Cellebrite DI Ltd.

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

Note 3. Business combination

a. Acquisition of Corellium:

On December 1, 2025, the Company completed the acquisition of 100% of the shares of Corellium, a U.S. based provider of Arm hypervisor virtualization technology used in secure software development across mobile, automotive, and IoT applications. The acquisition was completed to expand the Company’s product portfolio.

The purchase consideration for the acquisition was $156,116, which included $154,715 cash consideration and the fair value of liability classified contingent consideration ("Earn-out") of $1,401 (Refer to Note 15, for more information on the fair value of our contingent consideration liability). The Earn-out will be subsequently measured at fair value, with changes in fair value recognized within operating expenses or income. The purchase consideration does not include $20,000 fair value of RSAs that are subject to continued employment. The RSAs are recognized as compensation expense over the requisite service period. The acquisition was accounted for as a business combination.

The purchase price allocation as of the acquisition date was as follows:

Goodwill represents expected synergies from technology integration, expansion of product capabilities, and the assembled workforce. The Goodwill is not expected to be deductible for tax purposes.

The identifiable intangible assets and their estimated useful lives are as follows:

The fair value of the Technology was determined using the Multi-period Excess Earnings Method, while the fair value of the Customer Relationships and Backlog was determined using the Cost Saving Method.

During the year ended December 31, 2025, the Company recorded amortization expenses of $1,004, representing one month of amortization beginning on the acquisition date.

The Company recognized $3,818 of acquisition‑related costs, primarily professional service fees, which were expensed as incurred and presented within selling, general and administrative expenses.

Unaudited pro forma results of operations related to this acquisition have not been presented because the acquisition was not material to the Company’s consolidated statements of income.

b. Acquisition of CyTech:

On July 15, 2024, the Company completed the acquisition of 100% of Cyber Technology Services, Inc. (“CyTech”) shares, for a total consideration of $3,803. CyTech provide cybersecurity solutions, specializing in technical analysis, digital forensics, IT support, and intelligence operations. The purpose of the acquisition of CyTech in combination with forming Cellebrite Federal Solutions is to broaden the Company's business with U.S. federal customers. The acquisition was accounted for as a business combination.

The purchase price allocation for the acquisition has been determined as follows:

Goodwill is primarily attributable to expected synergies arising from technology integration and expanded product availability to the Company’s existing and new customers. Goodwill is deductible for income tax purpose.

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:

Amortization expenses related to the acquired intangible assets amounted to $156 and $72 for the years ended December 31, 2025 and 2024, respectively.

Pro forma results of operations related to this acquisition have not been prepared because they are not material to the Company's consolidated financial statements.

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

Note 4. Intangible assets, net

Finite-lived intangible assets:

a. Amortization expense amounted to $4,899, $3,349 and $3,347 for the years ended December 31, 2025, 2024 and 2023, respectively.

b. The expected future amortization expenses by year related to the intangible assets as of December 31, 2025 are as follows:

Note 5. Marketable securities

Marketable securities consisted of the following:

As of December 31, 2025 and 2024, no continuous unrealized losses for 12 months or greater were identified.

The following table summarizes the Company’s marketable securities by contractual maturities:

Note 6. Prepaid expenses and other current assets

Note 7. Inventories

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

Note 8. Property and equipment, net

The Company abandoned a lease during 2025 resulting in a write-off of the leasehold improvements of $895 and disposals of $554 associated with ordinary‑course activities. Depreciation expenses were $6,968, $7,258 and $6,664 in the year ended December 31, 2025, 2024 and 2023, respectively.

Note 9. Other accounts payable and accrued expenses

Note 10. Derivative Instruments

The Company’s risk management strategy includes the use of derivative financial instruments to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates.

ASC 815, "Derivatives and Hedging" ("ASC 815"), requires the Company to recognize all of its derivative instruments as either assets or liabilities on the balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, an entity must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.

