OneSpan Reports Q2 2025 Revenue Decline but Increases Net Income and Acquires Nok Nok Labs

OneSpan Inc. reported its financial results for the second quarter of 2025, revealing a total revenue of $59.8 million, a decrease of 2% from $60.9 million in the same quarter of the previous year. The decline was attributed to a drop in product and license revenue, which fell to $32.2 million from $32.4 million, and services and other revenue, which decreased to $27.6 million from $28.5 million. Despite the revenue decline, the company achieved a net income of $8.3 million, up from $6.6 million in the prior year, resulting in a basic earnings per share of $0.22 compared to $0.17.

In comparison to the first half of 2024, OneSpan's revenue for the first six months of 2025 also decreased by 2%, totaling $123.2 million, down from $125.8 million. The company noted that the decrease was partially offset by a favorable foreign exchange impact of approximately $1.2 million in the second quarter. The gross profit for the quarter increased to $44.0 million, leading to a gross margin of 73%, up from 66% in the prior year, primarily due to lower costs associated with product sales and an improved sales mix.

Strategically, OneSpan completed the acquisition of Nok Nok Labs on June 4, 2025, for a total consideration of $18.4 million. This acquisition is expected to enhance OneSpan's offerings in passwordless authentication solutions. The company also reported a significant increase in its annual recurring revenue (ARR), which rose to $177.8 million, an 8% increase from $165.3 million a year earlier, bolstered by contributions from the Nok Nok Labs acquisition.

Operationally, OneSpan's employee headcount decreased to 1,020 as of June 30, 2025, down from 1,056 a year prior, reflecting ongoing restructuring efforts aimed at improving efficiency. The company has implemented cost reduction measures, including workforce reductions, which have resulted in lower operating expenses. For the second quarter, total operating costs were $33.5 million, a slight increase from $32.7 million in the previous year, driven by higher sales and marketing expenses.

Looking ahead, OneSpan aims to focus on driving profitable growth in both its Security Solutions and Digital Agreements segments, with an emphasis on subscription revenue growth. The company anticipates continued challenges in hardware sales due to a shift towards mobile authentication solutions but remains optimistic about expanding its software offerings and enhancing customer relationships.