OneSpan Reports Second Quarter 2024 Financial Results
OneSpan Inc. (NASDAQ: OSPN) reported strong financial results for Q2 2024, with total revenue growing 9% year-over-year to $60.9 million. Key highlights include:
- Subscription revenue increased 29% year-over-year to $29.6 million
- Annual Recurring Revenue (ARR) grew 15% year-over-year to $165.3 million
- Net Retention Rate (NRR) of 112%
- Operating income of $7.6 million, compared to a loss of $17.8 million in Q2 2023
- Net income of $6.6 million, or $0.17 per diluted share
OneSpan raised its full-year 2024 guidance, now expecting revenue between $238-$246 million, ARR of $166-$170 million, and Adjusted EBITDA of $55-$59 million.
OneSpan Inc. (NASDAQ: OSPN) ha riportato risultati finanziari robusti per il secondo trimestre del 2024, con un fatturato totale cresciuto del 9% rispetto all'anno precedente, raggiungendo i 60,9 milioni di dollari. I principali punti salienti includono:
- Le entrate da abbonamento sono aumentate del 29% rispetto all'anno precedente, arrivando a 29,6 milioni di dollari
- Le entrate annuali ricorrenti (ARR) sono cresciute del 15% rispetto all'anno precedente, raggiungendo i 165,3 milioni di dollari
- Il tasso di retention netto (NRR) è stato del 112%
- Il reddito operativo è stato di 7,6 milioni di dollari, rispetto a una perdita di 17,8 milioni di dollari nel secondo trimestre del 2023
- Il reddito netto è stato di 6,6 milioni di dollari, ovvero 0,17 dollari per azione diluita
OneSpan ha aumentato le previsioni per l'intero anno 2024, aspettandosi ora un fatturato tra i 238 e i 246 milioni di dollari, un ARR tra i 166 e i 170 milioni di dollari e un EBITDA rettificato tra i 55 e i 59 milioni di dollari.
OneSpan Inc. (NASDAQ: OSPN) reportó resultados financieros sólidos para el segundo trimestre de 2024, con ingresos totales que crecieron un 9% interanual, alcanzando los 60,9 millones de dólares. Los aspectos destacados incluyen:
- Los ingresos por suscripción aumentaron un 29% interanual hasta 29,6 millones de dólares
- Los ingresos recurrentes anuales (ARR) crecieron un 15% interanual hasta 165,3 millones de dólares
- La tasa de retención neta (NRR) fue del 112%
- Los ingresos operativos fueron de 7,6 millones de dólares, en comparación con una pérdida de 17,8 millones de dólares en el segundo trimestre de 2023
- Los ingresos netos fueron de 6,6 millones de dólares, es decir, 0,17 dólares por acción diluida
OneSpan elevó su guía de ingresos para todo el año 2024, ahora esperando ingresos entre 238 y 246 millones de dólares, ARR entre 166 y 170 millones de dólares, y EBITDA ajustado entre 55 y 59 millones de dólares.
OneSpan Inc. (NASDAQ: OSPN)는 2024년 2분기 강력한 재무 성과를 보고했으며, 총 수익이 전년 대비 9% 증가하여 6090만 달러에 달했습니다. 주요 하이라이트는 다음과 같습니다:
- 구독 수익이 전년 대비 29% 증가하여 2960만 달러에 도달했습니다
- 연간 반복 수익 (ARR)이 전년 대비 15% 증가하여 1억 6530만 달러에 달했습니다
- 순 유지율 (NRR)은 112%였습니다
- 운영 소득은 760만 달러로, 2023년 2분기에 1780만 달러의 손실과 비교됩니다
- 순 소득은 660만 달러로, 희석 주당 0.17 달러입니다
OneSpan은 2024년 전체 연도 전망을 상향 조정했으며, 현재 2024년 수익을 2억 3800만 달러에서 2억 4600만 달러, ARR을 1억 6600만 달러에서 1억 7000만 달러, 조정 EBITDA를 5500만 달러에서 5900만 달러 사이로 예상하고 있습니다.
