Cellebrite Advances Plans to Transform and Elevate its Strategic Relationship with the U.S. Federal Government
Cellebrite (NASDAQ: CLBT) has launched Cellebrite Federal Solutions to enhance its strategic relationship with the U.S. federal government. This move includes the acquisition of Cyber Technology Services, Inc. (CyTech), expanding Cellebrite's capabilities in cybersecurity and digital forensics. The new unit, led by Erik Sachwitz, aims to address the evolving needs of U.S. federal customers and unlock more opportunities.
Key highlights:
- Acquisition of CyTech to broaden Cellebrite's expertise
- Establishment of a dedicated unit for federal sector
- Appointment of four renowned independent directors
- Focus on AI-driven Case-to-Closure platform
- U.S. federal customers generated 19% of Cellebrite's annual recurring revenue in the public sector in 2023, up 21% from the previous year
- Acquisition of CyTech expands Cellebrite's capabilities in cybersecurity and digital forensics
- Establishment of Cellebrite Federal Solutions to better serve U.S. federal government needs
- 21% year-over-year growth in annual recurring revenue from U.S. federal customers
- Appointment of four experienced independent directors to strengthen governance
- Strategic focus on AI-driven Case-to-Closure platform for accelerating justice
- None.
Insights
Cellebrite's acquisition of Cyber Technology Services, Inc. (CyTech) is a strategic move that could drive long-term
Expanding federal sector commitments through a dedicated unit like Cellebrite Federal Solutions suggests a focused approach to government contracts, which are typically more stable and longer-term. This move might mitigate revenue volatility associated with other sectors. Nonetheless, achieving FedRAMP authorization is important and could be a gating factor for future SaaS revenue streams. Given the federal sector's current contribution to recurring revenue, any delays here could affect near-term financial performance.
Integrating CyTech into its operations, Cellebrite gains an edge in cybersecurity and digital forensics, critical fields in federal investigations today. CyTech’s leadership in incident response bolsters Cellebrite’s capabilities in addressing sophisticated cyber threats, potentially increasing the company's value proposition to federal clients. This strengthened expertise could enhance Cellebrite's competitive positioning against other tech firms vying for federal contracts.
The shift to form a specific federal business unit highlights the importance of specialized operations in dealing with government entities, which often have unique regulatory and operational requirements. The expertise brought in by CyTech's seasoned team can streamline Cellebrite's adaptation to these nuances. However, cybersecurity is a rapidly evolving field and continuous innovation will be necessary to maintain this competitive edge over time.
The creation of Cellebrite Federal Solutions and the appointment of renowned independent directors underscore a significant strategic push to solidify its presence in the federal market. These directors bring a wealth of experience in defense, cybersecurity and cloud computing, which are pivotal for aligning Cellebrite’s offerings with federal needs. Their involvement could facilitate new partnerships and contracts, fostering trust and credibility within government sectors.
However, investors should consider that this organizational expansion also comes with heightened operational complexities and potential integration challenges. The success of this move hinges on effectively leveraging the new directors' expertise to drive strategic initiatives and ensuring seamless integration of CyTech into Cellebrite's existing operations.
Launches Cellebrite Federal Solutions with the acquisition of Cyber Technology Services, Inc. and the appointment of four renowned independent directors
TYSONS CORNER, Va. and PETAH TIKVA, Israel, July 17, 2024 (GLOBE NEWSWIRE) -- Cellebrite (NASDAQ: CLBT), a leader in digital investigative solutions for the public and private sectors, officially established Cellebrite Federal Solutions, further elevating the Company’s ability to serve the unique needs of the U.S. federal government through its AI-driven Case-to-Closure [C2C] platform for accelerating justice.
This newly established operation builds on the Company's long and rich history of serving U.S. justice, defense, intelligence and other federal civilian agencies with its world-renowned Case-to-Closure platform, assisting in critical initiatives targeting the safety and protection of all American citizens.
