OneSpan Inc.
For the period ended Mar 31, 2026. Filed Apr 30, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Apr 30, 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-Q
Period ended 2025-09-30; filed 2025-10-30.
0001044777-25-000034
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-30.
0001044777-26-000019
Item 2. 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 166 previous paragraphs and 149 current paragraphs.
70 unchanged; 57 reworded; 21 added; 38 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 14 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 (21)
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 robust mobile app protection, defending users, devices, and applications against sophisticated attacks. Our digital agreement solutions streamline agreement workflows with secure e-signatures, identity verification, and smart digital forms, built to enable speed, compliance and exceptional customer experiences. Trusted by leading global enterprises, including more than 60% of the world’s 100 largest banks, OneSpan processes over 100 million digital agreements and billions of secure authentication transactions across more than 120 countries each year.
Current report
Recent acquisitions. In June 2025, we acquired Nok Nok Labs, Inc. ("Nok Nok Labs"), a leading provider of passwordless software authentication solutions, and in February 2026, we acquired Build38 GmbH ("Build38"), a leader in next-generation mobile application protection solutions. See Note 6, Business Acquisitions, for additional information about these two transactions (the "Acquisitions").
Current report
Interest (Expense) Income, Net
Current report
Other Expense, Net
Current report
(2)Cybersecurity operating income includes $0.7 million and $0.2 million of total amortization and depreciation expense for three months ended March 31, 2026 and 2025, respectively. Cybersecurity operating income also includes $0.3 million related to write-off of assets for the three months ended March 31, 2026. There were no write-off of assets for the three months ended March 31, 2025.
Current report
(1) Cybersecurity and Digital Agreements Subscription revenue during the three months ended March 31, 2025 includes $5.1 million and less than $0.1 million, respectively, of term maintenance that has been reclassified from maintenance and services to align with the revised presentation of revenue. See Note 4, Revenue from Contracts with Customers, for additional information.
Current report
•Cybersecurity revenue increased $0.8 million, or approximately 2%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in Cybersecurity revenue was primarily attributable to increased subscription revenue from the Acquisitions, existing customer expansions, and higher revenue from past due renewals, partially offset by lower multi-year term license revenue due to timing of customer renewals, and lower hardware revenue due to customer and product mix. Changes in foreign exchange rates for the three months ended March 31, 2026 compared to the same period in 2025 favorably impacted Cybersecurity revenue by $2.5 million.
Current report
For the three months ended March 31, 2026, revenue generated in EMEA was $2.5 million, or 8%, lower than the same period in 2025. The decrease in revenue stems largely from lower hardware revenue due to customer and product mix, and lower multi-year renewal term revenue for our authentication products.
Current report
For the three months ended March 31, 2026, revenue generated in the Americas was $4.1 million, or 19%, higher than the three months ended March 31, 2025, primarily due to increased subscription revenue from customer expansion in both business segments and revenue contribution from the Acquisitions.
Current report
For the three months ended March 31, 2026, revenue generated in APAC was $1.0 million, or 9%, higher than the three months ended March 31, 2025. The increase was primarily attributable to higher hardware revenue.
Current report
The cost of product and license revenue increased by less than $0.1 million, or 0.5%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Current report
The cost of services and other revenue increased by $1.1 million, or 15%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was attributable to additional cloud subscription revenue from existing customer expansions and, to a lesser extent, new customers, as well as higher third-party license costs.
Current report
•Cybersecurity gross profit decreased by $0.2 million, or 0.5%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to higher third-party license costs and cloud vendor costs. Cybersecurity gross margin was 74% during the three months ended March 31, 2026, compared to 76% for the three months ended March 31, 2025.
Current report
Sales and marketing expenses for the three months ended March 31, 2026 increased by $1.2 million, or 11%, compared to the three months ended March 31, 2025. The increase in expense was driven primarily by higher employee compensation costs, which included higher headcount from organic hires and from the two recent Acquisitions, increases in salaries, benefits, bonus, and commissions, as well as higher lead generation costs.
Current report
Research and development expenses for the three months ended March 31, 2026 increased by $1.2 million, or 15%, compared to the three months ended March 31, 2025. The increase in expense for the period was primarily driven by higher employee compensation costs, largely due to higher headcount from the two recent Acquisitions, and higher contractor costs, partially offset by higher internal software capitalization costs.
Current report
General and administrative expenses for the three months ended March 31, 2026 increased by $1.4 million, or 15%, compared to the three months ended March 31, 2025. The increase in expense for the period was largely driven by higher employee compensation costs, and higher non-recurring acquisition-related advisor costs compared to the prior year period.
Current report
Amortization of intangible assets expense for the three months ended March 31, 2026 increased by $0.1 million, or 26%, compared to the three months ended March 31, 2025. The increase in amortization expense was driven by an increase in acquired intangible assets due to the two recent Acquisitions.
Current report
Interest (expense) income, net
Current report
Interest (expense) income, net, was less than $(0.1) million and $0.7 million for the three months ended March 31, 2026 and 2025, respectively. The decrease was due to higher average excess cash invested in the prior year period compared to the current year period, as well as interest expense incurred in the current year related to the Credit Agreement. The decrease in invested cash is largely the result of the Company using cash to fund the Acquisitions.
