OneSpan Reports Third Quarter 2024 Financial Results
OneSpan (NASDAQ: OSPN) reported Q3 2024 financial results with mixed performance. Total revenue decreased 4% year-over-year to $56.2 million, while subscription revenue grew 29% to $33.6 million. The company achieved significant profitability improvements with operating income of $11.3 million compared to a loss of $4.8 million in the previous year. Digital Agreements revenue increased 18% to $15.4 million, while Security Solutions revenue declined 11% to $40.8 million. The company narrowed its full-year 2024 revenue guidance to $238-242 million and increased Adjusted EBITDA guidance to $65-67 million.
OneSpan (NASDAQ: OSPN) ha riportato i risultati finanziari del terzo trimestre 2024 con una performance mista. I ricavi totali sono diminuiti del 4% su base annua a 56,2 milioni di dollari, mentre i ricavi da abbonamento sono aumentati del 29% a 33,6 milioni di dollari. L'azienda ha raggiunto significativi miglioramenti nella redditività, con un reddito operativo di 11,3 milioni di dollari rispetto a una perdita di 4,8 milioni di dollari dell'anno precedente. I ricavi da Digital Agreements sono aumentati del 18% a 15,4 milioni di dollari, mentre i ricavi da Security Solutions sono diminuiti dell'11% a 40,8 milioni di dollari. L'azienda ha ristretto la guidance sui ricavi per l'intero anno 2024 a 238-242 milioni di dollari e ha aumentato la guidance sull'EBITDA corretto a 65-67 milioni di dollari.
OneSpan (NASDAQ: OSPN) reportó los resultados financieros del tercer trimestre de 2024 con un desempeño mixto. Los ingresos totales disminuyeron un 4% en comparación con el año anterior, alcanzando los 56,2 millones de dólares, mientras que los ingresos de suscripción crecieron un 29% hasta 33,6 millones de dólares. La compañía logró mejoras significativas en la rentabilidad, con un ingreso operativo de 11,3 millones de dólares en comparación con una pérdida de 4,8 millones de dólares el año anterior. Los ingresos de Digital Agreements aumentaron un 18% a 15,4 millones de dólares, mientras que los ingresos de Security Solutions disminuyeron un 11% hasta 40,8 millones de dólares. La empresa redujo su guía de ingresos para todo el año 2024 a entre 238 y 242 millones de dólares y aumentó la guía de EBITDA ajustado a entre 65 y 67 millones de dólares.
OneSpan (NASDAQ: OSPN)은 2024년 3분기 재무 결과를 발표하였으나, 성과가 엇갈렸다. 총 수익은 전년 대비 4% 감소한 5,620만 달러였으며, 구독 수익은 29% 증가하여 3,360만 달러에 달했다. 회사는 전년도 480만 달러의 손실과 비교하여 1,130만 달러의 운영 수익을 올려 상당한 수익성 개선을 달성했다. Digital Agreements 수익은 18% 증가하여 1,540만 달러였고, Security Solutions 수익은 11% 감소하여 4,080만 달러에 그쳤다. 회사는 2024년 전체 연간 수익 가이던스를 2억 3,800만 달러에서 2억 4,200만 달러로 좁혔으며, 조정 EBITDA 가이던스를 6,500만 달러에서 6,700만 달러로 늘렸다.
OneSpan (NASDAQ: OSPN) a publié des résultats financiers pour le troisième trimestre 2024 avec des performances mitigées. Le chiffre d'affaires total a diminué de 4 % par rapport à l'année précédente, atteignant 56,2 millions de dollars, tandis que les revenus d'abonnement ont augmenté de 29 % pour atteindre 33,6 millions de dollars. L'entreprise a réalisé des améliorations significatives de rentabilité avec un résultat d'exploitation de 11,3 millions de dollars, comparé à une perte de 4,8 millions de dollars l'année précédente. Les revenus des Digital Agreements ont augmenté de 18 % à 15,4 millions de dollars, tandis que les revenus de Security Solutions ont diminué de 11 % à 40,8 millions de dollars. L'entreprise a affiné ses prévisions de revenus pour l'année 2024 entre 238 et 242 millions de dollars et a augmenté ses prévisions de l'EBITDA ajusté entre 65 et 67 millions de dollars.
