What guidance did OneSpan's management provide for the next earnings period?

What does OneSpan do and what are its main business segments?

What were the key takeaways from OneSpan's earnings call?

Did OneSpan beat or miss consensus estimates last quarter?

What is the revenue and EPS growth rate for OneSpan year over year?

What is the market's earnings forecast for OneSpan next quarter?

What factors drove the changes in OneSpan's revenue and profit?

What is OneSpan's latest dividend and current dividend yield?

- **Software Dominance**: 80% of revenue from software, with ARR up 10% YoY to $180 million. Subscription revenue grows 12% YoY.
- **Strategic Acquisitions**: Nok Nok acquisition drives FIDO2 S3 product success, with 2 new logos in 4 months. ThreatFabric investment for 2026 growth.
- **Hardware Decline**: 16% YoY hardware revenue decline reflects secular shift to mobile authentication.
- **Cash Generation**: $17.5 million adjusted EBITDA (31% of revenue), $47 million YTD cash from operations.
- **2026 Vision**: Focused on FIDO2 adoption, ThreatFabric integration, and internal R&D to achieve Rule of 40 performance.

**【Management Opening】**
- Joe Maxa provided an overview of the call, emphasizing forward-looking statements and non-GAAP financial measures. The company highlighted its balanced capital allocation strategy, including shareholder returns and strategic investments.

**【CEO Commentary】**
- **Business Transformation**: 80% of revenue now from software, with ARR growing 10% YoY to $180 million. Hardware revenue decline (16% YoY) reflects secular shift to mobile-first authentication.
- **Strategic Initiatives**: 
  - Acquired Nok Nok Labs in June, adding FIDO2 S3 product; closed 2 new logos in 4 months, with pipeline for Q4.
  - Invested in ThreatFabric for mobile threat intelligence, enabling sales enablement for 2026 growth.
  - Hired CTO Ashish Jain to enhance R&D and internal development.
- **Financial Highlights**: 
  - Q3 revenue $57.1 million (+1% YoY), driven by 12% subscription growth.
  - Adjusted EBITDA $17.5 million (31% of revenue), cash from operations $11 million.
  - Returned $20 million to shareholders via buybacks and dividends.

**【CFO Financial Commentary】**
- **Revenue**: Q3 total revenue $57.1 million (+1% YoY), with subscription revenue up 12% YoY. Security ARR +11%, digital agreements ARR +8%.
- **Margins**: Gross margin 74% (flat YoY). Operating income $8.2 million (-28% YoY) due to Nok Nok acquisition costs and share-based compensation.
- **Cash Flow**: $85.6 million cash on hand, generating $11 million in Q3 and $47 million YTD.
- **Guidance Update**: 
  - Full-year revenue $239-241 million (-3% YoY), software/services $190-192 million (+3-4%), hardware $49-50 million (-16%).
  - ARR $183-187 million (+13% YoY), adjusted EBITDA $72-76 million.

**【Q&A Highlights】**
- **Revenue Guidance**: Lowered due to hardware decline ($2M) and slower net expansion in EMEA/APAC. Software growth (80% of business) expected to offset hardware decline.
- **FIDO2 Growth**: S3 product sees early success; FIDO2 adoption expected to accelerate in 2026, with Japan and U.S. as key markets.
- **Competitive Position**: Strong market share in mobile authentication; new products (e.g., FIDO2 keys) enhance competitive advantage.
- **2026 Outlook**: ThreatFabric partnership and internal R&D investments position for future growth, targeting Rule of 40 performance.

OneSpan Inc. (OSPN) Q3 2025 Earnings Call Transcript

- **Acquisition Boost**: Nok Nok Labs adds $8 million ARR, driving 8% YoY growth to $178 million. Subscription revenue surges 22%.
- **Profitability Strength**: Adjusted EBITDA margin 29.5%, H1 EBITDA $41 million (33% of revenue). Cash reserves $93 million.
- **Guidance Update**: Full-year ARR raised to $186-$192 million, reflecting acquisition and pipeline momentum.
- **Key Risks**: $3 million ARR impact from customer contractions, hardware revenue decline expected to ease in Q4.
- **Growth Focus**: North America expansion and FIDO2 adoption to drive 2026 growth, targeting Rule of 40 performance.

