OneSpan Inc.
For the period ended Jun 30, 2026. Filed Aug 4, 2026.
View on SEC.govAbout this filing
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.
Jun 30, 2026 · Filed Aug 4, 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 2026-03-31; filed 2026-04-30.
0001044777-26-000019
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0001044777-26-000040
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 149 previous paragraphs and 152 current paragraphs.
82 unchanged; 55 reworded; 14 added; 10 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 11 previous and 14 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 (14)
Current report
Other Income (Expense), Net
Current report
Cybersecurity operating income does not include any restructuring and other related charges for the three and six months ended June 30, 2026. Cybersecurity operating income includes $0.1 million and $0.2 million of restructuring and other related charges for the three and six months ended June 30, 2025, respectively.
Current report
Digital Agreements operating income does not include any restructuring and other related charges for the three and six months ended June 30, 2026.
Current report
•Cybersecurity revenue decreased $3.3 million, or approximately 7%, during the three months ended June 30, 2026, compared to the three months ended June 30, 2025. For the six months ended June 30, 2026, Cybersecurity revenue decreased $2.5 million, or approximately 3%, compared to the six months ended June 30, 2025. The decrease in Cybersecurity revenue for both periods was primarily due to lower hardware revenue, partially offset by an increase in software revenue. The decrease in hardware revenue was due to lower volume of hardware devices sold, partially offset by favorable customer mix. The increase in software revenue was due to an increase in subscription revenue primarily due to the two recent acquisitions and existing customer expansions, partially offset by lower multi-year term license revenue, the timing of customer renewals, and lower perpetual maintenance revenue due to contract transitions to term-based arrangements. Changes in foreign exchange rates for the three months ended June 30, 2026 compared to the same period in 2025 favorably impacted Cybersecurity revenue by $0.5 million. Changes in foreign exchange rates for the six months ended June 30, 2026 compared to the same period in 2025 favorably impacted Cybersecurity revenue by $3.1 million.
Current report
For the three months ended June 30, 2026, revenue generated in the Americas was $3.9 million, or 16%, higher than the three months ended June 30, 2025. For the six months ended June 30, 2026, revenue generated in the Americas was $7.9 million, or 18%, higher than the same period in 2025. The increase in revenue for both periods was largely due to an increase in Digital Agreements revenue, and to a lesser extent, Cybersecurity software revenue.
Current report
For the three months ended June 30, 2026, revenue generated in EMEA was $2.5 million, or 10%, lower than the same period in 2025. For the six months ended June 30, 2026, revenue generated in EMEA was $4.9 million, or 9%, lower than the same period in 2025. The decrease for both periods was primarily due to a decrease in Cybersecurity hardware and software revenues, partially offset by an increase in Digital Agreements revenue.
Current report
For the three months ended June 30, 2026, revenue generated in APAC was $0.8 million, or 6%, lower than the three months ended June 30, 2025, primarily due to lower Cybersecurity hardware revenue, offset partially by Cybersecurity software revenue. For the six months ended June 30, 2026, revenue generated in APAC was $0.2 million, or 1%, higher than the same period in 2025 due to an increase in Cybersecurity software revenue, offset partially by a decrease in Cybersecurity hardware revenue.
Current report
The cost of product and license revenue decreased by $1.7 million, or 20%, and $1.6 million, or 10% during the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025. The decrease in the cost of product and license revenue for both the three and six months ended June 30, 2026 was driven primarily by lower hardware revenues and more favorable customer mix.
Current report
•Cybersecurity gross profit decreased by $2.9 million, or 9%, during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Cybersecurity gross margin was 73% during the three months ended June 30, 2026, compared to 74% for the three months ended June 30, 2025. For the six months ended June 30, 2026, Cybersecurity gross profit decreased $3.1 million, or 5%, compared to the same period in 2025. Cybersecurity gross margin for the six months ended June 30, 2026 was 74%, compared to 75% for the six months ended June 30, 2025. The decrease in gross profit for both periods is primarily due to lower hardware revenues and higher third-party costs and cloud infrastructure costs, partially offset by improved hardware customer mix.
