OneSpan Reports Fourth Quarter and Full Year 2024 Financial Results

Rhea-AI Summary

OneSpan (NASDAQ: OSPN) reported its Q4 and full-year 2024 financial results, showing significant improvements in profitability despite mixed revenue performance. Q4 operating income rose to $11.8M from $1.8M year-over-year, while full-year operating income reached $44.8M compared to a $28.9M loss in 2023.

Q4 revenue decreased 3% to $61.2M, but subscription revenue grew 32% to $36.1M. Full-year revenue increased 3% to $243.2M, with subscription revenue up 31% to $139.4M. The company achieved an 8% growth in Annual Recurring Revenue (ARR) to $167.7M and maintained a Net Retention Rate of 106%.

For 2025, OneSpan projects revenue between $245-251M, ARR of $180-186M, and Adjusted EBITDA of $72-76M. The company also initiated a quarterly dividend program, with an initial payment of $0.12 per share made in February 2025.

Positive

• Operating income improved to $44.8M from -$28.9M loss YoY
• Q4 subscription revenue grew 32% YoY to $36.1M
• Gross margin increased to 74% from 69% YoY in Q4
• Initiated quarterly dividend of $0.12 per share
• Net income reached $57.1M vs -$29.8M loss previous year
• Cash position strengthened to $83.2M from $43.0M YoY

Negative

• Q4 total revenue declined 3% YoY to $61.2M
• Security Solutions revenue decreased 6% YoY in Q4
• Security Solutions full-year revenue declined 1%

Insights

Financial Analyst

OneSpan's Q4 and FY2024 results reveal a company successfully executing a strategic pivot toward a subscription-based business model while dramatically improving profitability. The 32% growth in Q4 subscription revenue to $36.1 million and 31% growth for the full year to $139.4 million demonstrates strong momentum in recurring revenue streams, now representing approximately 59% of total revenue compared to 43% a year ago.

The company's transformation is most evident in its profitability metrics. Q4 operating income surged to $11.8 million from $1.8 million in the prior year, while full-year operating income reached $44.8 million versus a $28.9 million loss in 2023. This $73.7 million year-over-year improvement in operating income reflects significant operational efficiencies and improved gross margins, which expanded 500 basis points to 74% in Q4 and 500 basis points to 72% for the full year.

The Net Retention Rate of 106% indicates existing customers are expanding their spending with OneSpan, though this metric is somewhat modest compared to high-growth SaaS companies that typically target 110-120%. The divergence between business segments is telling: Digital Agreements grew 20% for the full year while Security Solutions declined 1%, suggesting where future growth opportunities lie.

The initiation of a quarterly dividend ($0.12 per share) is particularly notable for a technology company and signals management's confidence in sustainable cash generation. With cash and equivalents nearly doubling to $83.2 million, OneSpan has built significant financial flexibility for potential M&A, share repurchases, or increased shareholder returns.

Management's 2025 guidance of $245-251 million in revenue (1-3% growth) with Adjusted EBITDA of $72-76 million suggests a continued focus on profitability over aggressive top-line expansion. This balanced approach appears well-aligned with the company's successful transition to a more predictable, higher-margin subscription business.

Technology Industry Expert

OneSpan's 2024 results reveal a company successfully navigating the critical transition from traditional security products to a cloud-based digital trust platform. The shift to subscription revenue (growing 32% in Q4) represents more than just a business model change—it reflects a fundamental architectural evolution from on-premises deployments to cloud-delivered services that can scale more efficiently and update continuously.

The performance divergence between business segments tells an important technology story. Digital Agreements' 20% full-year growth demonstrates OneSpan's successful entry into the rapidly expanding digital transaction management market, while the slight decline in Security Solutions (-1%) reflects the maturation of traditional authentication products. This bifurcation highlights the company's strategic challenge: balancing investment between legacy security offerings that still generate substantial cash flow and emerging cloud platforms that drive future growth.

The gross margin expansion to 74% in Q4 (from 69%) exemplifies the inherent economic advantages of cloud-based delivery models—each additional customer adds minimal incremental cost while benefiting from shared infrastructure. This scalability explains how OneSpan achieved a remarkable $73.7 million year-over-year improvement in operating income.

