Onespan (NASDAQ:OSPN) reported second-quarter 2026 revenue of $60.5 million, up 1% from a year earlier, as growth in subscription revenue and digital agreements partly offset lower hardware and perpetual-maintenance revenue. The company raised its full-year revenue and adjusted EBITDA outlook, citing stronger e-signature consumption and higher expected hardware revenue in the second half.
Subscription revenue increased 11% year over year to $47 million and represented 77% of total revenue, compared with 70% in the prior-year quarter. Annual recurring revenue rose 6.7% to $189.7 million, while net retention was 103%.
DigipassONE Platform Launch
OneSpan highlighted the recent launch of DigipassONE, an integrated authentication and security platform incorporating technologies acquired through Nok Nok Labs and Build38 along with OneSpan’s existing offerings.
Limongelli said the platform includes four components: DigipassONE Authenticate, DigipassONE Verify, DigipassONE Protect and DigipassONE Insights. The offering combines authentication methods including passkeys, FIDO2 security keys, hardware tokens, mobile authenticators and software authenticators. It also includes verifiable credentials and digital-wallet capabilities, mobile application protection, and analytics from authentication and application-protection signals.
The company said it sees future opportunities in agent-driven banking interactions, alongside existing branch, website and mobile-app channels. Limongelli said OneSpan expects banks will need tools to authenticate customers, verify intent and protect transactions as such interactions emerge.
During the question-and-answer session, Limongelli said DigipassONE Protect and the newer DigipassONE Verify capability create cross-selling opportunities within the company’s established bank customer base. He said OneSpan released an early version of DigipassONE Verify in June and is conducting proof-of-concept work with customers during the second half of 2026.
Limongelli also pointed to European digital-identity regulations, saying countries must complete wallet specifications by year-end and banks will need to accept such wallets by the end of 2027. He said the company does not yet have a clear read on customer budgets for 2027 because sales efforts remain focused on closing 2026 business.
Segment Performance
Cybersecurity revenue declined 7.5% to $40.9 million. Subscription revenue in the unit rose 2.5% to $27.2 million, supported by customer expansions, new customer wins, and contributions from the Nok Nok and Build38 acquisitions. The increase was partly offset by lower multiyear term-license revenue and lower pass-through renewal catch-up revenue than in the prior-year quarter.
Cybersecurity ARR increased 7.4% to $123 million, including the Build38 acquisition and a previously disclosed $3 million headwind. Operating income in the division was $13.8 million, or 34% of revenue, down from $19.8 million, or 45% of revenue, a year earlier. Chief Financial Officer Jorge Martell attributed the decline to revenue and gross-margin factors, expenses associated with acquired companies, and increased organic investments.
Digital agreements revenue climbed 25.2% to $19.5 million, driven by overage revenue, renewal-contract expansions and new customers. ARR in the segment grew 5.3% to $66.7 million. Operating income rose to $7 million, or 35.7% of revenue, from $2.9 million, or 18.4% of revenue, in the prior-year period.
Martell said overage revenue was primarily generated by a couple of customers exceeding committed transaction volumes. He said overages are not included in ARR or net retention metrics but can indicate higher platform activity that may lead to future expansion contracts. The company expects further overages in the third quarter, though at a lower level than in the second quarter.
Profitability, Cash and Outlook
Companywide gross margin was 73.6%, compared with 73.5% a year earlier. GAAP operating income was $8.7 million, down from $10.5 million, while GAAP earnings per share were $0.18, compared with $0.21. Non-GAAP earnings per share were $0.30, down from $0.34 in the prior-year quarter.
At quarter-end, OneSpan had $43.3 million in cash and cash equivalents and $5 million outstanding under its credit facility, compared with $49.8 million in cash and no debt at the end of the first quarter. Quarterly cash uses included $4.8 million for dividends, $2.9 million for repurchasing about 230,000 shares, and $3 million for capitalized software development. Operating cash flow was an outflow of $0.1 million, which Martell attributed primarily to working-capital fluctuations.
For full-year 2026, OneSpan raised its total revenue outlook to $248 million to $252 million from its prior range of $244 million to $249 million. The company now expects:
- Software and services revenue of $202 million to $204 million.
- Hardware revenue of $46 million to $48 million, up from prior guidance of $43 million to $45 million.
- ARR of $194 million to $198 million.
- Adjusted EBITDA of $67 million to $71 million, compared with previous guidance of $64 million to $68 million.
Martell said the updated outlook reflects expected incremental e-signature contract overages and stronger hardware revenue, particularly in the fourth quarter. He said approximately one-third of expected second-half hardware revenue is forecast for the third quarter, with a stronger fourth quarter anticipated.
About Onespan (NASDAQ:OSPN)
OneSpan, formerly known as Vasco Data Security International, is a Chicago-based cybersecurity software company specializing in digital identity and anti-fraud solutions. Founded in 1991, the company provides a suite of authentication and transaction security products designed to help organizations protect critical applications and high-value transactions across online, mobile and in-branch channels.
The core OneSpan portfolio includes multi-factor authentication, risk-based authentication and transaction signing solutions.