**【CEO Summary Section】**
- **Acquisition and Product Expansion**: Acquired Nok Nok Labs to add FIDO2 software capabilities, complementing existing hardware solutions. ARR increased by $8 million from this acquisition.
- **Revenue Performance**: Q2 ARR reached $178 million (8% YoY growth), with subscription revenue up 22% driven by security solutions. Security hardware revenue declined due to banks shifting to mobile-first authentication.
- **Go-to-Market Strategy**: Expanded North America sales team for security business, targeting low-single-digit market share growth. Latin America showed strong bookings in Q2.
- **Profitability**: Adjusted EBITDA of $18 million (29.5% of revenue) and $41 million for H1, highest on record. Maintained strong cash flow, ending Q2 with $93 million in cash.
- **Shareholder Returns**: Paid $10 million in dividends for H1 and approved another $0.12 per share dividend for Q3.

**【CFO Financial Commentary】**
- **Financial Highlights**: Q2 revenue $59.8 million (-2% YoY), gross margin 73% (vs. 66% YoY). Non-GAAP EPS $0.34, up from $0.31 YoY. ARR guidance updated to $186-$192 million (vs. prior $180-$186 million).
- **Segment Performance**: Security Solutions ARR +9% YoY, Digital Agreements ARR +4.5% YoY. Security subscription revenue +39%, offset by hardware decline.
- **Balance Sheet**: $92.9 million cash, $100 million credit facility for M&A. Q2 operating cash flow $6.2 million, used for dividend ($4.6 million) and Nok Nok acquisition ($12.1 million).
- **Guidance**: Full-year revenue $245-$251 million, ARR $186-$192 million, adjusted EBITDA $72-$76 million.

**【Q&A Key Highlights】**
- **Competitive Position**: Nok Nok acquisition positions for cross-sell into existing 1,000+ customers, with FIDO2 adoption expected to accelerate in 2026.
- **ARR Growth Drivers**: North America security team expansion and Latin America pipeline strength. Q3-Q4 ARR growth expected to improve from H1 contraction.
- **Risks**: $3 million ARR impact from two large customer contractions. Hardware revenue headwinds persist, but Q2 hardware revenue similar to Q1.
- **Pipeline**: Q2 bookings strong, with Q3-Q4 typically larger closing quarters. EMEA weakness offset by Americas and APAC growth.

OneSpan Inc. (OSPN) Q2 2025 Earnings Call Transcript

- **Record Profitability**: Q1 EBITDA hits $23M (36% of revenue), up 15% YoY, driven by software growth and cost control.
- **Subscription Momentum**: ARR +9%, digital agreements revenue +13%, security +7%, despite hardware decline.
- **Cash & Dividends**: $29M cash from ops, $105M cash on hand, first $0.12/share dividend paid.
- **Guidance Confidence**: Full-year targets reaffirmed amid macro uncertainty, with $1M tariff risk flagged.
- **Strategic Focus**: M&A prioritized for security innovation; FX and tariff impacts monitored but deemed manageable.


**【CEO Summary Section】**
- Q1 2025 ARR grew 9% to $168.4M, driven by expansion contracts in security and digital agreements. Subscription revenue rose 9%, with digital agreements up 13% and security up 7%.
- Record adjusted EBITDA of $23M (36% of revenue) reflects improved profitability. On-time renewal rate dipped slightly due to two large contracts delayed to Q2.
- Hardware revenue decline offset by software growth; sunsetted products caused $1.4M headwind in Q1, expected to taper in 2026.
- Strong cash generation ($29M from operations) and first quarterly dividend of $0.12/share highlight capital return strategy.

**【CFO Financial Commentary】**
- Q1 revenue $63.4M (-2% YoY), with digital agreements up 9% and security down 5%. Gross margin 74% (flat YoY) due to favorable product mix.
- GAAP net income $17.2M ($0.37/share), up 15% YoY. Non-GAAP EPS $0.45, beating expectations by $0.06.
- Security segment operating margin 61%, digital agreements improved to 22% (vs. -2% last year). 
- Full-year guidance reaffirmed: revenue $245-251M, ARR $180-186M, EBITDA $72-76M. Watch for $1M potential tariff impact on hardware.