Gains and losses on derivatives instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that are attributable to a particular risk), are recorded in accumulated other comprehensive income (loss) and reclassified into statement of income (loss) in the same accounting period in which the designated forecasted transaction or hedged item affects earnings.

The Company entered into option and forward contracts to hedge a portion of anticipated New Israeli Shekel ("NIS") payroll and benefit payments. These derivative instruments are designated as cash flow hedges, as defined by ASC 815 and accordingly are measured at fair value. These transactions are effective and, as a result, gain or loss on the derivative instruments are reported as a component of accumulated other comprehensive income and reclassified as Cost of revenue and Operating expenses, at the time that the hedged income/expense is recorded.

The Company currently hedges its exposure to the variability in future cash flows for a maximum period ofone year. As of December 31, 2025, the Company expects to reclassify all of its unrealized gains and losses from accumulated other comprehensive income to earnings during the next tenmonths. The fair value of the Company's outstanding derivative instruments at December 31, 2025 and 2024 is summarized below:

The effect of derivative instruments in cash flow hedging relationship on other comprehensive income for the year ended December 31, 2025, 2024 and 2023, is summarized below:

Derivatives in foreign exchange cash flow hedging relationships for the year ended December 31, 2025, 2024 and 2023, is summarized below:

Note 11. Lease

The Company entered into operating leases primarily for offices. The leases have remaining lease terms of up to 11 years, some of which may include options to extend the leases for up to an additional 1 year. The components of operating lease costs were as follows:

Supplemental balance sheet information related to operating leases is as follows:

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

Minimum lease payments for the Company’s ROU assets over the remaining lease periods as of December 31, 2025, are as follows:

The Company abandoned a lease during 2025 resulting in abandonment of the right-of-use asset of $865

Note 12. Commitments and contingencies

From time to time, the Company may be involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated the Company would accrue a liability for the estimated loss. As of December 31, 2025 and 2024, the Company is not involved in any material claims or legal proceedings which require accrual of liability for the estimated loss.

Note 13. Shareholders’ equity

a. Ordinary Shares

As of December 31, 2025 and 2024, the Company was authorized to issue 3,454,112,863 shares of par value NIS 0.00001 per share ordinary share. The voting, dividend and liquidation rights of the holders of the Company’s common share is subject to and qualified by the rights, powers and preferences of the holders of the preferred shares as set forth below.

Ordinary Shares confers upon its holders the following rights:

i. The right to participate and vote in the Company’s general meetings. Each ordinary share will entitle its holder, when attending and participating in the voting toone vote;

ii. Dividends or distribution shall be paid or be made to the holders of ordinary shares, shall be in an amount equal the product of the dividend or distribution payable or made on each ordinary share determined as if all preferred shares had been converted into ordinary shares and the number of ordinary shares issuable upon conversion of such preferred share, in each case calculated on the record date for determination of holders entitled to receive such dividend or distribution; and

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

iii. The right to a share in the distribution of the Company’s excess assets upon liquidation pro rata to the par value of the share held by such holder.

b. Option Plan, RSU’s and PSU’s:

On August 5, 2021, the Company adopted the 2021 Share Inventive Plan (the “2021 Share Incentive Plan”). The 2021 Share Incentive Plan provides for the grant of share options (including incentive share options and non-qualified share options), ordinary shares, RSUs, PSUs, and other share-based awards.

As of December 31, 2025 the aggregate number of shares that may be issued pursuant to awards under this 2021 Plan is 17,898,577 and there were 11,297,923 Ordinary Shares underlying outstanding awards (including options, PSUs and RSUs).

As of December 31, 2025 the aggregate amount of options, RSUs and PSUs outstanding under all plans is 12,624,891.

A summary of the status of options under the 2021 Shares Incentive Plan as of December 31, 2025 and changes during the relevant period ended on that date is presented below:

The weighted average fair values at grant date of options granted for the year ended December 31, 2024 and 2023 were $5.81 and $3.59 per share, respectively.

The total intrinsic value of options exercised during the years 2025, 2024 and 2023, was $80,390, $72,615, and $33,237, respectively.

