OneSpan Inc.
For the period ended Dec 31, 2025. Filed Feb 26, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 26, 2026
OSPN$21.59-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-27.
0001628280-25-008750
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-26.
0001044777-26-000008
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 208 previous paragraphs and 197 current paragraphs.
99 unchanged; 72 reworded; 26 added; 35 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
OneSpan helps organizations build secure, seamless, and trusted digital experiences through two solution portfolios: Cybersecurity and Digital Agreements. Our cybersecurity solutions protect identities, secure mobile apps, and safeguard access through advanced high-assurance authentication, threat intelligence, fraud prevention, and mobile app protection, defending users, devices, and applications against sophisticated attacks. Our digital agreement solutions streamline agreement workflows with secure e-signatures, identity verification, and smart digital forms, built to enable speed, compliance and exceptional customer experiences. Trusted by leading global enterprises, including more than 60% of the world’s 100 largest banks, OneSpan processes over a hundred million digital agreements and billions of secure authentication transactions across more than 120 countries each year.
Current report
Beginning in mid-2023 and through the third quarter of 2024, our focus was on adjusting our cost structure to enable both business divisions to operate profitably. These cost optimization efforts were a major factor in the overall business returning to operating profitability in the fourth quarter of 2023. The subsequent increase in profitability, combined with high levels of cash generation, enabled us to return approximately $31.6 million to shareholders in 2025 in the form of quarterly dividends and share repurchases. Beginning in the fourth quarter of 2024 and continuing through 2025, we continued to operate profitably while taking a number of important steps to generate future revenue growth:
Current report
•In December 2024, we hired a new Chief Technology Officer, Ashish Jain, to lead our research and development efforts.
Current report
•In June 2025, we acquired Nok Nok Labs, a provider of passwordless software authentication solutions, which brought S3, a leading FIDO software product, to our product portfolio. This acquisition provides OneSpan's customers with a wider range of flexible, adaptable authentication options. See Note 6, Business Acquisitions, for additional information.
Current report
•In June 2025, we entered into the Credit Agreement with MUFG and other lenders party thereto. The Credit Agreement provides for a $100.0 million revolving credit facility with a $10.0 million letter of credit sublimit and a $10.0 million swingline loan sublimit. The proceeds of borrowings under the Credit Agreement may be used for general corporate purposes. We may borrow, repay and reborrow funds under the revolving credit facility until its maturity on June 23, 2030. See Note 12, Debt, for additional information.
Current report
•In October 2025, we announced a strategic investment in, and partnership with, ThreatFabric Holding B.V., a Dutch company that provides mobile threat intelligence, malware risk detection, and behavioral analytics, to further enhance the value we offer by providing fraud detection solutions to our customers. See Note 2, Summary of Significant Accounting Policies, for additional information.
Current report
•In December 2025, we hired a new Chief Revenue Officer, Shaun Bierweiler, to lead our go-to-market efforts, and to drive growth and customer success.
Current report
•Later in December 2025, we entered into a definitive agreement to acquire Build38, a leader in next-generation mobile application protection solutions, to extend our investment in advanced mobile security technologies. See Note 6, Business Acquisitions, for additional information.
Current report
Our efforts to broaden and strengthen our product offerings are driven in part by a secular shift away from physical authentication devices such as our Digipass tokens. Because consumers increasingly interact with their banks through their mobile devices rather than desktop computers, they are more likely to prefer authentication methods that enable secure, convenient access to mobile banking apps without the need for a physical device. In response to this trend, our bank and financial institution customers have increasingly adopted a “mobile first” approach to consumer authentication that prioritizes the mobile user experience over traditional desktop experiences. This approach has resulted in a reduction of Digipass hardware authenticator sales and an increase in sales of software authentication licenses delivered through software applications on mobile devices. Due largely to the mobile first trend, our revenue from Digipass devices declined from 78% of our revenue in 2015 to 20% of our revenue in 2025. Although we plan to continue to invest in our Digipass authenticators, including our newer FIDO2 Digipass devices, as an important component of our broad authentication solution portfolio, we are focused on driving revenue growth in higher–margin software solutions, both through further expansion of our Cybersecurity software solutions and through continued growth in our Digital Agreements division.
Current report
Other Expense, Net
Current report
As of December 31, 2025, we adopted ASU 2023-09, Income Taxes (Topic 740) –Improvements to Income Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures. See Note 14, Income Taxes, for additional information.
Current report
For the year ended December 31, 2025, revenue generated in EMEA was $6.0 million, or 5%, lower than the same period in 2024, primarily due to lower hardware volumes attributed to the mobile-first trend and end-of-life products, partially offset by an increase in revenue from mobile application security products.
Current report
Gross profit increased $4.8 million, or 3% for the year ended December 31, 2025 compared to the year ended December 31, 2024. Total gross margin was 74% for the year ended December 31, 2025, compared to 72% for the year ended December 31, 2024. The change was primarily driven by an increase in software revenue and decrease in hardware revenue, and the prior year impact of the 2024 write-off.
Current report
•Cybersecurity gross profit decreased $0.6 million for the year ended December 31, 2025 compared to the prior year. Cybersecurity gross margin was 74% and 73% for the years ended December 31, 2025 and 2024, respectively. The increase in the gross margin of 1% was due to an increase in higher-margin hardware revenue, despite lower overall hardware revenue, due to favorable hardware product and customer mix partially offset by slightly lower margins in software revenue, despite higher overall software revenue, primarily due to incremental third party costs.
