Earnings Call Transcript - CLBT Q3 2024

Operator, Operator

Welcome to the Cellebrite Third Quarter 2024 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. I would now like to turn the call over to your first speaker today, Mr. Andrew Kramer. Thank you, Todd, and welcome, everybody, to Cellebrite's Third Quarter 2024 Financial Results Call. I'm joined in New York City today by Yossi Carmil, Cellebrite's CEO; Dana Gerner, Cellebrite's CFO; and Tom Hogan, Cellebrite's Executive Chairman. There's a slide presentation that accompanies our prepared remarks. Please advance the slides in the webcast viewer to follow our commentary. We will call out the slide number we are referring to in our remarks. The call is being recorded, and a replay of the call will be made available on our website shortly after the call along with the transcript of this event soon after. Starting with Slide 2, a copy of today's press release and financial statements, including GAAP to non-GAAP reconciliations, the slide presentation in the quarterly financial tables and supplemental historical information for the first three quarters of 2024 and each quarter of 2023 and 2022 are available on the Investor Relations website at investors.cellebrite.com. Unless stated otherwise, our discussion of our third quarter 2024 financial metrics as well as the financial metrics provided in our outlook will be done on a non-GAAP basis only, and all historical comparisons are with the third quarter of 2023. 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 actual results to differ materially from historical results and/or from forecast. So some of these forward-looking statements are discussed under the heading Risk Factors and elsewhere in the company's annual report on Form 20-F filed with the SEC on March 21, 2024, and as amended on April 12, 2024. Company does not undertake to update any forward-looking statements to reflect future events or circumstances. Slide three provides the agenda of topics we'll cover on today's call. And with that being said, I'll turn the call over to Yossi Carmil, Cellebrite's CEO.