A key element of this announcement is the acquisition of Cyber Technology Services, Inc. (CyTech). CyTech, which was founded in 2002, brings extensive domain expertise in cybersecurity, digital forensics and incident response services. CyTech’s employees will be part of Cellebrite Federal Solutions, further broadening and complementing Cellebrite's capabilities and supporting the Company’s ongoing expansion within this customer segment.
The actions announced by Cellebrite today support the Company’s strategy to substantially broaden its business with U.S. federal customers over the longer term. Terms of the transaction were not disclosed.
“The establishment of this dedicated unit underscores Cellebrite’s strategic commitment to the federal sector, recognizing its critical role and potential in our mission to enhance public safety and accelerate justice,” said Tom Hogan, Cellebrite Executive Chairman of the Board. “Today’s actions, combined with the investments we are making to achieve FedRAMP authorization of our software-as-a-service offerings, demonstrate that Cellebrite is taking strategic steps to address the evolving needs of our U.S. federal customers and unlock more opportunity with them over the coming years.”
“This is an exciting venture, and we welcome this talented group to our team,” said Yossi Carmil, Cellebrite’s CEO. “This move reinforces our dedication and support for the U.S. federal government to have the best digital investigative resources.”
The new unit will be led by Erik Sachwitz. Erik has led Cellebrite's U.S. federal business since 2020. In 2023, U.S. federal customers generated approximately
"This is a game-changing opportunity for CyTech, and we are thrilled to join Cellebrite to better engage these unique partnerships with the U.S. federal government,” said Tim Poole, formerly President of CyTech who now serves as Vice President of Cellebrite Federal Solutions. “As a seasoned digital forensics professional, I know first-hand what our customers are dealing with. We are here to strengthen the incredible offerings from Cellebrite that will help our U.S. federal customers achieve their objectives.”
Further, Cellebrite Federal Solutions is building a world-class board of independent directors. These directors bring a wealth of expertise and a range of valued skills covering U.S. defense, cyber intelligence, SaaS and cloud execution and prosecutorial expertise.
The four independent directors are:
- Lt. Gen. (ret.) Ken Tovo: former Commander of the Green Berets and U.S. Special Forces
- Ken, a distinguished leader in special operations and strategic planning, has a 35-year career that spans from Green Beret service to leading the 34,000-strong Army Special Operations Command. Ken currently serves on the boards of several companies, is the chairman of the Green Beret Foundation, a non-profit organization dedicated to assisting US Army Green Berets and their families and is an advisory board member of a nonprofit that supports the educational needs of killed, wounded or seriously injured servicemembers. Ken is the president of DOL Enterprises, Inc, a consulting firm providing services primarily in the defense and technology sectors.
- Dr. Barry West: former CIO and CISO U.S. Department of Commerce and Department of Homeland Security
- Dr. West is a veteran technologist and business leader with over 40 years of experience in the information technology field, and his expertise spans areas such as cybersecurity, cloud computing and innovation. Dr. West’s experience includes serving as CIO at the FDIC, PBGC, DOC, FEMA, NWS and DHS. Currently, he serves as the Founder and CEO of West Wing Advisory Services, LLC.
- Mark Ferrer: former COO of SAP
- Mark is an experienced global operating executive, currently serving on the board of directors for Blue Ridge Networks and Vbrick Corp. His extensive background includes leadership roles at Citrix, SAP, HP, and pivotal CEO positions at two public companies, contributing to significant market cap growth and strategic initiatives in the technology industry.
- Barbara Grewe: Sr. Director FBI 9/11 Review Commission
- Barbara is a seasoned professional with a diverse background in international strategy, policy and cybersecurity, having held senior roles at The MITRE Corporation, FBI 9/11 Review Commission and the Government Accountability Office. Her extensive experience spans from strategic management consulting at McKinsey & Co. and litigation at Covington & Burling, to serving as an Assistant U.S. Attorney, demonstrating her versatility and commitment to public service.