OneSpan (NASDAQ: OSPN) hat die finanziellen Ergebnisse des dritten Quartals 2024 mit gemischter Leistung berichtet. Die Gesamterlöse sind im Vergleich zum Vorjahr um 4% auf 56,2 Millionen Dollar gesunken, während die Abonnementeinnahmen um 29% auf 33,6 Millionen Dollar gestiegen sind. Das Unternehmen erzielte erhebliche Verbesserungen bei der Rentabilität mit einem Betriebsergebnis von 11,3 Millionen Dollar im Vergleich zu einem Verlust von 4,8 Millionen Dollar im Vorjahr. Die Einnahmen aus Digital Agreements stiegen um 18% auf 15,4 Millionen Dollar, während die Einnahmen aus Security Solutions um 11% auf 40,8 Millionen Dollar zurückgingen. Das Unternehmen hat seine Prognose für die Gesamteinnahmen für das Jahr 2024 auf 238-242 Millionen Dollar eingegrenzt und die angepasste EBITDA-Prognose auf 65-67 Millionen Dollar angehoben.
- Operating income improved to $11.3 million from -$4.8 million loss year-over-year
- Subscription revenue grew 29% year-over-year to $33.6 million
- Digital Agreements revenue increased 18% to $15.4 million
- Gross profit margin improved to 74% from 69% year-over-year
- Net income reached $8.3 million vs -$4.1 million loss previous year
- Cash position strengthened to $77.5 million from $43.0 million at year-end 2023
- Increased Adjusted EBITDA guidance to $65-67 million
- Total revenue declined 4% year-over-year to $56.2 million
- Security Solutions revenue decreased 11% to $40.8 million
- Narrowed full-year revenue guidance due to reduced hardware token shipments
Insights
OneSpan's Q3 results demonstrate a strategic shift towards higher-margin subscription revenues amid overall revenue decline. The
The Digital Agreements segment shows strong momentum with
-
Operating income was
, compared to an operating loss of$11.3 million in the year-ago period$4.8 million -
Revenue decreased
4% year-over-year to$56.2 million -
Subscription revenue increased
29% year-over-year to$33.6 million -
Annual Recurring Revenue (ARR) increased
9% year-over-year to 1$163.9 million -
Net Retention Rate (NRR) of
106% 2
“We reported another strong quarter of subscription growth, profitability and cash generation driven by our team’s hard work and operational focus,” stated OneSpan CEO, Victor Limongelli. “The OneSpan team has done a tremendous job in delivering value to our customers while increasing our profitability. We are now much better positioned to drive efficient revenue growth over the long-term.”
Third Quarter 2024 Financial Highlights
-
Total revenue was
, a decrease of$56.2 million 4% compared to for the same quarter of 2023. Digital Agreements revenue was$58.8 million , an increase of$15.4 million 18% year-over-year. Security Solutions revenue was , a decrease of$40.8 million 11% year-over-year. -
ARR increased
9% year-over-year to .$163.9 million -
Gross profit was
, or$41.5 million 74% gross margin, compared to , or$40.7 million 69% in the same period last year. -
Operating income was
, compared to operating loss of$11.3 million in the same period last year.$4.8 million -
Net income was
, or$8.3 million per diluted share, compared to net loss of$0.21 , or$4.1 million per diluted share, in the same period last year. Non-GAAP net income was$(0.10) , or$13.1 million per diluted share, compared to net income of$0.33 , or$3.6 million per diluted share in the same period last year.3$0.09 -
Adjusted EBITDA was
, compared to$16.7 million in the same period last year.3$6.3 million -
Cash and cash equivalents were
at September 30, 2024 compared to$77.5 million at December 31, 2023.$43.0 million
Financial Outlook
For the full year 2024, OneSpan is narrowing the range of its previously issued revenue guidance to reflect a reduction in anticipated hardware token shipments, partially offset by stronger than previously expected subscription revenues. The Company is affirming its ARR guidance and is increasing its Adjusted EBITDA guidance to reflect stronger than originally anticipated operating leverage driven by improved execution of its cost savings initiatives.
More specifically, for the Full Year 2024, OneSpan expects:
-
Revenue to be in the range of
to$238 million , as compared to its previous guidance range of$242 million to$238 million .$246 million -
ARR to finish the year in the range of
to$166 million .$170 million -
Adjusted EBITDA to be in the range of
to$65 million , as compared to its previous guidance range of$67 million to$55 million .$59 million
Conference Call Details
In conjunction with this announcement, OneSpan Inc. will host a conference call today, October 30, 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 third quarter 2024.