Current report
Other expense, net
Current report
We recorded income tax expense of $2.8 million and $3.4 million for the three months ended March 31, 2026 and 2025, respectively. Lower income tax expense for the three months ended March 31, 2026 was primarily attributable to lower pre-tax income.
Removed paragraphs (38)
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 combined identity verification, electric 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 transactions in more than 100 countries annually.
Previous report
"Mobile-first" trend. Security Solutions total revenue decreased by 1% and 3% during the three and nine months ended September 30, 2025, respectively, as compared to the equivalent periods in 2024. A key factor contributing to this decrease was a reduction in hardware revenues driven by certain customers adopting a “mobile first” approach, which prioritizes using mobile authentication solutions to enhance user experience over traditional hardware authentication devices, particularly for consumer banking. This trend has generally resulted in a reduction of sales volumes of our Digipass hardware authenticator devices, as banks adopt a higher mix of software authentication licenses delivered through software applications on mobile devices.
Previous report
Increase in multi-year on-premise term subscription contracts. Revenue for the Security Solutions segment for the three and nine months ended September 30, 2025 was positively impacted by a shift of certain customers from single-year to multi-year on-premises term subscription contracts. Although on-premises term subscription contracts may have a term of up to five years, we generally recognize the license revenue upfront after the contract becomes effective. This can result in a positive year-over-year revenue impact as customers shift from single-year to multi-year contracts.
Previous report
2024 write-off. In the three and nine months ended September 30, 2024, we wrote off costs associated with acquired technology and capitalized internally-developed software costs due to our decision to discontinue investment in blockchain technology. This write-off significantly impacted various year-over-year comparisons, as discussed below. The write-offs for 2024 materially impacted operations compared to the immaterial write-off recorded in 2025.
Previous report
Restructuring Plan
Previous report
In 2021 and 2022, our Board approved cost reduction actions designed to advance our operating model, streamline our business, improve efficiency, and enhance our capital resources.
Previous report
On 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 related to vendor contract termination and rationalization actions. We currently expect that we will incur restructuring charges of approximately less than $0.1 million to $0.2 million related to the 2023 Actions for the remainder of 2025, substantially all of which relate to employee transition and severance payments.
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
As part of the restructuring plan (including the 2023 Actions), we reduced headcount by eliminating approximately 341 positions. We incurred severance and related benefits costs, recorded in “Restructuring and other related charges” in the consolidated statements of operations.
Previous report
Business Acquisition
Previous report
On June 4, 2025, we acquired Nok Nok Labs, Inc ("Nok Nok Labs") pursuant to a merger agreement that resulted in our purchase of all of the outstanding equity interests of Nok Nok Labs. Nok Nok Labs is a leading provider of passwordless software authentication solutions that use FIDO (Fast IDentity Online) authentication protocols. We expect that the technology acquired in the acquisition will provide OneSpan's customers with a wider range of flexible, adaptable authentication options. The results of operations since the acquisition date are included in our Security Solutions reportable operating segment. See Note 6, Business Acquisitions, for additional information.
Previous report
Credit Agreement
Previous report
On June 23, 2025, OneSpan Inc. and certain of its subsidiaries entered into a $100.0 million credit agreement (the “Credit Agreement) with MUFG Bank, Ltd ("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. As of September 30, 2025, the Company had outstanding letters of credit of $0.4 million and no borrowings outstanding under the Credit Agreement. Any outstanding letters of credit reduce the availability of funds to borrow. As of September 30,2025, the Company was in compliance with all covenants under the Credit Agreement. See Note 12, Debt, for additional information.
Previous report
Interest Income, Net
Previous report
Other (Expense) Income, Net
Previous report
(4) Digital Agreements operating income includes $1.9 million and $5.5 million of total amortization and depreciation expense for the three and nine months ended September 30, 2025, respectively. Digital Agreements operating income includes $1.5 million and $4.6 million of total amortization and depreciation expense for the three and nine months ended September 30, 2024, respectively.
Previous report
Digital Agreements operating income includes $0.0 million and $0.2 million of restructuring and other related charges for the three and nine months ended September 30, 2025, respectively. Digital Agreements operating income includes $0.4 million and $1.4 million of restructuring and other related charges for the three and nine months ended September 30, 2024, respectively.
Previous report
(1) Professional services and other includes perpetual software licenses revenue, which was immaterial for the three and nine months ended September 30, 2025 and 2024.
Previous report
•Security Solutions revenue decreased $0.5 million, or approximately 1%, during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease in Security Solutions revenue was primarily attributable to lower volumes of hardware devices sold due largely to the mobile-first trend discussed in the "Overview" section above, and to a lesser extent, lower perpetual-based maintenance due to our transition to term licenses and cloud subscription license models, offset by higher term licenses, primarily from existing customers, and revenue from customers acquired in our acquisition of Nok Nok Labs. Timing of customer renewals and the transition of certain customers from single-year to multi-year term license contracts positively impacted on-premises revenue in the quarter. Changes in foreign exchange rates for the three months ended September 30, 2025 compared to the same period in 2024 favorably impacted Security Solutions revenue by $1.3 million.
