OneSpan Reports Q1 2025 Revenue of $63.4 Million, Net Income Increases to $14.5 Million

OneSpan Inc. reported its financial results for the first quarter of 2025, revealing a total revenue of $63.4 million, a decrease of 2% from $64.8 million in the same period of 2024. The decline was primarily attributed to a drop in product and license revenue, which fell to $37.2 million from $37.8 million, and services revenue, which decreased to $26.1 million from $27.0 million. Despite the revenue decline, the company achieved a net income of $14.5 million, up from $13.5 million a year earlier, resulting in a diluted earnings per share of $0.37, compared to $0.35 in the prior year.

The company experienced significant changes in its operational metrics, with a notable reduction in total current liabilities, which decreased from $110.3 million at the end of 2024 to $87.0 million by March 31, 2025. This reduction was driven by lower deferred revenue and accrued wages. Additionally, OneSpan's cash and cash equivalents increased to $105.2 million from $83.2 million, reflecting improved liquidity. The company also reported a decrease in accounts receivable, which fell to $29.6 million from $56.2 million, indicating a more efficient collection process.

Strategically, OneSpan has focused on enhancing its product offerings and operational efficiency. The company reported a 7% increase in subscription revenue from its Security Solutions segment and a 13% increase from its Digital Agreements segment compared to the previous year. The company continues to transition towards a subscription-based model, which is expected to drive future growth. OneSpan has also implemented cost reduction measures, including workforce reductions that resulted in a decrease in average employee headcount from 183 to 158 in sales and marketing roles.

In terms of geographic performance, OneSpan's revenue distribution remained stable, with 49% generated from the EMEA region, 33% from the Americas, and 18% from the Asia Pacific. However, revenue from EMEA and the Americas saw slight declines, attributed to lower hardware sales. The company reported an Annual Recurring Revenue (ARR) of $168.4 million, a 9% increase year-over-year, driven by growth in subscription contracts and new customer acquisitions.

Looking ahead, OneSpan aims to continue its focus on profitable growth, particularly in its subscription revenue streams. The company anticipates that ongoing restructuring efforts will yield further operational efficiencies and cost savings. Management remains optimistic about the potential for revenue growth in both segments, despite the challenges posed by market conditions and currency fluctuations. The company plans to maintain its commitment to innovation and customer service as it navigates the evolving digital landscape.