Slide 1: Investor Presentation Q3 2022
Investor Presentation Q3 2022 November 1, 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; the results we expect from the investments we are making in sales, mar
Slide 3: Company Overview
Company Overview O OneSpan
Slide 4: OneSpan At A Glance
OneSpan At A Glance 800 3,200 100+ $215M $94M 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% through 202
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: Q3 2022 Financial Highlights
Q3 2022 Financial Highlights
Slide 15: Q3 2022 Financial Highlights
Q3 2022 Financial Highlights $136M 14% 26% Annual Recurring ARR growth3 Subscription Revenue (ARR)1 ARR Growth 109% $94M 25% Dollar-Based Net Cash and STI; no Subscription Expansion (DBNE)2 long-term debt Revenue Growth 1,2 See Appendix for definition 3 ARR growth ratePROPRIETARY AND CONFIDENTIAL. A
Slide 16: Digital Agreements ARR & Revenue Growth
Digital Agreements ARR & Revenue Growth ARR Growth Revenue Growth 18% $46M 20% $39M $12M $10M Q3'21 Q3'22 Q3'21 Q3'22 Subscription Maintenance Subscription Maintenance PS & Other ▪ Subscription ARR grew 23% to $41M ▪ Subscription revenue grew 25% to $10.3M ▪ Maintenance ARR declined 13% to $5M ▪ Mai
Slide 17: Security Solutions ARR & Revenue Growth
Security Solutions ARR & Revenue Growth ARR Growth Revenue Growth 13% 7% $90M $45M $80M $42M Q3'21 Q3'22 Q3'21 Q3'22 Subscription Maintenance Subscription Maintenance PS & Other Digipass ▪ Subscription ARR grew 28% to $61M ▪ Subscription revenue grew 25% to $11.9M ▪ Maintenance ARR declined 9% to $2
Slide 18: Total Company ARR & Revenue Growth
Total Company ARR & Revenue Growth ARR Growth Revenue Growth 14% 9% $136M $57M $119M $52M Q3'21 Q3'22 Q3'21 Q3'22 Subscription Maintenance Subscription Maintenance PS & Other Digipass ▪ Subscription ARR grew 26% to $101M ▪ Subscription revenue grew 25% to $22.3M ▪ Maintenance ARR declined 10% to $34
Slide 19: 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) $134 $136 $87 $88 $90 $129 $84 $124 $80 $119 $45 $46 $111 $75 $42 $72 $72 $104 $108 $39 $40 $67 $96 $36 $36 $32 $29 Growth rate benefitted from perpetual t
Slide 20: 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 $51 $53 $51 $52 $52 $52 $53 $48 $44 $43 $45 $13 $43 $42 $42 $41 $39 $12 $11 $10 $10 $10 $10 $10 $7 Q3'20 Q3'21 Q3'22 Q3'20 Q3'21 Q3'22 Q3'20 Q3'
Slide 21: 2022 Guidance and Long-Term Targets
2022 Guidance and Long-Term Targets Revenue FY21 Actual Prior FY22 Guidance New FY22 Guidance FY22 – FY25 CAGR Total Revenue $214 M ≥ FY21 Revenue ≥ FY21 Revenue 10% - 12% Digital Agreements $40 M -- -- 30% - 35% Security Solutions $174 M -- -- 1% - 3% Profitability Metrics FY21 Actual Prior FY22 Gu
Slide 22: Strategic Cost Savings Plan Update
Strategic Cost Savings Plan Update December 2021 – Phase One1 May 2022 – Phase Two21 December 2021 Plan • Substantially complete • Approximately $3 million in annualized cost saving during Q3’22 • Achieved approximately $11.8 million in annualized cost savings • Approximately $9 million in total vs.
Slide 23: Appendix
Appendix O OneSpan
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Net Income to Adjusted EBITDA (in thousands, unaudited) Three months ended Nine months ended September 30, September 30, 2021 2022 2021 2022 Net income (loss) $ (975) $ (7,201) $ (16,811) $ (11,337) Interest income, net 4 (179) (2) (197) Provision (benefit)
Slide 25: Definitions
Definitions 1 - ARR is calculated as the approximate 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 negotia
Slide 26: 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 27: 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 28: OneSpan
OneSpan The Digital Agreements Company