OneSpan Inc.

NON-GAAP RECONCILIATION

We report financial results in accordance with GAAP. We also regularly report several financial measures that are not calculated in accordance with GAAP, including Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure that we define as net income before interest, taxes, depreciation and amortization, long-term incentive compensation, restructuring and other related charges, and certain non-recurring items, including acquisition-related costs, rebranding costs, and non-routine shareholder matters. Our management believes that Adjusted EBITDA, when taken together with Net Income (Loss), its most directly comparable financial measure, provides useful supplemental information regarding the performance of our business. See below under the header “Adjusted EBITDA” for a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure.

We also used two EBITDA-related metrics, 2024 Adjusted EBITDA and H1 Adjusted 2024 EBITDA, for purposes of setting targets for our 2024 executive compensation program, as described in “Compensation Discussion & Analysis – Annual Cash Incentive Compensation.” These metrics are defined differently than the Adjusted EBITDA definition we use for regular financial reporting purposes. See below under the header “EBITDA-Related Metrics used for 2024 Executive Compensation Purposes”.

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss) before interest, taxes, depreciation, amortization, long-term incentive compensation, restructuring and other related charges, and certain non-recurring items, including acquisition related costs, rebranding costs. and non-routine shareholder matters. We use Adjusted EBITDA as a simplified measure of performance for use in communicating our performance to investors and analysts and for comparisons to other companies within our industry. As a performance measure, we believe that Adjusted EBITDA presents a view of our operating results that is most closely related to serving our customers. By excluding interest, taxes, depreciation, amortization, long-term incentive compensation, restructuring costs, and certain other non-recurring items, we are able to evaluate performance without considering decisions that, in most cases, are not directly related to meeting our customers’ requirements and were either made in prior periods (e.g., depreciation, amortization, long-term incentive compensation, non-routine shareholder matters), deal with the structure or financing of the business (e.g., interest, one-time strategic action costs, restructuring costs, impairment charges) or reflect the application of regulations that are outside of the control of our management team (e.g., taxes). In addition, removing the impact of these items helps us compare our core business performance with that of our competitors.

Adjusted EBITDA is not a measure of performance under GAAP and should not be considered in isolation or as an alternative or substitute for the most directly comparable financial measure calculated in accordance with GAAP. While we believe that Adjusted EBITDA is useful for the purposes described above, it has limitations associated with its use, since it excludes items that may have a material impact on our reported results and may be different from similar measures used by other companies. A reconciliation of Net Income (Loss) to Adjusted EBITDA appears below.

ADJUSTED EBITDA

Reconciliation of Net Income (Loss) to Adjusted EBITDA

(1) Includes cost of sales depreciation and amortization expense directly related to delivering cloud subscription revenue of $3.4 million and $1.5 million for the years ended December 31, 2024 and 2023, respectively. Costs are recorded in “Services and other cost of goods sold” on the consolidated statements of operations.

(2) Long-term incentive compensation includes share-based compensation and cash incentive grants awarded to employees located in jurisdictions where we do not issue share-based compensation due to tax, regulatory or similar reasons. The immaterial expense associated with these cash incentive grants was $0.2 million and $0.3 million for the years ended December 31, 2024 and 2023, respectively.

(3) Includes write-offs of intangible assets and property and equipment, net of $0.8 million and $1.0 million, respectively, for the year ended December 31, 2024 and 2023. Costs are recorded in "Services and other costs of good sold" and "Restructuring and other related charges," respectively on the consolidated statements of operations. Also, includes restructuring and other related charges of $0.1 million for the year ended December 31, 2024 and $0 for the year ended December 31, 2023. These charges are recorded in "Services and other costs of good sold" on the consolidated statements of operations.

(4) For the year ended December 31, 2024, other non-recurring items consist of $4.2 million of fees related to non-recurring projects.

For the year ended December 31, 2023, other non-recurring items consist of $1.6 million of fees related to non-recurring projects and our acquisition of substantially all of the assets of the ProvenDB business of Southbank Software Pty Ltd., and $1.4 million of fees related to non-recurring items, primarily severance payable to our former chief executive officer.

EBITDA-Related Metrics used for 2024 Executive Compensation Purposes

For purposes of the Company’s 2024 executive compensation program:

•2024 Adjusted EBITDA is defined as the Company’s 2024 EBITDA (earnings before interest, taxes, depreciation and amortization) excluding all stock-based compensation costs, severance costs (including related termination costs such as legal fees), and capitalized software costs (i.e., adding back those costs to EBITDA).

•H1 2024 Adjusted EBITDA has the same definition as 2024 Adjusted EBITDA, except that it is for the first half of 2024 only (January 1, 2024 through June 30, 2024).

2024 ADJUSTED EBITDA AND HI 2024 ADJUSTED EBITDA

Reconciliation of Net Income to 2024 Adjusted EBITDA

Reconciliation of Net Income to H1 Adjusted EBITDA