Yossi Carmil, CEO

Thank you, Andy, and thank you all for joining us this morning. So we delivered a strong third quarter performance that exceeded expectations thanks to increasing traction with our case to close platform, what we call the C2C platform, the impact of our ongoing investment in market-leading innovation and solid execution on all fronts. As illustrated on Slide 4, we produced notable ARR growth, surpassed $100 million in quarterly revenue for the first time in company's history and generated outstanding profitability. We are proud that we have consistently delivered a healthy mix of ARR growth and profitability with recent results comfortably exceeding our baseline for Rule of 45 performance. To put it simply, Cellebrite's business momentum remained strong in the third quarter, and we anticipate a positive finish to our year. Now Dana will cover this in a few minutes. Beyond the solid quarterly results, we took important strategic actions and accomplishments over the past several months, all of which are architected to drive long-term profitable growth and corresponding enterprise value. Cellebrite is uniquely positioned as a differentiated end-to-end platform provider with software offerings spanning the digital investigative lifecycle. Our AI-driven C2C platform enables customers to close more cases faster by enhancing their productivity and efficiency for collecting, reviewing, sharing and analyzing digital evidence. We have taken deliberate steps to anchor our C2C platform around three increasingly integrated flagship software solutions. And I want to give here a brief overview. So Insights is our family of digital forensic software that enables law enforcement to collect and review digital evidence from mobile phones, cloud applications, computers, and many other digital businesses. Guardian is our set of SaaS-based case and evidence management offerings for managing the examination process, securely sharing evidence and enabling interagency and cross-agency collaboration. Our Pathfinder investigative suite includes AI-powered analytics and open-source intelligence tools for expediting investigations by surfacing leads, pinpointing connections, and identifying valuable evidence buried within mountains of structured and unstructured data across multiple digital businesses. So, we are mobilizing to capitalize on the extensive opportunities we see to expand our customer spending with us while also winning new logos. To that end, Cellebrite Federal Solutions was launched earlier this summer to expand our relationship with the U.S. federal government, and this unit is now fully operational. I'm pleased to share that we delivered an excellent Q3 in the U.S. federal sector. In addition, we have continued to augment our quota carrying sales force in all major geographies to amplify our go-to-market motion for upgrades, upsells, and cross-sells. As we look forward, towards 2025, this investment positions Cellebrite with the ramp sales capacity which is required for sustaining solid top-line expansion and extending into new buying centers within our installed customer base. Cellebrite's relationship with over 5,300 public sector customers typically begins by helping examiners and investigators to collect and review digital evidence across mobile phones, computers, cloud, and other digital sources. There is a long growth runway ahead for Cellebrite digital forensic solutions, and part of this expansion is expected to come from upgrading customers from our legacy digital forensic software to our new Insights suites. The value proposition for this upgrade is compelling. Insights leverages a modern tech stack along with both proven and new digital forensic capabilities that enable customers to complete an examination as much as twice as fast while accessing more devices, extracting more data, and retaining more important information. In addition to the Insights upgrade, we believe our customers will want to extend the scope of their deployment, whether it is in a traditional technical lab environment or by extending our technology into the field. Just as important, we see substantial opportunities for customers to leverage our modular approach to Insights by having high-value capabilities around advanced local access or unlock and for automating and accelerating key examination processes. When we launched Insights earlier this year, our goal was to operate the vast majority of our installed base over the next three years with 10% adoption in 2024. We increased last quarter our 2024 target to 15%, and we are on track to achieve these new targets. Another area of strategic progress is in the cloud. We continue to increase our product investment to cloudify existing capabilities, enhance existing cloud offerings, and develop new cloud-native solutions across our Insights, Guardian, and Pathfinder product suites. I'm happy to report that we are seeing some very positive return on this investment. For example, during the past 12 months, Guardian grew more than 100% as more customers adopted this SaaS-based solution to transform how they manage and share digital evidence with investigators and prosecutors. Our investment in cloud infrastructure is also opening new doors for our Pathfinder analytics, which leverages AI technology to quickly surface leads and identify connections buried within mountains of structured and unstructured data across multiple digital devices. In September, we announced Pathfinder in the cloud with AWS, allowing customers to access Pathfinder through the secure Amazon virtual private cloud. As we look to expand further into investigative and intelligence units, we are building our SaaS-based capabilities