William Blair initiated research coverage of Cellebrite DI Ltd. (CLBT $10.71), the worldwide leader in smartphone forensics with its UFED software.
Analysts Jonathan Ho and Louie DiPalma estimate the company will generate 2021 revenue of $235 million, which is more than three times larger than the second-biggest industry vendor, and expect 2022 revenue of $270 million.
“Cellebrite is aiming to become a one-stop shop by providing mobile forensics, analytics, and workflow solutions,” Ho said. “With the explosion of unstructured data from mobile smartphone applications, mobile phone extraction solutions are experiencing rapid growth. Based on our industry conversations, industry surveys, and commentary from Cellebrite, nearly every criminal investigation involves cellphone evidence. Cellebrite provides a critical service by helping law enforcement with legal search warrants to gain access to locked devices so that manufacturers are not pressured to provide that access. Its mobile phone extraction software is used by all 20 of the largest police departments in North America, and by 6,700 customers around the world. We estimate Cellebrite has 73% market share for mobile phone extraction revenue, with revenue that is three times greater than the next-largest provider.”
DiPalma added, “Cellebrite’s net customer retention in the second quarter of 2021 was 142% with the company selling more UFED seats and cross-selling new products, such as its Pathfinder analytics software and UFED Cloud, to existing customers. Enterprises also use Cellebrite’s software for compliance purposes and for incident response; currently, 67 of the 100 companies in the Fortune 100 use Cellebrite’s extraction software. Over the next five years, we expect Cellebrite to expand its enterprise offerings with more robust cyber incident response services.”
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Outperform (Buy): 76%
Market Perform (Hold): 23%
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