins also improved due to the…
• FY2025 10-K: …considered as an alternative to operating income, operating margin or any other performance measures derived in accordance with GAAP as measures of performance. Non-GAAP financial measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Cost of Revenue,…
• CVLT (Commvault Systems, Inc)
• FY2025 10-K: …and cyber resilience market is intensely competitive and highly fragmented. The principal competitive factors in our industry include product functionality, performance, integration, platform coverage, scalability, price, global sales infrastructure, technical support, branding and reputation. The ability of major…
• FY2025 10-K: …to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations. Summary Disclosures about Contractual Obligations and Commercial Commitments We have various contractual obligations and commitments, such as contingent consideration…
• APPN (APPIAN CORPORATION)
• FY2025 10-K: …accounted for more than 10% of our total revenue in 2025, 2024, or 2023. Our Competition Our main competitors fall into four categories: (1) providers of custom software solutions that address, or are developed to address, some of the use cases that applications developed on our platform target; (2) providers of…
• FY2025 10-K: …to desire to differentiate themselves through software-enabled process automation, increasing their reliance on process automation solutions, changes in the competitive landscape, technological changes, including due to advancements in AI, budgetary constraints of our customers, and changes in economic conditions. If…
• MNDY (monday.com Ltd.)
• FY2025 20-F: …less cost of revenues, and gross margin, or gross profit as a percentage of revenue, has been, and will continue to be, affected by various factors, including the timing of our acquisition of new customers, renewals of and follow-on sales to existing customers, costs associated with operating our cloud-based…
• FY2025 20-F: …1 - Who we are 36 FY2025 20-F Our competition We are creating a new category of software that seeks to change the way people work and businesses operate. As a result, we compete across multiple different markets. Our competitors include the following: ● companies that primarily offer project and work management…
• QTWO (Q2 Holdings, Inc.)
• FY2025 10-K: …subscriptions for our solutions on similar pricing terms, our revenues may decline and our business could suffer. As we create new solutions or enhance our existing solutions to support new technologies and devices, our pricing of these solutions and related services may be unattractive to customers or fail to cover…
• FY2025 10-K: …activities, we have not focused on patents and patent applications historically. We license third-party technologies, such as bill-pay technologies, that are incorporated into some of our solutions. Our Competition The market for digital solutions for financial services providers is highly competitive. We believe…
• BSY (BENTLEY SYSTEMS, INCORPORATED)
• FY2025 10-K: …Resources applications include Hexagon AB and the AVEVA unit of Schneider Electric, as well as Dassault Systèmes, Datamine, Maptek, RMS, and Micromine in mining; • our key competitors in Industrial applications include Hexagon AB and the AVEVA unit of Schneider Electric; • our key competitors in Commercial/Facilities…
• FY2025 10-K: …acquisition, or management change could lead to pricing pressure, erosion of our margins, loss of accounts, and loss of market share, all of which could harm our business, financial condition, and results of operations. We have in the past and expect to continue in the future to seek to grow our business through…
• APPF (AppFolio, Inc.)
• FY2025 10-K: …focused on customer service and the support of our operations (including salaries, cash bonuses, benefits, and stock-based compensation), platform infrastructure costs (such as data center operations and hosting-related costs), and allocated shared and other costs. Cost of revenue excludes depreciation of property…
• FY2025 10-K: …of income from operations, the most comparable GAAP measure, to Non-GAAP Operating Income, and operating margin, the most comparable GAAP measure, to Non-GAAP Operating Margin is provided in the table below. We encourage investors to review the reconciliation of these historical non-GAAP financial measures to their…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.