OSPN

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 4:30 p.m. ET VP of Investor Relations - Joe Maxa Chief Executive Officer - Victor Limongelli Chief Financial Officer - Jorge Martell Need a quote from a Motley Fool analyst? Email [email protected] Operator: Good day and thank you for standing by. Welcome to the OneSpan Second Quarter 2026 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Joe Maxa, VP of Investor Relations. Please go ahead. Joe Maxa: Thank you, Operator. Hello, everyone. Thank you for joining the OneSpan Second Quarter 2026 Earnings Conference Call. This call is being webcast and can be accessed on the Investor Relations section of OneSpan's website at investors.onespan.com. Joining me on the call today is Victor Limongelli, our Chief Executive Officer; and Jorge Martell, our Chief Financial Officer. This afternoon, after market close, OneSpan issued a press release announcing results for our second quarter of 2026. To access a copy of the press release and other investor information, please visit our website. Following our prepared comments today, we will open the call for questions. Please note that statements made during this conference call that relate to future plans, events, or performance, including the outlook for full year 2026 and other long-term financial targets are forward-looking statements. These statements involve risks and uncertainties and are based on current assumptions. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements. I direct your attention to today's press release and the company's filings with the U.S. Securities and Exchange Commission for a discussion of such risks and uncertainties. Also note that certain financial measures that may be discussed on this call are expressed on a non-GAAP basis and have been adjusted from a related GAAP financial measure. We have provided an explanation for and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures in the earnings press release and in the investor presentation available on our website. In addition, please note that all growth rates discussed on this call refer to a year-over-year basis unless otherwise indicated. The date of this conference call is August 4, 2026. Any forward-looking statements and related assumptions are made as of this date. Except as required by law, we undertake no obligation to update these statements as a result of new information or future events or for any other reason. I will now turn the call over to Victor. Victor Limongelli: Thank you, Joe. Hello, everyone. Thank you for joining us today. We had a strong second quarter, including subscription revenue growth of 11% and solid profitability with an adjusted EBITDA margin of 28%. Before reviewing our results in more detail, I'd like to spend a few minutes discussing our recently launched DigipassONE authentication platform, which represents an important milestone in OneSpan's evolution. DigipassONE unifies the innovations from our Nok Labs and Build38 acquisitions with OneSpan's existing capabilities, delivering a single integrated platform solution. DigipassONE includes 4 components: DigipassONE Authenticate, DigipassONE Verify, DigipassONE Protect and DigipassONE Insights. First and foremost, DigipassONE Authenticate builds on the foundation of the world's broadest suite of authentication functionality, including passkeys, FIDO2 security keys, hardware tokens, mobile authenticators and software authenticators, to deliver secure phishing-resistant login and transaction signing. Banks and other high-value, high-trust customers gain the flexibility to support different users, devices and authentication preferences through a unified platform. DigipassONE Verify expands the platform with our new capabilities for verifiable credentials and digital wallets. Verifiable credentials are designed to improve onboarding, authentication and trust by enabling cryptographically secure and tamper-proof identity verification. DigipassONE Protect strengthens the offering with our mobile application shielding technology. Delivered via both SDKs and post-compilation app wrapping, it protects mobile apps against tampering, abuse and runtime threats, promoting reliability and trustworthiness for users. Last but not least, DigipassONE Insights ties it all together with telemetry and analytical insights across authentication flows and application protection signals so that customers can better react to imminent threats or challenging operating environments. Looking ahead, over the next few years, we expect consumers to begin using agents to conduct banking and other high-value transactions, and we further expect that the development of this new channel for customer interaction will augment, not replace, the existing channels of in-person, online and mobile. In other words, in the future, banks will continue to engage with their customers across branches, websites and mobile apps while adding a new category of agent-driven banking interactions. DigipassONE provides the foundation to help banks and other high-value, high-trust businesses authenticate customers, verify intent, and protect transactions across both existing and emerging channels. We see the shift to agentic-driven interactions in the future as an opportunity to extend our offering and further strengthen our value to our customers. Stepping back, the launch of DigipassONE is a key milestone in a broader platform strategy that strengthens our ability to innovate, deepen customer relationships, address new market opportunities and support long-term growth. Turning to our Digital Agreements business, where we focus on delivering secure, seamless agreement workflows purpose built for financial services and other highly regulated industries. We believe our combination of white-labeled e-signatures, identity verification and workflow automation provides a meaningful differentiator in the market. In addition, we are investing in AI-enabled capabilities designed to help customers improve efficiency, gain deeper insights from agreement workflows, deliver a better end-user experience, seamlessly integrate with agentic workflows and simplify deployment within existing environments. Turning to our results. As mentioned, we had a solid second quarter, including generating $17 million of adjusted EBITDA or 28% of revenue. We ended the second quarter with annual recurring revenue of $190 million, up 7% year-over-year. Total Q2 revenue grew 1% to $60.5 million, and second quarter subscription revenue grew 11% to $47 million and accounted for 77% of total revenue, up from 70% in last year's Q2. Both business units continued to be solidly profitable at the division level, supporting our Board's commitment to a balanced capital allocation strategy that considers shareholder returns, organic investment and targeted M&A. In the second quarter, we returned almost $8 million to shareholders through dividends and share repurchases. And on an aggregate basis over the last four quarters, the total return to shareholders exceeds $40 million or over $1 per share. The Board has also approved a quarterly dividend of $0.13 per share to be paid in the current quarter, and we'll continue to evaluate additional share repurchase opportunities. In summary, we continue to make progress in building a stronger foundation for future growth. We have expanded our capabilities through targeted acquisitions and internal innovation, both of which are evidenced in the launch of DigipassONE. We remain focused on serving our customers now and investing for the future in order to be able to continue delivering value to them for years to come. With that, I'll turn the call over to Jorge. Jorge Martell: Thanks, Victor, and good afternoon, everyone. I'm very pleased to report another strong quarter and continued progress in building a solid foundation for growth. I'm particularly excited about our recent launch of DigipassONE, our platform strategy built to help customers modernize authentication and address other security needs without disrupting existing systems, user experience or business operations. Turning to our results. Annual recurring revenue, or ARR, increased 6.7% year-over-year to $189.7 million, driven by expansion of existing customer contracts, new logos and the acquisition of Build38. Our net retention rate, or NRR, was 103%. Q2 revenue was $60.5 million, an increase of 1% compared to last year's second quarter, driven by 11% growth in subscription revenue, partially offset by a decline in hardware revenue due to the fact that significant hardware revenue had been pulled forward into Q1, which we discussed with you last quarter, as well as a decline in perpetual maintenance revenue as customers continue to move to term licenses. For the quarter, as Victor mentioned, subscription revenue increased to 77% of total revenue, up from 70% in the prior year quarter. While hardware and perpetual maintenance revenues accounted for a combined 23% of total revenue as compared to 30% in last year's Q2. Gross margin was 73.6% compared to 73.5% in Q2 of last year. GAAP operating income was $8.7 million compared to $10.5 million in Q2 2025. The year-over-year change primarily reflects increased operating costs related to our recent acquisitions, including headcount, as well as certain cost-related go-to-market leadership and other organic investments. GAAP net income per share was $0.18 compared to $0.21 in the second quarter of last year. Non-GAAP net income per share was $0.30 compared to $0.34 in last year's Q2. Adjusted EBITDA and adjusted EBITDA margin were $16.9 million and 27.9%, respectively. This is compared to $17.6 million and 29.5% in the same period last year. Next, I will discuss the financial results for our 2 business divisions starting with Cybersecurity. Cybersecurity ARR grew 7.4% year-over-year to $123 million, inclusive of the $3 million headwind we discussed last quarter and the acquisition of Build38. Revenue decreased 7.5% to $40.9 million. Subscription revenue grew 2.5% to $27.2 million, driven by customer expansion contracts, new logos as well as revenue from our acquisitions of Nok and Build38, partially offset by lower year-over-year multi-year term license revenue and lower past-due renewal catch-up revenue this quarter compared to last year's second quarter as we continue to improve our on-time renewal performance. As noted, hardware and perpetual maintenance revenue declined as expected. Gross margin for the Cybersecurity division was 73% compared to 74% in the prior year quarter, primarily reflecting incremental third-party license costs and incremental amortization of capitalized software costs from the Build38 acquisition. Operating income was $13.8 million or 34% of revenue compared to $19.8 million or 45% of revenue in last year's Q2. The year-over-year change was driven by the differences in revenue and gross margin just discussed, an increase in operating expenses from acquired companies and increased organic investments. Now turning to Digital Agreements. ARR grew 5.3% year-over-year to $66.7 million. Revenue grew 25.2% to $19.5 million, driven by strong overage revenue, expansion of renewal contracts and new customer additions. We are encouraged by the strong overage revenue because it is a positive indicator of transaction volume growth, which often results in expansion contracts with existing customers due to higher utilization rates. We expect additional overages in the third quarter of 2026 but not to the same extent as in Q2. As a reminder, overages are not included in ARR or NRR. Gross margin improved to 74.7%, up from 71.4% in the prior year period, primarily reflecting higher revenue, including overage revenue. Operating income was $7 million or 35.7% of revenue compared to $2.9 million or 18.4% of revenue in the same period last year. The strong improvement in operating income was primarily driven by revenue growth, higher gross margin and a modest decline in operating expenses, primarily reflecting higher internal software capitalization costs. Turning to our balance sheet. We ended the second quarter with $43.3 million in cash and cash equivalents and $5 million outstanding under our credit facility compared to $49.8 million in cash and cash equivalents and no outstanding debt at the end of the first quarter. During the quarter, our primary cash outflows, including $4.8 million for our quarterly dividend, $2.9 