Slide 1: Investor Presentation – Q1 2023
Investor Presentation – Q1 2023 May 4, 2023
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of applicable U.S. securities laws, including statements regarding: 2023 guidance and long- term financial targets; the outcomes we expect from our strategic transformation plan; expected results of t
Slide 3: Company Overview
Company Overview O OneSpan
Slide 4: OneSpan – The Digital Agreements Security Company
OneSpan – The Digital Agreements Security Company 850 3,200 100+ 60% $224M $141M $530M $107M Employees Customers Countries of the World’s Revenue, TTM ARR Market Cap Cash & STI Largest Banks (As of 3/31/23) (3/31/23) (5/3/23) (3/31/23) are Customers 1 Digital Agreements and Security Solutions revenu
Slide 5: Trusted Security Partner to Global Blue-Chip Enterprises
Trusted Security Partner to Global Blue-Chip Enterprises Other Financial Banking Insurance Government Healthcare Other Services PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED 5
Slide 6: Revenue Breakdown
Revenue Breakdown Operating Segments Geographic Split Q1 2023 Revenue Q1 2023 Revenue Digital Agreements APAC 20% 16% Europe 48% 36% 80% Security Americas Solutions PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED 6
Slide 7: Our Vision and Mission
Our Vision Our Mission A world of trusted To accelerate our customer’s digital revenue digital customer streams and operating efficiencies by enabling interactions and secure, compliant, and refreshingly easy digital transactions agreement lifecycles. PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVE
Slide 8: Our Solution Portfolio
Our Solution Portfolio… DIGITAL AGREEMENT WORKFLOW VERIFY AUTHENTICATE INTERACT TRANSACT VAULT Biometric Intelligent Adaptive Simple, Advanced & Cloud Storage Online Notarization Qualified eSignature Verification Authentication Secure Virtual Digital Smart Forms Blockchain Vault Global ID Proofing H
Slide 9: Allows us to Secure Customer Transaction Lifecycles
…Allows us to Secure Customer Transaction Lifecycles VERIFY AUTHENTICATE INTERACT TRANSACT & SIGN VAULT TRANSACTION and RECORD TYPE Bank Wire Notary Crypto Smart Auto Qualified Loan Transfer Contract Loan Electronic Signature PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED 9
Slide 10: Support High Value B2B & B2C Transactions
…and Support High Value B2B & B2C Transactions Internal Use Cases External Use Cases High Credit / Lending Payments Applications Money Transfers New Patient Onboarding Mortgage Applications Insurance Claims Retail Processing NDAs Account OneSpan Opening VALUE Transaction Cloud Commercial Banking Int
Slide 11: Large and Growing Addressable Markets
Large and Growing Addressable Markets Digital Agreements market includes: Digital Agreements Market • E-Signature 2-3x larger than • Virtual room E-Signature • Remote online notary • IDV & Authentication • Transaction signing E-Signature Market • eVaulting $5.3B $5.3B e-Signature market growing +30%
Slide 12: Unified GTM Motion with an Enterprise Sales Approach
Unified GTM Motion with an Enterprise Sales Approach CUSTOMER SEGMENTATION BASED ON EMPLOYEE COUNT OSPN SALES FOCUS PARTNER COVERAGE Tiers Efficient Resource Global System Resellers & Platform (Employee Count) Allocation with Sellers Integrators Distributors Partners Large Enterprise SAM 100,000+ En
Slide 13: Competitive Differentiation
Competitive Differentiation World-class security DNA in identity verification, authentication and transaction signing Deep expertise in end-user experience, cloud workflows, document verification and electronic signing Deep roots and experience in highly regulated global markets Ability to leverage
Slide 14: Financial Highlights & Outlook
Financial Highlights & Outlook
Slide 15: Q1 2023 Financial Highlights
Q1 2023 Financial Highlights $58M $141M $(1.6)M Revenue ARR1 Adjusted EBITDA (10% Growth) (10% Growth) $30M $109M $107M Subscription Revenue Subscription ARR Cash and STI; no (29% Growth) (19% Growth) long-term debt 1 See Appendix for definition. PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED 15