For investors and analysts accessing the conference call by phone, please refer to the press release dated October 16, 2024, announcing the date of OneSpan’s third 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 September 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
|
|
Nine Months Ended
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Revenue |
|
|
|
|
|
|
|
||||||||
Product and license |
$ |
28,640 |
|
|
$ |
31,732 |
|
|
$ |
98,875 |
|
|
$ |
95,461 |
|
Services and other |
|
27,602 |
|
|
|
27,106 |
|
|
|
83,133 |
|
|
|
76,717 |
|
Total revenue |
|
56,242 |
|
|
|
58,838 |
|
|
|
182,008 |
|
|
|
172,178 |
|
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold |
|
|
|
|
|
|
|
||||||||
Product and license |
|
7,394 |
|
|
|
11,004 |
|
|
|
28,347 |
|
|
|
36,330 |
|
Services and other |
|
7,300 |
|
|
|
7,165 |
|
|
|
24,377 |
|
|
|
21,599 |
|
Total cost of goods sold |
|
14,694 |
|
|
|
18,169 |
|
|
|
52,724 |
|
|
|
57,929 |
|
|
|
|
|
|
|
|
|
||||||||
Gross profit |
|
41,548 |
|
|
|
40,669 |
|
|
|
129,284 |
|
|
|
114,249 |
|
|
|
|
|
|
|
|
|
||||||||
Operating costs |
|
|
|
|
|
|
|
||||||||
Sales and marketing |
|
10,138 |
|
|
|
16,664 |
|
|
|
33,574 |
|
|
|
56,388 |
|
Research and development |
|
7,533 |
|
|
|
10,133 |
|
|
|
24,133 |
|
|
|
29,686 |
|
General and administrative |
|
11,343 |
|
|
|
11,559 |
|
|
|
32,907 |
|
|
|
44,038 |
|
Restructuring and other related charges |
|
697 |
|
|
|
6,524 |
|
|
|
3,905 |
|
|
|
13,076 |
|
Amortization of intangible assets |
|
585 |
|
|
|
583 |
|
|
|
1,766 |
|
|
|
1,749 |
|
Total operating costs |
|
30,296 |
|
|
|
45,463 |
|
|
|
96,285 |
|
|
|
144,937 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) |
|
11,252 |
|
|
|
(4,794 |
) |
|
|
32,999 |
|
|
|
(30,688 |
) |
|
|
|
|
|
|
|
|
||||||||
Interest income, net |
|
624 |
|
|
|
587 |
|
|
|
1,246 |
|
|
|
1,675 |
|
Other income (expense), net |
|
(1,915 |
) |
|
|
353 |
|
|
|
(1,293 |
) |
|
|
342 |
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes |
|
9,961 |
|
|
|
(3,854 |
) |
|
|
32,952 |
|
|
|
(28,671 |
) |
Provision for income taxes |
|
1,688 |
|
|
|
279 |
|
|
|
4,658 |
|
|
|
1,569 |
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
8,273 |
|
|
$ |
(4,133 |
) |
|
$ |
28,294 |
|
|
$ |
(30,240 |
) |
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.21 |
|
|
$ |
(0.10 |
) |
|
$ |
0.74 |
|
|
$ |
(0.75 |
) |
Diluted |
$ |
0.21 |
|
|
$ |
(0.10 |
) |
|
$ |
0.73 |
|
|
$ |
(0.75 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding |
|
|
|
|
|
|
|
||||||||
Basic |
|
38,695 |
|
|
|
40,454 |
|
|
|
38,323 |
|
|
|
40,529 |
|
Diluted |
|
39,458 |
|
|
|
40,454 |
|
|
|
38,864 |
|
|
|
40,529 |
|
OneSpan Inc. |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(In thousands, unaudited) |
|||||||
|
September 30, |
|
December 31, |
||||
|
2024 |
|
2023 |
||||
ASSETS |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
77,478 |
|
|
$ |
43,001 |
|
Restricted cash |
|
350 |
|
|
|
529 |
|
Accounts receivable, net of allowances of |
|
28,841 |
|
|
|
64,387 |
|
Inventories, net |
|
13,019 |
|
|
|
15,553 |
|
Prepaid expenses |
|
6,703 |
|
|
|
6,575 |
|
Contract assets |
|
6,390 |
|
|
|
5,139 |
|
Other current assets |
|
9,092 |
|
|
|
11,159 |
|
Total current assets |
|
141,873 |
|
|
|
146,343 |
|
Property and equipment, net |
|
20,838 |
|
|
|
18,722 |
|
