OneSpan Reports 3% Revenue Growth to $243.2 Million, Achieves Profitability in Digital Agreements Segment

OneSpan Inc. reported a modest increase in total revenue for the fiscal year ended December 31, 2024, reaching $243.2 million, a 3% rise from $235.1 million in 2023. The company achieved profitability for the first time in its Digital Agreements segment, which saw a 20% revenue increase to $61.0 million, while the Security Solutions segment experienced a slight decline of 1%, totaling $182.2 million. The overall gross profit improved to $174.6 million, reflecting a gross margin of 72%, up from 67% in the previous year, primarily driven by a shift towards higher-margin subscription services.

In terms of operational changes, OneSpan undertook significant restructuring efforts, reducing its workforce by approximately 330 positions as part of a broader strategy to enhance profitability. This restructuring led to a decrease in operating expenses by 30%, totaling $129.8 million in 2024. The company also initiated a quarterly cash dividend program, declaring an initial dividend of $0.12 per share, signaling a commitment to returning value to shareholders.

OneSpan's strategic focus has shifted towards subscription revenue growth, particularly in its Digital Agreements segment, which has transitioned to a Software as a Service (SaaS) model. The company reported a 33% year-over-year increase in subscription revenue from its Security Solutions segment, indicating a successful pivot towards software solutions amid declining hardware sales. The adoption of mobile-first strategies by customers has influenced this shift, as organizations increasingly prioritize software authentication over traditional hardware.

Geographically, OneSpan's revenue distribution showed a notable performance in the Americas, which grew by 8% to $86.8 million, while revenue from the EMEA region decreased by 3%. The Asia Pacific region also saw a 10% increase, contributing $47.8 million. The company continues to face challenges related to foreign currency fluctuations, which impacted revenue and operating expenses, although the overall effect was minimal in 2024.

Looking ahead, OneSpan aims to sustain its profitability and revenue growth through continued investment in high-margin software solutions and strategic partnerships. The company acknowledges the competitive landscape, particularly in the e-signature market, and plans to enhance brand recognition and customer engagement to drive future growth. Despite the positive trajectory, OneSpan remains cautious about potential economic uncertainties and their impact on customer spending, particularly in the banking and financial services sectors, which constitute a significant portion of its customer base.