Previous report
•For the nine months ended September 30, 2025, Security Solutions revenue decreased $4.5 million, or approximately 3%, which 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. The decrease was partially offset by higher term license and maintenance revenues, primarily from existing customers, increased cloud subscription revenue, and revenue from customers acquired in our acquisition of Nok Nok Labs. Timing of customer renewals and the transition of certain customers from single-year to multi-year term license contracts positively impacted on-premises revenue in the period. Changes in foreign exchange rates for the nine months ended September 30, 2025 compared to the same period in 2024 favorably impacted Security Solutions revenue by $1.4 million.
Previous report
For the three months ended September 30, 2025, revenue generated in EMEA was $0.9 million, or 4%, lower than the same period in 2024. The increase in revenue from software authentication and mobile application security products were offset by lower hardware volumes attributed to the mobile-first trend and end-of-life products. For the nine months ended September 30, 2025, revenue generated in EMEA was $3.5 million, or 4%, lower than the same period in 2024. The decrease for this period was 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 software authentication and mobile application security products.
Previous report
For the three months ended September 30, 2025, revenue generated in the Americas was $4.0 million, or 18%, higher than the three months ended September 30, 2024, primarily due to an increase in revenue from software authentication products, and to a lesser extent, Digital Agreements revenue. For the nine months ended September 30, 2025, revenue generated in the Americas was $6.5 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, partially offset by lower hardware revenue.
Previous report
For the three months ended September 30, 2025, revenue generated in APAC was $2.3 million, or 19%, lower than the three months ended September 30, 2024. For the nine months ended September 30, 2025, revenue generated in APAC was $4.7 million, or 12%, lower than the same period in 2024. The decrease for both periods was 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 report
The cost of product and license revenue decreased by $0.4 million, or 5%, and $4.3 million, or 15% during the three and nine months ended September 30, 2025, respectively, compared to the three and nine months ended September 30, 2024. The decrease in cost of product and license revenue for both the three and nine months ended September 30, 2025 was driven primarily by lower hardware revenue and hardware costs, partially offset by higher third-party license costs.
Previous report
The cost of services and other revenue increased by $0.7 million, or 10%, and decreased $1.2 million, or 5% during the three and nine months ended September 30, 2025, respectively, compared to the three and nine months ended September 30, 2024. The increase as compared to the three months ended September 30, 2024 was attributable to our increase in cloud subscription revenue from existing customer expansions and, to a lesser extent, new customers and overages. The decrease as compared to the nine months ended September 30, 2024 was largely due to the prior year impact of the 2024 write-off discussed in the "Overview" above. Lower cloud platform costs for the three and nine months ended September 30, 2025 were also a factor in the year-over-year decrease.
Previous report
•Security Solutions gross profit decreased $0.5 million, or 2%, during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Security Solutions gross margin was 74% during the three months ended September 30, 2025, compared to 75% for the three months ended September 30, 2024. The gross margin declined slightly period over period, but included an increase in lower-margin software revenue, offset by higher-margin hardware revenue, despite lower overall hardware revenue, due to favorable hardware customer mix and the prior year impact of the 2024 write-off. For the nine months ended September 30, 2025, Security Solutions gross profit increased $0.3 million, or less than 1%, compared to the same period in 2024. Security Solutions gross margin for the nine months ended September 30, 2025 was 75%, compared to 72% for the nine months ended September 30, 2024. The increase in the gross margin was due to an increase in gross profit from software revenue at flat margins and higher-margin hardware revenue, despite lower overall hardware revenue, due to favorable hardware customer mix and the prior year impact of the 2024 write-off.
Previous report
Sales and marketing expenses for the three months ended September 30, 2025 increased by $1.3 million, or 12%, compared to the three months ended September 30, 2024. The increase in expense 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, offset by lower bonus accruals and share-based compensation costs. Sales and marketing expenses for the nine months ended September 30, 2025 increased by $0.8 million, or 2%, compared to the nine months ended September 30, 2024. The increase was driven primarily by higher commission costs. This increase was partially offset by decreased software licensing costs due to optimizing services and lower travel and entertainment expenses.
Previous report
Research and development expenses for the three months ended September 30, 2025 increased by $1.3 million, or 17%, compared to the three months ended September 30, 2024. The increase in expense for the period was primarily driven by higher compensation costs as a result of headcount additions and higher consulting costs, in each case associated with the acquisition of Nok Nok Labs, partially offset by higher internal software capitalization costs. Research and development expenses for the nine months ended September 30, 2025 increased by $2.0 million, or 8%, compared to the nine months ended September 30, 2024. The increase in expense for the period was primarily driven by higher compensation costs, higher consulting costs and lower internal software capitalization costs.
Previous report
General and administrative expenses for the three months ended September 30, 2025 increased by $0.8 million, or 7%, compared to the three months ended September 30, 2024. The increase in expense for the three months ended September 30, 2025 as compared to the prior year period was largely driven by increased stock-based compensation expense and director fees in 2025 compared to prior year. General and administrative expenses for the nine months ended September 30, 2025 increased by $0.6 million, or 2%, compared to the nine months ended September 30, 2024. The increase in expense for the nine months ended September 30, 2025 as compared to the prior year period was largely driven by increased stock-based compensation expense and higher consulting costs in 2025 compared to the prior year. This increase was partially offset 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.
