Summary
OneSpan closed fiscal 2024 with a softer top line and much stronger profitability. Fourth quarter revenue slipped 2.8% to $61.2 million from $62.9 million a year earlier, while gross profit rose 4.2% to $45.3 million. Gross margin climbed to 74.0% from 69.1%, helped by a richer software mix and lower hardware volumes. Operating income was $11.8 million, compared with $1.8 million in the prior-year quarter, and net income reached $28.8 million against $0.4 million. A tax benefit tied to a valuation allowance release, a worthless stock deduction and an intra-entity transfer of intellectual property lifted net income well above operating income, so the earnings headline overstates the quarter's operating momentum.
The two segments moved in opposite directions. Security Solutions revenue fell 6% in the quarter while Digital Agreements revenue rose 8%. For the full year, Security Solutions revenue was down 1% and Digital Agreements revenue was up 20%. Subscription revenue rose 32% in the quarter and 31% for the year, which shows how quickly the revenue base is shifting toward recurring contracts. Hardware remains the drag, because customers are adopting a mobile-first approach that favors software authentication licenses over Digipass authenticators. Annual recurring revenue rose 8% to $167.7 million at December 31, 2024. Net retention rate was 106%, below the 110% reported a year earlier. Remaining performance obligations were $103.45 million, up 11.9% from $92.44 million, while deferred revenue declined 3.6% to $70.86 million.
The full year shows what the cost reductions did. Revenue rose 3.4% to $243.18 million, gross profit rose 10.7% to $174.58 million, and gross margin improved to 71.8% from 67.1%. Operating income was $44.80 million, compared with an operating loss of $28.87 million in 2023, and net income was $57.08 million, compared with a net loss of $29.80 million. Diluted earnings per share were $1.46 for the year against a loss of $0.74. Operating cash flow was $55.67 million, up from a use of $10.74 million in 2023, and the fourth quarter alone generated $12.43 million versus $3.10 million a year earlier. Capital expenditures fell 25.9% for the year to $9.24 million. Cash and cash equivalents stood at $83.2 million at December 31, 2024, up from $43.0 million a year earlier. On a non-GAAP basis, fourth quarter net income was $9.7 million, or $0.24 per diluted share, and full year non-GAAP net income was $51.5 million, or $1.32 per diluted share. Adjusted EBITDA was $19.8 million in the quarter, up from $11.2 million, and $72.5 million for the full year, up from $12.0 million.
Guidance for the full year 2025 puts ARR at $180 million to $186 million and Adjusted EBITDA at $72 million to $76 million, and management also gave a revenue range for the year. The Adjusted EBITDA outlook is not reconciled to GAAP net income. The board initiated a quarterly cash dividend of $0.12 per share, and the first payment went out on February 14, 2025 to shareholders of record on January 31, 2025. Restructuring is still running. OneSpan has eliminated roughly 330 positions under the plan and expects $0.5 million to $1.0 million of additional charges after 2024, with the plan ending December 31, 2025. The risk list is familiar: loss of one or more large customers, competition and pricing pressure in e-signature, lengthy sales cycles, security breaches, and reliance on third parties for certain products and data center services. Tariffs and trade disputes are also called out. Currency exposure is real, since about 83% of 2024 revenue came from outside the United States and 41% was denominated in Euros, and foreign exchange transaction losses were $0.9 million for the year.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $61.2M | $56.2M | +8.8% | $62.9M | -2.8% |
| Gross profit | $45.3M | $41.5M | +9.0% | $43.5M | +4.2% |
| Gross margin | 74.0% | 73.9% | +0.2 pp | 69.1% | +5.0 pp |
| Research & development | $8.3M | $7.5M | +10.0% | $8.7M | -5.1% |
| Sales & marketing | $11.0M | $10.1M | +8.2% | $13.8M | -20.8% |
| General & administrative | $13.1M | $11.3M | +15.5% | $14.2M | -7.9% |
| Total operating expenses | $33.5M | $30.3M | +10.5% | $41.6M | -19.6% |
| Operating income (loss) | $11.8M | $11.3M | +4.9% | $1.8M | +549.8% |
| Operating margin | 19.3% | 20.0% | -0.7 pp | 2.9% | +16.4 pp |
| Net income (loss) | $28.8M | $8.3M | +248.0% | $441.0K | +6427.9% |
| Net margin | 47.1% | 14.7% | +32.4 pp | 0.7% | +46.4 pp |
| Diluted EPS | $0.74 | $0.21 | +$0.53 | $0.01 | +$0.73 |
| Net retention rate | 106.0% | 106.0% | ±0.0 pp | 110.0% | -4.0 pp |
Risks
Security Solutions total revenue decreased 1% in 2024, largely due to lower Digipass hardware revenue as banking customers adopt mobile-first authentication, and the company expects Digipass authenticator token revenue to decrease modestly year-over-year in 2025. It must grow software and Digital Agreements revenue to offset this decline.
Bank and financial institution customers may increasingly move from multi-factor authentication to FIDO2 passkeys, and competitors that more quickly integrate generative AI into their products could weaken OneSpan's competitive position.
Digipass authenticator devices are assembled at facilities in mainland China and one facility in Romania and depend on a limited number of suppliers, exposing OneSpan to tariffs, trade disputes, geopolitical tensions, and inventory-related losses if demand forecasts are inaccurate.
As an ICT provider to EU financial entities, OneSpan faces DORA and NIS2 obligations, including enhanced security, incident reporting, and customer-imposed audits; failure to meet them could lead to penalties, liabilities, suspension of products, and loss of business.
Top 10 customers contributed 20% of total worldwide revenue in 2024, down from 22% in 2023 and 23% in 2022, but a significant portion of sales remains concentrated; loss of substantial sales to any one could adversely affect revenues and profits.
The sales cycle in the financial services market is often nine to 18 months long, and delays in customer purchasing decisions can cause significant period-to-period variation in operating results because expenses are based on anticipated revenue levels.
OneSpan terminated approximately 330 employees in 2022, 2023 and 2024 as part of restructuring, which may make it harder and more expensive to retain key employees and attract new hires, and remaining staff have assumed additional work that could slow customer service and product development.
At December 31, 2024, goodwill and intangible assets had a net book value of $99.8 million, primarily from acquisitions; adverse market conditions or changes in critical assumptions could result in a significant impairment charge to earnings.
In 2024, approximately 83% of revenue and 59% of operating expenses were generated or incurred outside the U.S., exposing results to foreign currency fluctuations, geopolitical tensions, tariffs, and economic instability in foreign markets.
A majority of revenue is derived from banking and financial services customers, making OneSpan susceptible to consolidation, contraction, and cost reduction measures in that industry, which could lead to longer sales cycles, deferrals, and increased price competition.
Net Retention Rate was 106% at December 31, 2024 compared with 110% at December 31, 2023, indicating slower expansion from existing customers even as ARR grew 8% to $167.7 million.
At December 31, 2024, OneSpan had U.S. federal, state, and foreign net operating losses of $22.7 million, $44.1 million, and $117.0 million, respectively, some of which begin to expire in 2025, and ownership changes could limit their use.
SaaS KPIs
All quarters →Annual Recurring Revenue (ARR)
Net Retention Rate (NRR)
Summary, forecast, risks and KPIs are extracted from OneSpan Inc.'s SEC filings for Q4 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.