OneSpan's Net Retention Rate of 106% suggests customers are finding value in the platform but indicates room for improvement in cross-selling between security and agreement solutions. Leading SaaS companies typically achieve NRR above 110%, pointing to an opportunity for OneSpan to better integrate its product portfolio to drive expansion within existing accounts.

The company's 2025 guidance of $245-251 million in revenue with continued strong profitability suggests a balanced approach to growth and efficiency. With $83.2 million in cash and a new dividend program, OneSpan appears positioned to make strategic technology investments while returning capital to shareholders—an unusual but potentially effective strategy as they compete against both specialized digital agreement providers and broader enterprise software platforms that are increasingly embedding similar functionality.

• Fourth quarter operating income was $11.8 million compared to $1.8 million in the fourth quarter of 2023; full year operating income was $44.8 million compared to an operating loss of $28.9 million for the full year 2023
• Fourth quarter revenue decreased 3% year-over-year to $61.2 million; full year revenue increased 3% year-over-year to $243.2 million
• Fourth quarter subscription revenue increased 32% year-over-year to $36.1 million; full year subscription revenue increased 31% year-over-year to $139.4 million
• Annual Recurring Revenue (ARR) increased 8% year-over-year to $167.7 million¹
• Net Retention Rate (NRR) of 106%²

BOSTON--(BUSINESS WIRE)-- OneSpan Inc. (NASDAQ: OSPN) today reported financial results for the fourth quarter and full year ended December 31, 2024.

“We ended the year with another strong quarter of subscription revenue growth, profitability and cash generation,” stated OneSpan CEO, Victor Limongelli. “With the improvements we have made to our operating profile over the last year, combined with planned disciplined investments and an ongoing focus on operational excellence, I believe we are in a strong position to drive efficient revenue growth and profitability over the long-term.”

Fourth Quarter 2024 Financial Highlights

• Total revenue was $61.2 million, a decrease of 3% compared to $62.9 million for the same quarter of 2023. Security Solutions revenue was $45.5 million, a decrease of 6% year-over-year. Digital Agreements revenue was $15.7 million, an increase of 8% year-over-year.
• ARR increased 8% year-over-year to $167.7 million.
• Gross profit was $45.3 million, or 74% gross margin, compared to $43.5 million, or 69% in the same period last year.
• Operating income was $11.8 million, compared to operating income of $1.8 million in the same period last year.
• Net income was $28.8 million, or $0.72 per diluted share, compared to net income of $0.4 million, or $0.01 per diluted share, in the same period last year. Non-GAAP net income was $9.7 million, or $0.24 per diluted share, compared to net income of $7.6 million, or $0.19 per diluted share in the same period last year.³
• Adjusted EBITDA was $19.8 million, compared to $11.2 million in the same period last year.³
• Cash and cash equivalents were $83.2 million at December 31, 2024 compared to $43.0 million at December 31, 2023.

Full Year 2024 Financial Highlights

• Total revenue was $243.2 million, an increase of 3% compared to $235.1 million for the same period of 2023. Security Solutions revenue was $182.2 million, a decrease of 1% year-over-year. Digital Agreements revenue was $61.0 million, an increase of 20% year-over-year.
• Gross profit was $174.6 million, or 72% gross margin, compared to $157.7 million, or 67% in the same period last year.
• Operating income was $44.8 million, compared to an operating loss of $28.9 million in the same period last year.
• Net income was $57.1 million, or $1.46 per diluted share compared to a net loss of $29.8 million, or $0.74 per diluted share in the same period last year. Non-GAAP net income was $51.5 million, or $1.32 per diluted share, compared to net income of $0.3 million, or $0.01 per diluted share in the same period last year.³
• Adjusted EBITDA was $72.5 million compared to $12.0 million in the same period last year.³

Financial Outlook

For the Full Year 2025, OneSpan expects:

• Revenue to be in the range of $245 million to $251 million.
• ARR to be in the range of $180 million to $186 million.
• Adjusted EBITDA to be in the range of $72 million to $76 million.