Slide 16: Q1 2023 Revenue Growth
Q1 2023 Revenue Growth Digital Agreements Security Solutions Total Company 10% 18% $58M 13% $52M $46M $13M $39M $12M Q1'22 Q1'23 Q1'22 Q1'23 Q1'22 Q1'23 Subscription Maintenance Subscription Maintenance Subscription Maintenance PS & Other PS & Other Digipass PA & Other Digipass ▪ Subscription revenu
Slide 17: Q1 2023 ARR Growth
Q1 2023 ARR Growth Digital Agreements Security Solutions Total Company 10% $141M 7% $129M 14% $93M $87M $48M $42M Q1'22 Q1'23 Subscription Maintenance Q1'22 Q1'23 Q1'22 Q1'23 Subscription Maintenance Subscription Maintenance ▪ Subscription ARR grew 17% ▪ Subscription ARR grew 20% ▪ Subscription ARR
Slide 18: 2023 Guidance and Long-Term Targets
2023 Guidance and Long-Term Targets Revenue FY22 Actual FY23 Guidance FY22 – FY25 CAGR Total Revenue $219M $232M - $242M 12% - 14% Digital Agreements $48M -- 35%+ Security Solutions $171M -- 3%+ Profitability Metrics FY22 Actual FY23 Guidance % of Revenue, 2025 Gross Margin 68% -- 70%+ Adjusted EBIT
Slide 19: 3-Year CAGR Targets – Revenue
3-Year CAGR Targets – Revenue Digital Agreements Security Solutions Total Company 12%- 3%+ 14% CAGR CAGR 35%+ CAGR FY'22 FY'23E FY'24E FY'25E FY'22 FY'23E FY'24E FY'25E FY'22 FY'23E FY'24E FY'25E Subscription Maintenance Subscription Maintenance Subscription Maintenance PS & Other PS & Other Digipas
Slide 20: 3-Year CAGR Targets – ARR
3-Year CAGR Targets – ARR Digital Agreements Security Solutions Total Company 20%+ CAGR 5%+ 35%+ CAGR CAGR FY'22 FY'23E FY'24E FY'25E FY'22 FY'23E FY'24E FY'25E FY'22 FY'23E FY'24E FY'25E PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED 20
Slide 21: Appendix
Appendix O OneSpan
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Net Income to Adjusted EBITDA (in thousands, unaudited) Three months ended March 31, 2022 2023 Net income (loss) $ 5,214 $ (8,356) Interest income (expense), net 17 (503) Provision for income taxes 1,173 689 1 Depreciation and amortization of intangible asse
Slide 23: Strategic Cost Savings Plan
Strategic Cost Savings Plan1 Phase Two • Announced May 2022 • Approximately $10.7 million in total annualized cost savings as of March 31, 2023 • $20 - $25 million in annualized cost savings expected by end of 2025 • Cost savings are expected to be re-invested to help drive revenue growth 1 We annou
Slide 24: Segment & Total Company Revenue Trend; Last Two Years
Segment & Total Company Revenue Trend; Last Two Years Digital Agreements Security Solutions Total Company (in millions) (in millions) (in millions) $59 $57 $57 $58 $52 $53 $51 $52 $52 $48 $45 $44 $46 $43 $42 $42 $41 $39 $13 $12 $12 $12 $10 $10 $10 $11 $10 Q1'21 Q1'22 Q1'23 Q1'21 Q1'22 Q1'23 Q1'21 Q1
Slide 25: Segment & Total Company ARR Trend, Last Two Years
Segment & Total Company ARR Trend, Last Two Years Digital Agreements Security Solutions Total Company (in millions) (in millions) (in millions) $139 $141 $134 $136 $124 $129 $119 $88 $90 $92 $93 $108 $111 $84 $87 $80 $75 $72 $45 $46 $47 $48 $39 $40 $42 $36 $36 Growth rate benefitted from perpetual t
Slide 26: Definitions
Definitions 1 – Annual Recurring Revenue, or ARR, is calculated as the approximate annualized value of our customer recurring contracts as of the measurement date. These include subscription, term-based license, and maintenance contracts and exclude one-time fees. To the extent that we are negotiati
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures We report financial results in accordance with GAAP. We also evaluate our performance using certain non-GAAP operating metrics, including Adjusted EBITDA. Our management believes that these measures, when taken together with the corresponding GAAP financial metrics, provi
Slide 28: Copyright and Trademarks
Copyright and Trademarks Copyright© 2023 OneSpan North America Inc., all rights reserved. OneSpan™, the “O” logo, “BE BOLD. BE SECURE.”™, DIGIPASS® and “The Digital Agreements Company” are registered or unregistered trademarks of OneSpan North America Inc. or its affiliates in the U.S. and other cou
Slide 29: OneSpan
OneSpan The Digital Agreements Company