Current report
•Digital Agreements operating income for the three and six months ended June 30, 2026 was $7.0 million and $12.3 million, respectively, compared to operating income of $2.9 million and $6.2 million, for the three and six months ended June 30, 2025, respectively. The increase for both periods ended June 30, 2026 is largely due to higher revenue, including overages fees, and lower research and development expenses, and sales and marketing expenses compared to the prior year periods.
Current report
Other income (expense), net
Current report
As of June 30, 2026, we had $5.0 million of borrowings outstanding under our $100.0 million revolving credit facility entered into on June 23, 2025. The borrowing will be used for general corporate purposes and reflects our ability to access liquidity under the Credit Agreement, as needed, to support our operating and capital requirements. As of June 30, 2026, we had $0.4 million letters of credit outstanding. Subject to the terms of the Credit Agreement, we may borrow, repay, and reborrow amounts under the revolving credit facility until its maturity on June 23, 2030, and may prepay revolving loans without penalty or premium, subject to notice and customary breakage costs. Borrowings under the Credit Agreement bear interest at variable rates based on our election and consolidated net leverage ratio, and we are also required to pay a commitment fee on the unused portion of the facility. We believe that the revolving credit facility, including the remaining availability thereunder, provides us with additional financial flexibility to fund general corporate purposes and support our liquidity needs.
Current report
(3) 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.
Current report
Adjusted EBITDA for the three months ended June 30, 2026 was $16.9 million compared to $17.6 million for the three months ended June 30, 2025. Adjusted EBITDA for the six months ended June 30, 2026 was $37.9 million compared to $40.7 million for the six months ended June 30, 2025. The decrease for both periods was largely driven by lower net income both quarter to date and year to date, largely due to internal investments and incremental costs year over year form the two recent acquisitions. Year-over-year changes in foreign exchange rates favorably impacted Adjusted EBITDA by approximately $0.2 million for the three months ended June 30, 2026 and favorably impacted Adjusted EBITDA by approximately $1.7 million for the six months ended June 30, 2026.
Removed paragraphs (10)
Previous report
Other Expense, Net
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
•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.
Previous report
Other expense, net
Previous report
We are party to lease agreements that require letters of credit to secure the obligations, which totaled $0.2 million as of December 31, 2025.
Previous report
Adjusted EBITDA for the three months ended March 31, 2026 was $21.0 million compared to $23.0 million for the three months ended March 31, 2025. The decrease was largely driven by higher costs of golds sold, sales and marketing costs, and research and development costs and by lower product and license revenue, partially offset by increased service and other revenue. Year-over-year changes in foreign exchange rates favorably impacted Adjusted EBITDA by approximately $1.5 million for the three months ended March 31, 2026.
Reworded paragraphs (55)
Previous 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”).
Current wording
This commentary should be read in conjunction with the condensed consolidated financial statements and related notes thereto of OneSpan for the three- and six-month periods ended June 30, 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
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.
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 and six months ended June 30, 2026, and Cybersecurity and Digital Agreements subscription revenue grew 2% and 25%, respectively, as compared to the three months ended June 30, 2025, respectively, and 5% and 18% as compared to the six months ended June 30, 2025, respectively.
Previous 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.
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 and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025.
Previous 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.
Current wording
Foreign exchange rate impact for the six months ended June 30, 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 $3.3 million and $3.0 million, respectively, for thesix months ended June 30, 2026 as compared to the same period in 2025. The impact of changes in foreign exchange rates on the Digital Agreements segment for this period was approximately $0.3 millionas compared to the same period in 2025.
Previous wording
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 wording
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.
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 March 31, 2026 compared to the comparable prior year period resulted in an increase in operating expenses of $1.0 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 June 30, 2026 compared to the comparable prior year period resulted in an increase in operating expenses of $1.2 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 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.