Quarterly Cash Dividend

On December 16, 2024, OneSpan announced that its Board of Directors had approved a regular quarterly cash dividend as part of the initiation of a recurring quarterly dividend program. The initial quarterly cash dividend of $0.12 per share was paid on February 14, 2025 to shareholders of record at the close of business on January 31, 2025.

Conference Call Details

In conjunction with this announcement, OneSpan Inc. will host a conference call today, February 27, 2025, 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 fourth quarter and full year 2024.

For investors and analysts accessing the conference call by phone, please refer to the press release dated January 15, 2025, announcing the date of OneSpan’s fourth quarter and full year 2024 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.

____________________________________________

1. 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 Annual Report on Form 10-K for the year ended December 31, 2024 for additional information describing how we define ARR, including how ARR differs from GAAP revenue.
2. 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.
3. 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.

About OneSpan

OneSpan provides secure authentication, identity, electronic signature and digital workflow solutions that protect and facilitate digital transactions and agreements. The Company delivers products and services that automate and secure customer-facing and revenue-generating business processes for use cases ranging from simple transactions to workflows that are complex or require higher levels of security. Trusted by global blue-chip enterprises, including more than 60% of the world’s 100 largest banks, OneSpan processes millions of digital agreements and billions of multi-factor authentication transactions in 100+ countries annually.

For more information, go to www.onespan.com. You can also follow @OneSpan on X (Twitter) or visit us on LinkedIn and Facebook.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of applicable U.S. securities laws, including statements regarding our 2025 financial guidance, our plans to make disciplined investments, continue our focus on operational excellence, and drive efficient revenue growth and profitability over the long-term and our general 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 (the “SEC”) 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.

OneSpan Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)
	Three Months Ended December 31,								Years Ended December 31,
		2024				2023				2024				2023
Revenue
Product and license	$	33,203			$	35,387			$	132,078			$	130,848
Services and other		27,968				27,541				111,101				104,258
Total revenue		61,171				62,928				243,179				235,106
Cost of goods sold
Product and license		8,385				12,346				36,732				48,676
Services and other		7,494				7,116				31,871				28,715
Total cost of goods sold		15,879				19,462				68,603				77,391
Gross profit		45,292				43,466				174,576				157,715
Operating costs
Sales and marketing		10,972				13,847				44,546				70,235
Research and development		8,290				8,734				32,423				38,420
General and administrative		13,100				14,229				46,007				58,267
Restructuring and other related charges		539				4,235				4,444				17,311
Amortization of intangible assets		585				604				2,351				2,353
Total operating costs		33,486				41,649				129,771				186,586
Operating income (loss)		11,806				1,817				44,805				(28,871	)
Interest income, net		561				415				1,807				2,090
Other income (expense), net		1,168				(874	)			(125	)			(532	)
Income (loss) before income taxes		13,535				1,358				46,487				(27,313	)
(Benefit) provision for income taxes		(15,253	)			917				(10,595	)			2,486
Net income (loss)	$	28,788			$	441			$	57,082			$	(29,799	)
Net income (loss) per share
Basic	$	0.74			$	0.01			$	1.49			$	(0.74	)
Diluted	$	0.72			$	0.01			$	1.46			$	(0.74	)
Weighted average common shares outstanding
Basic		38,836				39,716				38,387				40,193
Diluted		39,887				40,095				39,085				40,193

