Financial Data and Key Metrics Changes - The company reported record high adjusted EBITDA of $23 million, nearly 15% higher than last year's first quarter record of $20 million, with adjusted EBITDA reaching 36% of revenue [7][15] - First quarter revenue was $63.4 million, a 2% decline compared to the same period last year [16] - First quarter gross margin increased to 74% from 73% in the prior year [16][17] - GAAP operating income was $17.2 million compared to $14.1 million in the first quarter of last year [18] Business Line Data and Key Metrics Changes - Subscription revenue grew 9%, driven by demand for software authentication, app shielding, and e-signature solutions [8][15] - In the security business, subscription revenue grew 7%, while overall security revenue declined 5% [20] - Digital agreements revenue grew 9%, with subscription revenue increasing by 13% [21] Market Data and Key Metrics Changes - The revenue mix by region remained consistent, with EMEA accounting for 49%, the Americas for 33%, and Asia Pacific for 18% [23] - The company expects potential tariff-related costs of up to $1 million for the full year 2025, primarily affecting hardware revenue [25] Company Strategy and Development Direction - The company aims to continue optimizing its cost structure and driving efficient revenue growth while maintaining profitability commitments [7][12] - There is a focus on operational excellence and a balanced capital allocation strategy, including potential increases in capital return to shareholders and targeted M&A [14][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit subscription revenue growth for the full year 2025 despite macroeconomic uncertainties [24][26] - The company is monitoring the impact of tariffs and foreign currency fluctuations but remains optimistic about its core business [25][61] Other Important Information - The company generated $29 million in cash from operations and ended the quarter with $105 million in cash on hand [13][23] - The board approved a quarterly dividend of $0.12 per share, totaling approximately $4.6 million [13][14] Q&A Session Summary Question: Impact of tariffs on hardware revenue - Management indicated that Europe is the largest market for hardware, with minimal tariff impact observed to date [32][34] Question: Quantifying the impact of large deals slipping into Q2 - Management clarified that the two large contracts would not impact Q1 ARR as their start date was April 1 [40] Question: Confidence in maintaining guidance amid macro uncertainty - Management noted a strong start to the year in terms of bookings, contributing to their confidence in maintaining guidance [44][46] Question: Adjusted EBITDA margin expectations for the full year - Management explained that Q1 typically has a favorable revenue mix, and they expect a shift in the mix for the remainder of the year [50][52] Question: Revenue derived from outside the US - Approximately 90% of security revenue comes from outside the US, while the digital agreements business has a more balanced mix [53] Question: Capital allocation strategy - Management indicated a focus on targeted M&A in the security sector to expand capabilities, alongside potential buybacks or Dutch auctions [70]

OneSpan (OSPN) Q1 2025 Earnings Call May 01, 2025 04:30 PM ET Speaker0 thank you for standing by. Welcome to the Q1 twenty twenty five OneSpan Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Joe Maxa, Vice President of Investor Relations. Please go ahead. Speake ...