and leveraging our ongoing investment in AI through an expanded suite of tools and capabilities that can help analysts and investigators analyze an even broader range of digital data sources, coordinate and collaborate better, and boost productivity by automating time-consuming burdensome tasks. I would also like to briefly cover the recent capital market milestones, which underscore our success in driving shareholder value. First, in mid-September, we completed our previously announced warrant redemption program, which reduced 10.1 million net new ordinary shares. Second, our strong stock price performance from mid-August through early November resulted in multiple triggering events totaling 21 million shares that have further increased our public stock load. At a high level, these milestones enable us to move forward with a significantly clearer capital table, healthy trading liquidity, and simplified financial reporting. Now Dana will provide more color about these developments in a few minutes. So let's turn to Slide 6 now, which highlights our 4 strategic priorities. I would like to illustrate how our success in each of these areas has enabled us to produce an NRR north of 120% for 23 consecutive quarters. Our first priority is to extend our leadership in the digital forensic units of our customers. Insights helps customers better address their case load growth and makes it easier and more affordable for them to also access the newest smartphones on the market. Since Insights was launched during Q1 '24, we have seen healthy attachment rates for our unlock module among customers with no prior local access solutions upgrade to Insights. That trend has helped us mainly double the penetration of our advanced local access solutions within the installed base to the low 30% range during the past 12 months. The win on this slide is a great example of how an Insights upgrade with an unlock option can generate meaningful growth. Our second priority is to accelerate our growth within the investigative units, which we call the IU units of our law enforcement customers. Earlier this year, we added dedicated sales specialists within our quota carrying sales force targeting the investigative and intelligence units, and we are already seeing these initiatives help build a large pipeline of opportunities. Our third priority is to extend our business in the private sector, where Cellebrite's data collection solution helps enterprises and service providers conduct advanced corporate investigations and eDiscovery use cases. Our strategic partnership with Relativity, which we announced a few months ago, is off to a good start, highlighted by our participation in Relativity's event last quarter. We continue to see Endpoint Inspector maintain good momentum with both enterprises and service providers as the remote data production solution of choice for mobile devices, computers, and cloud workplace applications. Our fourth strategic priority is to help our customers harness the power of cloud. Earlier on the call, I detailed the investments we are making to expand our range of cloud-based solutions and enhance the infrastructure that supports them. While customers in the U.S. have been the primary early adopters of Guardian, we are starting to make inroads in certain international markets, which is highlighted by our first Guardian bill as part of larger deployments of our full C2C portfolio by a regional police force in a key Western European country. I would like to conclude my prepared remarks on Slide 7. Cellebrite's market remains very healthy, with multiple tailwinds that are producing three major trends. First, today's crime involves more data and increasingly complex data. Second, operational inefficiencies make it harder for law enforcement to advance their investigations. And third, the need to build public confidence around the ethics and accountability of law enforcement. Given the constraints from law enforcement budgets, our customers cannot simply allocate more manpower to solve these challenges. As a result, Cellebrite customers are increasingly recognizing the need to invest in the type of disruptive technology that Cellebrite delivers. This is a major driver behind our plan to hold our first-ever case to closure user event at the leading event for digital investigation in late Q1, '25 in Washington, D.C. Looking ahead, we are well positioned to close 2024 on a very positive note. Given our progress to date and the strength of our near-term pipeline, we have once again raised our 2024 target for revenue and adjusted EBITDA while also increasing the low end of our ARR guidance. We look forward to 2025 with confidence in our ability to consistently deliver a balanced mix between ARR expansion with healthy profitability that will produce or exceed the baseline for Rule of 45. The mission at Cellebrite is both inspirational and aspirational. It is focused on enabling our customers to deliver justice faster, smarter, and more defensively to help close the public safety gap and create a safer world. The team at Cellebrite is making good on the company's brand promise by delivering an end-to-end set of digital investigative solutions for law enforcement agencies around the world. Cellebrite's workforce has performed admirably so far in 2024. While the conflict in Israel escalated during the third quarter, our business has not experienced any disruption. This is attributed to the focus and results of our team, especially those based in Israel, and we appreciate their ongoing commitment and contributions. So that concludes my comments on our quarterly performance and accomplishments. I will now turn the call over to Dana. Dana, please.