OneSpan Inc. CONSOLIDATED BALANCE SHEETS (In thousands, unaudited)
	December 31,
		2024				2023
ASSETS
Current assets
Cash and cash equivalents	$	83,160			$	43,001
Restricted cash		171				529
Accounts receivable, net of allowances of $1,600 in 2024 and $1,536 in 2023		56,229				64,387
Inventories, net		10,792				15,553
Prepaid expenses		6,547				6,575
Contract assets		8,687				5,139
Other current assets		9,479				11,159
Total current assets		175,065				146,343
Property and equipment, net		20,966				18,722
Operating lease right-of-use assets		7,725				6,171
Goodwill		92,365				93,684
Intangible assets, net of accumulated amortization		7,481				10,832
Deferred income taxes		20,516				1,721
Other assets		14,616				11,718
Total assets	$	338,734			$	289,191
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	13,310			$	17,452
Deferred revenue		67,465				69,331
Accrued wages and payroll taxes		13,793				14,335
Short-term income taxes payable		4,403				2,646
Dividend payable		4,765				—
Other accrued expenses		6,339				10,684
Deferred compensation		200				382
Total current liabilities		110,275				114,830
Long-term deferred revenue		3,390				4,152
Long-term lease liabilities		6,932				6,824
Deferred income taxes		3,680				1,067
Other long-term liabilities		1,927				3,177
Total liabilities		126,204				130,050
Commitments and contingencies
Stockholders' equity
Preferred stock: 500 shares authorized, none issued and outstanding at December 31, 2024 and 2023		—				—
Common stock: $0.001 par value per share, 75,000 shares authorized; 41,782 and 41,243 shares issued; 38,058 and 37,519 shares outstanding at December 31, 2024 and 2023		38				38
Additional paid-in capital		122,534				118,620
Treasury stock, at cost, 3,724 shares outstanding at December 31, 2024 and 2023		(47,380	)			(47,377	)
Retained earnings		151,256				98,939
Accumulated other comprehensive loss		(13,918	)			(11,079	)
Total stockholders' equity		212,530				159,141
Total liabilities and stockholders' equity	$	338,734			$	289,191

OneSpan Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited)
	Years Ended December 31,
		2024				2023
Cash flows from operating activities:
Net income (loss)	$	57,082			$	(29,799	)
Adjustments to reconcile net income (loss) from operations to net cash used in operations:
Depreciation and amortization of intangible assets		8,364				6,479
Write-off of intangible assets		804				—
Write-off of property and equipment, net		1,081				3,183
Impairment of inventories, net		—				143
Deferred tax (benefit) expense		(16,156	)			118
Share-based compensation		8,955				14,252
Provision for credit losses, net		64				(65	)
Changes in operating assets and liabilities:
Accounts receivable		6,855				1,571
Inventories, net		4,079				(3,275	)
Contract assets		(5,669	)			(574	)
Accounts payable		(3,854	)			(253	)
Income taxes payable		1,782				(2,367	)
Accrued expenses		(4,149	)			(1,531	)
Deferred compensation		(182	)			9
Deferred revenue		(1,647	)			2,015
Other assets and liabilities		(1,742	)			(641	)
Net cash provided by (used in) operating activities		55,667				(10,735	)
Cash flows from investing activities:
Maturities of short-term investments		—				2,330
Additions to property and equipment		(9,245	)			(12,484	)
Additions to intangible assets		(60	)			(59	)
Cash paid for acquisition of business		—				(1,800	)
Net cash (used in) provided by investing activities		(9,305	)			(12,013	)
Cash flows from financing activities:
Contingent payment related to acquisition		(200	)			—
Tax payments for restricted stock issuances		(5,041	)			(2,939	)
Repurchase of common stock, net of excise tax		(3	)			(29,155	)
Net cash used in financing activities		(5,244	)			(32,094	)
Effect of exchange rate changes on cash		(1,317	)			997
Net increase (decrease) in cash		39,801				(53,845	)
Cash, cash equivalents, and restricted cash, beginning of period		43,530				97,375
Cash, cash equivalents, and restricted cash, end of period	$	83,331			$	43,530

Operating Segments

We report our financial results under the following two lines of business, which are our reportable operating segments: Security Solutions and Digital Agreements.

• Security Solutions. 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 Security Solutions segment are on-premises and, to a lesser extent, cloud software products, and include multi-factor authentication and transaction signing solutions, such as mobile application security and mobile software tokens.

• 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 largely 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 expenses, 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 deemed significant segment expenses. Unallocated corporate costs include costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment.

