Slide 1: Investor Presentation – Q3 2023
Investor Presentation – Q3 2023 November 8, 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 our plan to continue driving operational excellence while executing on additional cost reduction initiatives in the fourth quarter of
Slide 3: Company Overview
Company Overview O OneSpan
Slide 4: OneSpan – The Digital Agreements Security Company
OneSpan – The Digital Agreements Security Company 719 3,600 100+ 60% $229M $150M $337M $68M Employees Customers Countries of the World’s Revenue, TTM ARR Market Cap Cash & Equiv. (9/30/23) Largest Banks (As of 9/30/23) (9/30/23) (11/7/23) (9/30/23) are Customers PROPRIETARY AND CONFIDENTIAL. ALL RIG
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 Q3 2023 Revenue Q3 2023 Revenue Digital Agreements APAC 22% 21% Europe 45% 78% 34% 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 customers' 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: Q3 2023 Financial Highlights
Q3 2023 Financial Highlights $59M $150M $6.3M Revenue ARR1 Adjusted EBITDA (3% growth) (10% growth) (40% growth) $26M $119M $68.5M Subscription Revenue Subscription ARR Cash and Equiv. (18% growth) (17% growth) no long-term debt 1 See Appendix for definition. PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS
Slide 16: Q3 2023 Revenue Growth
Q3 2023 Revenue Growth Digital Agreements Security Solutions Total Company 3% $57M $59M 2% 7% $46M $45M $13M $12M Q3'22 Q3'23 Q3'22 Q3'23 Q3'22 Q3'23 Subscription Maintenance Subscription Maintenance Subscription Maintenance PS & Other PS & Other Digipass PS & Other Digipass ▪ Subscription revenue g
Slide 17: Q3 2023 ARR Growth
Q3 2023 ARR Growth Digital Agreements Security Solutions Total Company 10% $150M 9% $136M $98M 13% $90M $51M $46M Q3'22 Q3'23 Subscription Maintenance Q3'22 Q3'23 Q3'22 Q3'23 Subscription Maintenance Subscription Maintenance ▪ Subscription ARR grew 15% ▪ Subscription ARR grew 18% ▪ Subscription ARR
Slide 18: 2023 Guidance and FY24 Financial Targets
2023 Guidance and FY24 Financial Targets Metric FY23 Guidance (prior) FY23 Guidance (new) FY24 Targets Low to mid single digit Revenue $226M - $232M $228M - $232M growth Adjusted EBITDA1 $0M - $3M $2M - $4M 20% - 23% Margin ARR2 $148M - $152M $148M - $152M -- 1 Adjusted EBITDA is a non-GAAP financia
Slide 19: Cost Reduction Actions
Cost Reduction Actions1,2 Approximate combined annualized cost savings from our 2023 Cost Reduction Actions and Phase Two of our Restructuring Plan, announced May 2022 Q3 2023 intra-quarter: $24 million Cumulative, end of Q3, 2023: $43 million Q4 2023, estimated: $15 million Cumulative, end of Q4, 2
Slide 20: Appendix
Appendix O OneSpan
Slide 21: 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, 2022 2023 2022 2023 Net income (loss) $ (7,201) $ (4,133) $ (11,337) $ (30,240) Interest income, net (179) (587) (197) (1,675) Provision
Slide 22: 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 $59 $57 $57 $58 $56 $52 $52 $53 $48 $45 $44 $46 $44 $46 $42 $42 $39 $13 $12 $12 $12 $12 $13 $10 $11 $10 Q3'21 Q3'22 Q3'23 Q3'21 Q3'22 Q3'23 Q3'21 Q3
Slide 23: 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) $150 $139 $141 $144 $134 $136 $124 $129 $93 $96 $98 $119 $92 $88 $90 $84 $87 $80 $49 $51 $45 $46 $47 $48 $39 $40 $42 Growth rate benefitted from perpetual t
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 and support contracts and exclude one-time fees. To the extent that we a
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 financial metrics, namely Adjusted EBITDA, Non-GAAP Net Income (Loss) and Non-GAAP Diluted Net Income (Loss) Per Share. Our management believes that these measures
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