A Russian-owned phone-hacking vendor collapsed, and Cellebrite waits to inherit the vacuum
Federal charges killed Oxygen Forensics, a Russian-owned supplier of phone-cracking software to the Secret Service and Pentagon, and police in Europe are halting use too. Cellebrite, the Israeli market leader, is the heir in waiting, but its own cut forecast shows a foreign-entity permit slowing its cloud deals.
Vincent Jiang · 2 min read
A Russian-owned vendor collapsed inside the US government
On September 23, 2026, federal prosecutors charged Lee Reiber, Oxygen Forensics' chief executive, and Oleg Davydov, a Moscow co-owner, with conspiracy to commit wire fraud: the firm, they allege, sold phone-extraction software to the Secret Service, the Pentagon, the FBI and Homeland Security while hiding that five Russian nationals owned and controlled it 123. US authorities seized the company's website after the charges 1. For investors the fallout runs through Cellebrite, the Israeli market leader listed on Nasdaq as CLBT and the heir in waiting for the displaced contracts 146.
The Secret Service's National Computer Forensics Institute had awarded Oxygen a five-year contract in September 2024 with a $12 million ceiling 2. The agency discontinued the software in February 2026 over security risks, saying it ran only on air-gapped networks with no evidence of compromised data, while the State Department signed a new Oxygen contract in August, weeks before the arrests 1. British and European police agencies are now halting use, and the complaint does not allege the code contained backdoors 13.
The heir has a permit problem
Cellebrite sued Oxygen in 2015 and alleged then that its rival was Russian-controlled 1. Its Inseyets extraction app pauses the Apple+0.50% — Apple, up 0.50 percent today 72-hour reboot timer that police race against, and its users include Customs and Border Protection and the Pentagon 4. Immigration and Customs Enforcement, though, just bought a rival tool, GrayKey Preserve, from Magnet Forensics 4.
The vacuum cannot be booked yet. On August 13, Cellebrite reported second-quarter annual recurring revenue of $507.8 million, below its own $510–513 million projection, cut the full-year figure by about $15 million at the midpoint, replaced chief executive Tom Hogan with Shiv Ramji, and the shares fell 29% to $10.80 5. Management blamed "a foreign entity permit requirement, which is applied to cloud technology" for delaying deals 5. The same foreign-vendor scrutiny appears to sit on both sides of this trade.
Revenue has risen year over year for ten straight quarters; the Q3 guide asks the vacuum to show up
- Quarterly revenue
- Estimate
Data
| Quarterly revenue | |
|---|---|
| Q1 '24 | $89.58M |
| Q2 '24 | $95.71M |
| Q3 '24 | $106.86M |
| Q4 '24 | $109.05M |
| Q1 '25 | $107.55M |
| Q2 '25 | $113.28M |
| Q3 '25 | $126.03M |
| Q4 '25 | $128.82M |
| Q1 '26 | $128.3M |
| Q2 '26 | $131.14M |
| Q3 '26 guide (estimate) | $146.5M ($145–148M) |
The number that decides it
Revenue has still risen year over year for ten straight quarters 8. DA Davidson, a brokerage, reiterated a Buy rating and a $15 target on September 15, and the board has authorized a United States redomicile by the first half of 2027 67. Kaplan Fox, a plaintiffs' securities law firm, is investigating the August disclosure on behalf of investors 5.
The first receipt is the November 11 report, guided to $145–148 million of third-quarter revenue 6. The government that seized Oxygen's website is now the customer Cellebrite is waiting on 1.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