Segment and consolidated operating results (unaudited):

	Three Months Ended December 31, 2024
(In thousands)	Security Solutions				Digital Agreements				Corporate and Other				Total
Revenue	$	45,459			$	15,712			$	—			$	61,171
Cost of goods sold		11,211				4,666				2				15,879
Gross profit		34,248				11,046				(2	)			45,292
Gross margin		75	%			70	%		*					74	%
Sales and marketing		6,304				3,718				950				10,972
Research and development		4,191				3,999				100				8,290
Other segment items (3)(5)		460				715				13,049				14,224
Operating (loss) income (4)(6)		23,293				2,614				(14,101	)			11,806
Interest income, net														561
Other income (expense), net														1,168
Income (loss) before income taxes													$	13,535

	Three Months Ended December 31, 2023
(In thousands)	Security Solutions				Digital Agreements				Corporate and Other			Total
Revenue	$	48,429			$	14,499						$	62,928
Cost of goods sold		15,865				3,597			—				19,462
Gross profit (2)		32,564				10,902			—				43,466
Gross margin		67	%			75	%		*				69	%
Sales and marketing		7,149				5,647			1,051				13,847
Research and development		3,992				4,542			200				8,734
Other segment items (3)(5)		1,060				1,418			16,590				19,068
Operating (loss) income (4)(6)		20,363				(705	)		(17,841	)			1,817
Interest income, net													415
Other income (expense), net													(874	)
Income (loss) before income taxes												$	1,358

	Year Ended December 31, 2024
(In thousands)	Security Solutions				Digital Agreements				Corporate and Other				Total
Revenue	$	182,187			$	60,992			$	—			$	243,179
Cost of goods sold		49,319				19,281				3				68,603
Gross profit (1)		132,868				41,711				(3	)			174,576
Gross margin		73	%			68	%		*					72	%
Sales and marketing		24,684				15,658				4,204				44,546
Research and development		16,132				16,117				174				32,423
Other segment items (3)(5)		1,990				4,321				46,491				52,802
Operating income (loss) (4)(6)		90,062				5,615				(50,872	)			44,805
Interest income, net														1,807
Other income (expense), net														(125	)
Income (loss) before income taxes													$	46,487

	Year Ended December 31, 2023
(In thousands)	Security Solutions				Digital Agreements				Corporate and Other				Total
Revenue	$	184,181			$	50,925			$	—			$	235,106
Cost of goods sold		64,207				13,183				1				77,391
Gross profit (2)		119,974				37,742				(1	)			157,715
Gross margin		65	%			74	%		*					67	%
Sales and marketing		35,356				31,566				3,313				70,235
Research and development		18,894				18,687				839				38,420
Other segment items (3)(5)		5,534				6,014				66,383				77,931
Operating (loss) income (4)(6)		60,190				(18,525	)			(70,536	)			(28,871	)
Interest income, net														2,090
Other income (expense), net														(532	)
Income (loss) before income taxes													$	(27,313	)

(1)		Digital Agreements gross profit includes an intangible asset write-off of $0.8 million and an internal capitalized software write-off of $0.7 million for the year ended December 31, 2024.
(2)		Security Solutions gross profit includes $1.6 million of inventory impairments incurred throughout 2023 related to discontinuation of investments in our Digipass CX product, of which $1.4 million was reversed in the quarter ended December 31, 2023.
(3)		Security Solutions other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the three months and years ended December 31, 2024 and 2023.
(4)		Security Solutions operating income includes total amortization and depreciation expense of $0.3 million and $0 for the three months ended December 31, 2024 and 2023, respectively, and $0.9 million and $0 of total amortization and depreciation expense for the years ended December 31, 2024 and 2023, respectively.
		Security Solutions operating income includes $2.0 million and $5.5 million of restructuring and other related charges for the years ended December 31, 2024 and 2023, respectively.
(5)		Digital Agreements other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the three months and years ended December 31, 2024 and 2023.
(6)		Digital Agreements operating income includes total amortization and depreciation expense of $1.6 million and $0.6 million for the three months ended December 31, 2024 and 2023, respectively, and $6.2 million and $3.7 million for the years ended December 31, 2024 and 2023, respectively.
		Digital Agreements operating income includes $1.7 million and $3.7 million of restructuring and other related charges for the years ended December 31, 2024 and 2023, respectively.