Dana Gerner, CFO

Thank you, Yossi. It was a fantastic quarter for Cellebrite. We have delivered the Rule of 54 performance of 3. It reflects great fundamental execution alongside the expected seasonality. But to be clear, while we are excited about the Rule of X performance of this quarter, our long-term plans are to deliver a Rule of X range between 45 and 50. Now let's start the review of the third quarter on Slide 9. Our ARR grew 26% year-on-year to $371 million at the end of September. As noted on this slide, our gross retention was approximately 91%, which is in line with recent quarters. Consistent with our historical trends, much of ARR growth over the 12-month period came from higher spending by our customers. From a product perspective, our Insights suite drove the majority of our ARR growth, which is complemented by the contribution from our Guardian and Pathfinder offerings. Geographically, the ARR mix for the 12 months ended September 30, 2024, was in line with prior quarters, consistent with the year-to-date revenue mix. The Americas represented 54% of the total ARR, with EMEA at 34% and Asia Pacific at 12%. In terms of growth rates by geography, the Americas grew 26%, thanks to solid demand in our U.S. Federal and SLG customer segments. ARR in EMEA grew 24%, and improved 31% in the Asia Pacific region. Turning to Slide 10, we delivered third quarter revenue of $106.8 million, our first quarter in the company's history where revenue exceeded $100 million. The 27% growth in total revenue over the same period last year was primarily fueled by a 27% increase in subscription revenue. Our top-line performance benefited from some professional services revenue that was generated earlier than expected and the quarterly mix of on-premise and cloud deployment. Subscription revenue represented approximately 87% of the total revenue, which is in line with recent quarters. Now let's move to Slide 11 for a review of our non-GAAP gross margins and non-GAAP operating expenses, which exclude share-based compensation, amortization of intangible assets and acquisition-related expenses. Our Q3 gross margins of 86.1% was at the higher end of our full-year target. In terms of our operating expenses, Q3 operating costs were $62.5 million, a 19% year-over-year increase. This primarily reflects higher personnel costs between our sales and marketing and research and development organizations and higher one-time project expenses within R&D. We ended September with 1,109 employees, a 3% increase from the second quarter and a 12% increase from the same quarter last year. Slide 12 covers our profitability and cash position. We delivered Q3 adjusted EBITDA of $31.3 million or 29% on a margin basis versus 25% in last year's Q3. Our profit performance reflects positively on our success in driving strong revenue growth, maintaining excellent gross profit margins, and effectively managing our cost structure. Our Q3 non-GAAP operating income was $29.5 million, with non-GAAP net income of $31.8 million or $0.14 on a fully diluted basis. We ended September with $413.6 million in cash, cash equivalents, and investments, an increase of $47.6 million from the second quarter and an increase of $130.4 million from the same quarter last year. The sequential increase for the quarter primarily reflects strong cash flow from operations. Free cash flow for the third quarter, which we define as net cash provided by operating activities less capital expenditures and the purchase of intangible assets, was $39.8 million, up 42% from the same quarter last year due primarily to strong fundamental operating performance. I'd now like to move to Slide 13 to briefly cover the capital markets events that occurred during the third quarter. On September 16, we successfully completed our warrant redemption with approximately 29.7 million public and private warrants being exercised and converted into 10.1 million net new ordinary shares. Additionally, Cellebrite's stock price performance from July through the middle of September triggered two separate price triggers, one at $12.5 and another at $15, resulting in the commitment to issue a total of 10 million price adjustment shares and invest a total of 6 million restricted sponsor shares. Our Q3 diluted weighted average share outstanding as of September 30, 2024, increased 7% from Q2 levels due primarily to the timing and magnitude of these events. Two days ago, we disclosed that our recent stock price performance met the $17.5 price trigger, which resulted in issuing another 5 million price adjustment shares. Overall, these milestones support our long-standing goals of optimizing our capital structure, sustaining healthy trading liquidity, and simplifying our financial reporting. In terms of our financial reporting, since we fully retired all of the outstanding warrants and triggered 100% of our client adjustment shares and 80% of our restricted sponsor shares, the value of the remaining restricted sponsor shares and the remaining price adjustment shares as of September 30 are now represented on our balance sheet between shareholder's equity rather than a liability, and we are no longer obligated to revalue them. Let's move to Slide 14 for our updated 2024 fourth quarter and full fiscal year financial expectations. Based on our results for the first three quarters of the year and our assessment of the near-term opportunities, we have again raised our outlook for the year. In terms of annual revenue, with a strong Q3, we increased our 2024 revenue range to be between $397 million and $401 million, which implies Q4 revenue between $105 million and $109 million. We also increased our 2024 adjusted EBITDA target range to be between $96 million and $100 million or 24% to 25% on a margin basis. This implies fourth quarter adjusted EBITDA in the range of $25 million to $29 million or 24% to 27% on a margin basis. This assumes that fourth quarter gross margins will be in the mid-80% range and fourth quarter operating costs will be between $64 million to $66 million. Finally, we increased the low end of our 2024 ARR target range to $390 million. In terms of modeling our diluted share count and factoring in all of the previously discussed capital market events from Q3 and Q4, we expect our fourth quarter weighted average diluted share count to be around 241 million shares and a full-year weighted average diluted share count to be approximately 222 million. We expect to begin 2025 with approximately 255 million diluted shares outstanding. Overall, our third quarter was highlighted by robust financial results and meaningful tactical and strategic execution. As a result, we are well positioned to deliver a 2024 performance in excess of Rule of 45 for the second consecutive year, thanks to increased profitability that benefited from stronger-than-planned gross margins and disciplined spending, even as we invested meaningfully in our product house and go-to-market organizations. Looking ahead, we believe we remain well positioned to deliver solid ARR expansion and profitability that will enable us to deliver or exceed our target baseline of Rule of 45 focusing on initiatives critical to our long-term success, such as enhancing customer success, accelerating our efforts around the cloud, fueling innovation, and incrementally expanding our quota-carrying sales force and marketing teams. That concludes my commentary. I'll ask you to go to Slide 15, so that I can now turn the call back to Yossi.

