Slide 1: Investor Presentation – Q4 and FY 2023
Investor Presentation – Q4 and FY 2023 March 6, 2024
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 our 2024 financial guidance and our plans to continue to focus on driving efficient revenue growth, profitability and cash flow in 20
Slide 3: Company Overview
Company Overview O OneSpan
Slide 4: OneSpan – The Digital Agreements Security Company
OneSpan – The Digital Agreements Security Company 676 4,000+ 100+ 60% $235M $155M 110% $42M Employees Customers Countries of the World’s Revenue ARR1 NRR2 Cash & Equiv. (12/31/23) Largest Banks (FY 2023) (12/31/23) (12/31/23) (12/31/23) are Customers 1,2 See Appendix for definitions. PROPRIETARY AND
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: Two Operating Segments
Two Operating Segments FY 2023 Revenue Security Solutions • Leading provider of authentication and transaction signing solutions for the who’s who of global banks • Transition to subscription from perpetual software Security Digital license model is largely complete Solutions Agreements • 33% operat
Slide 7: GTM Focused on Enterprise Sales and Growing Partner Network
GTM Focused on Enterprise Sales and Growing Partner Network 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,
Slide 8: 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 9: Financial Highlights & Outlook
Financial Highlights & Outlook
Slide 10: Full Year 2023 Financial Highlights
Full Year 2023 Financial Highlights $235M $155M $12.0M Revenue ARR1 Adjusted EBITDA (7% growth) (11% growth) (5% Margin; 88% growth) $106M $125M $42.5M Subscription Revenue Subscription ARR Cash and Equiv. (19% growth) (18% growth) no long-term debt 1 See Appendix for definition. PROPRIETARY AND CON
Slide 11: Revenue Growth – Security Solutions
Revenue Growth – Security Solutions Q4 2023 FY 2023 7% $184M $171M 10% $48M $44M Q4'22 Q4'23 FY'22 FY'23 Subscription Maintenance PS & Other Digipass Subscription Maintenance PS & Other Digipass ▪ Subscription revenue increased 13% to $14.1M ▪ Subscription revenue increased 28% to $60.6M ▪ Maintenan
Slide 12: Revenue Growth – Digital Agreements
Revenue Growth – Digital Agreements1 Q4 2023 FY 2023 5% $50.9M $48.4M 16% $14.5M $12.4M Q4'22 Q4'23 FY'22 FY'23 Subscription Maintenance PS & Other Subscription Maintenance PS & Other ▪ Subscription revenue increased 17% to $13.2M ▪ Subscription revenue increased 9% to $45.9M ▪ Cloud subscription re
Slide 13: Revenue Growth – Total Company
Revenue Growth – Total Company1 Q4 2023 FY 2023 7% $219M $235M 11% $63M $57M Q4'22 Q4'23 FY'22 FY'23 Subscription Maintenance PS & Other Digipass Subscription Maintenance PS & Other Digipass ▪ Subscription revenue increased 15% to $27.3M ▪ Subscription revenue increased 19% to $106.4M ▪ Maintenance
Slide 14: ARR Growth
ARR Growth Digital Agreements Security Solutions Total Company 11% 10% $155M 15% $101M $139M $92M $54M $47M FY'22 FY'23 FY'22 FY'23 FY'22 FY'23 Subscription Maintenance Subscription Maintenance Subscription Maintenance ▪ Subscription ARR grew 18% to $49M ▪ Subscription ARR grew 19% to $75M ▪ Subscri
Slide 15: 2024 Guidance Metrics
2024 Guidance Metrics Metric FY23 Actual FY24 Guidance Revenue $235.1M $238M - $246M Adjusted EBITDA1 $12.0M $47M - $52M ARR2 $154.6M $160M - $168M 1 Adjus ted EBITDA is a non-GAAP financial measure. The Company i s not provi ding a reconciliation of Adjusted EBITDA guidance to GAAP net income, the
Slide 16: Cost Reduction Actions
Cost Reduction Actions Approximate combined annualized cost savings from our 2023 Cost Reduction Actions and Phase Two of our Restructuring Plan, announced May 20221,2 Q4 2023 intra-quarter: $15.5 million Cumulative, end of Q4, 2023: $58.5 million Q1 2024, estimated: $5 million Cumulative, end of Q4
Slide 17: Appendix
Appendix O OneSpan
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Net Income to Adjusted EBITDA (in thousands, unaudited) Three months ended Years Ended December 31, December 31, 2022 2023 2022 2023 Net income (loss) $ (3,097) $ 441 $ (14,434) $ (29,799) Interest income, net (398) (415) (595) (2,090) Provision for income t
Slide 19: Revenue Trend – Last Two Years
Revenue Trend – Last Two Years Digital Agreements 1 Security Solutions Total Company (in millions) (in millions) (in millions) $63 $59 $59 $57 $57 $58 $56 $52 $53 $48 $48 $45 $44 $46 $44 $46 $42 $39 $14 $13 $13 $12 $12 $12 $12 $11 $10 Q4'21 Q4'22 Q4'23 Q4'21 Q4'22 Q4'23 Q4'21 Q4'22 Q4'23 1 Q4 2021,
Slide 20: ARR Trend – Last Two Years
ARR Trend – Last Two Years Digital Agreements Security Solutions Total Company (in millions) (in millions) (in millions) $155 $150 $139 $141 $144 $134 $136 $101 $124 $129 $93 $96 $98 $88 $90 $92 $84 $87 $49 $51 $54 $45 $46 $47 $48 $40 $42 Q4'21 Q4'22 Q4'23 Q4'21 Q4'22 Q4'23 Q4'21 Q4'22 Q4'23 PROPRIE
Slide 21: Definitions
Definitions 1 – ARR, or Annual Recurring Revenue, 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 and support contracts and exclude one-time fees. To the extent that we a
Slide 22: 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 financial metrics, namely Adjusted EBITDA, Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) Per Diluted Share. Our management believes that these measures
Slide 23: Copyright and Trademarks
Copyright and Trademarks Copyright© 2024 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 24: OneSpan
OneSpan The Digital Agreements Company