Revenue by major products and services (unaudited):

	Three Months Ended December 31,
	2024						2023
(In thousands)	Security Solutions			Digital Agreements			Security Solutions			Digital Agreements
Subscription	$	20,913		$	15,207		$	14,065		$	13,245
Maintenance and support		9,217			415			10,326			1,022
Professional services and other (1)		891			90			1,423			232
Hardware products		14,438			—			22,615			—
Total Revenue	$	45,459		$	15,712		$	48,429		$	14,499

	Year Ended December 31,
	2024						2023
(In thousands)	Security Solutions			Digital Agreements			Security Solutions			Digital Agreements
Subscription	$	80,555		$	58,848		$	60,550		$	45,886
Maintenance and support		38,342			1,736			42,240			4,143
Professional services and other (1)		4,439			408			5,425			896
Hardware products		58,851			—			75,966			—
Total Revenue	$	182,187		$	60,992		$	184,181		$	50,925

(1)	Professional services and other includes perpetual software licenses revenue, which was immaterial for both the three months and year ended December 31, 2024, and approximately 1% of total revenue for both the three months and year ended December 31, 2023.

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 (Loss) and Non-GAAP Net Income (Loss) 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 (loss) before interest, taxes, depreciation, amortization, long-term incentive compensation, 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, 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, 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.

Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands, unaudited)
	Three Months Ended December 31,								Years Ended December 31,
(In thousands)		2024				2023				2024				2023
Net income (loss)	$	28,788			$	441			$	57,082			$	(29,799	)
Interest income, net		(561	)			(415	)			(1,807	)			(2,090	)
(Benefit) provision for income taxes		(15,253	)			917				(10,595	)			2,486
Depreciation and amortization of intangible assets (1)		2,278				1,955				8,364				6,479
Long-term incentive compensation (2)		2,814				4,136				9,172				14,562
Restructuring and other related charges (3)		609				4,235				6,063				17,311
Other non-recurring items (4)		1,163				(112	)			4,223				3,048
Adjusted EBITDA	$	19,838			$	11,157			$	72,502			$	11,997

(1)	Includes cost of sales depreciation and amortization expense directly related to delivering cloud subscription revenue of $1.0 million and $3.4 million for the three months and year ended December 31, 2024, respectively, and $0.8 million and $1.5 million for the three months and year ended December 31, 2023, respectively. Costs are recorded in "Services and other cost of goods sold" on the consolidated statements of operations.
(2)	Long-term incentive compensation includes share-based compensation and cash incentive grants awarded to employees located in jurisdictions where we do not issue share-based compensation due to tax, regulatory or similar reasons. The immaterial expense associated with these cash incentive grants was less than $0.1 million for both the three months ended December 31, 2024 and 2023, and $0.2 million and $0.3 million for the years ended December 31, 2024 and 2023, respectively.
(3)	Includes write-offs of intangible assets and property and equipment, net, of $0.8 million and $1.0 million, respectively, for the year ended December 31, 2024 and $0 for both the three months and year ended December 31, 2023. Costs are recorded in "Services and other cost of goods sold" and "Restructuring and other related charges," respectively, on the consolidated statements of operations.
	Includes restructuring and other related charges of less than $0.1 million and $0.1 million for the three months and year ended December 31, 2024, respectively, and $0 for both the three months and year ended December 31, 2023. These charges are recorded in "Services and other cost of goods sold" on the consolidated statements of operations.
(4)	For the three months ended December 31, 2024 other non-recurring items consist of $1.2 million and of fees related to non-recurring projects. For the three months ended December 31, 2023, other non-recurring items consist of an inventory write-off reversal of $1.4 million, offset by $1.4 million of fees related to non-recurring items, primarily severance payable to our former chief executive officer.
	For the year ended December 31, 2024, other non-recurring items consist of $4.2 million of fees related to non-recurring projects. For the year ended December 31, 2023, other non-recurring items consist of $1.6 million of fees related to non-recurring projects and our acquisition of ProvenDB, and $1.4 million of fees related to non-recurring items, primarily severance payable to our former chief executive officer.

