OneSpan (US:OSPN)2026-02-26 22:32Financial 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]