OneSpan Inc. (NASDAQ: OSPN) a annoncé de solides résultats financiers pour le deuxième trimestre 2024, avec un chiffre d'affaires total en hausse de 9 % par rapport à l'année précédente, atteignant 60,9 millions de dollars. Les points saillants incluent :
- Les revenus d'abonnement ont augmenté de 29 % par rapport à l'année précédente, atteignant 29,6 millions de dollars
- Les revenus annuels récurrents (ARR) ont augmenté de 15 % par rapport à l'année précédente, atteignant 165,3 millions de dollars
- Le taux de conservation net (NRR) était de 112 %
- Le revenu opérationnel était de 7,6 millions de dollars, contre une perte de 17,8 millions de dollars au deuxième trimestre 2023
- Le revenu net était de 6,6 millions de dollars, soit 0,17 dollar par action diluée
OneSpan a relevé ses prévisions pour l'année 2024, s'attendant maintenant à des revenus compris entre 238 et 246 millions de dollars, un ARR compris entre 166 et 170 millions de dollars et un EBITDA ajusté compris entre 55 et 59 millions de dollars.
OneSpan Inc. (NASDAQ: OSPN) hat im 2. Quartal 2024 starke finanzielle Ergebnisse gemeldet, mit einem Gesamterlös, der im Vergleich zum Vorjahr um 9% auf 60,9 Millionen USD gestiegen ist. Die wichtigsten Highlights sind:
- Die Abonnementerlöse stiegen im Vergleich zum Vorjahr um 29% auf 29,6 Millionen USD
- Die annualisierten wiederkehrenden Einnahmen (ARR) wuchsen im Vergleich zum Vorjahr um 15% auf 165,3 Millionen USD
- Die Nettobindungsrate (NRR) betrug 112%
- Das Betriebsergebnis belief sich auf 7,6 Millionen USD, verglichen mit einem Verlust von 17,8 Millionen USD im 2. Quartal 2023
- Das Nettoergebnis betrug 6,6 Millionen USD, also 0,17 USD pro verwässerter Aktie
OneSpan hat seine Prognose für das gesamte Jahr 2024 angehoben und erwartet nun Erlöse zwischen 238 und 246 Millionen USD, ARR von 166 bis 170 Millionen USD und bereinigtes EBITDA von 55 bis 59 Millionen USD.
- Total revenue grew 9% year-over-year to $60.9 million
- Subscription revenue increased 29% year-over-year to $29.6 million
- Annual Recurring Revenue (ARR) grew 15% year-over-year to $165.3 million
- Net Retention Rate (NRR) of 112%
- Operating income of $7.6 million, compared to a loss of $17.8 million in Q2 2023
- Net income of $6.6 million, or $0.17 per diluted share
- Digital Agreements revenue increased 30% year-over-year
- Gross profit margin improved to 66% from 62% in the same period last year
- Cash and cash equivalents increased to $63.8 million from $43.0 million at the end of 2023
- Raised full-year 2024 guidance for revenue, ARR, and Adjusted EBITDA
- None.
Insights
OneSpan's Q2 2024 results demonstrate robust growth and improved profitability, signaling a positive trajectory for the digital agreements security company. The 9% year-over-year revenue increase to
Particularly noteworthy is the 15% year-over-year increase in Annual Recurring Revenue (ARR) to
The company's profitability has significantly improved, with operating income of
The upward revision of the full-year 2024 guidance for ARR and Adjusted EBITDA indicates management's confidence in the company's growth trajectory and operational execution. However, investors should monitor the company's ability to maintain this momentum and continue improving its long-term operating profile amidst potential market challenges.
OneSpan's Q2 2024 results highlight the company's strong position in the digital agreements and security solutions market. The 30% year-over-year growth in Digital Agreements revenue to
The 4% growth in Security Solutions revenue to
The company's focus on subscription-based offerings, evident from the 29% growth in subscription revenue, aligns with industry trends towards cloud-based, scalable solutions. This shift not only provides more predictable revenue streams but also enhances customer stickiness, as reflected in the strong Net Retention Rate of
Looking ahead, OneSpan's ability to innovate and adapt to evolving cybersecurity threats and digital transaction needs will be crucial. The company should focus on integrating advanced technologies like AI and blockchain to maintain its competitive edge in the rapidly evolving digital security landscape.