million to repurchase approximately 230,000 shares of common stock and $3 million for capitalized software development costs. Operating cash flow was a modest outflow of $0.1 million, primarily reflecting normal net working capital fluctuations. By geographic region, revenue in the second quarter of 2026 was 46% from the Americas, 35% from EMEA and 19% from Asia Pacific compared to 40%, 39% and 21% from the same regions in the second quarter of 2025, respectively. The year-over-year changes in revenue by region primarily reflect growth in digital agreements and cybersecurity software in the Americas, which is consistent with our investment strategy and plan; lower cybersecurity hardware, and software revenue in EMEA partially offset by growth in digital agreements; and lower hardware revenue in Asia Pacific, partially offset by an increase in cybersecurity software. Now turning to some modeling notes and our outlook. We are pleased with our second quarter results and the progress we've made in positioning the company for long-term growth. For the full year 2026, we are increasing our revenue guidance primarily to reflect higher volumes and consumption in our e-signature business that is expected to result in incremental contract overages, along with an increase in expected hardware revenue in the second half of the year, primarily Q4, due to increased hardware bookings in the first half of the year as compared to our plan. Our current hardware revenue forecast calls for about 1/3 of the second half hardware revenue to be recognized in Q3, which is consistent with the last couple of years showing Q3 as the seasonally lowest of the 4 quarters, followed by a much stronger fourth quarter. More specifically, for the full year 2026, we expect total revenue to be in the range of $248 million to $252 million as compared to our previous guidance range of $244 million to $249 million. We expect software and services revenue to be in the range of $202 million to $204 million as compared to our previous guidance range of $201 million to $204 million. We expect hardware revenue to be in the range of $46 million to $48 million as compared to our previous guidance range of $43 million to $45 million. We expect ARR to be in the range of $194 million to $198 million, and we expect adjusted EBITDA to be in the range of $67 million to $71 million as compared to our previous guidance range of $64 million to $68 million. That concludes my remarks. I will now turn the call back to Victor. Victor Limongelli: Thanks, Jorge. To recap, we are pleased with our second quarter results and the progress we continue to make across the business. We are serving our customers with mission-critical solutions, investing in areas where we see meaningful growth opportunities and maintaining the financial discipline that enables us to return capital to shareholders. We believe OneSpan is becoming a stronger and more focused company, and we remain committed to creating long-term value for our customers and shareholders. Jorge and I will now be happy to take your questions. Operator: Our first question comes from Gray Powell from U.S. Bank. Gray Powell: Maybe a couple on my side and more of a high-level question, I guess. So just thinking out like over the next year or 2, as hardware becomes a smaller component of the business, how should we think about the potential for growth to improve on a sustainable basis? And then just more specifically, what are like the 2 or 3 things that need to happen for OneSpan to sustainably get revenue growth back into the, call it, mid- to high single digits on an organic basis? Victor Limongelli: Yes, thanks, Gray. So I think you're familiar with this. We've certainly talked about it in the past, and you can see it in the numbers. Over time, our software business has been growing, and we had an offset, a negative offset from the hardware business for quite some time. And we felt like if we could get the hardware business stable, maybe have some revenue coming from the newer security keys as well as stabilization in the overall hardware business, that, that growth would show up -- overall growth would show up as a result of the software growth. So we've seen -- you see in the subscription revenue numbers. You see it in the ARR numbers. We've been having solid software growth, and we expect that to continue. Obviously we're not giving guidance for next year, but we have some exciting things happening in terms of our product portfolio, the new DigipassONE platform, and we have emerging technologies with DigipassONE Verify as well, so -- as well as new hires that we've announced on the go-to-market side, new head of marketing, new channel leader, et cetera. So we are taking all those steps to build for additional growth and get those targets that you're talking about. Gray Powell: Okay. That's helpful. And then just, I guess, a separate question. So look, I know DigipassONE has only been out a couple of weeks. Anything you can say on early feedback or customer interest? And then just trying to think through like what kind of ASP uplift you think that could create for the platform and the potential for net retention rates to improve off of current levels. Victor Limongelli: Yes, so if you think about the platform, we had a very strong authentication offering, which we strengthened considerably about a year ago, a little over a year ago when we bought Nok and added the passkey capability. So we have that strong authentication platform, and we have been providing app shielding, what we're calling DigipassONE Protect for some time, but now we own the technology with the acquisition of Build38. So those are cross opportunities going to all the banks that we have and adding app shielding and a potential new capability -- not a potential, a new capability that we're developing, DigipassONE Verify. So those are cross opportunities. If you think about how to increase revenue growth rates, you're either selling existing things to new customers or new things to existing customers or new or existing things to new customers as well, but the easiest path there is going to be a cross-sell, is to sell new things to existing customers. And that's what we're trying to do, to drive up the attach rate with DigipassONE Protect, to start down the path of an attach rate with DigipassONE Verify since that's new. And both of those give us an opportunity because we do have this great customer base built out over many years, and that's where we see the most straightforward way to increase the software growth rates. Operator: Our next question comes from Catharine Trebnick from Rosenblatt. Catharine Trebnick: You frame the agent-driven interactions as incremental in the channel. I know you just released this product. So any specific use cases that your marketing team has identified that you're going after, like high-value payments, dispute resolution? And then what are you actually seeing in the budget for '26? Or should we really think of this more like a '27 item? And then Gray already grabbed my question on the ASP. Victor Limongelli: So Catharine, to clarify, are you asking about DigipassONE Verify? Catharine Trebnick: Yes. Victor Limongelli: Yes, so that's a new capability. We're doing POCs with customers in the second half of the year. We released an early release version of that in June, and we expect to be learning a lot more about budgets as we go through the process. Catharine Trebnick: But... Victor Limongelli: I think you know this, but in general -- oh, go ahead. Sorry. Catharine Trebnick: No, no, I'm just trying to figure out what use cases you'd be targeting with that and how different that is from what you're currently selling. Victor Limongelli: So if you think about what it's doing, there is a European digital identity regulations. The countries have to have wallet specifications done by the end of the year. Obviously, that's going to be many, many different wallets. You have Google and Apple as well so -- and then banks are going to have to accept them by the end of '27. So we see this as just such a great complement to our authentication offering because people are going to, in a cryptographically tamper-proof way, prove their identity, which is obviously super important in onboarding and in general, in authentication. So we see this as an add-on that a lot of banks, well, first of all, in Europe are going to be -- they're going to be regulatory drivers behind it, but also in other markets, it's going to be a super helpful way to make for more secure interactions with your customers. Now in terms of budgets for it, there are regulatory drivers in '27. Most of our, probably over half of our bookings come between September and Labor Day and the end of the year. So we're heading into our busy season in terms of sales. And I would say, we don't have a clear read on 2027 budgets from our customers yet because we're focused, as you might imagine, very much on closing 2026 business. But the POCs and the interest we're seeing from customers are a good sign. Operator: Our next question comes from Erik Suppiger from B. Riley Securities. Erik Suppiger: Congrats on a good quarter and getting DigipassONE out. Just following up on Catharine's question. What adoption -- what are the use cases for banks that are using AI agents for banking? And then I'm just curious on the Digital Agreements side, was the overage associated with a particular account? Or is this more of a broader trend? It seemed like it was a particularly strong quarter and you're talking about some strength in Q3. So what's driving that? Victor Limongelli: Yes, so I'll let Jorge answer the overage question, but let me talk about AI agents. So what we believe will occur -- so if you think about mobile banking apps, the most common activities that are undertaken by customers are things that are pretty straightforward, checking their balance, sending money to a friend or a payment for something, monitoring transactions that have hit or not hit their account. And we think that agents will do, not all of it, right? I think this is going to be a new channel for banks, not a -- everything will happen with agents. So if you fast forward, 4 or 5 years, then banks are interacting with customers in their physical branches. Some people still go into those, a few people at least. Through websites, on a laptop or desktop, through a mobile banking app, which is very, very common today, but also through agentic workflows. Now, the ability for a bank to accept those agentic workflows, for a consumer to have an agent that they use to hit multiple different accounts and for the bank to be able to authenticate that this agent is authorized to act on behalf of this consumer and to verify intent, there's work to be done on those things. But I think that channel is absolutely coming. And the more -- one of the things that we offer to banks and other high-trust, high-value customers is this breadth of offering. So it's not -- we're not offering just passkeys or just protection for your mobile banking app, but across the ways that you interact with your customers, you don't need multiple vendors for this consumer -- customer interaction. You can use OneSpan and cover -- well, we don't cover branches, I guess, but you can cover all of the digital channels. Jorge Martell: Yes, I can jump in and address the Digital Agreements overage question, Erik. Thanks for that question. So look, I think we're pretty happy in terms of how DA performed for the quarter, 25% growth. Even if you exclude the overages, which were about year-over-year higher by $2-and-change million, you still get to a growth, Erik, of double digit, 11.3%, which is pretty encouraging. And again, when you think about -- take a step back and think about how are these overages generated. They're generated because our clients are overutilizing our -- the volume of transactions they committed, which is a good thing. Arguably, you can think about overages as a leading indicator for ARR, if you would, because often happens that overages then translate into higher expansion contracts now part of ARR. At this point, if it's an overage, it's not part of ARR. So it's not part of NRR and all those metrics but -- so you can think about overages as a leading indicator for ARR and then a leading indicator for revenue. So we feel good about that, obviously happy with the performance. And