Previous report
Restructuring and Other Related Charges
Previous report
Restructuring and other related charges for the three months ended September 30, 2025 decreased by less than $0.1 million, or less than 1%, compared to the three months ended September 30, 2024. We currently expect that we will incur minimal restructuring charges related to the 2023 Actions for the remainder of 2025. Restructuring and other related charges for the nine months ended September 30, 2025 decreased by $2.7 million, or 70%, compared to the nine months ended September 30, 2024. The decrease was largely due to minimal headcount reduction, vendor rationalization costs and capitalized software write-off in 2025 compared to 2024.
Previous report
Amortization of intangible assets expense for the three months ended September 30, 2025 increased by $0.2 million, or 27%, compared to the three months ended September 30, 2024. Amortization of intangible assets expense for the nine months ended September 30, 2025 increased by $0.2 million, or 12%, compared to the nine months ended September 30, 2024. The increase for both periods related to increased intangible assets associated with the acquisition of Nok Nok Labs.
Previous report
Interest income, net
Previous report
Interest income, net, was $0.4 million and $0.6 million for the three months ended September 30, 2025 and 2024, respectively. Interest income, net, was $1.8 million and $1.2 million for the nine months ended September 30, 2025 and 2024, respectively. The increase in interest income for the nine months ended September 30, 2025 was due to higher average excess cash invested in the period compared to last year.
Previous report
Other (Expense) Income, net
Previous report
We recorded income tax expense of $1.9 million and $1.7 million for the three months ended September 30, 2025 and 2024, respectively. Higher income tax expense for the three months ended September 30, 2025 was primarily attributable to an increase in the effective tax rate related to higher nondeductible expenses and a lower change in valuation allowance benefit. We recorded income tax expense of $7.5 million and $4.7 million for the nine months ended September 30, 2025 and 2024, respectively. The increase in income tax expense for the nine months ended September 30, 2025 was primarily attributable to an increase in income before taxes and an increase in our effective tax rate, along with a $1.2 million tax benefit recorded during the nine months ended September 30, 2024 in connection with a Mutual Agreement Procedure request. Additional information on this request can be found in our 2024 Annual Report on Form 10-K.
Previous 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$0.2 million and $0.3 million for the three months ended September 30, 2025 and 2024, respectively, and $0.9 million and $0.7 million for the nine months ended September 30, 2025 and 2024, respectively.
Previous report
(3) Includes write-offs of property and equipment, net, of $0.7 million for the three and nine months ended September 30, 2025. Includes write-offs of intangible assets and property and equipment, net, of $0.8 million and $1.0 million, respectively, for the nine months ended September 30, 2024. Costs are recorded in "Services and other cost of goods sold" and "Restructuring and other related charges," respectively, on the condensed consolidated statements of operations.
Reworded paragraphs (57)
Previous wording
This commentary should be read in conjunction with the condensed consolidated financial statements and related notes thereto of OneSpan for the three- and nine-month periods ended September 30, 2025 and 2024 as well as our consolidated financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Form 10-K”).
Current wording
This commentary should be read in conjunction with the condensed consolidated financial statements and related notes thereto of OneSpan for the three-month periods ended March 31, 2026 and 2025 as well as our consolidated financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”).
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of applicable U.S. securities laws, including statements regarding our goal of driving profitable, efficient growth in both operating segments, with a particular emphasis on subscription revenue growth; our plans for managing our Security Solutions and Digital Agreements segments; expectations about trends in our cost of goods sold, gross margin, and sales and marketing, research and development, and general and administrative expenses; the impact of foreign currency rate fluctuations; expectations regarding sources and uses of cash; and our general expectations regarding our operational or financial performance in the future. Forward-looking statements may be identified by words such as "seek", "believe", "plan", "estimate", "anticipate", “expect", "intend", "continue", "outlook", "may", "will", "should", "could", or "might", and other similar expressions. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could materially affect our business and financial results include, but are not limited to: difficulties increasing or maintaining our rate of revenue growth; our ability to attract new customers and retain and expand sales to existing customers; our ability to successfully develop and market new product offerings and product enhancements; changes in customer requirements; the potential effects of technological changes; the loss of one or more large customers; difficulties enhancing and maintaining our brand recognition; competition; lengthy sales cycles; challenges retaining key employees and successfully hiring and training qualified new employees; security breaches or cyber-attacks; real or perceived malfunctions or errors in our products; interruptions or delays in the performance of our products and solutions; reliance on third parties for certain products and data center services; our ability to effectively manage third party partnerships, acquisitions, divestitures, alliances, or joint ventures; economic recession, inflation, tariffs or trade disputes, and political instability; claims that we have infringed the intellectual property rights of others; changing laws, government regulations or policies; pressures on price levels; component shortages; delays and disruption in global transportation and supply chains; impairment of goodwill or amortizable intangible assets causing a significant charge to earnings; actions of activist stockholders; and exposure to increased economic and operational uncertainties from operating a global business, as well as other factors described in the “Risk Factors” section of our most recent Annual Report on Form 10-K (filed with the SEC on February 27, 2025) and Part II, Item IA of our Quarterly Re…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of applicable U.S. securities laws, including statements regarding: our goal of driving profitable, efficient growth in both operating segments, with a particular emphasis on subscription revenue growth; expectations regarding the contributions of, and results from, our acquisitions of Build38 GmbH and Nok Nok Labs, Inc.; expectations about trends in our cost of goods sold, gross margin, and sales and marketing, research and development, and general and administrative expenses; the expected impact of foreign currency rate fluctuations; expectations regarding sources and uses of cash; and our general expectations regarding our operational or financial performance in the future. Forward-looking statements may be identified by words such as "seek", "believe", "plan", "estimate", "anticipate", “expect", "intend", "continue", "outlook", "may", "will", "should", "could", or "might", and other similar expressions. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could materially affect our business and financial results include, but are not limited to: difficulties increasing or maintaining our rate of revenue growth; our ability to attract new customers and retain and expand sales to existing customers; our ability to successfully develop and market new product offerings and product enhancements; changes in customer requirements; the potential effects of technological changes; the loss of one or more large customers; difficulties enhancing and maintaining our brand recognition; competition; lengthy sales cycles; challenges retaining key employees and successfully hiring and training qualified new employees; security breaches or cyber-attacks; real or perceived malfunctions or errors in our products; interruptions or delays in the performance of our products and solutions; reliance on third parties for certain products and data center services; our ability to effectively manage third party partnerships, acquisitions, divestitures, alliances, or joint ventures; economic recession, inflation, tariffs or trade disputes, and political instability; claims that we have infringed the intellectual property rights of others; changing laws, government regulations or policies; pressures on price levels; component shortages; delays and disruption in global transportation and supply chains; impairment of goodwill or amortizable intangible assets causing a significant charge to earnings; actions of activist stockholders; and exposure to increased economic and operational uncertainties from operating a global business, as well as other factors described in the “Risk Factors” section of our most recent Annual Report on Form 10-K (filed with the SEC on February…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
We report our financial results under the following two lines of business, which are our reportable segments: Security Solutions and Digital Agreements.
Current wording
We report our financial results under the following two business units, 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, transaction signing, and mobile application security solutions.
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 Identity Verification.
Previous wording
We seek to drive profitable, efficient growth in both operating segments, with a particular emphasis on subscription revenue growth. Both operating segments were profitable for the three and nine months ended September 30, 2025, and Security Solutions and Digital Agreements subscription revenue grew 13% and 11% as compared to the three months ended September 30, 2024, respectively, and 17% and 10% as compared to the nine months ended September 30, 2024, respectively.
Current wording
We seek to drive profitable, efficient growth in both operating segments, with a particular emphasis on subscription revenue growth. Both operating segments were profitable for the three months ended March 31, 2026, and Cybersecurity and Digital Agreements subscription revenue grew 7% and 11%, respectively, as compared to the three months ended March 31, 2025.
Previous wording
As discussed in greater detail below in "Results of Operations", the following factors and trends had a significant impact on our financial results for the three and nine months ended September 30, 2025:
Current wording
As discussed in greater detail below in "Results of Operations", the following factors had a significant impact on our financial results for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.
Previous wording
Foreign exchange rate impact for the three months ended September 30, 2025. Changes in foreign exchange rates favorably impacted both total revenue and Security Solutions revenue by approximately $1.3 million for the three months ended September 30, 2025 as compared to the equivalent period in 2024. The impact of changes in foreign exchange rates for the nine months ended September 30, 2025, as well as the impact of these changes on the Digital Agreements segment, were immaterial.
Current wording
Foreign exchange rate impact for the three months ended March 31, 2026. Changes in foreign exchange rates, in particular the weakening of the U.S. Dollar relative to the Euro, favorably impacted both total revenue and Cybersecurity revenue by approximately $2.7 million and $2.5 million, respectively, for the three months ended March 31, 2026 as compared to the equivalent period in 2025. The impact of changes in foreign exchange rates on the Digital Agreements segment for this period was approximately $0.2 million as compared to the equivalent period in 2025.
Previous wording
We generate revenue from the sale of our subscriptions, maintenance and support, professional services, and Digipass hardware products. We believe comparison of revenues between periods is heavily influenced by the timing of orders and shipments, reflecting the transactional nature of significant parts of our business.
Current wording
We generate revenue from the sale of our subscriptions, perpetual maintenance and services, and Digipass hardware products. We believe comparison of revenues between periods is heavily influenced by the timing of orders and shipments, reflecting the transactional nature of significant parts of our business.
Previous wording
•Service and other revenue. Service and other revenue includes solutions that are provided on a cloud-based subscription model, maintenance and support, and professional services.
Current wording
•Service and other revenue. Service and other revenue includes solutions that are provided on a cloud-based subscription model, term and perpetual maintenance and support, and services.
Previous wording
Historically, operating expenses have been impacted by changes in foreign exchange rates. We estimate the change in currency rates during the three months ended September 30, 2025 compared to the comparable prior year period resulted in an increase in operating expenses of less than $0.5 million. We estimate the change in currency rates during the nine months ended September 30, 2025 compared to the comparable prior year period resulted in an increase in operating expenses of $0.6 million.
Current wording
Historically, operating expenses have been impacted by changes in foreign exchange rates. We estimate the change in currency rates during the three months ended March 31, 2026 compared to the comparable prior year period resulted in an increase in operating expenses of $1.0 million.