Second Quarter Financial Results
-
Second quarter revenue grew
9% year-over-year to$60.9 million
-
Second quarter subscription revenue grew
29% year-over-year to$29.6 million
-
Annual Recurring Revenue (ARR) increased
15% year-over-year to 1$165.3 million
-
Net Retention Rate (NRR) of
112% 2
“I’m extremely proud of our team, as their hard work and continued focus on operational rigor delivered a strong quarter with
Second Quarter 2024 Financial Highlights
-
Total revenue was
, an increase of$60.9 million 9% compared to for the same quarter of 2023. Digital Agreements revenue was$55.7 million , an increase of$15.5 million 30% year-over-year. Security Solutions revenue was , an increase of$45.5 million 4% year-over-year.
-
ARR increased
15% year-over-year to .$165.3 million
-
Gross profit was
, or$40.3 million 66% gross margin, compared to , or$34.3 million 62% in the same period last year.
-
Operating income was
, compared to operating loss of$7.6 million in the same period last year.$17.8 million
-
Net income was
, or$6.6 million per diluted share, compared to net loss of$0.17 , or$17.8 million per diluted share, in the same period last year. Non-GAAP net income was$(0.44) , or$12.0 million per diluted share, compared to net loss of$0.31 , or$7.3 million per diluted share in the same period last year.3$(0.18)
-
Adjusted EBITDA was
, compared to$16.1 million in the same period last year.$(3.8) million
-
Cash and cash equivalents were
at June 30, 2024 compared to$63.8 million at December 31, 2023.$43.0 million
Financial Outlook
For the Full Year 2024, OneSpan expects:
-
Revenue to be in the range of
to$238 million .$246 million
-
ARR to finish the year in the range of
to$166 million , as compared to its previous guidance range of$170 million to$160 million .$168 million
-
Adjusted EBITDA to be in the range of
to$55 million , as compared to its previous guidance range of$59 million to$51 million .3$55 million
Conference Call Details
In conjunction with this announcement, OneSpan Inc. will host a conference call today, August 1, 2024, 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 2024.
For investors and analysts accessing the conference call by phone, please refer to the press release dated July 9, 2024, announcing the date of OneSpan’s second quarter 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.
____________________________________________
- 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, 2024 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.
- 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 security, identity, electronic signature (“e-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
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
Unless otherwise noted, references in this press release to “OneSpan”, “Company”, “we”, “our”, and “us” refer to OneSpan Inc. and its subsidiaries.