Yossi Carmil, CEO

Thank you, Dana. The last 20 years, 19 as CEO has been an amazing journey for me with many successes along the way. When I began as CEO, there were just 18 of us working from a small office. At the end of this year 2024, I will finish my tenure as CEO, having established Cellebrite as a market and technology leader with 1,100 employees and a global footprint that includes dozens of offices worldwide and 7,000 customers in over 100 countries. Cellebrite is now a publicly traded company that has made major strides over the past three years in earning the trust of shareholders and driving meaningful value creation. This level of success would not have been possible without the support of our customers, partners, and investors, and the commitment and contribution of our talented employees. It has been very rewarding to have led Cellebrite over the past two decades. However, I believe it is now the right time for me to step aside as CEO and pass the baton to a new leader who will take Cellebrite to the next level. At some point down the road, I will focus on different types of roles that will allow me to contribute my knowledge and experience to the high-tech industry. But before that can happen, we plan to close out 2024 on a successful note as reflected in our updated outlook and complete all the work necessary to position the company to sustain its business momentum next year and beyond. Cellebrite will move forward with a strong leadership team, an exciting technological roadmap, and a compelling strategic plan that is aimed at driving value creation for all key stakeholders. As I search for my successor, I'd like to personally thank Tom Hogan for his support since he joined as Executive Chairman 16 months ago. In a very short time, we developed a strong partnership, and he has made a significant impact in many areas such as strategic planning, sales, marketing, and investor communications, to name a few. His imprint on Cellebrite has been and will continue to be critical to our success. I know Tom will help lead a very thoughtful and efficient search for a new CEO and provide our company with great leadership as interim CEO. In closing, I am confident in Cellebrite's strategic direction and in our company's ability to capitalize on the opportunities that lie ahead. As proud as I am of what we have achieved in the past 20 years, I know the best for Cellebrite is yet to come. I remain a loyal and supportive shareholder, and I look forward to seeing all that Cellebrite will accomplish over the coming years. Before we take questions, Tom Hogan would like to close out our prepared remarks. Tom, please.

Tom Hogan, Executive Chairman

Thanks, Yossi. I'll be brief, but I want to start by sharing my heartfelt compliments to you. As many of you know, I've been at this for a long time. I've seen leaders who excel at scale and there are others that excel as entrepreneurs. However, it's the rare exception of a leader who gracefully navigates the company from early-stage revenue up to and through the $100 million mark. The few that successfully cross that chasm, even more rarely then succeed in guiding the company from $100 million all the way to $400 million. In a world that's increasingly focused on short-term performance with equally shortened CEO tenure, Yossi has stayed the course, as I shared, for over 19 years as CEO of Cellebrite and leaves a legacy that we should all be proud of. On behalf of all of our employees, our customers, our shareholders, and the full Cellebrite Board, I want to express our gratitude for his service and wish him nothing but continued health and success. Yossi's decision brings mixed emotions. On one hand, I couldn't be more pleased for him personally. He's earned this break to figure out what comes next while reconnecting with all the personal priorities that are often collateral damage as a CEO. On the flip side, his passion and history with this company certainly leave some big shoes to fill. As for the future, our search efforts have already kicked into high gear. I believe that this company is unique — the proverbial one in a million. I'm not sure where you find a company that's both AI-driven and cloud-centric, a company that's the undisputed platform leader in a large, growing, and still highly fragmented market while at the same time delivering high levels of ARR growth with outstanding customer loyalty and retention and strong free cash flow, all underscoring the effort to make the world a better, safer place. Based on that profile, we fully expect a rich list of qualified candidates to quickly surface and compete for this job. Cellebrite deserves nothing short of an exceptional new CEO, and this Board is completely committed to protecting that standard as we evaluate candidates. It's impossible to predict or commit to a specific date or timeline, but we do not expect a protracted process. We will move with purpose and pace, and to the extent there is any gap between Yossi's departure at the end of 2024 and the arrival of a new world-class leader, I will step in as the interim CEO. With that said, we'll now ask the operator to open the floor for comments and questions.

Operator, Operator

Operator Instructions. Our first question will come from Shaul Eyal with TD Cowen. Please go ahead.

Shaul Eyal, Analyst

Thank you. Good afternoon. Yossi, congratulations on the quarter. Congrats on the past few decades, and congrats on the road ahead. I know Tom, as you think about the search process, will the new CEO be based in Israel or in the U.S.? And also my follow-up question, Dana, any contribution from the CyTech acquisition this quarter?

Thomas Hogan, Executive Chairman

Let's take the easy one.

Dana Gerner, CFO

Yes, I'll take the easy one. As we said when we acquired CyTech, the contribution has been very minimal. This quarter was slightly below $0.5 million to the total revenue.

Thomas Hogan, Executive Chairman

Yes. And on your first point, the answer is we're casting the widest net possible, given the unique asset this company represents in our desire to secure the best CEO on the planet. Therefore, we are not restricting our search to any geography, whether it be Israel or the U.S.

Michael Cikos, Analyst

Thanks for taking the questions, guys. And Yossi, it's been a pleasure working with you over the last couple of years. I'll let go of Shaul's comments. The first question I have for you was related to the CEO succession plan here. I wanted to get a better sense of when Cellebrite retained the executive firm. I know we're talking about expectations for surfacing new candidates quickly, but how have the candidates been that you assessed so far? And then the second piece is that investors here sometimes get concerned about CEO succession plans. I know that the firm just had its Investor Day. Is there any reason to think that the longer-term models through calendar '28 that we received in March are changing?