Current report
Sales and marketing expenses increased $2.4 million, or 5%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was driven primarily by higher employee compensation costs, which included increases in salaries, benefits and commission as a result of headcount additions, including the acquisition of Nok Nok Labs. This increase was partially offset by decreased software licensing costs and lead generation costs due to rationalization efforts.
Current report
Research and development expenses increased $1.7 million, or 5%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase in expense for the period was primarily driven by higher compensation and related benefit costs, including the acquisition of Nok Nok Labs, and lower internal software capitalization costs in 2025 compared to 2024.
Current report
Amortization of intangible assets was $2.5 million and $2.4 million for years ended December 31, 2025 and 2024, respectively. The increase in 2025 as compared to 2024 relates to increased amortization from the intangible assets associated with the acquisition of Nok Nok Labs.
Current report
Segment Operating Income
Current report
•Cybersecurity: For the year ended December 31, 2025, Cybersecurity operating income was $80.0 million, which was $10.1 million, or 11%, lower than the prior year. This decrease was largely due to higher sales and marketing expenses and research and development expenses, including employee compensation and external advisor expenses, partially offset by lower restructuring costs.
Current report
•Digital Agreements: Operating income for the year ended December 31, 2025 was $16.0 million, compared to $5.6 million in the prior year. The increase was driven by higher gross profit as discussed in the gross profit section above and lower operating expenses primarily due to lower employee compensation costs.
Current report
Other Expense, Net
Current report
For the year ended December 31, 2025, other expense, net was $1.1 million, compared to $0.1 million for the year ended December 31, 2024. The change was largely driven by increased foreign exchange transaction losses in 2025 compared to foreign exchange transaction losses in 2024, as well as lower income from foreign government subsidies.
Current report
Benefit from income taxes
Current report
We reported NRR of 104% and 106% at December 31, 2025 and 2024, respectively. The year-over-year change in NRR was primarily due to a decrease in contracts that increased in value and to a lesser extent, an increase in contracts that decreased in value, or contracted, partially offset by a reduction in churned contracts.
Current report
Starting January 1, 2025, employer payroll taxes related to employee stock-based award transactions are included in long-term incentive compensation and related payroll tax expense. Prior period amounts have been adjusted to reflect these changes. We are excluding these payroll taxes from Adjusted EBITDA results since they are tied to the timing and size of the vesting of the underlying stock-based awards and the price of our common stock at the time of vesting, which may vary from period to period independent of our operating performance. Employer payroll taxes related to employee stock-based award transactions amounted to $1.0 million and $0.9 million for the years ended December 31, 2025 and 2024, respectively.
Current report
For the year ended December 31, 2025, net cash used in financing activities was $38.4 million, which was attributable to dividends paid, cash paid for share repurchases, tax payments for stock issuances, and payment of debt issuance costs.
Removed paragraphs (35)
Previous report
OneSpan delivers cutting-edge solutions in two key areas: advanced secure authentication and digital agreements. Our secure authentication solutions protect devices, users, and applications with robust multi-factor and passwordless authentication and other fraud prevention technologies. Our digital agreements solutions combine identity verification, electronic signatures, and digital workflows to streamline agreements, enhance compliance, and accelerate business processes. We empower organizations to automate and secure both customer-facing and revenue-generating processes, supporting a wide range of use cases—from simple transactions to complex workflows requiring elevated 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 secure authentication transactions in more than 100 countries annually.
Previous report
Business Segments
Previous report
During 2022 and the first half of 2023, OneSpan was operating under a three-year strategic plan that focused on driving revenue growth in Digital Agreements. However, in mid-2023, we determined that we were unlikely to achieve the revenue growth levels set forth in that strategic plan within the contemplated three-year timeframe due to a number of factors, including increasing maturity and competitiveness in the market for e-signature solutions, limited awareness of our brand among buyers of e-signature tools, and higher pricing aggressiveness from competitors.
Previous report
In response to these challenges, we modified our strategy to focus more heavily on improving profitability across the business. To this end, in August 2023, our Board approved the 2023 Actions (discussed below) to achieve higher levels of profitability while maintaining the Company's long-term growth potential. .
Previous report
We now seek to drive profitable, efficient growth in both operating segments, with a particular emphasis on subscription revenue growth. Digital Agreements became profitable for the first time in the third quarter of 2024 and both operating segments were profitable for the full year 2024. Security Solutions and Digital Agreements subscription revenue grew 33% and 28% year-over-year in 2024, respectively.
Previous report
Security Solutions total revenue decreased 1% in 2024, largely due to a reduction in hardware revenues driven by certain customers adopting a “mobile-first” approach, which prioritizes the mobile user experience over traditional desktop and hardware experiences, particularly for consumer banking. This approach has resulted in a reduction of Digipass hardware authenticator sales and an increase in sales of software authentication licenses delivered through software applications on mobile devices. As organizations embrace the convenience and accessibility of mobile technology, we expect to increase our focus on high-margin software solutions while continuing to invest in our hardware authentication solutions in order to meet diverse customer needs.
Previous report
Digital Agreements total revenue increased 20% in 2024 and we substantially completed transitioning the segment to a SaaS revenue model.