OneSpan Inc. |
||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||
(In thousands, except per share data) |
||||||||||||||
(Unaudited) |
||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||
Revenue |
|
|
|
|
|
|
|
|||||||
Product and license |
$ |
32,438 |
|
$ |
30,583 |
|
|
$ |
70,236 |
|
$ |
63,729 |
|
|
Services and other |
|
28,486 |
|
|
25,150 |
|
|
|
55,531 |
|
|
49,611 |
|
|
Total revenue |
|
60,924 |
|
|
55,733 |
|
|
|
125,767 |
|
|
113,340 |
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of goods sold |
|
|
|
|
|
|
|
|||||||
Product and license |
|
11,247 |
|
|
14,038 |
|
|
|
20,953 |
|
|
25,326 |
|
|
Services and other |
|
9,336 |
|
|
7,401 |
|
|
|
17,078 |
|
|
14,434 |
|
|
Total cost of goods sold |
|
20,583 |
|
|
21,439 |
|
|
|
38,031 |
|
|
39,760 |
|
|
|
|
|
|
|
|
|
|
|||||||
Gross profit |
|
40,341 |
|
|
34,294 |
|
|
|
87,736 |
|
|
73,580 |
|
|
|
|
|
|
|
|
|
|
|||||||
Operating costs |
|
|
|
|
|
|
|
|||||||
Sales and marketing |
|
10,510 |
|
|
19,713 |
|
|
|
23,437 |
|
|
39,724 |
|
|
Research and development |
|
8,341 |
|
|
10,090 |
|
|
|
16,600 |
|
|
19,553 |
|
|
General and administrative |
|
11,557 |
|
|
15,826 |
|
|
|
21,564 |
|
|
32,479 |
|
|
Restructuring and other related charges |
|
1,711 |
|
|
5,846 |
|
|
|
3,208 |
|
|
6,552 |
|
|
Amortization of intangible assets |
|
585 |
|
|
583 |
|
|
|
1,180 |
|
|
1,166 |
|
|
Total operating costs |
|
32,704 |
|
|
52,058 |
|
|
|
65,989 |
|
|
99,474 |
|
|
|
|
|
|
|
|
|
|
|||||||
Operating income (loss) |
|
7,637 |
|
|
(17,764 |
) |
|
|
21,747 |
|
|
(25,894 |
) |
|
|
|
|
|
|
|
|
|
|||||||
Interest income, net |
|
521 |
|
|
585 |
|
|
|
622 |
|
|
1,088 |
|
|
Other income (expense), net |
|
331 |
|
|
29 |
|
|
|
622 |
|
|
(11 |
) |
|
|
|
|
|
|
|
|
|
|||||||
Income (loss) before income taxes |
|
8,489 |
|
|
(17,150 |
) |
|
|
22,991 |
|
|
(24,817 |
) |
|
Provision for income taxes |
|
1,936 |
|
|
601 |
|
|
|
2,970 |
|
|
1,290 |
|
|
|
|
|
|
|
|
|
|
|||||||
Net income (loss) |
$ |
6,553 |
|
$ |
(17,751 |
) |
|
$ |
20,021 |
|
$ |
(26,107 |
) |
|
|
|
|
|
|
|
|
|
|||||||
Net income (loss) per share |
|
|
|
|
|
|
|
|||||||
Basic |
$ |
0.17 |
|
$ |
(0.44 |
) |
|
$ |
0.52 |
|
$ |
(0.65 |
) |
|
Diluted |
$ |
0.17 |
|
$ |
(0.44 |
) |
|
$ |
0.52 |
|
$ |
(0.65 |
) |
|
|
|
|
|
|
|
|
|
|||||||
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|||||||
Basic |
|
38,529 |
|
|
40,399 |
|
|
|
38,229 |
|
|
40,435 |
|
|
Diluted |
|
39,007 |
|
|
40,399 |
|
|
|
38,680 |
|
|
40,435 |
|
OneSpan Inc. |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands, unaudited) |
||||||||
|
June 30, |
|
December 31, |
|||||
|
2024 |
|
2023 |
|||||
ASSETS |
|
|
|
|||||
Current assets |
|
|
|
|||||
Cash and cash equivalents |
$ |
63,843 |
|
|
$ |
43,001 |
|
|
Restricted cash |
|
460 |
|
|
|
529 |
|
|
Accounts receivable, net of allowances of |
|
43,799 |
|
|
|
64,387 |
|
|
Inventories, net |
|
12,507 |
|
|
|
15,553 |
|
|
Prepaid expenses |
|
6,126 |
|
|
|
6,575 |
|
|
Contract assets |
|
6,036 |
|
|
|
5,139 |
|
|
Other current assets |
|
11,096 |
|
|
|
11,159 |
|
|
Total current assets |
|
143,867 |
|
|
|
146,343 |
|
|
Property and equipment, net |
|
20,251 |
|
|
|
18,722 |
|
|
Operating lease right-of-use assets |
|
7,262 |
|
|
|
6,171 |
|
|