About Cellebrite
Cellebrite’s (Nasdaq: CLBT) mission is to enable its customers to protect and save lives, accelerate justice and preserve privacy in communities around the world. We are a global leader in Digital Investigative solutions for the public and private sectors, empowering organizations in mastering the complexities of legally sanctioned digital investigations by streamlining intelligence processes. Trusted by thousands of leading agencies and companies worldwide, Cellebrite’s Digital Investigative platform and solutions transform how customers collect, review, analyze and manage data in legally sanctioned investigations. To learn more visit us at www.cellebrite.com, https://investors.cellebrite.com, or follow us on X at @Cellebrite.
Caution Regarding Forward Looking Statements
This document includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward looking statements may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “will,” “appear,” “approximate,” “foresee,” “might,” “possible,” “potential,” “believe,” “could,” “predict,” “should,” “continue,” “expect,” “estimate,” “may,” “plan,” “outlook,” “future” and “project” and other similar expressions that predict, project or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include, but are not limited to, the following: CyTech’s employees will be part of Cellebrite Federal Solutions, further broadening and complementing Cellebrite's capabilities and supporting the Company’s ongoing expansion within this customer segment; with the boost of talents from CyTech, we are even better positioned to serve our federal partners and support their missions; and today’s actions, combined with the investments we are making to achieve FedRAMP authorization of our software-as-a-service offerings, demonstrate that Cellebrite is taking strategic steps to address the evolving needs of our U.S. federal government agency customers and unlock more opportunity with them over the coming years. Such forward-looking statements are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to: Cellebrite’s ability to keep pace with technological advances and evolving industry standards; Cellebrite’s material dependence on the purchase, acceptance and use of its solutions by law enforcement and government agencies; real or perceived errors, failures, defects or bugs in Cellebrite’s solutions; Cellebrite’s failure to maintain the productivity of sales and marketing personnel, including relating to hiring, integrating and retaining personnel; intense competition in all of Cellebrite’s markets; the inadvertent or deliberate misuse of Cellebrite’s solutions; failure to manage its growth effectively; Cellebrite’s ability to introduce new solutions and add-ons; its dependency on its customers renewing their subscriptions; the low volume of business Cellebrite conducts via e-commerce; risks associated with the use of artificial intelligence; the risk of requiring additional capital to support the growth of its business; risks associated with higher costs or unavailability of materials used to create its hardware product components; fluctuations in foreign currency exchange rates; lengthy sales cycle for some of Cellebrite’s solutions; near term declines in new or renewed agreements; risks associated with inability to retain qualified personnel and senior management; the security of Cellebrite’s operations and the integrity of its software solutions; risks associated with the negative publicity related to Cellebrite’s business and use of its products; risks related to Cellebrite’s intellectual property; the regulatory constraints to which Cellebrite is subject; risks associated with Cellebrite’s operations in Israel, including the ongoing Israel-Hamas war and the risk of a greater regional conflict; risks associated with different corporate governance requirements applicable to Israeli companies and risks associated with being a foreign private issuer and an emerging growth company; market volatility in the price of Cellebrite’s shares; changing tax laws and regulations; risks associated with joint ventures, partnerships and strategic initiatives; risks associated with Cellebrite’s significant international operations; risks associated with Cellebrite’s failure to comply with anti-corruption, trade compliance, anti-money-laundering and economic sanctions laws and regulations; risks relating to the adequacy of Cellebrite’s existing systems, processes, policies, procedures, internal controls and personnel for Cellebrite’s current and future operations and reporting needs; and other factors, risks and uncertainties set forth in the section titled “Risk Factors” in Cellebrite’s annual report on Form 20-F filed with the SEC on March 21, 2024 and as amended on April 12, 2024, and in other documents filed by Cellebrite with the U.S. Securities and Exchange Commission (“SEC”), which are available free of charge at www.sec.gov. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, in this communication or elsewhere. Cellebrite undertakes no obligation to update its forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.
Contacts:
Media
Victor Cooper
Sr. Director of Corporate Communications + Content Operations
Victor.cooper@cellebrite.com
+1 404.804.5910
Investors
Andrew Kramer
Vice President, Investor Relations
investors@cellebrite.com
+1 973.206.7760
FAQ
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