Operating lease right-of-use assets |
|
7,872 |
|
|
|
6,171 |
|
Goodwill |
|
96,132 |
|
|
|
93,684 |
|
Intangible assets, net of accumulated amortization |
|
8,117 |
|
|
|
10,832 |
|
Deferred income taxes |
|
1,770 |
|
|
|
1,721 |
|
Other assets |
|
12,672 |
|
|
|
11,718 |
|
Total assets |
$ |
289,274 |
|
|
$ |
289,191 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable |
$ |
13,279 |
|
|
$ |
17,452 |
|
Deferred revenue |
|
48,418 |
|
|
|
69,331 |
|
Accrued wages and payroll taxes |
|
9,452 |
|
|
|
14,335 |
|
Short-term income taxes payable |
|
3,160 |
|
|
|
2,646 |
|
Other accrued expenses |
|
5,903 |
|
|
|
10,684 |
|
Deferred compensation |
|
232 |
|
|
|
382 |
|
Total current liabilities |
|
80,444 |
|
|
|
114,830 |
|
Long-term deferred revenue |
|
2,929 |
|
|
|
4,152 |
|
Long-term lease liabilities |
|
7,431 |
|
|
|
6,824 |
|
Deferred income taxes |
|
1,104 |
|
|
|
1,067 |
|
Other long-term liabilities |
|
2,780 |
|
|
|
3,177 |
|
Total liabilities |
|
94,688 |
|
|
|
130,050 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders' equity |
|
|
|
||||
Preferred stock: 500 shares authorized, none issued and outstanding at September 30, 2024 and December 31, 2023 |
|
— |
|
|
|
— |
|
Common stock: |
|
38 |
|
|
|
38 |
|
Additional paid-in capital |
|
122,098 |
|
|
|
118,620 |
|
Treasury stock, at cost: 3,724 shares outstanding at September 30, 2024 and December 31, 2023 |
|
(47,377 |
) |
|
|
(47,377 |
) |
Retained earnings |
|
127,233 |
|
|
|
98,939 |
|
Accumulated other comprehensive loss |
|
(7,406 |
) |
|
|
(11,079 |
) |
Total stockholders' equity |
|
194,586 |
|
|
|
159,141 |
|
Total liabilities and stockholders' equity |
$ |
289,274 |
|
|
$ |
289,191 |
|
OneSpan Inc. |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(In thousands, unaudited) |
|||||||
|
Nine Months Ended September 30, |
||||||
|
2024 |
|
2023 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income (loss) |
$ |
28,294 |
|
|
$ |
(30,240 |
) |
Adjustments to reconcile net income (loss) from operations to net cash used in operations: |
|
|
|
||||
Depreciation and amortization of intangible assets |
|
6,086 |
|
|
|
4,524 |
|
Write-off of intangible assets |
|
804 |
|
|
|
— |
|
Write-off of property and equipment, net |
|
1,053 |
|
|
|
2,712 |
|
Impairments of inventories, net |
|
— |
|
|
|
1,568 |
|
Deferred tax (benefit) expense |
|
(14 |
) |
|
|
44 |
|
Stock-based compensation |
|
6,110 |
|
|
|
10,192 |
|
Provision for credit losses, net |
|
(124 |
) |
|
|
62 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
35,552 |
|
|
|
26,334 |
|
Inventories, net |
|
2,639 |
|
|
|
(5,277 |
) |
Contract assets |
|
(2,080 |
) |
|
|
(542 |
) |
Accounts payable |
|
(4,197 |
) |
|
|
(834 |
) |
Income taxes payable |
|
519 |
|
|
|
(2,826 |
) |
Accrued expenses |
|
(9,491 |
) |
|
|
(4,620 |
) |
Deferred compensation |
|
(150 |
) |
|
|
(67 |
) |
Deferred revenue |
|
(22,165 |
) |
|
|
(15,425 |
) |
Other assets and liabilities |
|
405 |
|
|
|
557 |
|
Net cash provided by (used in) operating activities |
|
43,241 |
|
|
|
(13,838 |
) |
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Maturities of short-term investments |
|
— |
|
|
|
2,330 |
|
Additions to property and equipment |
|
(7,273 |
) |
|
|
(9,035 |
) |
Additions to intangible assets |
|
(53 |
) |
|
|
(31 |
) |
Cash paid for acquisition of business |