Previous report
We plan to incrementally take actions under the restructuring plan until December 31, 2025, when the plan terminates. We completed substantially all of the workforce reductions planned as part of the 2023 Actions in 2023 and 2024. The vendor contract component of the 2023 Actions is planned for completion by the end of 2025.
Previous report
•Impairment of intangible assets. Impairment of intangible assets are incurred when we determine that the carrying value of an asset exceeds its fair value. We test annually, or when triggering events arise. During the year ended December 31, 2022, we performed an impairment review of the customer relationships intangible assets obtained in our 2018 acquisition of Dealflo Limited (“Dealflo”). The impairment review was triggered by our July 2022 notification to customers regarding our intent to gradually sunset our Dealflo solution in the months leading up to December 31, 2023. The results of the impairment review indicated that the carrying value of the Dealflo customer relationships exceeded the fair value, and we recorded a $3.8 million impairment charge on the entire remaining value of the asset during the year ended December 31, 2022. This was recorded in "restructuring and other related charges" on the consolidated statements of operations.
Previous report
Other Income (Expense), Net
Previous report
Revenue
Previous report
(1)Professional services and other includes perpetual software licenses revenue, which was immaterial for the year ended December 31, 2024 and approximately 1% of total revenue for the year ended December 31, 2023.
Previous report
For the year ended December 31, 2024, revenue generated in EMEA was $3.0 million or 3% lower than the same period in 2023, primarily driven by a decrease in hardware revenue due to lower volumes sold and the impact of sunsetting our Dealflo solution, largely offset by an increase in software authentication revenue from customer expansions.
Previous report
Gross profit increased $16.9 million, or 11% for the year ended December 31, 2024 compared to the year ended December 31, 2023. Total gross margin was 72% for the year ended December 31, 2024, compared to 67% for the year ended December 31, 2023. The increase in total gross profit was driven by higher software versus hardware revenue mix and the changes in cost of revenue discussed above.
Previous report
•Security Solutions gross profit increased $12.9 million, or approximately 11%, for the year ended December 31, 2024 compared to the prior year. The increase in gross profit was primarily driven by an increase in subscription revenue. Security Solutions gross margin was 73% and 65% for the years ended December 31, 2024 and 2023, respectively. The increase in gross margin is primarily the result of increased subscription revenue which is a higher margin product, combined with a decline in hardware revenue, which has lower margins.
Previous report
Sales and marketing expenses decreased $25.7 million, or 37%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily driven by lower employee compensation costs which included decreases in commissions, salaries, and benefits as a result of headcount reductions, decreased consulting and marketing costs, and lower travel and entertainment expenses.
Previous report
General and administrative expenses decreased $12.3 million, or 21%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This decrease in expense was largely due to lower employee compensation costs, which included a decrease in salaries, severance, payroll taxes, and related benefits as a result of lower headcount. Additionally, stock-based compensation expense was lower year-over-year due to lower headcount, including the termination of our former CEO, and lower annual equity awards granted to employees. These decreases were offset by higher bonus accruals and other non-recurring expenses.
Previous report
Amortization of intangible assets was $2.4 million for both years ended December 31, 2024 and 2023.
Previous report
Segment Operating Income (Loss)
Previous report
•Security Solutions: For the year ended December 31, 2024, Security Solutions operating income was $90.1 million, which was $29.9 million, or 50%, higher than the prior year. This increase was driven by higher gross profit (discussed above), a result of favorable product and revenue mix, and lower sales and marketing expenses, research and development expenses, and restructuring expenses all largely due to lower employee costs due to lower headcount.
Previous report
•Digital Agreements: Operating income for the year ended December 31, 2024 was $5.6 million, compared to an operating loss of $18.5 million for the prior year. The increase in operating income was primarily driven by higher revenue, lower sales and marketing expenses and research and development expenses, including lower employee compensation costs, marketing expenses, travel and entertainment costs, and lower restructuring expenses, partially offset by the write-off of our acquired blockchain technology and related capitalized software in 2024.
Previous report
Other Income (Expense), Net
Previous report
For the year ended December 31, 2024, other income (expense), net was $(0.1) million, compared to $(0.5) million for the year ended December 31, 2023. The fluctuation was primarily driven by a decrease in subsidies received from foreign governments, offset by lower transaction losses due to the favorable US dollar rate against other functional currencies and lower loss on disposal of assets.
Previous report
(Benefit) provision for income taxes
Previous report
We reported NRR of 106% and 110% at December 31, 2024 and 2023, respectively. Year-over-year, NRR was primarily impacted by the same factors that affected ARR, as discussed above.
Previous report
Our working capital at December 31, 2024 was $64.8 million, a increase of $33.3 million, or 106%, from $31.5 million at December 31, 2023. The increase was due to a significantly higher cash balance, partially offset by lower accounts receivable, and lower accounts payable, accrued wages and payroll taxes, and deferred revenue.
Previous report
For the year ended December 31, 2023, net cash used in financing activities was $32.1 million, which consisted of $29.2 million of common stock repurchases, both in open market repurchases and pursuant to the Tender Offer discussed in Note 2, Summary of Significant Accounting Policies, in the notes to consolidated financial statements included in Part IV, Item 15, Exhibits and Financial Statements Schedules, and $2.9 million of tax payments for restricted stock issuances.