yes, it did come from, I would say, a couple of customers primarily, Erik. We normally have a run rate of overages for the full year, I'll talk full year now, probably about $1 million to $1.5 million. I think this year, we're obviously going to exceed that amount. For the second half of the year, it's going to be much less than we recognized so far in the first half, but nonetheless, we feel good about overages. We like overages not only because it is revenue, but it is a leading indicator for activity in our platform. Erik Suppiger: Okay. And then real quick on -- one last one on the hardware. It looks like you're looking for a pretty strong second half. Is that driven by FIDO2? Or is there anything that's incrementally picking up in the second half within the hardware? Jorge Martell: Yes, we -- I can add. Victor Limongelli: Go ahead, Jorge. Go ahead. Jorge Martell: Sorry, just real quickly. So yes, so we increased our guidance for hardware from $44 million midpoint to now $47 million, Erik. The primary reason for that is, I guess, a couple things. One is we saw better activity or higher activity compared to our plan bookings in this case. In the first half of the year, which gives us confidence in terms of when these orders are going to get delivered. The earlier we have the bookings, the higher likelihood that those bookings will get delivered in year. And so for that reason, we increased our -- have a better visibility and then increased our guidance as well. Go ahead, Vic. Victor Limongelli: Yes, I was going to say, the FIDO2 security keys, we see an avenue for that even within banking to make for easier login. Primarily -- not exclusively but primarily in a corporate banking market, where hardware is a little bit stronger in corporate banking than in consumers, consumers tend to use a mobile banking app. Many, many corporate customers, if they're a treasury department or something like that are doing their online banking in front of a big screen, where a hardware device is not inconvenient. They keep it in their desk drawer and then they use it when it's time to login and time for transaction signing as well. So we see the FIDO token opportunity there as well, looking ahead to '27, which is one of the reasons we feel good about -- well, better than we have in the past about hardware, about being able to have that be a flattish business rather than a declining business. Obviously, we haven't given '27 guidance, but it's encouraging, what we've seen in '26 on the hardware side. Erik Suppiger: Okay. And it sounds like it's finally the FIDO2 is offsetting the decline in the legacy hardware products. Is that right? Victor Limongelli: It's promising on the banking side overall and getting hardware to a -- it was quite a large business a decade ago. So getting it to a flat to potentially even growing if things go really well, business really helps the overall number. Even though, of course, software is the overwhelming majority of our business, it helps to not to have a decline in a segment. Operator: Our next question comes from Rudy Kessinger from D.A. Davidson. Please go ahead. Rudy Kessinger: Just one for me. What did renewals look like in the quarter? I know the overage is good. The hardware looks like it's better, but if I look at ARR, if you take a step down quarter-by-quarter, your expansion rate stepped down a couple points quarter-over-quarter as well. So what do renewals look like? Or any color on the quarter-over-quarter declines in those metrics? Jorge Martell: Yes, I can give you some commentary. Rudy, thanks for the question. So look, I think GRR metrics for the businesses were, I'd say, relatively consistent. I think Digital Agreements was in the 93-ish percent, and the GRR for security business was in the kind of 86-ish percent, Rudy, so relatively consistent, within the band. As we mentioned, sequentially, we were going to have a hit of about $3 million just sequential Q1 to Q2, and that's already part of these numbers. As we go into the second half of the year, we expect to see sequential increases on both DA and security but overall, I think I would say healthy renewal rates. We're getting more proactive. The team is doing a fantastic job at being proactive, reaching out to customers and trying to secure those renewals as early as possible. And it gives us visibility into the timing. And one of the things that you also notice in my prepared remarks, Rudy, is that, year-over-year, we did have less, call it, catch-up revenue from past-due renewal just year-over-year. And that's also an indication that as we get better at renewals and those renewals are getting timely renewed, then you're not going to see this incremental lumpiness, if you would, because renewals are getting close to past due. And so that's also another sign that the team is doing great on renewals and we're improving those metrics. Operator: Our next question comes from Anja Soderstrom from Sidoti. Anja Soderstrom: Most of them have been addressed already, but I'm just curious in terms of M&A. You've been quite acquisitive over the past couple of years. What's your appetite for more acquisitions? And what would you be looking for? Victor Limongelli: Well, we're certainly -- as you can tell by the last 13 or 14 months, we're certainly open to the idea if it fits into our product strategy. And you can see, really happy with the way we were able to take those 2 and fold it into our overall offering with DigipassONE. You can see how that strengthens the overall business. We're going to continue to be opportunistic and look for -- the term we've used is targeted M&A. We want to be prudent in how we do it and not reckless. So we're definitely going to be looking for things that fit in well and that makes sense for us. And then the other thing, really kudos to our team and the teams from Nok and Build38 that joined us because the integrations have done very well. We've been able to build a unified team, I think, and retain talent, and all those things have been good proof points for us to make us continue to think that's a viable strategy. In terms of what we would be looking for, I don't want to disclose too much in that area, but you can see, I think, strategically where we're headed. So things that fit into our overall strategy, we'll continue to look for them. Anja Soderstrom: And how do you see the market has developed over the past couple of months? Has it been -- the valuations come down or come up? Or what do you... Victor Limongelli: Well, it's not like we're -- it's not like -- I don't know if we're the right person to ask on the month-by-month M&A market because we're looking, but we're not actively bidding every month on a business. Overall, I think we were very, very happy with the talent that we acquired and the technology we acquired with the deal in -- earlier this year in March with Build38 as well as last summer with Nok, and we'll continue to look. Anja Soderstrom: Okay. And also, I'm just curious about the update to your go-to-market leadership and marketing. How is that evolving? And when do you expect to see some tangible results from those changes? Victor Limongelli: Yes, I mean, look, we're already seeing results. I mean, the DigipassONE launch was -- I don't think would have gone as well or as smoothly without our new head of marketing. So the impact's already being felt. Channel and marketing are both super important. Revenue -- I think it's fair to say, if you think about a 9- to 12-month sales cycle for most of our customers and our deals, I think the impact's more in '27 than in '26 in terms of tangible revenue. But in terms of execution, we're already seeing an impact. Operator: This concludes the question-and-answer session. I would now like to turn it back to Joe for closing remarks. Joe Maxa: Thank you, everyone, for joining us today. We look forward to updating you again next quarter. Have a nice evening. Operator: Thank you for your participation in today's conference. This does conclude the program and you may now disconnect. 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This article first appeared on GuruFocus. Total Revenue: $60.5 million, up 1% year over year. Subscription Revenue: $47 million, up 11% year over year, representing 77% of total revenue. Annual Recurring Revenue (ARR): $189.7 million, up 6.7% year over year. Net Retention Rate (NRR): 103%. Gross Margin: 73.6%, compared to 73.5% in Q2 2025. GAAP Operating Income: $8.7 million, compared to $10.5 million in Q2 2025. GAAP Net Income Per Share: $0.18, compared to $0.21 in Q2 2025. Non-GAAP Net Income Per Share: $0.30, compared to $0.34 in Q2 2025. Adjusted EBITDA: $16.9 million, with a margin of 27.9%. Cybersecurity Division Revenue: $40.9 million, down 7.5% year over year. Cybersecurity ARR: $123 million, up 7.4% year over year. Cybersecurity Subscription Revenue: $27.2 million, up 2.5% year over year. Cybersecurity Gross Margin: 73%, compared to 74% in the prior-year quarter. Cybersecurity Operating Income: $13.8 million, or 34% of revenue. Digital Agreements Revenue: $19.5 million, up 25.2% year over year. Digital Agreements ARR: $66.7 million, up 5.3% year over year. Digital Agreements Gross Margin: 74.7%, up from 71.4% in the prior-year period. Digital Agreements Operating Income: $7.0 million, or 35.7% of revenue. Cash and Cash Equivalents: $43.3 million at end of Q2. Shareholder Returns: Returned almost $8 million in Q2 through dividends and share repurchases. Warning! GuruFocus has detected 6 Warning Signs with TRNS. Is OSPN fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. OneSpan Inc (NASDAQ:OSPN) reported strong second-quarter results with subscription revenue growth of 11% and an adjusted EBITDA margin of 28%, demonstrating solid profitability. The launch of the DigipassONE platform unifies authentication, verification, protection, and insights, creating cross-sell opportunities and strengthening the company's value proposition for banks. Digital Agreements revenue grew 25.2% year-over-year, driven by strong overage revenue, which serves as a leading indicator for future expansion contracts and ARR growth. The company raised its full-year 2026 revenue and adjusted EBITDA guidance, reflecting higher e-signature consumption and increased hardware bookings in the first half of the year. OneSpan Inc (NASDAQ:OSPN) returned nearly $8 million to shareholders in Q2 through dividends and share repurchases, with over $40 million returned over the last four quarters, highlighting a balanced capital allocation strategy. The company sees promising growth in the FIDO2 security key market, particularly in corporate banking, which could help stabilize the hardware business and reduce its drag on overall growth. Total revenue growth was modest at 1% year-over-year, as strong subscription growth was partially offset by declines in hardware and perpetual maintenance revenue. Cybersecurity division revenue decreased 7.5% year-over-year, impacted by lower multi-year term license revenue and reduced past-due renewal catch-up revenue. GAAP operating income declined to $8.7 million from $10.5 million in Q2 2025, reflecting increased operating costs from recent acquisitions and organic investments. The company's net retention rate (NRR) stepped down to 103%, and ARR saw a sequential decline, indicating some softness in expansion and renewal metrics. Operating cash flow was a modest outflow of $0.1 million in the quarter, primarily due to normal working capital fluctuations, which could raise concerns about cash generation. The company acknowledged that the impact of new go-to-market leadership and marketing hires on tangible revenue is more likely to be felt in 2027, given the 9-12 month sales cycle. Q: How should we think about the potential for growth to improve on a sustainable basis as hardware becomes a smaller component of the business, and what needs to happen to get revenue growth back into the mid- to high-single digits organically?A: Victor Limongelli (CEO) explained that the software business has been growing, but this growth has been offset by declines in the hardware business. If they can stabilize the hardware segment, potentially with revenue from newer security keys, the overall growth will reflect the software gains. He pointed to the solid subscription revenue and ARR numbers as evidence of this trend and highlighted the new DigipassONE