|
— |
|
|
|
(1,800 |
) |
Net cash used in investing activities |
|
(7,326 |
) |
|
|
(8,536 |
) |
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Contingent payment related to acquisition |
|
(200 |
) |
|
|
— |
|
Tax payments for restricted stock issuances |
|
(2,632 |
) |
|
|
(2,335 |
) |
Repurchase of common stock |
|
— |
|
|
|
(3,527 |
) |
Net cash used in financing activities |
|
(2,832 |
) |
|
|
(5,862 |
) |
|
|
|
|
||||
Effect of exchange rate changes on cash |
|
1,215 |
|
|
|
145 |
|
|
|
|
|
||||
Net increase (decrease) in cash |
|
34,298 |
|
|
|
(28,091 |
) |
Cash, cash equivalents, and restricted cash, beginning of period |
|
43,530 |
|
|
|
97,375 |
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
77,828 |
|
|
$ |
69,284 |
|
Operating Segments
Since the quarter ended June 30, 2022, we have reported our financial results 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
|
|
Nine Months Ended
|
||||||||||||
(In thousands, except percentages) |
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Digital Agreements |
|
|
|
|
|
|
|
||||||||
Revenue |
$ |
15,405 |
|
|
$ |
13,012 |
|
|
$ |
45,280 |
|
|
$ |
36,426 |
|
Gross profit (1) |
$ |
11,031 |
|
|
$ |
9,808 |
|
|
$ |
30,664 |
|
|
$ |
26,839 |
|
Gross margin |
|
72 |
% |
|
|
75 |
% |
|
|
68 |
% |
|
|
74 |
% |
Operating income (loss) (2) |
$ |
3,419 |
|
|
$ |
(4,666 |
) |
|
$ |
3,000 |
|
|
$ |
(17,820 |
) |
|
|
|
|
|
|
|
|
||||||||
Security Solutions |
|
|
|
|
|
|
|
||||||||
Revenue |
$ |
40,837 |
|
|
$ |
45,826 |
|
|
$ |
136,728 |
|
|
$ |
135,752 |
|
Gross profit (3) |
$ |
30,517 |
|
|
$ |
30,861 |
|
|
$ |
98,620 |
|
|
$ |
87,410 |
|
Gross margin |
|
75 |
% |
|
|
67 |
% |
|
|
72 |
% |
|
|
64 |
% |
Operating income (4) |
$ |
20,200 |
|
|
$ |
15,673 |
|
|
$ |
66,770 |
|
|
$ |
39,827 |
|
|
|
|
|
|
|
|
|
||||||||
Total Company: |
|
|
|
|
|
|
|
||||||||
Revenue |
$ |
56,242 |
|
|
$ |
58,838 |
|
|
$ |
182,008 |
|
|
$ |
172,178 |
|
Gross profit |
$ |
41,548 |
|
|
$ |
40,669 |
|
|
$ |
129,284 |
|
|
$ |
114,249 |
|
Gross margin |
|
74 |
% |
|
|
69 |
% |
|
|
71 |
% |
|
|
66 |
% |
|
|
|
|
|
|
|
|
||||||||
Statements of Operations reconciliation: |
|
|
|
|
|
|
|
||||||||
Segment operating income |
$ |
23,619 |
|
|
$ |
11,007 |
|
|
$ |
69,770 |
|
|
$ |
22,007 |
|
Corporate operating expenses not allocated at the segment level |
|
12,367 |
|
|
|
15,801 |
|
|
|
36,771 |
|
|
|
52,695 |
|
Operating income (loss) |
$ |
11,252 |
|
|
$ |
(4,794 |
) |
|
$ |
32,999 |
|
|
$ |
(30,688 |
) |
Interest income, net |
|
624 |
|
|
|
587 |
|
|
|
1,246 |
|
|
|
1,675 |
|
Other income (expense), net |
|
(1,915 |
) |
|
|
353 |
|
|
|
(1,293 |
) |
|
|
342 |
|
Income (loss) before income taxes |
$ |
9,961 |
|
|
$ |
(3,854 |
) |
|
$ |
32,952 |
|
|
$ |
(28,671 |
) |
(1) |
Digital Agreements gross profit includes intangible asset write-off of |
(2) |
Digital Agreements operating income (loss) includes |
(3) |
Security Solutions gross profit includes |
(4) |
Security Solutions operating income includes |
Revenue by major products and services (unaudited):
|
Three Months Ended September 30, |
||||||||||
|
2024 |
|
2023 |
||||||||
(In thousands) |
Digital Agreements |
|
Security Solutions |
|
Digital Agreements |
|
Security Solutions |
||||
Subscription |
$ |
15,045 |
|
$ |
18,603 |
|
$ |
11,807 |
|
$ |
14,378 |