The aggregate intrinsic value of the outstanding options at December 31, 2025, 2024 and 2023, represents the amount of 4,605,544,10,472,033 and 15,728,176, respectively, outstanding options that are in-the-money as of such dates. As of December 31, 2025, 2024 and 2023 all outstanding options are in-the-money.

A summary of the status of RSUs and PSUs under the 2021 Share Incentive Plan as of December 31, 2025 and changes during the relevant period ended on that date is presented below:

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

The weighted average fair value at grant date of RSUs and PSUs granted for the year ended December 31, 2025, 2024 and 2023 was $16.71, $10.63, and $5.75, respectively.

The total aggregate fair value of shares vested during the years 2025, 2024 and 2023 was$62,689, $44,304 and$13,805 respectively.

As of December 31, 2025, the Company had approximately $89,687 of unrecognized compensation expense related to non-vested shares options, non-vested RSU’s and non-vested PSU’s expected to be recognized over a weighted average period of 2.35 years.

c.2021 Employee Share Purchase Plan:

On August 5, 2021, the Company adopted the 2021 Employee Share Purchase Plan (“ESPP”).

As of December 31, 2025, the aggregate number of ordinary shares that may be issued pursuant to rights granted under the ESPP shall be 2,448,431 Shares. In addition, on the first day of each calendar year beginning on January 1, 2023 and ending on and including January 1, 2033, the number of Shares available for issuance under the Plan shall be increased by that number of Shares equal to the lesser of (a)1.0% of the ordinary shares outstanding on the last day of the immediately preceding calendar year, as determined on a fully diluted basis, and (b) such smaller number of shares as may be determined by the Company’s Board of Directors. If any right granted under the ESPP shall for any reason terminate without having been exercised, the Shares not purchased under such right shall again become available for issuance under the ESPP.

As of December 31, 2025, 2024 and 2023, 345,718,399,688 and 587,579 ordinary shares had been issued under the ESPP. The ESPP is compensatory and, as such, results in recognition of compensation cost.

d. The total equity-based compensation expense related to all of the Company's equity-based awards recognized for the year ended December 31, 2025, 2024 and 2023, was comprised as follows:

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

Note 14. Net income (loss) per share

The following table sets forth the computation of basic losses and earnings per share:

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

Note 15. Fair value measurements

The following table presents information about the Company’s assets and liabilities fair value at December 31, 2025 and December 31, 2024 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

Earn-out

Contingent earn‑out consideration is classified within Level 3 of the fair value hierarchy. The earn‑out relates to contingent consideration arising from business combinations. The Company estimated the fair value of the earn‑out liability based on the probability‑weighted assessment of achieving the contractual performance conditions, with valuation inputs reflecting the fair value of payments that would be made upon meeting those contingencies. The significant assumptions used in the Monte Carlo valuation model mainly relate to the projected ARR growth in the forecast years, expected ARR volatility and risk-free interest rate.

Under the Corellium Merger Agreement, the selling stockholders may receive up to $30 million of contingent consideration delivered as two separate payments (each, an “Earn-Out Period”). Each Earn‑Out Payment will be an amount equal to 70% of Annual Recurring Revenue (“ARR”) in excess of the applicable ARR target, subject to a $15 million cap per measurement period and with no payment due if the target is not exceeded. If Corellium’s “Atlas” business line has not been sold or transferred to a third-party before the end of an Earn‑Out Period, ARR and ARR targets are recalculated to include ARR of Corellium’s “Atlas” business line, with any incremental amount added to or subtracted from the Earn‑Out Payment following the second Earn-Out Period.

The earn‑out liability is remeasured to fair value at each reporting date, with changes recognized in operating expenses within the consolidated statements of income (loss) until the related milestones are settled, expire, or become no longer achievable. The carrying amount of the earn‑out liability represents its estimated fair value as of the reporting date.

As of December 31, 2025, the contingent earn-out consideration fair value total of $1,401 remained relatively unchanged since December 1, 2025.