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 June 30, 2026 and 2025, operating expenses included $3.5 million and $3.5 million, respectively, of expenses related to stock-based and long-term incentive plans. During the six months ended June 30, 2026 and 2025, operating expenses included $5.3 million and $6.3 million, respectively, of expenses related to stock-based and long-term incentive plans.
Previous 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.
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. There were no costs recorded for restructuring and related charges during the six months ended June 30, 2026.
Previous 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.
Current 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.
Previous wording
Changes in the effective rate reflect changes in the geographic mix of earnings and the tax rates in each of the countries in which it is earned. The statutory tax rate for the primary foreign tax jurisdictions ranges from 17% to 30%.
Current wording
Changes in the effective tax rate reflect changes in the geographic mix of earnings and the tax rates in each of the countries in which it is earned. The statutory tax rate for the primary foreign tax jurisdictions ranges from 17% to 33%.
Previous 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.
Current wording
During the three months ended June 30, 2026 and 2025, we generated approximately 76% and 78% of our revenues, respectively, and incurred approximately 57% and 54% of our operating expenses, respectively, outside of the U.S. During the six months ended June 30, 2026 and 2025, we generated approximately 78% and 81% of our revenues, respectively, and incurred approximately 57% and 56% 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 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.
Current wording
While the majority of our revenue is generated outside of the U.S., a significant amount of our revenue earned during the six months ended June 30, 2026 was denominated in U.S. Dollars. For the six months ended June 30, 2026, approximately 60% of our revenue was denominated in U.S. Dollars, 37% was denominated in Euros and 3% was denominated in other currencies. For the six months ended June 30, 2025, approximately 56% of our revenue was denominated in U.S. Dollars, 41% was denominated in Euros and 3% was denominated in other currencies.
Previous 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.
Current wording
Translation adjustments arising from differences in exchange rates generated a comprehensive loss of $0.4 million and $2.3 million during the three and six months ended June 30, 2026, respectively. For the three and six months ended June 30, 2025, translation adjustments arising from differences in exchange rates generated a comprehensive gain of $5.5 million and $8.2 million, respectively.
Previous 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.
Current wording
Gains and losses resulting from foreign currency transactions are included in the condensed consolidated statements of operations in other income (expense), net. Foreign exchange transaction losses aggregated $0.2 million and $0.7 million for the three and six months ended June 30, 2026, respectively. For the three and six months ended June 30, 2025, losses resulting from foreign currency transactions were $1.0 million and $1.1 million, respectively.
Previous 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.
Current wording
(1) Cybersecurity other segment items includes general and administrative expense and amortization of intangibles for the three months ended June 30, 2026, and general and administrative expense, write-off of assets, and amortization of intangibles for the six months ended June 30, 2026. Cybersecurity other segment items includes general and administrative expense and restructuring and other related charges for the three and six months ended June 30, 2025.
Previous wording
(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 wording
(2) Cybersecurity operating income includes $1.0 million and $1.7 million of total amortization and depreciation expense for the three and six months ended June 30, 2026, respectively. Cybersecurity operating income includes $0.2 million and $0.4 million of total amortization and depreciation expense for the three and six months ended June 30, 2025, respectively.
Previous 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.
Current wording
(3) Digital Agreements other segment items includes general and administrative expense and amortization of intangibles for the three and six months ended June 30, 2026. Digital Agreements other segment items includes general and administrative expense and restructuring and other related charges for thethree and six months ended June 30, 2025.
Previous 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.
Current wording
(4) Digital Agreements operating income includes $2.2 million and $4.3 million of total amortization and depreciation expense for the three and six months ended June 30, 2026, respectively. Digital Agreements operating income includes $1.8 million and $3.5 million of total amortization and depreciation expense for the three and six months ended June 30, 2025, respectively.
Previous wording
Digital Agreements operating income includes $0.2 million of restructuring and other related charges for the three months ended March 31, 2025.
Current wording
Digital Agreements operating income includes $0.1 million and $0.2 million of restructuring and other related charges for the three and six months ended June 30, 2025, respectively.