platform, emerging technologies like DigipassONE Verify, and new go-to-market hires as steps to achieve those higher growth targets. Q: Can you provide any early feedback or customer interest on the newly launched DigipassONE platform, and what kind of ASP uplift or improvement in net retention rates could it create?A: Victor Limongelli (CEO) stated that the platform strengthens their authentication offering with passkeys from the Nok Nok acquisition and now owns the app shielding technology via Build38. He sees these as cross-sell opportunities to their existing large bank customer base. The easiest path to increasing revenue growth is selling new things (like DigipassONE Protect and Verify) to existing customers, which is their primary strategy to drive up attach rates and increase software growth rates. Q: Regarding agent-driven interactions, what specific use cases are you targeting, and should we think of this as a 2026 or 2027 budget item? How does this change your go-to-market strategy?A: Victor Limongelli (CEO) clarified that DigipassONE Verify is a new capability currently in POCs with customers in the second half of the year. He sees it as a complement to authentication, driven by European digital identity regulations requiring wallets by the end of 2026 and bank acceptance by the end of 2027. He noted that over half of their bookings come in the latter part of the year, so they don't have a clear read on 2027 budgets yet, but the POCs and customer interest are positive signs. Q: What are the use cases for banks using AI agents, and was the strong overage revenue in Digital Agreements tied to a particular account or a broader trend?A: Victor Limongelli (CEO) explained that agents will handle straightforward banking tasks like checking balances and sending money, creating a new channel alongside branches, web, and mobile. Banks will need to authenticate that an agent is authorized to act for a consumer and verify intent, which OneSpan's breadth of offerings can support. Jorge Martell (CFO) added that the overage revenue was driven by a couple of customers overutilizing their committed transaction volumes. He views overages as a leading indicator for future ARR expansion, noting that even excluding the $2 million-plus year-over-year increase in overages, Digital Agreements still grew 11.3%. Q: The hardware guidance for the second half is strong. Is that driven by FIDO2, or is something else incrementally picking up?A: Jorge Martell (CFO) noted they increased hardware guidance from a $44 million to $47 million midpoint due to higher-than-planned bookings in the first half, which gives better visibility for deliveries in the year. Victor Limongelli (CEO) added that FIDO2 security keys are an avenue for growth, particularly in the corporate banking market where hardware is more common. He sees this as a reason to believe the hardware business can be flattish rather than declining, as FIDO2 offsets declines in legacy products. Q: What did renewals look like in the quarter, and can you provide color on the quarter-over-quarter decline in ARR and net expansion rate?A: Jorge Martell (CFO) stated that gross retention rates were relatively consistent, with Digital Agreements around 93% and the security business around 86%. He mentioned the previously discussed $3 million sequential headwind from Q1 to Q2 is already reflected in the numbers. He emphasized that the team is being more proactive on renewals, which reduces the lumpiness of past-due catch-up revenue and provides better visibility into timing. Q: What is your appetite for more acquisitions, and what would you be looking for?A: Victor Limongelli (CEO) confirmed they remain open to targeted M&A that fits their product strategy, as demonstrated by the successful integration of Nok Nok and Build38 into DigipassONE. He emphasized being prudent and not reckless, and while he didn't disclose specific targets, he indicated they would look for opportunities that align with their overall strategic direction. Q: How is the update to your go-to-market leadership and marketing evolving, and when will you see tangible results?A: Victor Limongelli (CEO) said they are already seeing results, citing the smooth DigipassONE launch as a benefit of the new Head of Marketing. However, given the typical 9-12 month sales cycle, he expects the tangible revenue impact to be more significant in 2027 than in 2026, though execution improvements are already evident. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Launched DigipassONE, a unified authentication platform integrating Nok Nok Labs and Build38 acquisitions to provide phishing-resistant login, verifiable credentials, and mobile app shielding. Performance was driven by 11% subscription revenue growth, which now accounts for 77% of total revenue, reflecting a successful transition from legacy hardware and perpetual models. Digital Agreements growth of 25% was significantly bolstered by contract overages, which management interprets as a leading indicator of high transaction volume and future expansion potential. Strategic positioning is shifting toward 'agentic-driven' banking, with the platform designed to authenticate interactions between consumers' AI agents and financial institutions. The Cybersecurity division's operating income decline reflects deliberate increases in headcount and go-to-market investments following recent acquisitions. Management attributes the hardware revenue decline to a significant pull-forward of orders into Q1, though they see stabilization in the segment due to FIDO2 security key adoption. Raised full-year 2026 revenue guidance to $248 million–$252 million, primarily due to higher-than-expected consumption in the e-signature business and increased hardware bookings. Guidance assumes Q3 will be the seasonally lowest quarter for hardware revenue, followed by a significantly stronger Q4 based on existing first-half bookings. The company is conducting Proof of Concepts (POCs) for DigipassONE Verify in the second half of 2026, targeting 2027 regulatory drivers such as European digital identity mandates. Management expects to drive future software growth through cross-selling new app shielding and verification capabilities to their established global banking customer base. Capital allocation strategy remains balanced between organic investment, targeted M&A, and returning capital to shareholders via dividends and repurchases. Cybersecurity ARR included a $3 million headwind previously disclosed, though management expects sequential increases in the second half of the year. Gross margins in Cybersecurity were slightly pressured by incremental third-party license costs and amortization related to the Build38 acquisition. The company improved on-time renewal performance, resulting in lower 'catch-up' revenue compared to the prior year, which management views as a sign of operational health despite the revenue comparison impact. Internal software capitalization costs increased, which contributed to a modest decline in operating expenses within the Digital Agreements division. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management believes growth will accelerate as the software business continues to expand and the hardware segment stabilizes through new security key offerings. New go-to-market leadership in marketing and channels is expected to yield more tangible revenue impacts in 2027. Overages contributed over $2 million year-over-year; while expected to continue in Q3, they will likely be at a lower level than the Q2 peak. Management views these overages as a 'leading indicator' for future ARR, as high utilization typically leads to larger contract renewals. Victor Limongelli anticipates a new 'agentic' channel where AI agents perform routine banking tasks like balance checks and payments. OneSpan aims to be the primary vendor for banks to verify the intent and authorization of these agents across all digital channels. The company remains open to 'targeted M&A' that fits the product strategy, citing successful talent retention and technology integration from recent deals. Management declined to specify exact targets but emphasized a prudent, non-reckless approach to valuations.

Interested in Onespan Inc? Here are five stocks we like better. OneSpan raised its 2026 outlook after reporting second-quarter revenue of $60.5 million, adjusted EBITDA of $16.9 million and stronger e-signature and expected hardware demand. Full-year revenue guidance increased to $248 million–$252 million, while adjusted EBITDA guidance rose to $67 million–$71 million. Subscription revenue grew 11% to $47 million, reaching 77% of total revenue, while ARR increased 6.7% to $189.7 million. Digital agreements revenue rose 25.2%, offsetting a 7.5% decline in cybersecurity revenue and contributing to improved segment profitability. OneSpan launched the DigipassONE integrated authentication platform, combining passkeys, digital wallets, mobile protection and analytics. The company expects cross-selling opportunities with existing bank customers and is conducting customer proofs of concept for its Verify capability in the second half of 2026. Onespan (NASDAQ:OSPN) reported second-quarter 2026 revenue of $60.5 million, up 1% from a year earlier, as growth in subscription revenue and digital agreements partly offset lower hardware and perpetual-maintenance revenue. The company raised its full-year revenue and adjusted EBITDA outlook, citing stronger e-signature consumption and higher expected hardware revenue in the second half. Subscription revenue increased 11% year over year to $47 million and represented 77% of total revenue, compared with 70% in the prior-year quarter. Annual recurring revenue rose 6.7% to $189.7 million, while net retention was 103%. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Chief Executive Officer Victor Limongelli said the quarter included “solid profitability,” with adjusted EBITDA of $16.9 million, or 27.9% of revenue. The company also returned nearly $8 million to shareholders during the quarter through dividends and share repurchases, and its board approved a quarterly dividend of $0.13 per share. OneSpan highlighted the recent launch of DigipassONE, an integrated authentication and security platform incorporating technologies acquired through Nok Nok Labs and Build38 along with OneSpan’s existing offerings. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Limongelli said the platform includes four components: DigipassONE Authenticate, DigipassONE Verify, DigipassONE Protect and DigipassONE Insights. The offering combines authentication methods including passkeys, FIDO2 security keys, hardware tokens, mobile authenticators and software authenticators. It also includes verifiable credentials and digital-wallet capabilities, mobile application protection, and analytics from authentication and application-protection signals. The company said it sees future opportunities in agent-driven banking interactions, alongside existing branch, website and mobile-app channels. Limongelli said OneSpan expects banks will need tools to authenticate customers, verify intent and protect transactions as such interactions emerge. → Why Rare Earth Processing Could Be the Real 2027 Opportunity During the question-and-answer session, Limongelli said DigipassONE Protect and the newer DigipassONE Verify capability create cross-selling opportunities within the company’s established bank customer base. He said OneSpan released an early version of DigipassONE Verify in June and is conducting proof-of-concept work with customers during the second half of 2026. Limongelli also pointed to European digital-identity regulations, saying countries must complete wallet specifications by year-end and banks will need to accept such wallets by the end of 2027. He said the company does not yet have a clear read on customer budgets for 2027 because sales efforts remain focused on closing 2026 business. Cybersecurity revenue declined 7.5% to $40.9 million. Subscription revenue in the unit rose 2.5% to $27.2 million, supported by customer expansions, new customer wins, and contributions from the Nok Nok and Build38 acquisitions. The increase was partly offset by lower multiyear term-license revenue and lower pass-through renewal catch-up revenue than in the prior-year quarter. Cybersecurity ARR increased 7.4% to $123 million, including the Build38 acquisition