Previous report
We have taxes payable of $0.5 million due within 1 year, which primarily represent deemed repatriation tax from 2017. We had $0 of unrecognized tax benefits as of both December 31, 2024 and 2023.
Previous report
The Company also enters into separate service agreements with certain hardware customers to perform distribution services. In these situations, revenue is recognized prior to physical delivery of a good (i.e. “bill-and-hold arrangements). The Company evaluates bill-and-hold arrangements, and records revenue accordingly when the following criteria are met:
Previous report
•The reason for the bill-and-hold arrangement is substantive;
Previous report
•The product is identified separately as belonging to the customer;
Previous report
•The product currently is ready for physical transfer to the customer; and
Previous report
•OneSpan does not have the ability to use the product or to direct it to another customer.
Previous report
Credit Losses
Previous report
In accordance with Accounting Standards Update ("ASU") No. 2016-13, the Company evaluates its allowance based on expected losses rather than incurred losses, which is known as the current expected credit loss ("CECL") model. The allowance is determined using the loss rate approach and is measured on a collective (pool) basis when similar risk characteristics exist. Where financial instruments do not share risk characteristics, they are evaluated on an individual basis. The allowance is based on relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.
Reworded paragraphs (72)
Previous wording
We report our financial results under the following two lines of business, which are our reportable operating segments: Security Solutions and Digital Agreements.
Current wording
We report our financial results under the following two business divisions, which are our reportable operating segments: Cybersecurity and Digital Agreements.
Previous wording
•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.
Current wording
•Cybersecurity. Cybersecurity, formerly Security Solutions, consists of our broad portfolio of software products, software development kits ("SDKs") and Digipass authenticator devices that are used to build applications designed to defend against attacks on digital transactions across online environments, devices, and applications. The software products and SDKs included in the Cybersecurity segment are delivered through on-premises and cloud-based deployment models and include standards-based authentication technologies such as Fast Identity Online ("FIDO") authentication and passkeys, multi-factor authentication, transaction signing solutions and mobile application security.
Previous wording
•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.
Current wording
•Digital Agreements. Digital Agreements consists of solutions that enable our clients to secure and automate business processes associated with their digital agreement and customer transaction lifecycles that require consent, non-repudiation and compliance. These solutions, which are cloud-based, include OneSpan Sign e-signature, OneSpan Notary, and OneSpan Identity Verification.
Previous wording
In December 2021, our Board approved a restructuring plan designed to advance our operating model, streamline our business, improve efficiency, and enhance our capital resources. The first phase of this restructuring plan began and was substantially completed during the three months ended March 31, 2022. In May 2022, our Board approved additional actions related to the restructuring plan through the year ending December 31, 2025. The additional actions consisted primarily of headcount-related reductions designed to continue to advance the same objectives as the first phase of the plan.
Current wording
In 2021 and 2022, our board of directors approved cost reduction actions designed to advance our operating model, streamline our business, improve efficiency, and enhance our capital resources.
Previous wording
In August 3, 2023, our Board of Directors approved further cost reduction actions (the "2023 Actions"). In connection with the 2023 Actions, we have incurred and expect to continue to incur restructuring charges, most of which relate to employee transition and severance payments and employee benefits, with a significantly smaller amount of charges relating to vendor contract termination and rationalization actions. We currently expect that we will incur restructuring charges of approximately $0.5 million to $1.0 million related to the 2023 Actions in periods after 2024, substantially all of which relate to employee transition and severance payments.
Current wording
In August 3, 2023, our board of directors approved further cost reduction actions (the "2023 Actions"). In connection with the 2023 Actions, we have incurred restructuring charges, most of which relate to employee transition and severance payments and employee benefits, with a significantly smaller amount of charges relating to vendor contract termination and rationalization actions. We terminated our restructuring plan as of December 31, 2025, as we substantially completed all of the workforce reductions and vendor contract termination and rationalization actions planned as part of the 2023 Actions from 2023 through 2025.
Previous wording
As part of the restructuring plan (including the 2023 Actions), we reduced headcount by eliminating approximately 330 positions. We incurred severance and related benefits costs, recorded in “Restructuring and other related charges” in the consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022.
Current wording
As part of the restructuring plan (including the 2023 Actions), we reduced headcount by eliminating approximately 345 positions. We incurred severance and related benefits costs, recorded in “Restructuring and other related charges” in the consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023.
Previous wording
On December 16, 2024, the Board of Directors declared a 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 as of the close of business on January 31, 2025. The declaration and payment of future dividends is subject to the sole discretion of the Board of Directors.
Current wording
On February 26, 2026, our board of directors declared a quarterly cash dividend as part of our recurring quarterly dividend program announced in December 2024. A cash dividend of $0.13 per share, which represents a year-over-year increase of 8.3%, will be paid on March 27, 2026 to shareholders of record as of the close of business on March 13, 2026. The declaration and payment of future dividends is subject to the sole discretion of the board.
Previous wording
Historically, operating expenses have been impacted by changes in foreign exchange rates. We estimate the change in currency rates in 2024 compared to 2023 resulted in a decrease in operating expenses of less than $0.1 million in 2024.
Current wording
Historically, operating expenses have been impacted by changes in foreign exchange rates. We estimate the change in currency rates in 2025 compared to 2024 resulted in an increase in operating expenses of $1.3 million in 2025.