Previous wording
The comparison of operating expenses can also be impacted significantly by costs related to our stock-based and long-term incentive plans. Long-term incentive plan compensation expense includes both stock-based incentives and an immaterial amount of cash-based incentives. During the three months ended September 30, 2025 and 2024, operating expenses included $3.4 million and $2.7 million, respectively, of expenses related to stock-based and long-term incentive plans. During the nine months ended September 30, 2025 and 2024, operating expenses included $9.6 million and $6.4 million, respectively, of expenses related to stock-based and long-term incentive plans.
Current wording
The comparison of operating expenses can also be impacted significantly by costs related to our stock-based and long-term incentive plans. Long-term incentive plan compensation expense includes both stock-based incentives and an immaterial amount of cash-based incentives. During the three months ended March 31, 2026 and 2025, operating expenses included $1.9 million and $2.8 million, respectively, of expenses related to stock-based and long-term incentive plans.
Previous wording
•Restructuring and related charges. Restructuring and other related charges consist of employee costs which include severance, retention pay, and related benefits incurred from 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 and related commercial efforts; and vendor rationalization costs for contractually committed services the Company is 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 related charges. Restructuring and other related charges consists of employee costs incurred in connection with headcount reductions, which include severance, retention pay, and related benefits, real estate rationalization costs, 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, which include write-offs of capitalized software assets no longer in use; write-offs of acquired technology and capitalized software; and vendor rationalization costs for contractually committed services that we are no longer utilizing. Prior to 2026, these costs were incurred in connection with restructuring plans previously approved by the Company's Board of Directors.
Previous wording
Interest income, net, consists of income earned on our cash equivalents, which are invested in short-term instruments at current market rates and interest expense, primarily related to the amortization of debt issuance costs associated with our credit facilities.
Current wording
Interest (expense) income, net, consists of income earned on our cash equivalents, which are invested in short-term instruments at current market rates and expense primarily related to the amortization of debt issuance costs associated with our credit facilities.
Previous wording
Other (expense) income, 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
Our effective tax rate reflects our global structure related to the ownership of our intellectual property (“IP”). The IP in our Security Solutions business is owned by our U.S subsidiaries. The e-signature IP in our Digital 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 either a percentage of revenue or on a cost plus basis or both. Under this structure, the earnings of our service provider subsidiaries are relatively constant. These service provider companies 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”). The IP in our Cybersecurity business is owned by our U.S. and German subsidiaries. The e-signature IP in our Digital 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 either a percentage of revenue or on a cost plus basis or both. Under this structure, the earnings of our service provider subsidiaries are relatively constant. These service provider companies tend to be in jurisdictions with higher effective tax rates. Fluctuations in earnings flow to the IP owners.
Previous wording
During the three months ended September 30, 2025 and 2024, we generated approximately 75% and 81% of our revenues and incurred approximately 53% and 58% of our operating expenses, respectively, outside of the U.S. During the nine months ended September 30, 2025 and 2024, we generated approximately 79% and 83% of our revenues and incurred approximately 55% and 60% of our operating expenses, respectively, outside of the U.S. 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
During the three months ended March 31, 2026 and 2025, we generated approximately 79% and 84% of our revenues and incurred approximately 57% and 58% of our operating expenses, respectively, outside of the U.S. 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 nine months ended September 30, 2025 was denominated in U.S. Dollars. For the nine months ended September 30, 2025, approximately 57% of our revenue was denominated in U.S. Dollars, 40% was denominated in Euros and 3% was denominated in other currencies. For the nine months ended September 30, 2024, approximately 55% of our revenue was denominated in U.S. Dollars, 41% 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 three months ended March 31, 2026 was denominated in U.S. Dollars. For the three months ended March 31, 2026, approximately 59% of our revenue was denominated in U.S. Dollars, 38% was denominated in Euros and 3% was denominated in other currencies. For the three months ended March 31, 2025, approximately 55% of our revenue was denominated in U.S. Dollars, 43% was denominated in Euros and 2% was denominated in other currencies.
Previous wording
Translation adjustments arising from differences in exchange rates generated a comprehensive loss of$0.9 million andgain of$7.3 million during the three and nine months ended September 30, 2025, respectively. For the three and nine months ended September 30, 2024, translation adjustments arising from differences in exchange rates generated a comprehensive gain of $5.9 million and $3.8 million, respectively.
Current wording
Translation adjustments arising from differences in exchange rates generated a comprehensive loss of$1.9 million during the three months ended March 31, 2026. For the three months ended March 31, 2025, translation adjustments arising from differences in exchange rates generated a comprehensive gain of $2.7 million.
Previous wording
Gains and losses resulting from foreign currency transactions are included in the condensed consolidated statements of operations in other (expense) income, net. Foreign exchange transaction losses aggregated $0.2 million and $1.3 million for the three and nine months ended September 30, 2025, respectively. For the three and nine months ended September 30, 2024, losses resulting from foreign currency transactions were $2.0 million and $1.8 million, respectively.
Current wording
Gains and losses resulting from foreign currency transactions are included in the condensed consolidated statements of operations in other expense, net. Foreign exchange transaction losses aggregated $0.5 million and $0.2 million for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
(1) Security Solutions other segment items includes general and administrative expense, restructuring and other related charges for thethree and nine months ended and September 30, 2025 and 2024.
Current wording
(1) Cybersecurity other segment items includes general and administrative expense, write-off of assets andamortization of intangiblesfor thethree months ended March 31, 2026. Cybersecurity other segment items includes general and administrative expense, restructuring and other related charges for thethree months ended March 31, 2025.