Goodwill |
|
93,072 |
|
|
|
93,684 |
|
|
Intangible assets, net of accumulated amortization |
|
8,679 |
|
|
|
10,832 |
|
|
Deferred income taxes |
|
1,693 |
|
|
|
1,721 |
|
|
Other assets |
|
12,039 |
|
|
|
11,718 |
|
|
Total assets |
$ |
286,863 |
|
|
$ |
289,191 |
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|||||
Current liabilities |
|
|
|
|||||
Accounts payable |
$ |
14,593 |
|
|
$ |
17,452 |
|
|
Deferred revenue |
|
55,928 |
|
|
|
69,331 |
|
|
Accrued wages and payroll taxes |
|
12,386 |
|
|
|
14,335 |
|
|
Short-term income taxes payable |
|
2,521 |
|
|
|
2,646 |
|
|
Other accrued expenses |
|
8,124 |
|
|
|
10,684 |
|
|
Deferred compensation |
|
151 |
|
|
|
382 |
|
|
Total current liabilities |
|
93,703 |
|
|
|
114,830 |
|
|
Long-term deferred revenue |
|
3,374 |
|
|
|
4,152 |
|
|
Long-term lease liabilities |
|
7,003 |
|
|
|
6,824 |
|
|
Deferred income taxes |
|
992 |
|
|
|
1,067 |
|
|
Other long-term liabilities |
|
3,212 |
|
|
|
3,177 |
|
|
Total liabilities |
|
108,284 |
|
|
|
130,050 |
|
|
Commitments and contingencies |
|
|
|
|||||
Stockholders' equity |
|
|
|
|||||
Preferred stock: 500 shares authorized, none issued and outstanding at June 30, 2024 and December 31, 2023 |
|
— |
|
|
|
— |
|
|
Common stock: |
|
38 |
|
|
|
38 |
|
|
Additional paid-in capital |
|
120,237 |
|
|
|
118,620 |
|
|
Treasury stock, at cost: 3,724 shares outstanding at June 30, 2024 and December 31, 2023 |
|
(47,377 |
) |
|
|
(47,377 |
) |
|
Retained earnings |
|
118,960 |
|
|
|
98,939 |
|
|
Accumulated other comprehensive loss |
|
(13,279 |
) |
|
|
(11,079 |
) |
|
Total stockholders' equity |
|
178,579 |
|
|
|
159,141 |
|
|
Total liabilities and stockholders' equity |
$ |
286,863 |
|
|
$ |
289,191 |
|
OneSpan Inc. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands, unaudited) |
||||||||
|
Six Months Ended June 30, |
|||||||
|
2024 |
|
2023 |
|||||
Cash flows from operating activities: |
|
|
|
|||||
Net income (loss) |
$ |
20,021 |
|
|
$ |
(26,107 |
) |
|
Adjustments to reconcile net income (loss) from operations to net cash used in operations: |
|
|
|
|||||
Depreciation and amortization of intangible assets |
|
4,145 |
|
|
|
2,835 |
|
|
Write-off of intangible assets |
|
804 |
|
|
|
— |
|
|
Write-off of property and equipment, net |
|
955 |
|
|
|
2,087 |
|
|
Impairments of inventories, net |
|
— |
|
|
|
1,568 |
|
|
Deferred tax benefit |
|
(108 |
) |
|
|
66 |
|
|
Stock-based compensation |
|
3,448 |
|
|
|
8,315 |
|
|
Allowance for credit losses |
|
(31 |
) |
|
|
(49 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|||||
Accounts receivable |
|
19,877 |
|
|
|
27,356 |
|
|
Inventories, net |
|
2,621 |
|
|
|
(4,299 |
) |
|
Contract assets |
|
(1,666 |
) |
|
|
(1,017 |
) |
|
Accounts payable |
|
(2,634 |
) |
|
|
35 |
|
|
Income taxes payable |
|
(107 |
) |
|
|
(2,638 |
) |
|
Accrued expenses |
|
(4,046 |
) |
|
|
(1,728 |
) |
|
Deferred compensation |
|
(231 |
) |
|
|
(122 |
) |
|
Deferred revenue |
|
(13,662 |
) |
|
|
(13,940 |
) |
|
Other assets and liabilities |
|
(124 |
) |
|
|
1,248 |
|
|
Net cash provided by (used in) operating activities |
|
29,262 |
|
|
|
(6,390 |
) |
|
|
|
|
|
|||||
Cash flows from investing activities: |
|
|
|
|||||
Maturities of short-term investments |
|
