Is Cellebrite (CLBT) Poised to Re-Accelerate in 2026?

Voss Capital, LLC, an investment management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Voss Capital’s funds, Voss Value Fund, LP, and the Voss Value Offshore Fund, Ltd returned +1.0% and +0.6% to investors net of fees and expenses respectively, in the second quarter compared to a +8.5% return for the Russell 2000 Index, +5.0% return for the Russell 2000 Value Index, and +10.9% return for the S&P 500 Index. The Voss Value Master Fund’s total gross exposure stood at 165.6% and the net long exposure was 68.9% as of June 30, 2025. The weight of the fund’s top 10 longs was 66.9% and the top 10 shorts were -40.8%. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second-quarter 2025 investor letter, Voss Capital highlighted stocks such as Cellebrite DI Ltd. (NASDAQ:CLBT). Headquartered in Petah Tikva, Israel, Cellebrite DI Ltd. (NASDAQ:CLBT) is a software company that develops solutions for legally sanctioned investigations. The one-month return of Cellebrite DI Ltd. (NASDAQ:CLBT) was 17.81%, and its shares lost 2.89% of their value over the last 52 weeks. On August 27, 2025, Cellebrite DI Ltd. (NASDAQ:CLBT) stock closed at $16.47 per share, with a market capitalization of $4.026 billion

Voss Capital stated the following regarding Cellebrite DI Ltd. (NASDAQ:CLBT) in its second quarter 2025 investor letter:

"Cellebrite DI Ltd. (NASDAQ:CLBT), the leading provider of digital forensics software used by law enforcement and government agencies worldwide, reported results that were about as constructive as we could have hoped for given the stock’s 50% drop from earlier in the year. Management cut revenue guidance by just 1% and raised EBITDA guide by 2%, while ARR was trimmed by ~4% (or $20M) due primarily to federal budget timing issues. While the ARR reset is concerning on the surface, we believe it is largely a prudent derisking exercise under the company’s new CFO, with cuts significant enough to reset expectations lower but not so large as to suggest systemic weakness. This leaves the stock positioned for potential beats in the back half of the year as federal contracts normalize. Importantly, gross margins remain exceptionally strong relative to software peers (subscription margins above 90%), billings growth has reaccelerated to 25% and now exceeds revenue and ARR growth, and free cash flow continues to outpace EBITDA by more than 30% thanks to low capex, favorable working capital dynamics, and R&D tax credits— underscoring CLBT’s pristine quality of earnings.

While incremental margin guidance still looks uneven, with unusual Q3 weakness implied before a sharp Q4 rebound, we suspect management is sandbagging and expect upside as one-time FedRAMP expenses roll off. With its recurring revenue base, highly differentiated technology, and improving operating leverage, Cellebrite looks well positioned to re-accelerate into 2026. We view this quarter as one that successfully reset the bar, re-establishing a credible base case with multiple paths to renewed growth while offering investors one of the highest-quality free cash flow profiles in all of small-cap software safely sequestered in a staunch duopoly."

Cellebrite DI Ltd. (NASDAQ:CLBT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held Cellebrite DI Ltd. (NASDAQ:CLBT) at the end of the first quarter, which was 30 in the previous quarter. Cellebrite DI Ltd. (NASDAQ:CLBT) reported revenue of $113.3 million in Q2 2025, up 18% from Q2 2024, driven by subscription revenue growth of 21%. While we acknowledge the potential of Cellebrite DI Ltd. (NASDAQ:CLBT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Cellebrite DI Ltd. (NASDAQ:CLBT) and shared the list of best stocks under $20 to buy for the long term. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.