Previous wording
Security Solutions operating income includes less than $0.1 million and $0.3 million of restructuring and other related charges for the three and nine months ended September 30, 2025, respectively. Security Solutions operating income includes $0.2 million and $1.6 million of restructuring and other related charges for the three and nine months ended September 30, 2024, respectively.
Current wording
Cybersecurity operating income includes $0.2 million of restructuring and other related charges for the three months ended March 31, 2025.
Previous wording
(3) Digital Agreements other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the three and nine months ended September 30, 2025 and 2024.
Current wording
(3)Digital Agreements other segment items includes general and administrative expense andamortization of intangiblesfor thethree months ended March 31, 2026. Digital Agreements other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the three months ended March 31, 2025.
Previous wording
(2) Security Solutions operating income includes $0.4 million and $0.7 million of total amortization and depreciation expense for three and nine months ended September 30, 2025 and $0.2 million and $0.6 million for the three and nine months ended September 30, 2024, respectively.
Current wording
(4) Digital Agreements operating income includes $2.2 million and $1.7 million of total amortization and depreciation expense for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
Revenue by products and services allocated to the segments for the three and nine months ended September 30, 2025, and 2024 is as follows:
Current wording
Revenue by products and services allocated to the segments for the three months ended March 31, 2026, and 2025 is as follows:
Previous wording
Total revenue increased by $0.8 million, or 1%, during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Changes in foreign exchange rates as compared to the same period in 2024 favorably impacted revenue by approximately $1.3 million. For the nine months ended September 30, 2025, revenue decreased by $1.7 million, or 1%, compared to the nine months ended September 30, 2024. Changes in foreign exchange rates as compared to the same period in 2024 favorably impacted revenue by approximately $1.5 million.
Current wording
Total revenue increased by $2.6 million, or 4%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Changes in foreign exchange rates as compared to the same period in 2025 favorably impacted revenue by approximately $2.7 million.
Previous wording
•Digital Agreements revenue increased $1.3 million, or 9%, during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. For the nine months ended September 30, 2025, Digital Agreements revenue increased $2.7 million, or 6%. The increase in Digital Agreements revenue for both periods was primarily attributable to higher cloud subscription revenue from existing customer expansions and, to a lesser extent, 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 compared to the same period in 2024 favorably impacted Digital Agreements revenue by less than $0.1 million for the three months ended September 30, 2025. Changes in foreign exchange rates compared to the same period in 2024 favorably impacted Digital Agreements revenue by less than $0.1 million for the nine months ended September 30, 2025.
Current wording
•Digital Agreements revenue increased $1.7 million, or 11%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in Digital Agreements revenue was primarily attributable to higher subscription revenue from existing customer expansions and overages. Changes in foreign exchange rates compared to the same period in 2025 favorably impacted Digital Agreements revenue by less than $0.2 million for the three months ended March 31, 2026.
Previous wording
Our revenue is heavily influenced by the timing of orders and shipments, as well as the timing of customer renewals in any given period. As a result, we believe that the overall strength of our business is best evaluated over a longer term where the impact of transactions in any given period is not as significant as in a quarter-over-quarter comparison.
Current wording
Our revenue is heavily influenced by the timing of orders and shipments, as well as the timing of customer annual and multi-year renewals in any given period. As a result, we believe that the overall strength of our business is best evaluated over a longer term where the impact of transactions in any given period is not as significant as in a quarter-over-quarter comparison.
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 and New Zealand. 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 sales in North, Central, and South America; and 3) Asia Pacific (APAC), which includes Australia and New Zealand. The breakdown of revenue in each of our major geographic areas was as follows:
Previous wording
The following table presents cost of goods sold for our products and services for the three and nine months ended September 30, 2025 and 2024:
Current wording
The following table presents cost of goods sold for our products and services for the three months ended March 31, 2026 and 2025:
Previous wording
Gross profit increased by $0.5 million, or 1%, during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Gross margin was 74% for the three months ended September 30, 2025, compared to 74% for the three months ended September 30, 2024. Gross profit increased $3.8 million, or 3% during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. Gross profit margin was 74% for the nine months ended September 30, 2025, compared to 71% for the nine months ended September 30, 2024. The profit margin for three months ended September 30, 2025 was flat while the profit margin increase for the nine months ended September 30, 2025 was primarily driven by an increase in software revenue and higher-margin hardware revenue, despite lower overall hardware revenue, due to favorable hardware customer mix and the prior year impact of the 2024 write-off.
Current wording
Gross profit increased by $1.4 million, or 3%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Gross margin was 74% for the three months ended March 31, 2026, flat as compared to 74% for the three months ended March 31, 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 an unfavorable impact on overall cost of goods sold of $0.2 million for three months ended September 30, 2025 and was flat for nine months ended
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 an unfavorable impact on overall cost of goods sold of $0.7 million for three months ended March 31, 2026. Had currency rates during the three months ended March 31, 2026 been equal to rates in the comparable period of 2025, the gross margin would have been less than 1 percentage point lower, driven by the favorable currency rate impact to revenue.