Previous wording
The comparison of operating expenses can also be impacted significantly by costs related to our share-based and long-term incentive plans. In 2024, 2023, and 2022, operating expenses included $9.2 million, $14.6 million, and $8.8 million, respectively, of expenses related to share-based and long-term incentive plans. For the year ended December 31, 2024, stock-based compensation declined as compared to the year ended December 31, 2023, which was largely due to the departure of our former CEO and forfeitures recorded upon his termination, timing of annual grants, and a lower level of employee equity awards granted in 2024 compared to 2023. However, this decline was partially offset by the awards granted to our current CEO when he accepted his permanent role of President and CEO in 2024. Long-term incentive plan compensation expense consists of share-based incentives and an immaterial amount of cash-based incentives.
Current wording
The comparison of operating expenses can also be impacted significantly by costs related to our share-based and long-term incentive plans. In 2025, 2024, and 2023, operating expenses included $11.3 million, $9.2 million, and $14.6 million, respectively, of expenses related to share-based and long-term incentive plans. Long-term incentive plan compensation expense consists of share-based incentives and an immaterial amount of cash-based incentives.
Previous wording
•Research and development. Research and development expenses consist primarily of personnel costs and long-term incentive compensation. Our research and development expenses may fluctuate as a percentage of total revenue.
Current wording
•Research and development. Research and development expenses consist primarily of personnel costs (net of capitalized software costs), bonuses, and long-term incentive compensation. Our research and development expenses may fluctuate as a percentage of total revenue.
Previous wording
•General and administrative. General and administrative expenses consist primarily of personnel costs, legal, consulting and other professional fees, and long-term incentive compensation. Our general and administrative expenses may fluctuate as a percentage of total revenue.
Current wording
•General and administrative. General and administrative expenses consist primarily of personnel costs, bonuses, legal, consulting and other professional fees, transaction related expenses, and long-term incentive compensation. Our general and administrative expenses may fluctuate as a percentage of total revenue.
Previous wording
•Restructuring and other related charges. Restructuring and other related charges consists of employee costs which include severance, retention pay, and related benefits incurred in connection with headcount reductions as part of our restructuring plan, including the 2023 Actions; real estate rationalization costs incurred to optimize our real estate footprint which include lease contract termination costs, asset impairment charges, and lease right-of-use asset and lease liability write-off gains or losses; product and services optimization costs incurred to advance our operating model, which include write-offs of capitalized software assets no longer in use; write-offs of acquired blockchain technology and related capitalized software due to the discontinuation of incremental development investments in this technology and related commercial efforts; and vendor rationalization costs for contractually committed services that we are no longer utilizing. We plan to incrementally incur additional restructuring costs through December 31, 2025, when the restructuring plan terminates and the 2023 Actions are completed.
Current wording
•Restructuring and other related charges. Restructuring and other related charges consists of employee costs which include severance, retention pay, and related benefits incurred in connection with headcount reductions as part of our restructuring plan, including the 2023 Actions; real estate rationalization costs incurred to optimize our real estate footprint, which include lease contract termination costs, asset impairment charges, and lease right-of-use asset and lease liability write-off gains or losses; product and services optimization costs incurred to advance our operating model, which include write-offs of capitalized software assets no longer in use; write-offs of acquired blockchain technology and related capitalized software due to the discontinuation of incremental development investments in this technology and related commercial efforts; and vendor rationalization costs for contractually committed services that we are no longer utilizing. We terminated our restructuring plan as of December 31, 2025, as we substantially completed all of the workforce reductions and vendor contract termination and rationalization actions planned as part of the 2023 Actions in 2023 through 2025.
Previous wording
Interest income, net, consists of income earned on our cash equivalents and short-term investments. Our cash equivalents and short-term investments are invested in short-term instruments at current market rates.
Current wording
Interest income, net, consists of income earned on our cash equivalents, which are invested in short-term instruments at current market rates. Interest expense is primarily related to the amortization of debt issuance costs associated with our credit facilities.
Previous wording
Other income (expense), net, primarily includes exchange gains (losses) on transactions that are denominated in currencies other than our subsidiaries’ functional currencies, subsidies received from foreign governments in support of our research and development in those countries, and other miscellaneous non-operational expenses.
Current wording
Other expense, net, primarily includes exchange gains (losses) on transactions that are denominated in currencies other than our subsidiaries’ functional currencies, subsidies received from foreign governments in support of our research and development in those countries, and other miscellaneous non-operational expenses.
Previous wording
Agreements business is owned by a subsidiary in Canada. These subsidiaries have entered into agreements with most of the other OneSpan entities under which those other entities provide services to the IP owners on a cost plus basis. In addition, many of our OneSpan entities operate as distributors for all of our OneSpan products. Under this structure, the earnings of our service provider and distributor subsidiaries are relatively constant. These subsidiaries tend to be in jurisdictions with higher effective tax rates. Fluctuations in earnings flow to the IP owners.
Current wording
Our effective tax rate reflects our global structure related to the ownership of our intellectual property (“IP”). Our IP in our Cybersecurity division is owned by our U.S. subsidiaries. The e-signature IP in our Digital Agreements division is owned by a subsidiary in Canada. These subsidiaries have entered into agreements with most of the other OneSpan entities under which those other entities provide services to the IP owners on a cost plus basis. In addition, many of our OneSpan entities operate as distributors for all of our OneSpan products. Under this structure, the earnings of our service provider and distributor subsidiaries are relatively constant. These subsidiaries tend to be in jurisdictions with higher effective tax rates. Fluctuations in earnings flow to the IP owners.