**【Q&A Key Takeaways】**
- **Tariff Impact**: <5% of hardware revenue exposed to tariffs; EMEA hardware sales dominate, no immediate EU tariff risk.
- **ARR Growth**: Q1 net new ARR $0.7M; expect mid-single-digit Q2 growth, accelerating in H2.
- **Capital Allocation**: $0.12 quarterly dividend continues; M&A focus on security solutions to enhance bank customer value.
- **FX Sensitivity**: Euro/USD weakening benefits revenue but offsets European cost increases; net positive impact expected.
- **Customer Behavior**: No macro slowdown observed; Q1 bookings on track, Q2 pipeline strong despite geopolitical noise.


OneSpan (OSPN)-1 May 25-2025 Q1 Earnings call transcript

- **Record Profitability**: 2024 EBITDA $73 million (30% of revenue), ARR $168 million (+8.5%). Q4 gross margin 74%, up 500 bps YoY.
- **Subscription Surge**: Subscription revenue +32% to $139 million, 57% of total. Digital Agreements +28% annually, Security +33%.
- **Cash Dominance**: $56 million annual cash flow vs. $11M outflow in 2023. $83 million cash on hand, first dividend paid in Q1 2025.
- **2025 Outlook**: Revenue $245-251 million, ARR $180-186 million. Double-digit subscription growth, 106-108% NRR, modest cash flow improvement.

**【CEO Summary Section】**
- **Record Financial Performance**: Q4 2024 adjusted EBITDA reached $20 million (32% of revenue), with full-year EBITDA at $73 million (30% of revenue). ARR grew 8.5% to $168 million, driven by 12% growth in Digital Agreements and 6% in Security. Subscription revenue surged 32% to $139.4 million, accounting for 57% of total revenue.
- **Cash Generation Excellence**: Generated $56 million in cash from operations annually, up from a $11 million net outflow in 2023. Ended 2024 with $83 million in cash, a $40 million increase year-over-year. Initiated quarterly dividends, with the first payment in Q1 2025.
- **Strategic Priorities**: Transitioning to higher-margin software solutions, with 74% gross margin in Q4 (up from 69.1% in 2023). Focused on Digital Agreements expansion and Security's authentication solutions, targeting Rule of 40 performance.

**【CFO Financial Commentary】**
- **Revenue Breakdown**: Q4 2024 revenue $61.2 million (-3% YoY), with Security software/services up 20% and Digital Agreements up 8%. Full-year revenue $243.2 million (+3%), driven by 14% Security growth and 20% Digital Agreements expansion, offset by 23% hardware decline.
- **Profitability Metrics**: Q4 GAAP net income $0.72 per share vs. $0.01 in 2023. Non-GAAP EPS $0.24 vs. $0.19. Full-year GAAP net income $1.46 per share vs. a $0.74 loss. Gross margin improved to 71.8% (2023: 67.1%).
- **2025 Guidance**: Revenue $245-251 million, ARR $180-186 million, adjusted EBITDA $72-76 million. Expect double-digit subscription growth, with hardware decline continuing due to mobile-first banking trends.

**【Q&A Highlights】**
- **Hardware Decline Context**: Security hardware revenue fell 36% Q4 (-23% annually), driven by EMEA/Asia banks adopting mobile-first policies. 2025 guidance factors in ongoing hardware decline and FX headwinds (40% revenue in euros).
- **New Logo Growth**: Digital Agreements sees expansion through new logos and renewals. Security focuses on multiyear term deals and on-time renewals (up 700 bps YoY). Workforce authentication via channel partners targets new logos.
- **M&A Strategy**: Open to targeted acquisitions for value-added technologies, not revenue-driven. 2025 investments in Security R&D and channel expansion expected to modestly impact cash flow growth.
- **Net Retention Rate**: 2025 NRR expected within 106-108% range, reflecting stable customer expansion despite end-of-life product impacts.

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