Previous wording
•Digital Agreements gross profit increased $1.0 million, or 9%, during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Digital Agreements gross margin for the three months ended September 30, 2025 was 72%, compared to 72% for the three months ended September 30, 2024. For the nine months ended September 30, 2025, Digital Agreements gross profit increased $3.5 million, or 11%, compared to the same period in September 30, 2024. Digital Agreements gross margin for the nine months ended September 30, 2025 was 71%, compared to 68% for the nine months ended September 30, 2024. The increase in gross profit and gross margin was driven by higher cloud subscription revenue and the 2024 write-off, partially offset by lower term-based maintenance revenue.
Current wording
•Digital Agreements gross profit increased $1.6 million, or 15%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Digital Agreements gross margin for the three months ended March 31, 2026 was 72%, compared to 70% for the three months ended March 31, 2025. The increase in gross profit and gross margin was driven by higher cloud subscription revenue.
Previous wording
Operating expenses increased by $3.5 million, or 11%, during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. For the three months ended September 30, 2025, changes in foreign exchange rates negatively impacted operating expenses by approximately $0.5 million as compared to the same period in 2024. Operating expenses increased by $0.9 million, or 1%, during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. For the nine months ended September 30, 2025, changes in foreign exchange rates negatively impacted operating expenses by approximately $0.6 million as compared to the same period in 2024.
Current wording
Operating expenses increased by $3.8 million, or 13%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. For the three months ended March 31, 2026, changes in foreign exchange rates increased operating expenses by approximately $1.0 million as compared to the same period in 2025.
Previous wording
The following table presents the breakout of operating expenses by category for the three and nine months ended September 30, 2025 and 2024:
Current wording
The following table presents the breakout of operating expenses by category for the three months ended March 31, 2026 and 2025:
Previous wording
Average full-time sales, marketing, support, and operating employee headcount for the three and nine months ended September 30, 2025 was 169 and 165, respectively, compared to 148 and 166 for the three and nine months ended September 30, 2024, respectively. Average headcount was 14% higher and 1% lower for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.
Current wording
Average full-time sales, marketing, support, and operating employee headcount for the three months ended March 31, 2026 was 169 compared to 158 for the three months ended March 31, 2025. Average headcount was 7% higher for the three months ended March 31, 2026 compared to the same period in 2025.
Previous wording
Average full-time research and development employee headcount for the three and nine months ended September 30, 2025 was 238 and 229, respectively, compared to 228 and 239 for the three and nine months ended September 30, 2024, respectively. Average headcount was 4% higher and 4% lower for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.
Current wording
Average full-time research and development employee headcount for the three months ended March 31, 2026 was 245 compared to 222 for the three months ended March 31, 2025. Average headcount was 10% higher for the three months ended March 31, 2026 compared to the same period in 2025.
Previous wording
Average full-time general and administrative employee headcount for the three and nine months ended September 30, 2025 was 89 and 88, respectively, compared to 95 and 102 for the three and nine months ended September 30, 2024, respectively. Average headcount was 6% and 14% lower for the three and nine months ended September 30, 2025, compared to the same periods in 2024.
Current wording
Average full-time general and administrative employee headcount for the three months ended March 31, 2026 was 91 compared to 85 for the three months ended March 31, 2025. Average headcount was 7% higher for the three months ended March 31, 2026 compared to the same period in 2025.
Previous wording
•Security Solutions operating income for the three months ended September 30, 2025 was $16.7 million, which was a year-over-year decrease of $3.5 million, or 17%, from the three months ended September 30, 2024. Operating income for the nine months ended September 30, 2025 was $60.6 million, which was a year-over-year decrease of $6.1 million, or 9% , from the nine months ended September 30, 2024. The decrease was largely due to higher sales and marketing expenses and research and development expenses, including those from the acquisition of Nok Nok Labs.
Current wording
•Cybersecurity operating income for the three months ended March 31, 2026 was $20.8 million, which was a year-over-year decrease of $3.4 million, or 14%, from the three months ended March 31, 2025. The decrease was largely due to higher sales and marketing expenses and research and development expenses, as a result of organic investments and the incremental headcount from the recent Acquisitions.
Previous wording
•Digital Agreements operating income for the three months ended September 30, 2025 was $4.2 million compared to an operating income of $3.4 million for the three months ended September 30, 2024. Operating income for the nine months ended September 30, 2025 was $10.4 million compared to operating income of $3.0 million for the nine months ended September 30, 2024. The improvement in operating income for the three and nine months ended September 30, 2025 was driven by higher gross profit and lower operating expenses, including research and development expenses, sales and marketing expenses, employee compensation costs, marketing expenses, and travel and entertainment costs.
Current wording
•Digital Agreements operating income for the three months ended March 31, 2026 was $5.3 million compared to an operating income of $3.4 million for the three months ended March 31, 2025. The improvement in operating income was driven by higher gross profit and lower operating expenses, including lower research and development expenses and restructuring expenses.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Digital Agreements operating income includes $0.2 million of restructuring and other related charges for the three months ended March 31, 2025.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
September 30, 2025. Had currency rates during the three months ended September 30, 2025 been equal to rates in the comparable period of 2024, the gross margin would have been less than 1 percentage point lower, driven by the favorable currency rate impact to revenue. Had currency rates during the nine months ended September 30, 2025 been equal to rates in the comparable period of 2024, the gross margin would have been less than 1 percentage point higher.