Previous wording
We record changes in valuation allowance against deferred tax assets that, based on management’s assessment, are considered not to be more likely than not to be realized. The decrease in the valuation allowance in 2024 reflects a change in management's assessment of the ability to use existing deferred tax assets, including NOLs, due to an increase in the operating profit and intra-entity asset transfer of certain intellectual property ("IP Transfer") discussed in Note 13, Income Taxes. The increase in the valuation allowance in 2023 reflects Net Operating Losses (“NOLs”), other deduction carryforwards, and credits for which the realization is not more likely than not. The change in valuation allowance in 2024 also reflects other factors including, but not limited to, changes in management’s assessment of the ability to use existing deferred tax assets, including NOLs and other deduction carryforwards.
Current wording
We record changes in valuation allowance against deferred tax assets that, based on management’s assessment, are considered not to be more likely than not to be realized. The decrease in the valuation allowance in 2025 and 2024 reflects a change in management's assessment of our ability to use existing deferred tax assets, including NOLs and credits and other carryforwards, due to an increase in the operating profit and the intra-entity asset transfer of certain intellectual property ("IP Transfer") discussed in Note 14, Income Taxes.
Previous wording
In 2024 and 2023, we generated approximately 83% of our revenue for both years and incurred approximately 59% and 58% of our operating expenses outside of the U.S., respectively. As a result, changes in currency exchange rates, especially the Euro exchange rate and the Canadian dollar exchange rate, can have a significant impact on our revenue and operating expenses.
Current wording
In 2025 and 2024, we generated approximately 79% and 83%, of our revenue and incurred approximately 54% and 59% of our operating expenses outside of the U.S., respectively. As a result, changes in currency exchange rates, especially the Euro exchange rate and the Canadian dollar exchange rate, can have a significant impact on our revenue and operating expenses.
Previous wording
While the majority of our revenue is generated outside of the U.S., a significant amount of our revenue earned during the year ended December 31, 2024 was denominated in U.S. dollars. In 2024, approximately 55% of our revenue was denominated in U.S. dollars, 41% was denominated in Euros and 4% was denominated in other currencies. In 2023, approximately 53% of our revenue was denominated in U.S. dollars, 43% was denominated in Euros and 4% was denominated in other currencies.
Current wording
While the majority of our revenue is generated outside of the U.S., a significant amount of our revenue earned during the year ended December 31, 2025 was denominated in U.S. dollars. In 2025, approximately 57% of our revenue was denominated in U.S. dollars, 40% was denominated in Euros and 3% was denominated in other currencies. In 2024, approximately 55% of our revenue was denominated in U.S. dollars, 41% was denominated in Euros and 4% was denominated in other currencies.
Previous wording
In general, to minimize the net impact of currency fluctuations on operating income, we attempt to denominate an amount of billings in a currency such that it would provide a natural hedge against the operating expenses being incurred in that currency. We expect that changes in currency rates may impact our future results if we are unable to match amounts of revenue with our operating expenses in the same currency. If the amount of our revenue in Europe denominated in Euros continues as it is now or declines, we may not be able to balance fully the exposures of currency exchange rates on revenue and operating expenses.
Current wording
In general, to minimize the net impact of currency fluctuations on operating income, we attempt to denominate an amount of billings in a currency such that it would provide a natural hedge against the operating expenses being incurred in that currency. We expect that changes in currency rates may impact our future results if we are unable to match amounts of revenue with our operating expenses in the same currency. If the amount of our revenue in Europe denominated in Euros continues as it is now or declines, we may not be able to fully balance the exposures of currency exchange rates on revenue and operating expenses.
Previous wording
The financial position and the results of operations of our foreign subsidiaries, with the exception of our subsidiaries in Switzerland, Singapore and Canada, are measured using the local currency as the functional currency. The functional currency for our subsidiaries in Switzerland, Singapore and Canada is the U.S. dollar. Accordingly, assets and liabilities are translated into U.S. dollars using current exchange rates as of the balance sheet date. Revenues and expenses are translated at average exchange rates prevailing during the year. Translation adjustments arising from differences in exchange rates generated comprehensive loss of $3.3 million in 2024 and a comprehensive gain of $3.7 million in 2023. These amounts are included as a separate component of stockholders’ equity.
Current wording
The financial position and the results of operations of our foreign subsidiaries, with the exception of our subsidiaries in Switzerland, Singapore and Canada, are measured using the local currency as the functional currency. The functional currency for our subsidiaries in Switzerland, Singapore and Canada is the U.S. dollar. Accordingly, assets and liabilities are translated into U.S. dollars using current exchange rates as of the balance sheet date. Revenues and expenses are translated at average exchange rates prevailing during the year. Translation adjustments arising from differences in exchange rates generated comprehensive loss of $7.4 million in 2025 and a comprehensive gain of $3.3 million in 2024. These amounts are included as a separate component of stockholders’ equity.
Previous wording
Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations in other income (expense). Foreign exchange transaction losses aggregated $0.9 million and $1.1 million for the years ended December 31, 2024 and 2023, respectively.
Current wording
Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations in other expense, net. Foreign exchange transaction losses aggregated $1.6 million and $0.9 million for the years ended December 31, 2025 and 2024, respectively.