— |
|
|
|
2,330 |
|
|
Additions to property and equipment |
|
(5,321 |
) |
|
|
(6,491 |
) |
|
Additions to intangible assets |
|
(39 |
) |
|
|
(14 |
) |
|
Cash paid for acquisition of business |
|
— |
|
|
|
(1,800 |
) |
|
Net cash used in investing activities |
|
(5,360 |
) |
|
|
(5,975 |
) |
|
|
|
|
|
|||||
Cash flows from financing activities: |
|
|
|
|||||
Contingent payment related to acquisition |
|
(200 |
) |
|
|
— |
|
|
Tax payments for restricted stock issuances |
|
(1,831 |
) |
|
|
(1,546 |
) |
|
Net cash used in financing activities |
|
(2,031 |
) |
|
|
(1,546 |
) |
|
|
|
|
|
|||||
Effect of exchange rate changes on cash |
|
(1,098 |
) |
|
|
624 |
|
|
|
|
|
|
|||||
Net increase (decrease) in cash |
|
20,773 |
|
|
|
(13,287 |
) |
|
Cash, cash equivalents, and restricted cash, beginning of period |
|
43,530 |
|
|
|
97,374 |
|
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
64,303 |
|
|
$ |
84,087 |
|
Operating Segments
In May 2022, we announced a three-year strategic transformation plan that began on January 1, 2023. In conjunction with the strategic transformation plan and to enable a more efficient capital deployment model, effective with the quarter ended June 30, 2022, we began reporting under the following two lines of business, which are our reportable operating segments: Digital Agreements and Security Solutions.
- 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. This segment also includes costs attributable to our transaction cloud platform.
- 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 largely on-premises software products and include multi-factor authentication and transaction signing solutions, such as mobile application security and mobile software tokens.
Segment operating income consists of the revenues generated by a segment, less the direct costs of revenue, sales and marketing, research and development expenses, amortization expense, and restructuring and other related charges that are incurred directly by a segment. 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
|
|
Six Months Ended
|
|||||||||||||
(In thousands, except percentages) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
Digital Agreements |
|
|
|
|
|
|
|
|||||||||
Revenue |
$ |
15,463 |
|
|
$ |
11,862 |
|
|
$ |
29,876 |
|
|
$ |
23,414 |
|
|
Gross profit (1) |
$ |
9,741 |
|
|
$ |
8,583 |
|
|
$ |
19,632 |
|
|
$ |
17,031 |
|
|
Gross margin |
|
63 |
% |
|
|
72 |
% |
|
|
66 |
% |
|
|
73 |
% |
|
Operating loss (2) |
$ |
(155 |
) |
|
$ |
(7,121 |
) |
|
$ |
(420 |
) |
|
$ |
(13,154 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Security Solutions |
|
|
|
|
|
|
|
|||||||||
Revenue |
$ |
45,461 |
|
|
$ |
43,871 |
|
|
$ |
95,891 |
|
|
$ |
89,926 |
|
|
Gross profit (3) |
$ |
30,600 |
|
|
$ |
25,711 |
|
|
$ |
68,104 |
|
|
$ |
56,549 |
|
|
Gross margin |
|
67 |
% |
|
|
59 |
% |
|
|
71 |
% |
|
|
63 |
% |
|
Operating income (4) |
$ |
20,693 |
|
|
$ |
8,523 |
|
|
$ |
46,571 |
|
|
$ |
24,154 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Company: |
|
|
|
|
|
|
|
|||||||||
Revenue |
$ |
60,924 |
|
|
$ |
55,733 |
|
|
$ |
125,767 |
|
|
$ |
113,340 |
|
|
Gross profit |
$ |
40,341 |
|
|
$ |
34,294 |
|
|
$ |
87,736 |
|
|
$ |
73,580 |
|
|
Gross margin |
|
66 |
% |
|
|
62 |