Maintenance and support |
|
327 |
|
|
9,317 |
|
|
995 |
|
|
11,276 |
Professional services and other (1) |
|
33 |
|
|
820 |
|
|
210 |
|
|
1,333 |
Hardware products |
|
— |
|
|
12,097 |
|
|
— |
|
|
18,839 |
Total Revenue |
$ |
15,405 |
|
$ |
40,837 |
|
$ |
13,012 |
|
$ |
45,826 |
|
Nine Months Ended September 30, |
||||||||||
|
2024 |
|
2023 |
||||||||
(In thousands) |
Digital Agreements |
|
Security Solutions |
|
Digital Agreements |
|
Security Solutions |
||||
Subscription |
$ |
43,641 |
|
$ |
59,642 |
|
$ |
32,641 |
|
$ |
46,485 |
Maintenance and support |
|
1,321 |
|
|
29,125 |
|
|
3,121 |
|
|
31,914 |
Professional services and other (1) |
|
318 |
|
|
3,548 |
|
|
664 |
|
|
4,002 |
Hardware products |
|
— |
|
|
44,413 |
|
|
— |
|
|
53,351 |
Total Revenue |
$ |
45,280 |
|
$ |
136,728 |
|
$ |
36,426 |
|
$ |
135,752 |
(1) |
Professional services and other includes perpetual software licenses revenue, which was less than |
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 September 30, |
|
Nine Months Ended September 30, |
||||||||||||
(In thousands) |
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net income (loss) |
$ |
8,273 |
|
|
$ |
(4,133 |
) |
|
$ |
28,294 |
|
|
$ |
(30,240 |
) |
Interest income, net |
|
(624 |
) |
|
|
(587 |
) |
|
|
(1,246 |
) |
|
|
(1,675 |
) |
Provision for income taxes |
|
1,688 |
|
|
|
279 |
|
|
|
4,658 |
|
|
|
1,569 |
|
Depreciation and amortization of intangible assets (1) |
|
1,941 |
|
|
|
1,689 |
|
|
|
6,086 |
|
|
|
4,524 |
|
Long-term incentive compensation (2) |
|
2,744 |
|
|
|
1,933 |
|
|
|
6,358 |
|
|
|
10,426 |
|
Restructuring and other related charges (3) |
|
720 |
|
|
|
6,524 |
|
|
|
5,454 |
|
|
|
13,076 |
|
Other non-recurring items (4) |
|
1,983 |
|
|
|
599 |
|
|
|
3,060 |
|
|
|
3,160 |
|
Adjusted EBITDA |
$ |
16,725 |
|
|
$ |
6,304 |
|
|
$ |
52,664 |
|
|
$ |
840 |
|
(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 restructuring and other related charges of less than |
(4) |
For the three months ended September 30, 2024 and 2023, other non-recurring items consist of |
|
For the nine months ended September 30, 2024, 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 September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net income (loss) |
$ |
8,273 |
|
|
$ |
(4,133 |
) |
|
$ |
28,294 |
|
|
$ |
(30,240 |
) |
Amortization of intangible assets (1) |
|
585 |
|
|
|
583 |
|
|
|
1,967 |
|
|
|
1,749 |
|
Long-term incentive compensation (2) |
|
2,744 |
|
|
|
1,933 |
|
|
|
6,358 |
|
|
|
10,426 |
|
Restructuring and other related charges (3) |
|
720 |
|
|
|
6,524 |
|
|
|
5,454 |
|
|
|
13,076 |
|
Other non-recurring items (4) |
|
1,983 |
|
|
|
599 |
|
|
|
3,060 |
|
|
|
3,160 |
|
Tax impact of adjustments (5) |
|
(1,206 |
) |
|
|
(1,928 |
) |
|
|
(3,368 |
) |
|
|
(5,682 |
) |
Non-GAAP net income (loss) |
$ |
13,099 |
|
|
$ |
3,578 |
|
|
$ |
41,765 |
|
|
$ |
(7,511 |
) |
|
|
|
|
|
|
|
|
||||||||
Non-GAAP net income (loss) per share |
$ |
0.33 |
|
|
$ |
0.09 |
|
|
$ |
1.07 |
|
|
$ |
(0.19 |
) |
|
|
|
|
|
|
|
|
||||||||
Shares |
|
39,458 |
|
|
|
40,999 |
|
|
|
38,864 |
|
|
|
40,529 |
|
(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 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/20241030491620/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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