Previous wording
(2) Security Solutions other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the years ended December 31, 2024 and 2023.
Current wording
(2) Cybersecurity other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the years ended December 31, 2025 and 2024.
Previous wording
(3) Security Solutions operating income includes $0.9 million and $0 of total amortization and depreciation expense for the years ended December 31, 2024 and 2023, respectively.
Current wording
(3) Cybersecurity operating income includes $1.3 million and $0.9 million of total amortization and depreciation expense for the years ended December 31, 2025 and 2024, respectively.
Previous wording
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.
Current wording
Cybersecurity operating income includes $0.3 million and $2.0 million of restructuring and other related charges for the years ended December 31, 2025 and 2024, respectively.
Previous wording
(5) Digital Agreements operating income includes $6.2 million and $3.7 million of total amortization and depreciation for the years ended December 31, 2024 and 2023, respectively.
Current wording
(5) Digital Agreements operating income includes $7.5 million and $6.2 million of total amortization and depreciation for the years ended December 31, 2025 and 2024, respectively.
Previous wording
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.
Current wording
Digital Agreements operating income includes $1.0 million and $1.7 million of restructuring and other related charges for the years ended December 31, 2025 and 2024, respectively.
Previous wording
For the year ended December 31, 2024, total revenue increased by $8.1 million, or 3%, compared to the year ended December 31, 2023. Changes in foreign exchange rates as compared to the same period in 2023 negatively impacted total revenue by approximately $0.1 million.
Current wording
For the year ended December 31, 2025, total revenue was flat compared to the year ended December 31, 2024. Changes in foreign exchange rates as compared to the same period in 2024 favorably impacted total revenue by approximately $3.7 million.
Previous wording
•Security Solutions revenue decreased $2.0 million, or approximately 1%, during the year ended December 31, 2024 compared to the year ended December 31, 2023. This decrease was driven primarily by lower volumes of hardware devices sold, lower perpetual software license and perpetual-based maintenance revenues as we focus on transitioning to on-premises and cloud subscription license models, and the sunsetting of our Dealflo solution. The decrease was largely offset by higher on-premises subscription revenue from existing customer expansion, including an increase in multi-year contracts, for which we recognize most of the revenue early in the contract term. Changes in foreign exchange rates compared to the same period in 2023 negatively impacted Security Solutions revenue by $0.1 million.
Current wording
•Cybersecurity revenue decreased $4.5 million, or approximately 2%, during the year ended December 31, 2025 compared to the year ended December 31, 2024. This decrease was primarily attributable to lower volumes of hardware devices sold due to the mobile-first trend, and to a lesser extent, lower perpetual-based maintenance and professional services revenues due to our transition to term licenses and cloud subscription license models and the sunsetting of our Dealflo solution. The decrease was partially offset by higher term license subscription revenues, primarily from existing customers, increased cloud subscription revenue, and revenue from customers acquired in our acquisition of Nok Nok Labs. Changes in foreign exchange rates compared to the same period in 2024 favorably impacted Cybersecurity revenue by $3.5 million.
Previous wording
•Digital Agreements revenue increased $10.1 million, or approximately 20%, during the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase in Digital Agreements revenue was driven by higher cloud subscription revenue from existing customer expansion and new customers (which we sometimes refer to as "new logos"), partially offset by lower maintenance revenue related to the sunsetting of our on-premises e-signature product. Changes in foreign exchange rates as compared to the same period in 2023 favorably impacted Digital Agreements revenue by less than $0.1 million.
Current wording
•Digital Agreements revenue increased $4.5 million, or approximately 7%, during the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase in Digital Agreements revenue was primarily attributable to higher cloud subscription revenue from existing customer expansions and, to a lesser extent, customers new to OneSpan ("new logos") and overages, partially offset by lower term-based maintenance revenue due to our transition to cloud subscription licenses. Changes in foreign exchange rates as compared to the same period in 2024 favorably impacted Digital Agreements revenue by $0.2 million.
Previous wording
Revenue by Geographic Regions: We classify our sales by customer location in three geographic regions: 1) EMEA, which includes Europe, Middle East and Africa; 2) the Americas, which includes sales in North, Central, and South America; and 3) Asia Pacific (APAC), which also includes Australia, New Zealand, and India. The breakdown of revenue in each of our major geographic areas was as follows:
Current wording
Revenue by Geographic Regions: We classify our sales by customer location in three geographic regions: 1) EMEA, which includes Europe, Middle East and Africa; 2) the Americas, which includes North, Central, and South America; and 3) Asia Pacific (APAC), which also includes Australia and New Zealand. The breakdown of revenue in each of our major geographic areas was as follows:
Previous wording
For the year ended December 31, 2024, revenue generated in the Americas was $6.7 million or 8% higher than the same period in 2023, primarily driven by an increase in e-signature revenue from customer expansion and new logos and an increase in software authentication revenue from customer expansion, partially offset by a decrease in hardware revenue due to lower volumes sold.
Current wording
For the year ended December 31, 2025, revenue generated in the Americas was $8.9 million, or 10%, higher than the same period in 2024, primarily due to an increase in revenue from software authentication products and Digital Agreements revenue.
Previous wording
For the year ended December 31, 2024, revenue generated in APAC was $4.3 million or 10% higher than the same period in 2023, primarily driven by an increase in software authentication revenue from customer expansions, partially offset by a decrease in hardware revenue due to lower volumes sold.
