Slide 1: Investor Presentation Q2 2022
Investor Presentation Q2 2022 August 2, 2022
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 the outcomes we expect from our strategic transformation plan; our growth initiatives and market expectations; the potential benefits
Slide 3: Company Overview
Company Overview O OneSpan
Slide 4: OneSpan At A Glance
OneSpan At A Glance 800 3,200 100+ $215M $98M 60% 4B 65M Employees Customers Countries Revenue Cash & STI of the World’s Authenticated Active Digipass Largest Banks Users / Year Keys are Customers TWO SEGMENTS Digital Agreements Security Solutions PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Da
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: Creating Value By Integrating Our Core Competencies
Creating Value By Integrating Our Core Competencies Cross-Product Innovation Digital Agreements Security Solutions Identity Authenticator Virtual Room E-Signature Transaction Verification Solutions Signing PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED 6
Slide 7: Securing Cloud Transaction Workflows with Superior UX
Securing Cloud Transaction Workflows with Superior UX Verify Authenticate Interact Transact Sign Store VALUE PROP Prospective Engage & Transact Customer with Verified Customer Improved Security & Authentication Capabilities Optimized Completion Rates / Better CX Multiple Identity Flexible and adapti
Slide 8: Large and Growing Addressable Markets
Large and Growing Addressable Markets Digital Agreements Market Digital Agreements market includes: 2-3x larger than • E-Signature E-Signature • Virtual room • Remote online notary • IDV & Authentication E-Signature Market • Transaction signing $5.3B $5.3B e-Signature market growing +30% IDV and thr
Slide 9: The New OneSpan Vision and Mission
The New OneSpan Vision and Mission Vision A world of trusted digital interactions and agreements. Mission To accelerate our customers’ digital transformations by enabling secure, compliant and refreshingly easy digital customer agreements and transactions. PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RE
Slide 10: Modern Transaction Cloud Platform
Modern Transaction Cloud Platform Modern cloud customer engagement necessitates secure and compliant ONESPAN global workflows pre- and post-authentication ENTERPRISE TRANSACTION CLOUD CUSTOMER VERIFY AUTHENTICATE INTERACT Transaction Bank Wire Qualified Notary Crypto Smart Auto Transfer Electronic T
Slide 11: 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 12: Ability to Support High-Value, High-Assurance B2B & B2C Transactions
Ability to Support High-Value, High-Assurance B2B & B2C Transactions Internal Use Cases External Use Cases High Payments Money Insurance Transfers Claims Notarization Retail Processing Account Credit / Lending Insurance Opening Applications Policy New Patient Applications Mortgage Onboarding Applica
Slide 13: The New OneSpan – at Inflection Point
The New OneSpan – at Inflection Point 1 Building on a strong foundation 2 Differentiated solutions will 3 Executing clear transformation plan drive growth and priorities PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED 13
Slide 14: Q2 2022 Financial Highlights
Q2 2022 Financial Highlights
Slide 15: Q2 2022 Financial Highlights
Q2 2022 Financial Highlights $134M 21 % 35 % Annual Recurring ARR growth Subscription Revenue (ARR)1 ARR Growth 116 % $98M 26% Dollar-Based Net Cash and STI; no Subscription Expansion (DBNE)2 long-term debt Revenue Growth 1,2 See Appendix for definition PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESER
Slide 16: Q2 2022 ARR & ARR Growth
Q2 2022 ARR & ARR Growth Segment & Total ARR1 Segment & Total ARR Growth $134M ▪ Digital Agreements ARR grew 27% to $45M $111M ▪ Subscription ARR grew 34% to $40M $45 $90M ▪ Security Solutions ARR grew 18% to $89M $35 $28 ▪ Subscription ARR grew 35% to $57M ▪ Total Company ARR grew 21% to $134M $89
Slide 17: Q2 2022 Revenue & Revenue Growth
Q2 2022 Revenue & Revenue Growth Segment & Total Revenue Segment & Total YoY Revenue Growth1 $55M $53M $52M ▪ Digital Agreements: 10% Revenue Growth $6.8 $9.5 $10.5 ▪ Subscription revenue grew 12% to $9M ▪ Maintenance and support declined 7% to $1M ▪ Security Solutions: (1%) Revenue Growth $48.1 ▪ S
Slide 18: Segment ARR Growth
Segment ARR Growth Digital Agreements1 Security Solutions Total Company1 (in millions) (in millions) (in millions) $134 $89 $131 $85 $88 $125 $81 $119 $45 $76 $111 $43 $70 $73 $104 $108 $40 $38 $66 $96 $63 $90 $34 $35 $35 $29 $28 Growth rate benefitted from perpetual to subscription transition; subs
Slide 19: Segment Revenue Growth
Segment Revenue Growth Digital Agreements1 Security Solutions1 Total Company (in millions) (in millions) (in millions) $59 $55 $51 $53 $51 $52 $52 $52 $53 $48 $48 $13 $44 $43 $43 $42 $41 $42 $39 $11 $10 $10 $10 $10 $10 $7 $7 Q2'20 Q2'21 Q2'22 Q2'20 Q2'21 Q2'22 Q2'20 Q2'21 Q2'22 1 Q4‘21 figures have
Slide 20: 2022 Guidance and Long-Term Targets
2022 Guidance and Long-Term Targets Revenue FY21 Actual FY22 Guidance FY22 – FY25 CAGR Total Revenue $214 M ≥ FY21 Revenue 10% - 12% Digital Agreements $40 M -- 30% - 35% Security Solutions $174 M -- 1% - 3% Profitability Metrics FY21 Actual FY22 Guidance % of Revenue, 2025 Gross Margin 67% -- ~70%
Slide 21: Strategic Cost Savings Plan Update
Strategic Cost Savings Plan Update December 2021 – Phase One1 May 2022 – Phase Two21 December 2021 Plan Achieved approximately $11.8 million Achieved approximately $6 million in in annualized cost savings as of June annualized cost savings as of June 30, 30, 2022 vs. $10 million - $12 million 2022;
Slide 22: Appendix
Appendix O OneSpan
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Net Income to Adjusted EBITDA (in thousands, unaudited) Three months ended Six months ended June 30, June 30, 2021 2022 2021 2022 Net income (loss) $ (6,685) $ (9,350) $ (15,836) $ (4,136) Interest income, net (2) (35) (6) (18) Provision (benefit) for income
Slide 24: Definitions
Definitions 1 - ARR is calculated as the annualized value of our customer recurring contracts with a term of at least one-year, as of the measuring date. These include subscription, term-based license, and maintenance contracts and exclude one-time fees. To the extent that we are negotiating a renew
Slide 25: 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 26: Copyright and Trademarks
Copyright and Trademarks Copyright© 2022 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 27: OneSpan
OneSpan The Digital Agreements Company