NEW YORK, August 13, 2026, 1:15 p.m. EDT
- Shares dropped 31% as ARR failed to meet the previous quarter’s range.
- Guidance was cut for full-year ARR and revenue, but the EBITDA target was increased.
- Shiven Ramji took over as CEO right away, as part of a scheduled handover.
Cellebrite DI Ltd. NASDAQ:CLBT shares dropped 31% on Thursday. The digital forensics software firm fell short of its quarterly recurring revenue goal and reduced its growth forecast for the full year. A CEO transition announced the same day raised further execution concerns.
The market reaction far exceeded the magnitude of the updated forecasts. Cellebrite trimmed the midpoint of its 2026 ARR guidance by 2.6%, and its revenue midpoint by 1.8%, while lifting the adjusted EBITDA midpoint by 2.6%. The gap between these adjustments suggests a credibility reset is underway, instead of a routine earnings shortfall.
| Market reaction | At 1:02 p.m. EDT |
|---|---|
| Share price | $10.475 |
| Change | -$4.775, or -31.31% |
| Intraday range | $9.58-$10.62 |
| Volume | 23.5 million shares |
| Previous close | $15.25 |
The stock fell to $9.58, dropping under Nasdaq’s earlier listed 52-week low of $11.02. With approximately 249 million shares in circulation, this drop wiped out nearly $1.2 billion in market capitalization.
Annual recurring revenue (ARR) for the second quarter came in at $507.8 million, marking a 21% increase year-over-year. However, this figure came in $2.2 million below the previous guidance’s lower limit. Revenue was within the forecast range, and adjusted EBITDA surpassed the upper end of projections.
| Q2 metric | Actual | Prior guidance | Result |
|---|---|---|---|
| ARR | $507.8 million | $510-$513 million | $2.2 million under guidance low |
| Revenue | $131.1 million | $130-$133 million | Inside target |
| Adjusted EBITDA | $31.8 million | $29-$31 million | $0.8 million over top end |
| Net retention rate | 117% | Not guided | 2 points higher than Q1 |
CEO Shiven Ramji said extended sales cycles impacted performance. The shift to the Inseyets platform brought less expansion than anticipated. “We are taking action to improve execution going forward,” he said. SEC-filed company release
The yearly adjustment was small in dollar terms but wide-ranging. Management cut the ranges for both ARR and revenue. The revised guidance points to ARR growth between 14% and 16%, compared with the prior 18% to 19% range.
| 2026 outlook | May midpoint | August midpoint | Midpoint change |
|---|---|---|---|
| ARR | $570 million | $555 million | -$15 million, or -2.6% |
| Revenue | $568 million | $558 million | -$10 million, or -1.8% |
| Adjusted EBITDA | $152 million | $156 million | +$4 million, or +2.6% |
| Adjusted EBITDA margin | 26%-27% | Near 28% | Increase |
Margins provide some balance. Adjusted EBITDA for the second quarter climbed to $31.8 million, representing 24.2% of revenue. Free cash flow over the trailing 12 months totaled $144.2 million, which corresponds to a 28% margin.
Cellebrite named Ramji as its new CEO, effective right away. Ramji, who started in May as president of products and technology, takes over from Thomas Hogan in what the company called a planned leadership change.
Ramji takes over as product launches remain irregular. Genesis posted its first revenue in the quarter, while Guardian landed a major FedRAMP contract. Still, management adopted a cautious stance on immediate gains from new products.
| Analyst or consensus | Latest rating | Target | Target versus $10.475 | Date |
|---|---|---|---|---|
| DA Davidson | Buy | $20 | +90.9% | May 27, 2026 |
| Needham | Buy | $15 | +43.2% | May 15, 2026 |
| JPMorgan | Overweight | $24 | +129.1% | November 13, 2025 |
| Lake Street | Buy | $23 | +119.6% | November 13, 2025 |
| BofA Securities | Buy | $25 | +138.7% | November 13, 2025 |
| S&P Global consensus | Strong Buy | $21 average | +100.5% | Updated May 27, 2026 |
The analyst table appears notably bullish at present, as all targets were set before the reset. Even Needham’s lowest target, at $15, is 43% higher than the current intraday price. Investors are advised to anticipate updates before viewing that gap as potential upside.
Guidance for the third quarter projects revenue between $145 million and $148 million. ARR is expected to be in the range of $524 million to $528 million. Achieving these targets would indicate if postponed deals moved to the period rather than being lost.
Risks: Prolonged government sales cycles may continue, and Inseyets conversions might stay sluggish. Uncertainties include new CEO performance, government budget constraints, export regulations, and exposure connected to Israel. Robust cash flow and quicker Genesis scaling could help mitigate these risks.
The following test is quantifiable. Cellebrite needs to complement its 117% retention rate by accelerating net-new ARR growth. For now, Thursday’s 31% drop signals a lack of confidence that improved margins could not offset.
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