and a previously disclosed $3 million headwind. Operating income in the division was $13.8 million, or 34% of revenue, down from $19.8 million, or 45% of revenue, a year earlier. Chief Financial Officer Jorge Martell attributed the decline to revenue and gross-margin factors, expenses associated with acquired companies, and increased organic investments. Digital agreements revenue climbed 25.2% to $19.5 million, driven by overage revenue, renewal-contract expansions and new customers. ARR in the segment grew 5.3% to $66.7 million. Operating income rose to $7 million, or 35.7% of revenue, from $2.9 million, or 18.4% of revenue, in the prior-year period. Martell said overage revenue was primarily generated by a couple of customers exceeding committed transaction volumes. He said overages are not included in ARR or net retention metrics but can indicate higher platform activity that may lead to future expansion contracts. The company expects further overages in the third quarter, though at a lower level than in the second quarter. Companywide gross margin was 73.6%, compared with 73.5% a year earlier. GAAP operating income was $8.7 million, down from $10.5 million, while GAAP earnings per share were $0.18, compared with $0.21. Non-GAAP earnings per share were $0.30, down from $0.34 in the prior-year quarter. At quarter-end, OneSpan had $43.3 million in cash and cash equivalents and $5 million outstanding under its credit facility, compared with $49.8 million in cash and no debt at the end of the first quarter. Quarterly cash uses included $4.8 million for dividends, $2.9 million for repurchasing about 230,000 shares, and $3 million for capitalized software development. Operating cash flow was an outflow of $0.1 million, which Martell attributed primarily to working-capital fluctuations. For full-year 2026, OneSpan raised its total revenue outlook to $248 million to $252 million from its prior range of $244 million to $249 million. The company now expects: Software and services revenue of $202 million to $204 million. Hardware revenue of $46 million to $48 million, up from prior guidance of $43 million to $45 million. ARR of $194 million to $198 million. Adjusted EBITDA of $67 million to $71 million, compared with previous guidance of $64 million to $68 million. Martell said the updated outlook reflects expected incremental e-signature contract overages and stronger hardware revenue, particularly in the fourth quarter. He said approximately one-third of expected second-half hardware revenue is forecast for the third quarter, with a stronger fourth quarter anticipated. OneSpan, formerly known as Vasco Data Security International, is a Chicago-based cybersecurity software company specializing in digital identity and anti-fraud solutions. Founded in 1991, the company provides a suite of authentication and transaction security products designed to help organizations protect critical applications and high-value transactions across online, mobile and in-branch channels. The core OneSpan portfolio includes multi-factor authentication, risk-based authentication and transaction signing solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Onespan Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

OneSpan (OSPN) came out with quarterly earnings of $0.3 per share, beating the Zacks Consensus Estimate of $0.25 per share. This compares to earnings of $0.34 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +20.00%. A quarter ago, it was expected that this internet security company would post earnings of $0.36 per share when it actually produced earnings of $0.39, delivering a surprise of +8.33%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. OneSpan, which belongs to the Zacks Internet - Software industry, posted revenues of $60.47 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 4.70%. This compares to year-ago revenues of $59.84 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. OneSpan shares have added about 23.6% since the beginning of the year versus the S&P 500's gain of 11%. While OneSpan has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for OneSpan was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.31 on $59.51 million in revenues for the coming quarter and $1.23 on $246.53 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, MultiSensor AI Holdings, Inc. (MSAI), has yet to report results for the quarter ended June 2026. This company is expected to post quarterly loss of $1.20 per share in its upcoming report, which represents a year-over-year change of +70%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. MultiSensor AI Holdings, Inc.'s revenues are expected to be $2.1 million, up 47.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ONESPAN INC (OSPN) : Free Stock Analysis Report MultiSensor AI Holdings, Inc. (MSAI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

(Bloomberg) -- SpaceX’s first earnings report following its blockbuster initial public offering is one of the most anticipated events of the summer on Wall Street. Whether it’ll give investors a reason to buy the sinking stock is another matter. Most Read from Bloomberg Beer Dynasty Families Sell €731 Million Stake in AB InBev Apple’s New CEO Taps Retired Hardware Executive for Management Team Taco Bell Met With Michigan on Parasite Weeks Before Recall Mamdani Dismisses Business Leaders Advising NYC’s Mayor’s Fund S&P 500 Closes Near Record High on US-Iran Hopes: Markets Wrap Elon Musk’s satellite, space and artificial intelligence company went public at $135 in June, and the shares have been on a roller coaster ride ever since, shooting up to $225 in the first days of trading and then plunging below the offering price. They closed Monday at $114.53, down 15% from the IPO and 49% from their high on June 16, erasing more than $1 trillion in market value from that peak. Earnings will give investors a chance to reassess the stock. The problem is SpaceX isn’t profitable and has a very speculative business at this point, so the results may end up raising more questions than they answer. With the shares still trading at a sky-high valuation despite the selloff, it will be difficult to entice new buyers. “There is so much that’s in the future of the SpaceX story, so much that hasn’t been done yet, or ever, so there’s nothing to make you comfortable,” said Drew Cupps, portfolio manager and head of the 5Perspectives Growth Team investment group at Polen Capital, which owns a small position in the company. “There’s not a lot of here and now. There’s no, look at last year to justify what you should pay now.” To make matters even more challenging for the stock, a flood of fresh SpaceX shares also is about to hit the market, as the first of many lockups that ban early investors from selling expires two days after the earnings report. As many as 911.5 million SpaceX shares worth more than $100 billion will be released on Aug. 6. And that’s just the start as billions of additional shares will be eligible for trading before the end of the year. All of which will weigh on the stock price simply based on the market’s supply and demand function. “It’s a total mess,” said Ken Mahoney, chief executive officer of Mahoney Asset Management. Wall Street expects SpaceX to report a loss of 24 cents per share in the second quarter on $6.8 billion of revenue. The results have been somewhat of a moving target, however, because so little information about the business is available. Analysts have widened their estimates for the company’s loss by 18% in the past month. “I have very little confidence in those estimates,” said Jim Lebenthal, chief market strategist at Cerity Partners. “I don’t mean this obnoxiously, but I think they’re mostly licking their fingers and sticking it in the wind.” What investors and analysts will primarily be looking for is management’s comments on the company’s progress with AI, Starlink and its rocket launch business. “We don’t have concrete earnings power that would be analogous to other parts of the market, but we do have a visionary set of massively capable assets that are in some cases unrivaled over all others,” said Polen Capital’s Cupps. SpaceX’s results come on the heels of a strong run of earnings reports from big AI spenders, including Alphabet Inc., Microsoft Corp. and Amazon.com Inc. Investors are particularly rewarding companies that are showing clear payoffs from their capital expenditures. For example, shares of Amazon and Microsoft surged following the companies’ results. With a market capitalization of roughly $1.5 trillion, SpaceX rivals the size of many megacap tech firms and is bigger than Musk’s other company, Tesla Inc. But its financials aren’t close, at least not yet, meaning investors may apply additional scrutiny to its spending plans. Analysts expect the company to report capital expenditures of $18.5 billion in the quarter and $45.5 billion for 2026. The primary issue facing SpaceX shares is their extreme market valuation. The stock trades at about 448 times earnings estimated over the next 12 months, the highest multiple of any member of the Nasdaq 100 Index, and 26 times estimated sales, which is among the 10 highest ratios in the technology-heavy benchmark. That helps explain why the short interest in SpaceX, which measures bearish bets against the stock, jumped to 34% of the company’s float, or the number shares available to trade in the market, from about 18% a month ago, according to data from S3 Partners. There are already more short bets against SpaceX than there are against Tesla. Still, Wall Street remains overwhelmingly bullish on the stock. Of the 39 analysts tracked by Bloomberg who cover the company, 30 have buy ratings. And few have backtracked on their extravagant predictions from when SpaceX went public. Raymond James analyst Brian Gesuale is sticking with his call for the shares to reach $800 within the next 12 months on exponential revenue growth. Adam Jonas at Morgan Stanley recently reiterated his $300 price target and said that shares trading at $100 values the company’s AI business at zero, making this an attractive entry point for investors. And Bernstein’s Douglas Harned is urging investors to ignore the specifics of the earnings report and focus instead on the company’s confidence in the future. “We believe the quarterly results should not matter,” Bernstein analysts led by Harned wrote in a note to clients on Friday. “What will be important is the level of confidence projected by management regarding the company’s growth path. Investors should look beyond short term stock movements as we view the case for a multi-trillion dollar valuation is about ‘if’ not ‘when’, for orbital data center plans.” Tech Chart of the Day Amazon.com Inc. surpassed $3 trillion in market value for the first time, becoming only the fifth company to ever reach the milestone. Top Tech Stories Palantir Technologies Inc. raised revenue and income forecasts for the full year after posting second-quarter sales that far exceeded Wall Street’s estimates, describing commercial demand for its data analytics tools as “otherworldly.” Snap Inc. posted higher-than-projected quarterly sales and gave an upbeat forecast for the current period, signaling optimism ahead of the September commercial debut of its first pair of augmented reality glasses. Grab Holdings Ltd. raised its annual earnings and sales forecasts, a sign that robust demand from Southeast Asian commuters is helping to absorb impact of higher fuel prices stemming from the Middle East conflict. Apple Inc. briefly removed the Telegram messaging app from its App Store after finding content on the platform that violated a ban on child sexual abuse material. China is growing anxious that Anthropic PBC’s Mythos could be wielded against the world’s second-biggest economy, adding a volatile new issue to already heightened tensions before a planned summit between Xi Jinping and Donald Trump. Earnings Due Earnings Premarket: Earnings Postmarket: --With assistance from Subrat Patnaik and David Watkins. Most Read from Bloomberg Businessweek Americans Are Rethinking Their Love Affair With Plant Milks A Wall Street Troll Reinvented Himself as the Groypers’ Pick for Governor. The GOP Can’t Get Rid of Him Trump’s Arctic Mining Deal Signals a New Era of State Capitalism Tokenmaxxing Is Dead. Now Comes the Belt Tightening Why Wall Street Is Getting Angry ©2026 Bloomberg L.P.

