Core Insights - OneSpan has signed a definitive agreement to acquire Build38 to enhance its App Shielding capabilities in response to evolving cybersecurity threats [1][6] - The company is transitioning to a software-centric business model, expecting over 80% of its revenue to come from software by 2026, with hardware revenue declining significantly [3][6] - OneSpan reported a strong financial performance for Q4 2025, with revenue of $62.9 million, an 11.5% increase in annual recurring revenue (ARR), and record adjusted EBITDA of $77.6 million [5][10] Acquisition and Strategic Focus - The acquisition of Build38 aims to deepen integration with customer mobile applications and enhance detection methods, with expected closure in the current quarter [1][4] - OneSpan's acquisition strategy focuses on acquiring modern technology that addresses customer needs, particularly in authentication and App Shielding [7] Financial Performance - For Q4 2025, OneSpan's revenue was $62.9 million, reflecting a 3% year-over-year increase, with an annual ARR of $187 million [5][18] - The company reported full-year 2025 revenue of $243.2 million, flat compared to 2024, with a 12% growth in subscription revenue [10] - Adjusted EBITDA for 2025 reached $77.6 million, representing a margin of 31.9% [5][10] Business Segments - In the cybersecurity division, ARR grew 12% to $120 million, while revenue was flat year-over-year at $45.4 million [12] - The digital agreements segment saw a 10% increase in ARR to $67 million, with revenue growth of 11% in Q4 [13][14] Future Outlook - For 2026, OneSpan anticipates total revenue between $244 million and $249 million, with ARR projected to be between $192 million and $196 million [23] - The company plans to invest approximately $5.5 million in sales, marketing, and R&D, which may pressure near-term profitability [16] - The expected impact of the Build38 acquisition is a dilution of adjusted EBITDA by $3 million to $4 million in 2026 [6][16]

OneSpan (NasdaqCM:OSPN) Q4 2025 Earnings call February 26, 2026 04:30 PM ET Company ParticipantsJoe Maxa - VP of Investor RelationsJorge Martell - CFOTrevor Rambo - Software Equity Research AssociateVictor Limongelli - CEOConference Call ParticipantsAnja Soderstrom - Financial Analyst and Equity Research AnalystOperatorGood day. Thank you for standing by. Welcome to the Q4 2025 OneSpan Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there ...

Financial Data and Key Metrics Changes - In Q4 2025, adjusted EBITDA was $19 million, representing 31% of revenue, while for the full year, adjusted EBITDA was $78 million, or 32% of revenue [14][20] - Annual recurring revenue (ARR) reached $187 million, up 11.5% year-over-year, with Q4 software and services revenue growing 4% year-over-year [14][15] - Total revenue for Q4 was $63 million, a 3% increase year-over-year, while full year revenue was flat at $243.2 million due to a 17% decline in hardware revenue [15][20] Business Line Data and Key Metrics Changes - Cybersecurity revenue was flat year-over-year in Q4, while digital agreements revenue grew 11% [15][25] - For the full year 2025, cybersecurity revenue declined 2.5% to $177.7 million, but subscription revenue grew 13% [25] - Digital agreements ARR grew 10% to $67 million, with Q4 revenue increasing 11% to $17.5 million [26][27] Market Data and Key Metrics Changes - Revenue mix for 2025 was 42% from EMEA, 39% from the Americas, and 19% from Asia Pacific, reflecting shifts in digital agreements and cybersecurity software revenue [31] - The decline in hardware revenue was consistent with mobile-first trends in both Europe and Asia Pacific [31] Company Strategy and Development Direction - The company is focusing on software, expecting over 80% of revenue in 2026 to come from software, down from over 50% in 2019 [5] - Investments are being made in sales and marketing, including hiring a new Chief Revenue Officer, to enhance go-to-market capabilities [12][18] - The company plans to integrate AI-driven capabilities into its offerings to provide deeper insights and streamline decision-making [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment for 2026, with expectations for growth in software and services driven by digital agreements and moderate growth in cybersecurity [32][33] - The company anticipates a continued secular shift away from consumer banking hardware tokens, impacting hardware revenue [33] Other Important Information - The board approved an increase in the quarterly dividend from $0.12 to $0.13 per share, reflecting an annualized rate of $0.52 per share, an 8% increase [18] - The company generated $59.5 million in operating cash flow for the year and has no long-term debt [30] Q&A Session Summary Question: Demand environment at the start of the year - Management noted a reasonable start to the year with a strong finish in Q4, expecting benefits from new marketing investments in the second half of the year [39][40] Question: Hardware revenue performance and guidance - Management clarified that the $3 million revenue pull forward was on the software side, not hardware, and discussed the ongoing decline in hardware revenue due to shifts in consumer banking [41][46] Question: New CRO's impact on sales and marketing - Management highlighted the new CRO's focus on sales execution and pipeline development, expecting improvements over time [52][53] Question: Acquisition strategy and future M&A opportunities - Management emphasized the focus on acquiring valuable technology rather than revenue, aiming to solve customer problems with modern solutions [54][55] Question: AI as an opportunity and threat - Management acknowledged AI's potential to increase demand for authentication services while also noting the risks associated with rapidly evolving threats [57][58]

OneSpan (NasdaqCM:OSPN) Q4 2025 Earnings call February 26, 2026 04:30 PM ET Speaker3Good day. Thank you for standing by. Welcome to the Q4 2025 OneSpan Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will hear an automated message advising you your hand is raised. To withdraw your question, please p ...

Core Viewpoint - OneSpan Inc. is expanding its mobile security capabilities through the acquisition of Build38, aiming to enhance its App Shielding offerings and provide stronger protection against mobile application attacks [2][3][4]. Group 1: Acquisition Details - OneSpan signed a definitive agreement to acquire Build38, a company specializing in next-generation mobile application protection [2]. - The acquisition is expected to close by March 2026, pending regulatory approvals and customary closing conditions [6]. Group 2: Security Enhancements - The integration of Build38's SDK-based security tools will enhance OneSpan's mobile security portfolio, providing deeper in-app protection against attacks targeting applications and devices [3][4]. - The acquisition will improve visibility into mobile app activities, addressing a common need among security teams [3]. Group 3: Market Position and Compliance - Build38 is recognized as a Sample Vendor in the Gartner Hype Cycle for Application Security, 2025, and is a leading provider in Europe for securing mobile identities [5]. - The combined expertise of OneSpan and Build38 aims to elevate standards in mobile identity protection, particularly in regulated industries [5]. Group 4: Financial Information - OneSpan offers a quarterly dividend of $0.12 per share, resulting in a dividend yield of 4.12% as of January 29 [6].