Thomas Hogan, Executive Chairman

Yes. First, there's no fundamental change with respect to the business plan or strategy. That's something Yossi and I worked closely on starting last summer, establishing the framework, the narrative, and the platform for an end-to-end solution in the industry using that to guide us from an asset and an IP perspective that will fuel growth. Our focus is still on believing this is very much a growth company with a huge amount of headroom, and we continue to do it with balance in an eye on cash flow and profitability. So that positioning and framing we did in our inaugural Investor Day still holds. On your question about the search, we started to have conversations with Yossi just a few weeks ago. We then reached out to some Tier 1 search firms. They are fast at work building that slate, and as I shared, they are very bullish about our growth. This company continues to scale, and despite that, we continue to deliver strong Rule of X performance, which any potential smart CEO would love to see.

Yossi Carmil, CEO

And Mike, first of all, thank you for the kind words. Especially at this point, after reflecting with management on the strategy for the coming three to five years, which we have done recently, and reviewing the market trends and factors. I'm glad to say that everything plays in Cellebrite's favor in terms of strategic growth budgets and market conditions. On top of that, the market plays in our favor.

Jonathan Ho, Analyst

Hi, good morning and congratulations, Yossi. It's been great to work with you as well. When we look at the net retention, can you provide a bit of additional detail regarding how strong it's been? How much of this is driven by new seat expansion versus upsell?

Dana Gerner, CFO

Yes. As I mentioned, the vast majority of the contribution to the ARR growth and the net retention stems from expansion within the Insights offering, both by upgrading the current offerings and also by sending more volume. If you think about the analogs and the almost doubling in the last year, this is actually to the same seats that are utilizing an Insights-based solution, just giving them more capabilities. This is a combination of both. Some of it is also coming from the great performance of Guardian, which has more than doubled its ARR in the past 12 months, growing very fast from a small base.

Yossi Carmil, CEO

I would like to add that we are extremely satisfied with the feedback, comments, and reception of customers regarding Insights in the market. We have introduced a revolutionary solution for digital forensic units for examiners and investigators that allows them to complete examinations twice as fast, access more devices, and possess more capabilities.

Brian Essex, Analyst

Good morning. Thank you for taking my question. And Yossi, congratulations on all your accomplishments with Cellebrite, so hats off to you. My first question is around the federal sector. Can you provide an understanding of what percentage of your business does federal represent? How do you anticipate managing the evolution of Cellebrite Federal Solutions, particularly in relation to your existing federal relationships?

Yossi Carmil, CEO

I'll start by saying we have a very strong position in the federal space as part of our public sector activity for years now. By the end of 2023, the federal space represented around 20% of our overall activity, and that should remain meaningful. Creating the Cellebrite Federal Solutions unit allows us to broaden our TAM in the federal space. This structure will help us accelerate growth in this very strong segment and enables us to deploy a broader range of solutions and be exposed to new programs and opportunities.

Tomer Zilberman, Analyst

Hey guys, Yossi, congratulations on reaching this milestone in your career. Regarding government budgets in relation to your outperformance versus expectations and the Street, can you address how the federal budget ended?

Yossi Carmil, CEO

I'm glad to reiterate that we had a strong performance in the federal space during Q3. Our expectations regarding budget and our customers' ability to finance deals, including C2C initiatives and digital transformation, all met expectations. There have been no significant changes, and we remain confident in the federal budget moving into 2025 and beyond.

Operator, Operator

This does conclude the Q&A portion of today's call. I would now like to turn the floor over to Cellebrite's CEO, Yossi Carmil, for additional or closing remarks.

Yossi Carmil, CEO

First of all, I would like to thank you all for participating in this call. However, I would like to use the opportunity also to thank you for the long-term trust in Cellebrite, both in the past and into the future. Above all, I would like to express my gratitude to the Cellebrite employees for an excellent Q3. We still have a year left to successfully close, so good luck to us all in completing this year successfully. I would like to thank all the Cellebrite employees, and managers who have been part of my personal journey and success. Good luck to the company and to all of you.

Operator, Operator

Thank you. This does conclude the Cellebrite Third Quarter 2024 Financial Results conference call. Please disconnect your line at this time, and have a wonderful day.