Warrant liability

Upon the closing of the Merger,20,000,000 Public Warrants and 9,666,667 Private Warrants, that were both issued by TWC prior to the Merger, were outstanding to purchase the Company’s Ordinary Shares. Each warrant entitled the holder to purchaseone Company Ordinary Share at a price of $11.50 per share, subject to adjustments. The warrants were exercisable at any time commencing 30 days after the completion of the Merger and were to expire five years after the closing date of the Merger or earlier upon redemption or liquidation. The Company had the right to redeem the outstanding Public Warrants in whole and not in part at a price of $0.01 per warrant at any time after they became exercisable, provided that the last sale price of the Company Ordinary Shares equaled or exceeded $18.00 per share, subject to adjustments, for any 20 trading-days within a 30 trading-day period ending three business days prior to the date on which the Company sent notice of redemption to the warrant holders.

The Private Warrants had similar terms as the Public Warrants, except that the Private Warrants could be exercised for cash or on a cashless basis at the holder’s option and the private warrants could not be redeemed by the Company as long as they are held by the initial purchasers or their permitted transferees, but once they are transferred, they would have the same rights as the Public Warrants.

In addition, the Company had the right to redeem all the outstanding warrants (both public and private warrants) for $0.10 provided that the reference value equaled or exceeded $10.00 per share and the reference value was less than $18.00 per share. In both cases, the warrants holders subject to redemption could elect to exercise the warrants on a cashless basis and in the case of redemption for $0.10, the number of shares to be received would be determined by reference to the Make-Whole table included in the warrants' agreement.

As of December 31, 2023, the Company classified the warrants (both public and private) as a liability pursuant to ASC 815-40 since the warrants did not meet the equity classification conditions. Accordingly, the Company measured the warrants at their fair value. The warrants liability is subject to re-measurement

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of comprehensive loss.

During August 2024, the Company elected to redeem all of the outstanding public warrants. During August and September 2024 the Company issued an aggregate of 6,803,085 Ordinary Shares to the Public Warrants' holders. Of the 19,999,449 Public Warrants that were outstanding on August 15, 2024,4,645 Public Warrants were exercised for cash at an exercise price of $11.50 per Ordinary Share in exchange for an aggregate of 4,645 Ordinary Shares and 19,878,580 Public Warrants were exercised on a cashless basis in exchange for an aggregate of 6,798,440 Ordinary Shares. A total of 116,224 Public Warrants remained unexercised as of the redemption date and the Company redeemed those Public Warrants for an aggregate redemption price of $11.

During September 2024, the Private Warrants agreement was modified and as a result of the modification, the Company concluded that the Private Warrants were no longer required to be classified as a liability under ASC 815-40. As such, the Company reclassified the Private Warrants liability to equity as of the modification date. During November 2024, the Company issued 3,306,000 Ordinary Shares to the Private Warrants' holders with such Private Warrants exercised on a cashless basis.

As of December 31, 2024, the Company has no remaining warrants outstanding.

The estimated fair value of the private placement warrant liabilities is determined using Level 3 inputs. Inherent in a Black-Scholes valuation model are assumptions related to expected share-price volatility, expiration, risk-free interest rate and dividend yield. The Company estimates the volatility of its common share based on historical volatility of select peer companies that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expiration of the warrants. The dividend yield is based on the historical rate, which the Company anticipates will remain at 0%.

Restricted Sponsor Shares liability and Price Adjustment Shares liability

7,500,000 Ordinary Shares issued to TWC Tech Holdings II, LLC, out of a total of 13,500,000 shares, are Restricted Sponsor Shares and were set to vest in 3 tranches of 3,000,000,3,000,000 and 1,500,000, upon achievement of the triggering events (as defined in the Merger Agreement); if at any time during the Price Adjustment Period the price of Ordinary Shares was greater than or equal to $12.50, $15.00 and $30.00, respectively, over any 20 trading-days within any 30 trading-day period. In the event of a post-Closing change of control transaction involving the Company, any Restricted Sponsor Shares not previously vested will vest and will be entitled to participate in the change of control transaction. Upon the expiration of the Price Adjustment Period (a period ofseven years), any unvested Restricted Sponsor Shares that have not vested as of such time will be forfeited. The Company security holders shall be entitled to vote their unvested Restricted Sponsor Shares and receive dividends and other distribution, and to have all other economic rights, in each case, with respect to such Restricted Sponsor Shares while they remain unvested.

