Slide 1: Investor Presentation – Q4 and FY 2022
Investor Presentation – Q4 and FY 2022 February 28, 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 plans for managing our Digital Agreements and Security Solutions s
Slide 3: Company Overview
Company Overview O OneSpan
Slide 4: OneSpan At A Glance
OneSpan At A Glance 800 3,200 100+ $219M $99M 60% 4B 65M Employees Customers Countries Revenue Cash & STI of the World’s Authenticated Active Digipass (FY’22) (12/31/22) Largest Banks Users / Year Keys are Customers PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED 4
Slide 5: 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 6: 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 6
Slide 7: We Focus on Securing Customer Transaction Lifecycles
We Focus on Securing 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 7
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: Supports High-Value, High-Assurance B2B & B2C Transactions
…Supports High-Value, High-Assurance 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 Commercia
Slide 10: 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 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: Q4 2022 & Full Year 2022 Financial Highlights; Full Year 2023 Guidance & Updated 3-Year Outlook
Q4 2022 & Full Year 2022 Financial Highlights; Full Year 2023 Guidance & Updated 3-Year Outlook
Slide 13: FY 2022 Financial Highlights
FY 2022 Financial Highlights $139M 12 % 22 % Annual Recurring ARR growth4 Subscription Revenue (ARR)1 ARR Growth 107 % $99M 30% Net Recurring Cash and STI; no Subscription Revenue (NRR)2,3 long-term debt Revenue Growth (12/31/2022) 1,2 See Appendix for definition 3 Previously referred to as Dollar-B
Slide 14: ARR Growth
ARR Growth1 Digital Agreements Security Solutions Total Company 12% 9% $139M $124M 18% $92M $84M $47M $40M FY'21 FY'22 FY'21 FY'22 FY'21 FY'22 Subscription Maintenance Subscription Maintenance Subscription Maintenance ▪ Subscription ARR grew 22% to $42M ▪ Subscription ARR grew 22% to $63M ▪ Subscrip
Slide 15: Revenue Growth – Digital Agreements
Revenue Growth – Digital Agreements1 Q4 2022 FY 2022 19% $48.4M 15% $40.6M $12.4M $10.8M Q4'21 Q4'22 FY'21 FY'22 Subscription Maintenance PS & Other Subscription Maintenance PS & Other ▪ Subscription revenue grew 24% to $11.3M ▪ Subscription revenue grew 26% to $42.0M ▪ Maintenance revenue declined
Slide 16: Revenue Growth – Security Solutions
Revenue Growth – Security Solutions1 Q4 2022 FY 2022 2% 9% $174M $171M $48M $44M Q4'21 Q4'22 FY'21 FY'22 Subscription Maintenance PS & Other Digipass Subscription Maintenance PS & Other Digipass ▪ Subscription revenue grew 32% to $12.5M ▪ Subscription revenue grew 34% to $47.1M ▪ Maintenance revenue
Slide 17: Revenue Growth – Total Company
Revenue Growth – Total Company1 Q4 2022 FY 2022 2% $214M $219M 4% $59M $57M Q4'21 Q4'22 FY'21 FY'22 Subscription Maintenance PS & Other Digipass Subscription Maintenance PS & Other Digipass ▪ Subscription revenue grew 28% to $23.8M ▪ Subscription revenue grew 30% to $89.2M ▪ Maintenance declined 12%
Slide 18: 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 $134 $136 $129 $124 $119 $88 $90 $92 $111 $84 $87 $104 $108 $80 $75 $72 $72 $45 $46 $47 $42 $39 $40 $36 $36 $32 Growth rate benefitted from perpetual t
Slide 19: 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 $53 $52 $53 $51 $52 $52 $48 $43 $45 $44 $43 $42 $42 $41 $39 $13 $12 $12 $11 $10 $10 $10 $10 $10 Q4'20 Q4'21 Q4'22 Q4'20 Q4'21 Q4'22 Q4'20 Q4
Slide 20: 2023 Guidance and Long-Term Targets
2023 Guidance and Long-Term Targets Revenue FY22 Actual FY23 Guidance FY22 – FY25 CAGR (Prior) FY22 – FY25 CAGR (New) Total Revenue $219M $232M - $242M 10% - 12% 12% - 14% Digital Agreements $48M -- 30% - 35% 35%+ Security Solutions $171M -- 1% - 3% 3%+ Profitability Metrics FY22 Actual FY23 Guidanc
Slide 21: Strategic Cost Savings Plan Update
Strategic Cost Savings Plan Update Phase One1 Phase Two2 December 2021 Plan1 • Substantially complete (mid 2022) • Approximately $1 million in annualized cost saving during Q4’22 • Achieved approximately $11.8 million in annualized cost savings • Approximately $10.1 million in total vs. $10 million
Slide 22: Appendix
Appendix O OneSpan
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Net Income to Adjusted EBITDA (in thousands, unaudited) Quarters Ended Years Ended December 31, December 31, 2021 2022 2021 2022 Net income (loss) $ (13,773) $ (3,097) $ (30,584) $ (14,434) Interest income, net 3 (398) 1 (595) Provision (benefit) for income
Slide 24: 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 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© 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 27: OneSpan
OneSpan The Digital Agreements Company