% |
|
|
70 |
% |
|
|
65 |
% |
|
|
|
|
|
|
|
|
|
|||||||||
Statements of Operations reconciliation: |
|
|
|
|
|
|
|
|||||||||
Segment operating income |
$ |
20,538 |
|
|
$ |
1,402 |
|
|
$ |
46,151 |
|
|
$ |
11,000 |
|
|
Corporate operating expenses not allocated at the segment level |
|
12,901 |
|
|
|
19,166 |
|
|
|
24,404 |
|
|
|
36,894 |
|
|
Operating income (loss) |
$ |
7,637 |
|
|
$ |
(17,764 |
) |
|
$ |
21,747 |
|
|
$ |
(25,894 |
) |
|
Interest income, net |
|
521 |
|
|
|
585 |
|
|
|
622 |
|
|
|
1,088 |
|
|
Other income (expense), net |
|
331 |
|
|
|
29 |
|
|
|
622 |
|
|
|
(11 |
) |
|
Income (loss) before income taxes |
$ |
8,489 |
|
|
$ |
(17,150 |
) |
|
$ |
22,991 |
|
|
$ |
(24,817 |
) |
(1) |
Digital Agreements gross profit includes intangible asset write-off of |
|
(2) |
Digital Agreements operating loss includes |
|
(3) |
Security Solutions gross profit includes |
|
(4) |
Security Solutions operating income includes |
Revenue by major products and services (unaudited): |
||||||||||||
|
Three Months Ended June 30, |
|||||||||||
|
2024 |
|
2023 |
|||||||||
(In thousands) |
Digital Agreements |
|
Security Solutions |
|
Digital Agreements |
|
Security Solutions |
|||||
Subscription |
$ |
14,785 |
|
$ |
14,857 |
|
$ |
10,486 |
|
$ |
12,499 |
|
Maintenance and support |
|
490 |
|
|
9,742 |
|
|
1,130 |
|
|
10,473 |
|
Professional services and other (1) |
|
188 |
|
|
1,123 |
|
|
246 |
|
|
1,253 |
|
Hardware products |
|
— |
|
|
19,739 |
|
|
— |
|
|
19,646 |
|
Total Revenue |
$ |
15,463 |
|
$ |
45,461 |
|
$ |
11,862 |
|
$ |
43,871 |
|
|
Six Months Ended June 30, |
|||||||||||
|
2024 |
|
2023 |
|||||||||
(In thousands) |
Digital Agreements |
|
Security Solutions |
|
Digital Agreements |
|
Security Solutions |
|||||
Subscription |
|
28,597 |
|
|
41,039 |
|
|
20,834 |
|
|
32,107 |
|
Maintenance and support |
|
994 |
|
|
19,808 |
|
|
2,126 |
|
|
20,638 |
|
Professional services and other (1) |
|
285 |
|
|
2,728 |
|
|
454 |
|
|
2,669 |
|
Hardware products |
|
— |
|
|
32,316 |
|
|
— |
|
|
34,512 |
|
Total Revenue |
$ |
29,876 |
|
$ |
95,891 |
|
$ |
23,414 |
|
$ |
89,926 |
(1) |
Professional services and other includes perpetual software licenses revenue, which was approximately |
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 June 30, |
|
Six Months Ended June 30, |
|||||||||||||
(In thousands) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
Net income (loss) |
$ |
6,553 |
|
|
$ |
(17,751 |
) |
|
$ |
20,021 |
|
|
$ |
(26,107 |
) |
|
Interest income, net |
|
(521 |
) |
|
|
(585 |
) |
|
|
(622 |
) |
|
|
(1,088 |
) |
|
Provision for income taxes |
|
1,936 |
|
|
|
601 |
|
|
|
2,970 |
|
|
|
1,290 |
|
|
Depreciation and amortization of intangible assets (1) |
|
2,063 |
|
|
|
1,516 |
|
|
|
4,145 |
|
|
|
2,835 |
|
|
Long-term incentive compensation (2) |
|
1,994 |
|
|
|
4,571 |
|
|
|
3,615 |
|
|
|
8,494 |
|
|
Restructuring and other related charges (3) |
|
3,218 |
|
|
|
5,846 |
|
|
|
4,734 |
|
|
|
6,552 |
|
|
Other non-recurring items (4) |
|
906 |
|
|
|
1,974 |
|
|
|
1,077 |
|
|
|
2,559 |
|
|
Adjusted EBITDA |
$ |
16,149 |
|
|
$ |
(3,828 |
) |
|
$ |
35,940 |
|
|
$ |
(5,465 |
) |
(1) |
Includes cost of sales depreciation and amortization expense directly related to delivering cloud subscription revenue of |