Revenue increased 1% year-over-year to $60.5 million Subscription revenue increased 11% year-over-year to $46.7 million Operating income decreased 17% year-over-year to $8.7 million Adjusted EBITDA decreased 4% year-over-year to $16.9 million1 Annual Recurring Revenue (ARR) increased 7% year-over-year to $189.7 million2 Net Retention Rate (NRR) of 103%3 BOSTON, August 04, 2026--(BUSINESS WIRE)--OneSpan Inc. (NASDAQ: OSPN) today reported financial results for the second quarter ended June 30, 2026. "We delivered a strong second quarter highlighted by double-digit subscription revenue growth and strong profitability," stated OneSpan CEO Victor Limongelli. "Importantly, two weeks ago we introduced DigipassONE, a unified authentication platform that builds on the broadest suite of authentication functionality in the market with our new offering for verifiable credentials and digital wallets, strengthens the value of that suite with our expanded capabilities in protecting mobile applications, and ties it all together with telemetry and analytical insights to enable our customers to react to imminent threats or challenging operating conditions. In addition, the DigipassONE platform will serve as the foundation for further enhancements in the coming years, including supporting consumer agentic use cases for financial institutions and other high-trust, high-value environments." Second Quarter 2026 Financial Highlights Total revenue was $60.5 million, an increase of 1% compared to $59.8 million for the same quarter of 2025. Cybersecurity revenue was $40.9 million, a decrease of 7% year-over-year. Digital Agreements revenue was $19.5 million, an increase of 25% year-over-year. ARR increased 7% year-over-year to $189.7 million. Gross profit was $44.5 million, or 74% gross margin, compared to $44.0 million, or 73% gross margin, in the same period last year. Operating income was $8.7 million, compared to operating income of $10.5 million in the same period last year. Net income was $6.8 million, or $0.18 per diluted share, compared to net income of $8.3 million, or $0.21 per diluted share, in the same period last year. Non-GAAP net income was $11.6 million, or $0.30 per diluted share, compared to non-GAAP net income of $13.3 million, or $0.34 per diluted share in the same period last year.1 Adjusted EBITDA was $16.9 million, compared to $17.6 million in the same period last year. Cash and cash equivalents were $43.3 million at June 30, 2026 compared to $70.5 million at December 31, 2025. OneSpan repurchased approximately 230,000 shares of its common stock for $2.9 million. Recent Business Highlights OneSpan introduced DigipassONE™, a unified authentication platform that includes four components: DigipassONE Authenticate, DigipassONE Verify, DigipassONE Protect, and DigipassONE Insights. DigipassONE Authenticate builds on the foundation of the world’s broadest suite of authentication functionality—including passkeys, FIDO2 security keys, hardware tokens, mobile authenticators, and software authenticators—to deliver secure, phishing-resistant login and transaction signing. DigipassONE Verify simplifies the way organizations issue, manage, and verify identities across digital wallets. Verifiable credentials are designed to improve onboarding, authentication and trust by enabling cryptographically secure and tamper-proof identity verification. An early-access release of DigipassONE Verify was released in Q2. DigipassONE Protect strengthens the offering with our mobile application shielding technology, which protects mobile apps against tampering, abuse, and runtime threats, promoting reliability and trustworthiness for users. DigipassONE Insights ties it all together with telemetry and analytical insights across authentication flows and application protection signals, so that customers can better react to imminent threats or challenging operating environments. OneSpan’s Board of Directors has declared a quarterly cash dividend of $0.13 per share as part of the Company’s recurring quarterly dividend program. The dividend is payable on September 4, 2026 to shareholders of record as of the close of business on August 14, 2026. Financial Outlook OneSpan is updating its previously issued financial guidance to reflect increases in its revenue and Adjusted EBITDA expectations. For the Full Year 2026, the Company expects: Total revenue to be in the range of $248 million to $252 million, as compared to its previous guidance range of $244 million to $249 million. Software and services revenue to be in the range of $202 million to $204 million, as compared to its previous guidance range of $201 million to $204 million. Hardware revenue to be in the range of $46 million to $48 million, as compared to its previous guidance range of $43 million to $45 million. ARR to be in the range of $194 million to $198 million. Adjusted EBITDA to be in the range of $67 million to $71 million, as compared to its previous guidance range of $64 million to $68 million. Conference Call Details In conjunction with this announcement, OneSpan Inc. will host a conference call today, August 4, 2026, at 4:30 p.m. ET. During the conference call, Mr. Victor Limongelli, CEO, and Mr. Jorge Martell, CFO, will discuss OneSpan’s results for the second quarter 2026. For investors and analysts accessing the conference call by phone, please refer to the press release dated July 9, 2026, announcing the date of OneSpan’s second quarter 2026 earnings release. It can be found on the OneSpan investor relations website at investors.onespan.com. The conference call is also available in listen-only mode at investors.onespan.com. Shortly after the conclusion of the call, a replay of the webcast will be available on the same website for approximately one year. ____________________________________________ An explanation of the use of Non-GAAP financial measures is included below under the heading "Non-GAAP Financial Measures." A reconciliation of each Non-GAAP financial measure to the most directly comparable GAAP financial measure has also been provided in the tables below. We are not providing a reconciliation of Adjusted EBITDA guidance to GAAP net income, the most directly comparable GAAP measure, because we are unable to predict certain items included in GAAP net income without unreasonable efforts. ARR is calculated as the approximate annualized value of our customer recurring contracts as of the measurement date. These include subscription, term-based license, and maintenance and support contracts and exclude one-time fees. To the extent that we are negotiating a renewal with a customer within 90 days after the expiration of a recurring contract, we continue to include that revenue in ARR if we are actively in discussion with the customer for a new recurring contract or renewal and the customer has not notified us of an intention to not renew. See our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 for additional information describing how we define ARR, including how ARR differs from GAAP revenue. NRR is defined as the approximate year-over-year growth in ARR from the same set of customers at the end of the prior year period. About OneSpan OneSpan helps organizations build secure, seamless, and trusted digital experiences through two solution portfolios: Cybersecurity and Digital Agreements. Our cybersecurity solutions protect identities, secure mobile apps, and safeguard access through advanced high-assurance authentication, threat intelligence, fraud prevention, and robust mobile app protection, defending users, devices, and applications against sophisticated attacks. Our digital agreement solutions streamline agreement workflows with secure e-signatures, identity verification, and smart digital forms, built to enable speed, compliance and exceptional customer experiences. Trusted by leading global enterprises, including more than 60% of the world’s 100 largest banks, OneSpan processes over 100 million digital agreements and billions of secure authentication transactions across more than 120 countries each year. For more information, visit our website, explore our blog, or follow us on LinkedIn or YouTube. Forward-Looking Statements This press release contains forward-looking statements within the meaning of applicable U.S. securities laws, including statements regarding our 2026 financial guidance; our expectations regarding our DigipassONE platform and its anticipated use as a foundation for further product enhancements, including supporting consumer agentic use cases; and our general goals and expectations regarding our operational or financial performance in the future. Forward-looking statements may be identified by words such as "seek," "believe," "plan," "estimate," "anticipate," "expect," "intend," "continue," "outlook," "may," "will," "should," "could," or "might," and other similar expressions. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could materially affect our business and financial results include, but are not limited to: our ability to attract new customers and retain and expand sales to existing customers; our ability to successfully develop and market new product offerings and product enhancements; changes in customer requirements; the potential effects of technological changes; the loss of one or more large customers; difficulties enhancing and maintaining our brand recognition; competition; lengthy sales cycles; unintended costs and consequences of our cost reduction and restructuring actions, including higher than anticipated restructuring charges, disruption to our operations, litigation or regulatory actions, or employee turnover; challenges retaining key employees and successfully hiring and training qualified new employees; security breaches or cyber-attacks; real or perceived malfunctions or errors in our products; interruptions or delays in the performance of our products and solutions; reliance on third parties for certain products and data center services; our ability to effectively manage third party partnerships, acquisitions, divestitures, alliances, or joint ventures; economic recession, inflation, tariffs or trade disputes, and political instability; claims that we have infringed the intellectual property rights of others; changing laws, government regulations or policies; pressures on price levels; component shortages; delays and disruption in global transportation and supply chains; impairment of goodwill or amortizable intangible assets causing a significant charge to earnings; actions of activist stockholders; and exposure to increased economic and operational uncertainties from operating a global business, as well as other factors described in the "Risk Factors" section of our most recent Annual Report on Form 10-K, as updated by the "Risk Factors" section of our subsequent Quarterly Reports on Form 10-Q (if any). Our filings with the Securities and Exchange Commission and other important information can be found in the Investor Relations section of our website at investors.onespan.com. We do not have any intent, and disclaim any obligation, to update the forward-looking information to reflect events that occur, circumstances that exist or changes in our expectations after the date of this press release, except as required by law. Unless otherwise noted, references in this press release to "OneSpan," "Company," "we," "our," and "us" refer to OneSpan Inc. and its subsidiaries. Operating Segments We report our financial results under the following two lines of business, which are our reportable operating segments: Cybersecurity and Digital Agreements. Cybersecurity. Cybersecurity, formerly Security Solutions, consists of our broad portfolio of software products, software development kits ("SDKs") and Digipass authenticator devices that are used to build applications designed to defend against attacks on digital transactions across online environments, devices, and applications. The software products and SDKs included in the Cybersecurity segment are delivered through on-premises and cloud-based deployment models and include standards-based authentication technologies such as Fast Identity Online ("FIDO") authentication and passkeys, multi-factor authentication, transaction signing solutions and mobile application security. Digital Agreements. Digital Agreements consists of solutions that enable our clients to secure and automate business processes associated with their digital agreement and customer transaction lifecycles that require consent, non-repudiation and compliance. These solutions, which are cloud-based, include OneSpan Sign e-signature, OneSpan Notary, and Identity Verification. Segment operating income (loss) consists of the revenues generated by a segment, less the direct costs of revenue, sales and marketing, research and development expenses, general and administrative expenses, restructuring and other related charges, and amortization of intangible assets expense that are incurred directly by a segment. Sales and marketing and research and development expenses were determined to be significant segment expenses. Unallocated corporate costs include costs related to administrative functions that are performed in a centralized manner that are not directly attributable to a particular segment. Segment and consolidated operating results (unaudited): Revenue by major products and services (unaudited): Effective January 1, 2026, we have revised our presentation of revenue by major products and services to better align with how we manage the