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

Holders of the Ordinary Shares and vested RSUs, in each case as of immediately prior to the Merger, were eligible to receive up to 15,000,000 Ordinary Shares (the “Price Adjustment Shares”) issuable in three tranches of 5,000,000 upon achievement of the triggering events (if at any time during the Price Adjustment Period the price of the Company’s Ordinary Shares was greater than or equal to $12.50, $15.00 and $17.50, respectively, over any 20 trading-days within any 30 trading-day period.) or upon a Change of Control (as defined in Merger Agreement) before thefive year anniversary of the closing date of the Merger.

The Company has determined that the Price Adjustment Shares, and the Restricted Sponsor Shares are freestanding financing instruments since those rights are legally detachable and separately exercisable. The Company has determined that the Price Adjustment Shares, and the Restricted Sponsor Shares are not indexed to Company’s stock since if a Change of Control occurs, all the Ordinary Shares underlying the Price Adjustment Shares and the Restricted Sponsor Shares will be issued or released regardless of the Company’s stock price. Therefore, as of December 31, 2023, the Company accounted for the Price Adjustment Shares and for the Restricted Sponsor Shares as a liability measured at fair value through earnings.

During the third quarter of fiscal 2024, the $12.50 and the $15.00 triggering events occurred, resulting in only one triggering event remaining for both Restricted Sponsor shares and Price Adjustments Shares. As of September 13, 2024, upon meeting the second trigger event, the Company concluded that the Restricted Sponsor Shares and the Price Adjustments Shares were no longer required to be classified as a liability under ASC 815-40. As such, the Company reclassified the Restricted Sponsor Shares and Price Adjustment Shares from liability to equity. Consequently, the Company issued 10,000,000 Ordinary Shares to the price adjustment rights holders and 6,000,000 of the Restricted Sponsor Shares were no longer subject to forfeiture and share the same rights as the Company's Ordinary Shares.

During the fourth quarter of fiscal 2024, the $17.50 triggering event occurred, resulting in the issuance of 5,000,000 Ordinary Shares to the price adjustment rights holders.

The Restricted Sponsor shares liability and Price Adjustment Shares were measured at fair value using Level 3 inputs until September 13, 2024.

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

The following table provides quantitative information regarding Level 3 fair value measurements inputs as their measurement dates:

Note 16. Accumulated other comprehensive income

Note 17. Revenues

Disaggregation of Revenues

The following table provides information about disaggregated revenue by geographical areas

*Primarily from the United States

Contract Balances

Receivables are recorded when the right to consideration becomes unconditional. Unbilled receivables represents the Company's unconditional right to consideration not yet invoiced while billed receivables include invoiced amounts.

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

Contract liabilities consist of deferred revenue. Revenue is deferred when the Company invoices in advance of performance under a contract. The current portion of the deferred revenue balance is recognized as revenue during the 12-month period after the balance sheet date. The non-current portion of the deferred revenue balance is recognized as revenue following the 12-month period after the balance sheet date. Of the $262,217 and $242,823 of deferred revenue as of December 31, 2024 and December 31, 2023, respectively, the Company recognized $202,576 and $180,014 as revenue during the year ended December 31, 2025 and 2024, respectively.

The change in contract balances is consistent with the increase in the overall operation of the Company.

Remaining Performance Obligations

The Company’s remaining performance obligations are comprised of product and services revenue not yet delivered. As of December 31, 2025 and December 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $405,678 and $343,557 respectively, which consists of both billed consideration in the amount of $327,109 and $262,217 respectively, and unbilled consideration in the amount of $78,568 and $81,340 respectively, that the Company expects to recognize as revenue. As of December 31, 2025, the Company expects to recognize the majority of its remaining performance obligations as revenue over the next 12 months.