Previous wording
Revenue by products and services allocated to the segments for the three months ended March 31, 2026, and 2025 is as follows:
Current wording
Revenue by products and services allocated to the segments for the three and six months ended June 30, 2026, and 2025 is as follows:
Previous wording
(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 wording
(1) Cybersecurity and Digital Agreements Subscription revenue during the three months ended June 30, 2025 includes $5.9 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. Cybersecurity and Digital Agreements Subscription revenue during the six months ended June 30, 2025 includes $11.0 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.
Previous 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.
Current wording
Total revenue increased by $0.6 million, or 1%, during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Changes in foreign exchange rates as compared to the same period in 2025 favorably impacted revenue by approximately $0.6 million. Total revenue increased by $3.2 million, or 3%, during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Changes in foreign exchange rates as compared to the same period in 2025 favorably impacted revenue by approximately $3.3 million.
Previous 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.
Current wording
•Digital Agreements revenue increased $3.9 million, or 25%, during the three months ended June 30, 2026, compared to the three months ended June 30, 2025. For the six months ended June 30, 2026, Digital Agreements revenue increased $5.7 million, or 18%, during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase for both periods was primarily attributable to an increase in subscription revenue from existing customer expansions and overage usage fees. Changes in foreign exchange rates for the three months ended June 30, 2026, compared to the same period in 2025, favorably impacted Digital Agreements revenue by $0.1 million. Changes in foreign exchange rates for the six months ended June 30, 2026, compared to the same period in 2025, favorably impacted Digital Agreements revenue by $0.3 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 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) the Americas, which includes North, Central, and South America; 2) EMEA, which includes Europe, Middle East and Africa; 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 months ended March 31, 2026 and 2025:
Current wording
The following table presents cost of goods sold for our products and services for the three and six months ended June 30, 2026 and 2025:
Previous wording
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 wording
The cost of services and other revenue increased by $1.8 million, or 23%, and $2.9 million, or 19% during the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025. The increase in both periods is largely attributed to additional hosting server costs and third-party license costs driven by increased cloud subscription revenue from existing customers and, to a lesser extent, new customers, as well as amortization of intangible assets related to our acquisitions.
Previous 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.
Current wording
Gross profit increased by $0.5 million, or 1%, during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Gross margin was 74% for the three months ended June 30, 2026, as compared to 73% for the three months ended June 30, 2025. Gross profit increased by $1.9 million, or 2%, during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Gross margin was 74% for both the six months ended June 30, 2026 and 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 $0.7 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.
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 $0.1 million for three months ended June 30, 2026 and $0.6 million for the six months ended June 30, 2026. Had currency rates during the three months ended June 30, 2026 been equal to rates in the comparable period of 2025, the gross margin would have been 1 percentage point higher, driven by the favorable currency rate impact to revenue. Had currency rates during the six months ended June 30, 2026 been equal to rates in the comparable period of 2025, the gross margin would have 3 percentage points higher.
Previous 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.
Current wording
•Digital Agreements gross profit increased $3.4 million, or 31%, during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Digital Agreements gross margin for the three months ended June 30, 2026 was 75%, compared to 71% for the three months ended June 30, 2025. For the six months ended June 30, 2026, Digital Agreements gross profit increased $5.0 million, or 23%, compared to the same period in June 30, 2025. Digital Agreements gross margin for the six months ended June 30, 2026 was 74%, compared to 71% for the six months ended June 30, 2025. The increase in gross profit and gross margin for both periods was driven by higher subscription revenue from existing customer expansions and overage fees, as well as lower cloud infrastructure costs.
Previous 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.