Current wording
For the year ended December 31, 2025, revenue generated in APAC was $3.0 million, or 6%, lower than the same period in 2024, primarily attributable to lower hardware volumes and a decrease in revenue from software authentication products, partially offset by an increase in revenue from mobile application security products.
Previous wording
The cost of product and license revenue decreased $11.9 million or 25% for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease in cost of product and license revenue was primarily driven by lower hardware revenues.
Current wording
The cost of product and license revenue decreased $4.6 million or 13% for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease in cost of product and license revenue was primarily driven by lower hardware revenue and hardware costs, partially offset by higher third-party license costs.
Previous wording
The cost of services and other revenue increased $3.2 million or 11% for the year ended December 31, 2024, compared to the year ended December 31, 2023. This increase was largely due to higher cloud platform costs related to higher volume usage and the write-off of acquired technology and capitalized internally developed software costs due to our decision to discontinue our investment in blockchain technology in 2024.
Current wording
The cost of services and other revenue decreased $0.2 million or 1% for the year ended December 31, 2025, compared to the year ended December 31, 2024. This was due to the impact of our 2024 write-off of costs associated with our decision to discontinue investment in blockchain technology (see Note 8, Intangible Assets - net) (the "2024 write-off") and lower cloud platform costs in 2025.
Previous wording
The majority of our inventory purchases are denominated in U.S. dollars. Our sales are denominated in various currencies, including the Euro. The impact of changes in currency rates are estimated to have had a unfavorable impact on overall cost of goods sold of approximately $0.8 million for the year ended December 31, 2024. Had currency rates in 2024 been equal to rates in the comparable period of 2023, the gross profit margin would have been less than 1 percentage point higher for the year ended December 31, 2024.
Current wording
The majority of our inventory purchases are denominated in U.S. dollars. Our sales are denominated in various currencies, including the Euro. The impact of changes in currency rates are estimated to have had a unfavorable impact on overall cost of goods sold of less than $0.1 million for the year ended December 31, 2025. Had currency rates in 2025 been equal to rates in the comparable period of 2024, the gross profit margin would have been less than 1 percentage point lower for the year ended December 31, 2025.
Previous wording
•Digital Agreements gross profit increased $4.0 million, or approximately 11%, for the year ended December 31, 2024 compared to the prior year. The increase in gross profit was driven by higher overall revenue, partially offset by higher cloud platform costs and higher depreciation of capitalized software costs. Digital Agreements gross margin for the years ended December 31, 2024 and 2023 was 68% and 74%, respectively. The decrease in gross margin is primarily the result of an increase in depreciation of capitalized software costs and the write-off in 2024 of the previously capitalized software costs discussed above.
Current wording
•Digital Agreements gross profit increased $5.3 million, or approximately 13%, for the year ended December 31, 2025 compared to the prior year. Digital Agreements gross margin for the years ended December 31, 2025 and 2024 was 72% and 68%, respectively. The increase in gross profit and gross margin was driven by higher cloud subscription revenue, lower cloud platform costs, and the prior year impact of the 2024 write-off.
Previous wording
For the year ended December 31, 2024, operating expenses decreased by $56.8 million, or 30%, compared to the year ended December 31, 2023. Changes in foreign exchange rates favorably impacted operating expenses by approximately less than $0.1 million as compared to the year ended December 31, 2023.
Current wording
For the year ended December 31, 2025, operating expenses increased by $1.1 million, or 1%, compared to the year ended December 31, 2024. Changes in foreign exchange rates unfavorably impacted operating expenses by approximately $1.3 million as compared to the year ended December 31, 2024.
Previous wording
Average full-time sales and marketing employee headcount for year ended December 31, 2024 was 161, compared to 339 for year ended December 31, 2023. Average headcount in 2024 was 53% lower than in 2023 due to the restructuring activities discussed elsewhere in this Item 7.
Current wording
Average full-time sales and marketing employee headcount for year ended December 31, 2025 was 165, compared to 161 for year ended December 31, 2024.
Previous wording
Average full-time research and development employee headcount for the year ended December 31, 2024 was 234, compared to 305 for year ended December 31, 2023. Average headcount in 2024 was 23% lower than in 2023 due to the restructuring activities discussed elsewhere in this Item 7.
Current wording
Average full-time research and development employee headcount for the year ended December 31, 2025 was 232, compared to 234 for year ended December 31, 2024.
Previous wording
Research and development expenses decreased $6.0 million, or 16%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily driven by lower compensation costs, which included a decrease in salaries, payroll taxes, and related benefits as a result of lower headcount and lower consulting expenses, partially offset by increased bonus expense accruals.
Current wording
General and administrative expenses decreased $0.3 million, or 1%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. This decrease was largely driven by lower employee compensation costs, which included a decrease in salaries, payroll taxes, and related benefits as a result of lower headcount as well as lower bonus accruals, partially offset by by increased stock-based compensation expense and higher external advisor costs in 2025 compared to the prior year.
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Previous report — wording carried elsewhere
Our effective tax rate reflects our global structure related to the ownership of our intellectual property (“IP”). Our IP in our Security Solutions business is owned by a U.S. operating subsidiary. The e-signature IP in our Digital
Previous report — wording carried elsewhere
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.