|
(2) |
Long-term incentive compensation includes stock-based compensation and cash incentive grants awarded to employees located in jurisdictions where we do not issue stock-based compensation due to tax, regulatory or similar reasons. The immaterial expense associated with these cash incentive grants was |
|
(3) |
Includes write-offs of intangible assets and property and equipment, net of |
|
Includes immaterial restructuring and other related charges of less than |
||
(4) |
For the three months ended June 30, 2024, other non-recurring items consist of |
|
For the three months ended June 30, 2023, other non-recurring items consist of |
||
For the six months ended June 30, 2024, other non-recurring items consist of |
||
For the six months ended June 30, 2023, other non-recurring items consist of |
Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) 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, 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 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 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 (Loss) |
||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
Net income (loss) |
$ |
6,553 |
|
|
$ |
(17,751 |
) |
|
$ |
20,021 |
|
|
$ |
(26,107 |
) |
|
Amortization of intangible assets (1) |
|
666 |
|
|
|
704 |
|
|
|
1,381 |
|
|
|
1,327 |
|
|
Long-term incentive compensation (2) |
|
1,994 |
|
|
|
4,571 |
|
|
|
3,615 |
|
|
|
8,494 |
|
|
Restructuring and other related charges (3) |
|
3,218 |
|
|
|
5,846 |
|
|
|
4,734 |
|
|
|
6,552 |
|
|
Other non-recurring items (4) |
|
906 |
|
|
|
1,974 |
|
|
|
1,077 |
|
|
|
2,559 |
|
|
Tax impact of adjustments (5) |
|
(1,357 |
) |
|
|
(2,619 |
) |
|
|
(2,161 |
) |
|
|
(3,786 |
) |
|
Non-GAAP net income (loss) |
$ |
11,980 |
|
|
$ |
(7,275 |
) |
|
$ |
28,667 |
|
|
$ |
(10,961 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP net income (loss) per share |
$ |
0.31 |
|
|
$ |
(0.18 |
) |
|
$ |
0.74 |
|
|
$ |
(0.27 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Shares |
|
39,007 |
|
|
|
40,399 |
|
|
|
38,680 |
|
|
|
40,435 |
|
(1) |
Includes cost of sales amortization expense directly related to delivering cloud subscription revenue of |
|
(2) |
Long-term incentive compensation includes stock-based compensation and cash incentive grants awarded to employees located in jurisdictions where we do not issue stock-based compensation due to tax, regulatory or similar reasons. The immaterial expense associated with these cash incentive grants was |
|
(3) |
Includes write-offs of intangible assets and property and equipment, net of |
|
Includes immaterial restructuring and other related charges of less than |
||
(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) |
The tax impact of adjustments is calculated as |
Copyright© 2024 OneSpan North America Inc., all rights reserved. OneSpan™ is a registered or unregistered trademark of OneSpan North America Inc. or its affiliates in the
View source version on businesswire.com: https://www.businesswire.com/news/home/20240801904449/en/
Investor Contact:
Joe Maxa
Vice President of Investor Relations
+1-312-766-4009
joe.maxa@onespan.com
Source: OneSpan Inc.
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