Current wording
Operating expenses increased by $2.3 million, or 7%, during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. For the three months ended June 30, 2026, changes in foreign exchange rates increased operating expenses by approximately $0.2 million as compared to the same period in 2025. Operating expenses increased by $6.1 million, or 10%, during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. For the six months ended June 30, 2026, changes in foreign exchange rates increased operating expenses by approximately $1.2 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 months ended March 31, 2026 and 2025:
Current wording
The following table presents the breakout of operating expenses by category for the three and six months ended June 30, 2026 and 2025:
Previous wording
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 wording
Sales and marketing expenses for the three months ended June 30, 2026 increased by $1.6 million, or 14%, compared to the three months ended June 30, 2025. Sales and marketing expenses for the six months ended June 30, 2026 increased by $2.8 million, or 12%, compared to the six months ended June 30, 2025. The increase in expense for both periods 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.
Previous 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.
Current wording
Average full-time sales, marketing, support, and operating employee headcount for the three and six months ended June 30, 2026 was 176 and 173, respectively, compared to 163 and 160 for the three and six months ended June 30, 2025, respectively. Average headcount was 8% higher for both the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025.
Previous wording
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 wording
Research and development expenses for the three months ended June 30, 2026 increased by $0.5 million, or 5%, compared to the three months ended June 30, 2025, which was largely driven by higher employee compensation costs from the two recent acquisitions, offset partially by higher internal software capitalization costs. Research and development expenses for the six months ended June 30, 2026 increased by $1.6 million, or 9%, compared to the six months ended June 30, 2025. The increase 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, offset partially by higher internal software capitalization costs.
Previous 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.
Current wording
Average full-time research and development employee headcount for the three and six months ended June 30, 2026 was 254 and 250, respectively, compared to 228 and 225 for the three and six months ended June 30, 2025, respectively. Average headcount was 11% higher for both the three and six months ended June 30, 2026 compared to the same periods in 2025.
Previous wording
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 wording
General and administrative expenses for the three months ended June 30, 2026 increased by $0.2 million, or 1%, compared to the three months ended June 30, 2025, which was primarily due to higher employee compensation costs, offset partially by lower consulting expenses compared to the prior year period. General and administrative expenses for the six months ended June 30, 2026 increased by $1.6 million, or 7%, compared to the six months ended June 30, 2025. The increase in expense for the period was largely driven by higher employee compensation costs and higher non-recurring acquisition-related advisor costs, offset partially by lower consulting expenses compared to the prior year period.
Previous 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.
Current wording
Average full-time general and administrative employee headcount for both the three and six months ended June 30, 2026 was 92, compared to 86 for both the three and six months ended June 30, 2025. Average headcount was 7% higher for both the three and six months ended June 30, 2026 compared to the same periods in 2025.
Previous wording
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 wording
Amortization of intangible assets expense for the three months ended June 30, 2026 increased by less than $0.1 million, or 13%, compared to the three months ended June 30, 2025. Amortization of intangible assets expense for the six months ended June 30, 2026 increased by $0.2 million, or 19%, compared to the six months ended June 30, 2025. The increase in amortization expense for both periods was driven by an increase in acquired intangible assets due to the two recent acquisitions.
Previous 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.
Current wording
•Cybersecurity operating income for the three months ended June 30, 2026 was $13.8 million, which was a year-over-year decrease of $6.0 million, or 30%, from the three months ended June 30, 2025. Operating income for the six months ended June 30, 2026 was $34.6 million, which was a year-over-year decrease of $9.4 million, or 21%, from the six months ended June 30, 2025. The decrease for both periods was largely due to lower revenue and higher operating expenses as a result of organic investments and incremental headcount from the recent acquisitions, respectively.
Previous wording
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 wording
Interest (expense) income, net, was $(0.2) million and $0.7 million for the three months ended June 30, 2026 and 2025, respectively. Interest (expense) income, net, was $(0.2) million and $1.4 million for the six months ended June 30, 2026 and 2025, respectively. The decrease for both periods relates 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.
Showing the first 40 of 55 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the six months ended June 30, 2026 and 2025, other non-recurring items consist of $2.5 million and $1.6 million, respectively, of fees related to non-recurring acquisition projects.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Cybersecurity operating income includes $0.2 million of restructuring and other related charges for the three months ended March 31, 2025.
Previous report — wording carried elsewhere
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.