Note 18. Taxes on income

A. Israeli taxation

1. Corporate tax rates in Israel:

The tax rates relevant to corporations in Israel in the years 2025, 2024 and 2023 is 23%. However, the effective tax rate reported by a company that derives income from a Preferred Enterprise or Preferred Technological Enterprise (as discussed below) is lower.

2. Tax benefits under the Law for Encouragement of Capital Investments, 1959 (“the Investment Law”) Approved/Beneficiary Enterprise

Pursuant to the Investment Law, the Company was awarded “Approved Enterprise” and “Beneficiary Enterprise” status under the government alternative benefits path beginning in 2003 until 2018 (included). During this period the Company was entitled to beneficial tax rates of 0% –10%. The Company decided to terminate its “Approved” and ”Beneficiary Enterprise” status early and enjoy beneficial tax rates under the “preferred technological enterprise” status effective beginning 2019.

In the event of distribution of dividends from income taxable at 0% tax rate (the “Trapped Earnings”) as part of the Approved Enterprise or Beneficiary Enterprise statuses, the amount distributed will be subject to corporate tax at the rate ordinarily applicable to the Approved or Beneficiary Enterprise’s.

During October 2022, a final ruling was signed by the Company and the ITA, according to which, the Company paid approximately $4,900.

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

3. Tax benefits under the Law for Encouragement of Preferred Enterprise and Preferred Technology Enterprise

On May 16, 2017 the Knesset Finance Committee approved Encouragement of Capital Investment Regulations (Preferred Technological Income and Capital Gain of Technological Enterprise) — 2017 (hereinafter: “the Regulations”), which provides rules for applying the “Preferred Technological Enterprise” tax benefit track including the formula that provides the mechanism for allocating the technological income eligible for the benefits

Commencing in 2019 the Company elected the Preferred Technology Enterprise status to apply under the Law for the Encouragement of Capital Investments (the “Investment Law”). The approval is in affect for the tax years 2019 to 2023. In 2025, the Company applied to the Israel Tax Authority for a new ruling to extend its eligibility for such tax benefits, subject to the compliance with the conditions settled in such tax ruling, and is expected to be valid from 2024 until tax year 2028 (inclusive). The New Ruling has yet to be obtained, and there is no assurance that it will be obtained or as to its final conditions.

Income subject to the Preferred Technology Enterprise status is taxed at reduced tax rate of 12% and income from manufacturing activity in Area A is taxed at reduced tax rate of 7.5%.

4. Tax benefits under the Law for the Encouragement of Industry (Taxation), 1969:

Management believes that the Company currently qualifies as an "industrial company" under the above law and as such, is entitled to certain tax benefits including accelerated depreciation, deduction of public offering expenses in three equal annual installments and amortization of other intangible property rights for tax purposes.

5. Tax Benefits for Research and Development:

Israeli tax law (section 20A to the Israeli Tax Ordinance (New Version), 1961) allows a tax deduction for research and development expenses, including capital expenses, in the year in which they are paid. Such expenses must relate to scientific research in industry, agriculture, transportation or energy, and must be approved by the relevant Israeli government ministry, determined by the field of research. Expenses incurred in scientific research that are not approved by the relevant government ministry are amortized over a three-year period starting from the tax year in which they are paid.

6. Foreign Exchange Regulations:

Under the Foreign Exchange Regulations, the Company calculates its Israeli tax liability in U.S. dollars according to the Israeli Income Tax Regulations (Principles Regarding the Management of Books of Account of Foreign Invested Companies and Certain Partnerships and the Determination of Their Taxable Income), 1986. The tax liability, as calculated in U.S. dollars is translated into NIS according to the exchange rate as of December 31 of each year.