Non-GAAP Net Income (Loss) and Non-GAAP Net Income Per Diluted Share

We define Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) Per Diluted Share as net income (loss) or net income (loss) per diluted share, as applicable, before the consideration of long-term incentive compensation expenses, the amortization of intangible assets, restructuring costs, certain other non-recurring items, and one-time tax benefit adjustments. 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 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) and one-time tax benefit adjustments, 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 make a tax adjustment based on the above adjustments resulting in an effective tax rate on a Non-GAAP basis, which may differ from the GAAP tax rate. We believe the effective tax rates we use in the adjustment are reasonable estimates of the overall tax rates for the Company under its global operating structure.

Reconciliation of Net Income (Loss) to Non-GAAP Net Income (in thousands, except per share data) (unaudited)
	Three Months Ended December 31,								Years Ended December 31,
		2024				2023				2024				2023
Net income (loss)	$	28,788			$	441			$	57,082			$	(29,799	)
Amortization of intangible assets (1)		625				725				2,592				2,755
Long-term incentive compensation (2)		2,814				4,136				9,172				14,562
Restructuring and other related charges (3)		609				4,235				6,063				17,311
Other non-recurring items (4)		1,163				(112	)			4,223				3,048
One-time tax benefit adjustments (5)		(23,217	)			—				(23,217	)			—
Tax impact of adjustments (6)		(1,042	)			(1,797	)			(4,410	)			(7,535	)
Non-GAAP net income	$	9,740			$	7,628			$	51,505			$	342
Non-GAAP net income per share	$	0.24			$	0.19			$	1.32			$	0.01
Shares		39,887				40,095				39,085				40,833

(1)	Includes cost of sales amortization expense directly related to delivering cloud subscription revenue of less than $0.1 million and $0.2 million for the three months and year ended December 31, 2024, respectively, and $0.1 million and $0.4 million for the three months and year ended December 31, 2023, respectively. Costs are recorded in "Services and other cost of goods sold" on the consolidated statements of operations.
(2)	Long-term incentive compensation includes share-based compensation and cash incentive grants awarded to employees located in jurisdictions where we do not issue share-based compensation due to tax, regulatory or similar reasons. The immaterial expense associated with these cash incentive grants was less than $0.1 million for both the three months ended December 31, 2024 and 2023, and $0.2 million and $0.3 million for the years ended December 31, 2024 and 2023, respectively.
(3)	Includes write-offs of intangible assets and property and equipment, net, of $0.8 million and $1.0 million, respectively, for the year ended December 31, 2024 and $0 for both the three months and year ended December 31, 2023. Costs are recorded in "Services and other cost of goods sold" and "Restructuring and other related charges," respectively, on the consolidated statements of operations.
	Includes restructuring and other related charges of less than $0.1 million and $0.1 million, for the three months and year ended December 31, 2024, respectively, and $0 for both the three months and year ended December 31, 2023. These charges are recorded in "Services and other cost of goods sold" on the consolidated statements of operations.
(4)	See the footnotes to the Reconciliation of Net Income (Loss) to Adjusted EBITDA for a description of the components of other non-recurring items for each period presented.
(5)	Includes a one-time tax benefit for a change in the valuation allowance, a worthless stock deduction and an intra-entity asset transfer of certain intellectual property.
(6)	The tax impact of adjustments is calculated as 20% of the adjustments in all periods.

Copyright^© 2025 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.

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Investor Contact:

Joe Maxa

Vice President of Investor Relations

+1-312-766-4009

joe.maxa@onespan.com

Source: OneSpan Inc.

FAQ

What was OneSpan's (OSPN) Q4 2024 subscription revenue growth?

OneSpan's Q4 2024 subscription revenue grew 32% year-over-year to $36.1 million.

How much is OneSpan's (OSPN) quarterly dividend payment?

OneSpan initiated a quarterly dividend of $0.12 per share, first paid on February 14, 2025.

What is OneSpan's (OSPN) revenue guidance for 2025?

OneSpan expects 2025 revenue to be between $245 million and $251 million.

How did OneSpan's (OSPN) operating income change in 2024?

Operating income improved to $44.8 million in 2024 from a loss of $28.9 million in 2023.

What was OneSpan's (OSPN) ARR growth in Q4 2024?

OneSpan's Annual Recurring Revenue (ARR) increased 8% year-over-year to $167.7 million.