business and our strategic focus on growing recurring revenues. Accordingly, term maintenance revenue is now included within subscription revenue. As a result, subscription revenue now consists primarily of subscription licenses sold for on-premises software, the related maintenance and support revenue, and SaaS revenue. Additionally, maintenance revenue associated with perpetual licenses and professional services is now presented together, which reflects the steady decline in perpetual license arrangements. These changes are presentation-only and have no impact on total revenue, operating income, or cash flows, and prior-period results have been updated for comparability. Non-GAAP Financial Measures We report financial results in accordance with GAAP. We also evaluate our performance using certain non-GAAP financial metrics, namely Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Net Income Per Diluted Share. Our management believes that these measures, when taken together with the corresponding GAAP financial metrics, provide useful supplemental information regarding the performance of our business, as further discussed in the descriptions of each of these non-GAAP metrics below. These non-GAAP financial measures are not measures of performance under GAAP and should not be considered in isolation or as alternatives or substitutes for the most directly comparable financial measures calculated in accordance with GAAP. While we believe that these non-GAAP financial measures are useful for the purposes described below, they have limitations associated with their use, since they exclude items that may have a material impact on our reported results and may be different from similar measures used by other companies. Additional information about the non-GAAP financial measures and reconciliations to their most directly comparable GAAP financial measures appear below. Adjusted EBITDA We define Adjusted EBITDA as net income before interest, taxes, depreciation, amortization, long-term incentive compensation and related payroll tax expense, restructuring and other related charges, and certain non-recurring items, including acquisition related costs, rebranding costs, and non-routine shareholder matters. We use Adjusted EBITDA as a simplified measure of performance for use in communicating our performance to investors and analysts and for comparisons to other companies within our industry. As a performance measure, we believe that Adjusted EBITDA presents a view of our operating results that is most closely related to serving our customers. By excluding interest, taxes, depreciation, amortization, long-term incentive compensation and related payroll tax expense, restructuring costs, and certain other non-recurring items, we are able to evaluate performance without considering decisions that, in most cases, are not directly related to meeting our customers’ requirements and were either made in prior periods (e.g., depreciation, amortization, long-term incentive compensation and related payroll tax expense, non-routine shareholder matters), deal with the structure or financing of the business (e.g., interest, one-time strategic action costs, restructuring costs, impairment charges) or reflect the application of regulations that are outside of the control of our management team (e.g., taxes). In addition, removing the impact of these items helps us compare our core business performance with that of our competitors. Non-GAAP Net Income and Non-GAAP Net Income Per Diluted Share We define Non-GAAP Net Income and Non-GAAP Net Income Per Diluted Share as net income or net income per diluted share, as applicable, before the consideration of long-term incentive compensation expenses, the amortization of intangible assets, restructuring costs, and certain other non-recurring items. We use these measures to assess the impact of our performance excluding items that can significantly impact the comparison of our results between periods and the comparison to competitor results. We exclude long-term incentive compensation and related payroll tax expense because our long-term incentives generally reflect the use of restricted stock unit grants or cash incentive grants, including incentives directly tied to the performance of the business, while other companies may use different forms of incentives that have different cost impacts, which makes comparison difficult. We exclude amortization of intangible assets as we believe the amount of such expense in any given period may not be correlated directly to the performance of the business operations and that such expenses can vary significantly between periods as a result of new acquisitions, the full amortization of previously acquired intangible assets, or the write down of such assets due to an impairment event. However, intangible assets contribute to current and future revenue, and related amortization expense will recur in future periods until expired or written down. We also exclude certain non-recurring items including one-time strategic action costs and non-recurring shareholder matters, as these items are unrelated to the operations of our core business. By excluding these items, we are better able to compare the operating results of our underlying core business from one reporting period to the next. We use a long-term projected non-GAAP tax rate of 20% for the purpose of determining our Non-GAAP Net Income and Non-GAAP Net Income Per Diluted Share to provide better consistency across interim reporting periods. We will assess the appropriate non-GAAP tax rate on a regular basis, which could be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or other changes to our strategy or business operations. Copyright© 2026 OneSpan North America Inc., all rights reserved. OneSpan® is a registered or unregistered trademark of OneSpan North America Inc. or its affiliates in the U.S. and other countries. View source version on businesswire.com: https://www.businesswire.com/news/home/20260804163792/en/ Contacts Investor Contact: Joe MaxaVice President of Investor [email protected]

Revenue increased 4% year-over-year to $65.9 million Subscription revenue increased 8% year-over-year to $52.7 million Operating income decreased 14% year-over-year to $14.8 million Adjusted EBITDA decreased 9% year-over-year to $21.0 million1 Annual Recurring Revenue (ARR) increased 14% year-over-year to $192.1 million2 Net Retention Rate (NRR) of 105%3 BOSTON, April 30, 2026--(BUSINESS WIRE)--OneSpan Inc. (NASDAQ: OSPN) today reported financial results for the first quarter ended March 31, 2026. "We delivered a strong first quarter with solid profitability and subscription revenue growth," stated OneSpan CEO, Victor Limongelli. "We also closed the acquisition of Build38, which strengthens our cybersecurity product portfolio by enabling customers to build threat protection into their mobile applications, and by providing the telemetry necessary for visibility into the threat and operating environment. As we invest organically and through targeted M&A, we remain focused on driving efficient revenue growth, maintaining strong profitability and cash generation, and returning capital to shareholders." First Quarter 2026 Financial Highlights Total revenue was $65.9 million, an increase of 4% compared to $63.4 million for the same quarter of 2025. Cybersecurity revenue was $48.5 million, an increase of 2% year-over-year. Digital Agreements revenue was $17.4 million, an increase of 11% year-over-year. ARR increased 14% year-over-year to $192.1 million. Gross profit was $48.5 million, or 74% gross margin, compared to $47.1 million, or 74% gross margin, in the same period last year. Operating income was $14.8 million, compared to operating income of $17.2 million in the same period last year. Net income was $11.6 million, or $0.30 per diluted share, compared to net income of $14.5 million, or $0.37 per diluted share, in the same period last year. Non-GAAP net income was $14.8 million, or $0.39 per diluted share, compared to non-GAAP net income of $17.7 million, or $0.45 per diluted share in the same period last year.1 Adjusted EBITDA was $21.0 million, compared to $23.0 million in the same period last year. Cash and cash equivalents were $49.8 million at March 31, 2026 compared to $70.5 million at December 31, 2025. OneSpan repurchased approximately 510,000 shares of its common stock for $5.4 million. Recent Business Highlights OneSpan completed its acquisition of Build38, a provider of next-generation mobile application protection solutions, to expand its App Shielding capabilities and enable its customers to strengthen their mobile channels through continuous in-app protection, cloud-powered threat intelligence, and adaptive, AI-enabled defenses. The Company’s Board of Directors has declared a quarterly cash dividend of $0.13 per share as part of the Company’s recurring quarterly dividend program. The dividend is payable on June 4, 2026 to shareholders of record as of the close of business on May 14, 2026. OneSpan was named an Overall Leader, Product Leader, Innovation Leader, and Market Leader in the 2026 KuppingerCole Leadership Compass: Passwordless Authentication for Enterprises. Financial Outlook OneSpan is updating its previously issued financial guidance to reflect an increase in its ARR expectations. For the Full Year 2026, the Company expects: Total revenue to be in the range of $244 million to $249 million. Software and services revenue to be in the range of $201 million to $204 million. Hardware revenue to be in the range of $43 million to $45 million. ARR to be in the range of $194 million to $198 million, as compared to its previous guidance range of $192 million to $196 million. Adjusted EBITDA to be in the range of $64 million to $68 million. Conference Call Details In conjunction with this announcement, OneSpan Inc. will host a conference call today, April 30, 2026, at 4:30 p.m. ET. During the conference call, Mr. Victor Limongelli, CEO, and Mr. Jorge Martell, CFO, will discuss OneSpan’s results for the first quarter 2026. For investors and analysts accessing the conference call by phone, please refer to the press release dated April 9, 2026, announcing the date of OneSpan’s first quarter 2026 earnings release. It can be found on the OneSpan investor relations website at investors.onespan.com. The conference call is also available in listen-only mode at investors.onespan.com. Shortly after the conclusion of the call, a replay of the webcast will be available on the same website for approximately one year. About OneSpan OneSpan helps organizations build secure, seamless, and trusted digital experiences through two solution portfolios: Cybersecurity and Digital Agreements. Our cybersecurity solutions protect identities, secure mobile apps, and safeguard access through advanced high-assurance authentication, threat intelligence, fraud prevention, and robust mobile app protection, defending users, devices, and applications against sophisticated attacks. Our digital agreement solutions streamline agreement workflows with secure e-signatures, identity verification, and smart digital forms, built to enable speed, compliance and exceptional customer experiences. Trusted by leading global enterprises, including more than 60% of the world’s 100 largest banks, OneSpan processes over 100 million digital agreements and billions of secure authentication transactions across more than 120 countries each year. For more information, visit our website, explore our blog, or follow us on LinkedIn or YouTube. Forward-Looking Statements This press release contains forward-looking statements within the meaning of applicable U.S. securities laws, including statements regarding our 2026 financial guidance; our plans to drive efficient revenue growth, maintain strong profitability and cash generation, and return capital to shareholders; and our general goals and expectations regarding our operational or financial performance in the future. Forward-looking statements may be identified by words such as "seek", "believe", "plan", "estimate", "anticipate", "expect", "intend", "continue", "outlook", "may", "will", "should", "could", or "might", and other similar expressions. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could materially affect our business and financial results include, but are not limited to: our ability to attract new customers and retain and expand sales to existing customers; our ability to successfully develop and market new product offerings and product enhancements; changes in customer requirements; the potential effects of technological changes; the loss of one or more large customers; difficulties enhancing and maintaining our brand recognition; competition; lengthy sales cycles; unintended costs and consequences of our cost reduction and restructuring actions, including higher than anticipated restructuring charges, disruption to our operations, litigation or regulatory actions, or employee turnover; challenges retaining key employees and successfully hiring and training qualified new employees; security breaches or cyber-attacks; real or perceived malfunctions or errors in our products; interruptions or delays in the performance of our products and solutions; reliance on third parties for certain products and data center services; our ability to effectively manage third party partnerships, acquisitions, divestitures, alliances, or joint ventures; economic recession, inflation, tariffs or trade disputes, and political instability; claims that we have infringed the intellectual property rights of others; changing laws, government regulations or policies; pressures on price levels; component shortages; delays and disruption in global transportation and supply chains; impairment of goodwill or amortizable intangible assets causing a significant charge to earnings; actions of activist stockholders; and exposure to increased economic and operational uncertainties from operating a global business, as well as other factors described in the "Risk Factors" section of our most recent Annual Report on Form 10-K, as updated by the "Risk Factors" section of our subsequent Quarterly Reports on Form 10-Q (if any). Our filings with the Securities and Exchange Commission and other important information can be found in the Investor Relations section of our website at investors.onespan.com. We do not have any intent, and disclaim any obligation, to update the forward-looking information to reflect events that occur, circumstances that exist or changes in our expectations after the date of this press release, except as required by law. Unless otherwise noted, references in this press release to "OneSpan", "Company", "we", "our", and "us" refer to OneSpan Inc. and its subsidiaries. Operating Segments We report our financial results under the following two lines of business, which are our reportable operating segments: Cybersecurity and Digital Agreements. Cybersecurity. Cybersecurity, formerly Security Solutions, consists of our broad portfolio of software products, software development kits ("SDKs") and Digipass authenticator devices that are used to build applications designed to defend against attacks on digital transactions across online environments, devices, and applications. The software products and SDKs included in the Cybersecurity segment are delivered through on-premises and cloud-based deployment models and include standards-based authentication technologies such as Fast Identity Online ("FIDO") authentication and passkeys, multi-factor authentication, transaction signing solutions and mobile application security. Digital Agreements. Digital Agreements consists of solutions that enable our clients to secure and automate business processes associated with their digital agreement and customer transaction lifecycles that require consent, non-repudiation and compliance. These solutions, which are cloud-based, include OneSpan Sign e-signature, OneSpan Notary, and Identity Verification. Segment operating income (loss) consists of the revenues generated by a segment, less the direct costs of revenue, sales and marketing, research and development expenses, general and administrative expenses, restructuring and other related charges, and amortization of intangible assets expense that are incurred directly by a segment. Sales and marketing and research and development expenses were determined to be significant segment expenses. Unallocated corporate costs include costs related to administrative functions that are performed in a centralized manner that are not directly attributable to a particular segment. Segment and consolidated operating results (unaudited): Revenue by major products and services (unaudited): Effective January 1, 2026, we have revised our presentation of revenue by major products and services to better align with how we manage the business and our strategic focus on growing recurring revenues. Accordingly, term maintenance revenue is now included within subscription revenue. As a result, subscription revenue now consists primarily of subscription licenses sold for on-premises software, the related maintenance and support revenue, and SaaS revenue. Additionally, maintenance revenue associated with perpetual licenses and professional services is now presented together, which reflects the steady decline in perpetual license arrangements. These changes are presentation-only and have no impact on total revenue, operating income, or cash flows, and prior-period results have been updated for comparability. Non-GAAP Financial Measures We report financial results in accordance with GAAP. We also evaluate our performance using certain non-GAAP financial metrics, namely Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Net Income Per Diluted Share. Our management believes that these measures, when taken together with the corresponding GAAP financial metrics, provide useful supplemental information regarding the performance of our business, as further discussed in the descriptions of each of these non-GAAP metrics below. These non-GAAP financial measures are not measures of performance under GAAP and should not be considered in isolation or as alternatives or substitutes for the most directly comparable financial measures calculated in accordance with GAAP. While we believe that these non-GAAP financial measures are useful for the purposes described below, they have limitations associated with their use, since they exclude items that may have a material impact on our reported results and may be different from similar measures used by other companies. Additional information about the non-GAAP financial measures and reconciliations to their most directly comparable GAAP financial measures appear below. Adjusted EBITDA We define Adjusted EBITDA as net income before interest, taxes, depreciation, amortization, long-term incentive compensation and related payroll tax expense, restructuring and other related charges, and certain non-recurring items, including acquisition related costs, rebranding costs, and non-routine shareholder matters. We use Adjusted EBITDA as a simplified measure of performance for use in communicating our performance to investors and analysts and for comparisons to other companies within our industry. As a performance measure, we believe that Adjusted EBITDA presents a view of our operating results that is most closely related to serving our customers. By excluding interest, taxes, depreciation, amortization, long-term incentive compensation and related payroll tax expense, restructuring costs, and certain other non-recurring items, we are able to evaluate performance without considering decisions that, in most cases, are not directly related to meeting our customers’ requirements and were either made in prior periods (e.g., depreciation, amortization, long-term incentive compensation and related payroll tax expense, non-routine shareholder matters), deal with the structure or financing of the business (e.g., interest, one-time strategic action costs, restructuring costs, impairment charges) or reflect the application of regulations that are outside of the control of our management team (e.g., taxes). In addition, removing the impact of these items helps us compare our core business performance with that of our competitors. Non-GAAP Net Income and Non-GAAP Net Income Per Diluted Share We define Non-GAAP Net Income and Non-GAAP Net Income Per Diluted Share as net income or net income per diluted share, as applicable, before the consideration of long-term incentive compensation expenses, the amortization of intangible assets, restructuring costs, and certain other non-recurring items. We use these measures to assess the impact of our performance excluding items that can significantly impact the comparison of our results between periods and the comparison to competitor results. We exclude long-term incentive compensation and related payroll tax expense because our long-term incentives generally reflect the use of restricted stock unit grants or cash incentive grants, including incentives directly tied to the performance of the business, while other companies may use different forms of incentives that have different cost impacts, which makes comparison difficult. We exclude amortization of intangible assets as we believe the amount of such expense in any given period may not be correlated directly to the performance of the business operations and that such expenses can vary significantly between periods as a result of new acquisitions, the full amortization of previously acquired intangible assets, or the write down of such assets due to an impairment event. However, intangible assets contribute to current and future revenue, and related amortization expense will recur in future periods until expired or written down. We also exclude certain non-recurring items including one-time strategic action costs and non-recurring shareholder matters, as these items are unrelated to the operations of our core business. By excluding these items, we are better able to compare the operating results of our underlying core business from one reporting period to the next. We use a long-term projected non-GAAP tax rate of 20% for the purpose of determining our Non-GAAP Net Income and Non-GAAP Net Income Per Diluted Share to provide better consistency across interim reporting periods. We will assess the appropriate non-GAAP tax rate on a regular basis, which could be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or other changes to our strategy or business operations. Copyright© 2026 OneSpan North America Inc., all rights reserved. OneSpan™ is a registered or unregistered trademark of OneSpan North America Inc. or its affiliates in the U.S. and other countries. View source version on businesswire.com: https://www.businesswire.com/news/home/20260430387433/en/ Contacts Investor Contact: Joe Maxa Vice President of Investor Relations +1-312-766-4009 [email protected]

This article first appeared on GuruFocus. Total Revenue: $65.9 million, an increase of 4.1% year-over-year. Adjusted EBITDA: $21 million, representing 31.9% of revenue. Annual Recurring Revenue (ARR): $192.1 million, up 14.1% year-over-year. Subscription Revenue: $52.7 million, accounting for 80% of total revenue, grew 8.2% year-over-year. Gross Margin: Approximately 74%, consistent with the prior-year period. GAAP Net Income per Share: $0.30 compared to $0.37 a year ago. Non-GAAP Net Income per Share: $0.39 compared to $0.45 in the prior year period. Cash from Operations: $28.2 million generated during the quarter. Cash and Cash Equivalents: $49.8 million at the end of the first quarter. Cybersecurity ARR: $124.6 million, grew 16.5% year-over-year. Digital Agreements ARR: $67.5 million, grew 9.9% year-over-year. Dividend: Quarterly dividend of $0.13 per share approved. Share Buybacks: Approximately 1.5 million shares repurchased for over $18 million over the past three quarters. Warning! GuruFocus has detected 4 Warning Signs with NEWT. Is OSPN fairly valued? Test your thesis with our free DCF calculator. Release Date: April 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. OneSpan Inc (NASDAQ:OSPN) reported strong profitability with an adjusted EBITDA margin of 32% for Q1 2026. Subscription revenue grew by 8% year-over-year, with digital agreements seeing an 11% increase. The company completed the acquisition of Build 38, enhancing its mobile application security offerings. Annual recurring revenue (ARR) increased by 14% year-over-year, reaching $192 million. OneSpan Inc (NASDAQ:OSPN) returned capital to shareholders through share buybacks and increased dividends. GAAP operating income declined from $17.2 million in Q1 2025 to $14.8 million in Q1 2026 due to increased operating costs. GAAP net income per share decreased from $0.37 to $0.30 year-over-year. The company anticipates a $3 million ARR headwind in Q2 2026 due to non-renewal of two contracts. Hardware revenue continued its long-term decline, decreasing by 4.3% in Q1 2026. Operating income for the cybersecurity division decreased due to increased expenses from acquisitions and investments. Q: When can we anticipate some acceleration in top-line growth and reaching the Rule of 40? A: Victor Limongelli, CEO, highlighted the progress made, noting that the Rule of 40 metrics improved from 12 in 2023 to 36 in the most recent quarter. While not specifying an exact timeline, he emphasized ongoing efforts to drive subscription and ARR growth, despite the decline in consumer banking tokens. Q: What was the ARR for Knock Knock and Build 38 at the end of Q1? A: Jorge Martell, CFO, stated that Knock Knock's ARR was $9.7 million, up from $8.1 million at acquisition, reflecting 20% growth. Build 38's ARR was $2.8 million, making the combined ARR approximately $10.9 million, contributing to an organic ARR growth rate of about 7-8%. Q: How is the conflict in the Middle East affecting your business, particularly given your EMEA mix? A: Victor Limongelli, CEO, noted that the Gulf region accounts for only about 4% of revenue. While monitoring the situation, he mentioned strategic growth in the Americas and optimism about EMEA, with a focus on expanding in North America. Q: What is the main purpose of the Build 38 acquisition? A: Victor Limongelli, CEO, explained that Build 38 broadens OneSpan's offering by enhancing app shielding capabilities. It provides an SDK-based approach for built-in app protection and telemetry, offering deeper insights into mobile threats, thus strengthening their cybersecurity solutions. Q: How does the Knock Knock acquisition impact customer retention and upsell opportunities? A: Victor Limongelli, CEO, stated that Knock Knock enhances customer retention by offering passwordless authentication, which is becoming more prevalent. It provides upsell opportunities and strengthens OneSpan's position in the market, particularly in North America and Japan. For the complete transcript of the earnings call, please refer to the full earnings call transcript.