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

B. Income taxes on non-Israeli subsidiaries:

The Company’s subsidiaries incorporated in the US, Germany, Singapore, Australia, Brazil, UK, France, Canada, Japan and India are taxed according to tax laws in the countries of their residence. The Company’s effective tax rate depends on the geographical mix of where its profits are earned. In the year 2025, the Company’s U.S. subsidiary is subject to combined federal and state income taxes of 25% and the subsidiaries in Germany and Singapore are subject to corporation tax at a rate of approximately 33% and 17% respectively. As of December 31, 2025, the Company had approximately $66,925 undistributed earnings of its subsidiaries.

These undistributed earnings were designated as indefinitely reinvested.

In the event of a distribution of those earnings in the form of dividends, a sale of the subsidiaries, or certain other transactions, we may be liable for income taxes, subject to an adjustment, if any, for foreign tax credits and foreign withholding taxes payable to certain foreign tax authorities.

C. Deferred taxes

Deferred taxes recognized for the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and such amounts for income tax purposes. Significant components of the deferred tax liabilities and assets are as follows:

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

A reconciliation of the amount that would result from applying the Company’s statutory tax rate in Israel to income before income tax expense to the reported amount of income tax expense allocated to continuing operations is as follows:

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

Income(loss) before income tax expense is comprised as follows:

Tax expense allocated to continuing operations is comprised as follows:

A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows:

Interest and index (income) expense recognized related to uncertain tax positions amounted to $(87), $(29) and $173 in 2025 , 2024, and 2023, respectively. Total accrued interest as of December 31, 2025 and 2024 was $353 and $441, respectively, and were included in accrued expenses.

For the year ended December 31, 2025, the total tax (received) paid in cash was $(549), consisting primarily of tax received in Israel of $(636), the UK of $(200), and US Federal tax of $(721), partially offset by tax paid in Singapore of $269.

The Company currently does not expect unrecognized tax benefits to change significantly over the next 12 months, except in the case of settlements with tax authorities, the likelihood and timing of which is difficult to estimate.

The Company’s income tax assessments in Israel through the year 2020 are considered final.

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

The Company is subject to income tax in other jurisdictions outside of Israel, of which the major jurisdiction is the U.S. The Company’s operation in the US is subject to potential examination for tax years 2020 and afterwards.

Timing of the resolution of audits is highly uncertain and therefore, as of December 31, 2025, the Company cannot estimate the change in unrecognized tax benefits resulting from these audit within the next 12 months.

Note 19. Financial income (expense), net

Note 20. Transactions and Balances with Related Parties

SUN Corporation, the Company’s primary shareholder is also a reseller of the Company in the Japanese market.

A. Transactions with SUN Corporation

B. Balances with SUN Corporation

Note 21. Segment Information

The Company operates as one operating segment. The Company's chief operating decision maker ("CODM") is its chief executive officer. The CODM reviews financial information presented on a

Cellebrite DI Ltd. and its Subsidiaries

Notes to consolidated financial statements

U.S. dollars (in thousands, except share and per share data)

consolidated basis. The CODM uses consolidated net income to assess financial performance and allocate resources.

There is no expense or asset information that is supplemental to those disclosed in these consolidated financial statements, which are regularly provided to the CODM. The allocation of resources and assessment of the performance of the operating segment is based on consolidated net income, as shown in the Company’s consolidated statements of operations. The CODM considers the operation in the annual forecasting process and reviews actual results when making decisions about allocating resources. Since the Company operates as one operating segment, financial segment information, including profit or loss and asset information, can be found in the consolidated financial statements.

The following table presents the Company’s long-lived assets by geographic region, which consist of property and equipment, net and operating lease right-of-use assets:

Note 22. Subsequent events

On March 1, 2026, the Company completed the acquisition of 100% of the shares of SCG Canada Inc., (“SCG”), a leading provider of hand‑held digital forensics solutions for unmanned aerial vehicles (UAVs), for total consideration of approximately $17 million, subject to customary transaction adjustments, and an immaterial service related contingent consideration. The Company has not completed its acquisition accounting for this transaction.