Onespan Inc. · NASDAQ:OSPN
Onespan — Q3 2024 Earnings Presentation
24 slides from Onespan's earnings presentation, Oct 30, 2024
Slide 1: Investor Presentation – Q3 2024
Investor Presentation – Q3 2024 October 30, 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 drive efficient revenue growth, profitability and cash flow and our general expectations
Slide 3: Company Overview
Company Overview O OneSpan
Slide 4: OneSpan At-a-Glance
OneSpan At-a-Glance1 569 4,000+ 100+ >60% $245M $164M 106% $77M Employees Customers Countries of the World’s Revenue ARR2 NRR3 Cash & Equiv. 100 Largest Banks (TTM) are Customers 1 Metrics as of 9/30/24 PROPRIETARY 2,3 AND CONFIDENTIAL. ALL RIGHTS RESERVED 4 See Appendix for definitions.
Slide 5: 2024 – Focus on Improved Operational Efficiency & Profitability
2024 – Focus on Improved Operational Efficiency & Profitability Revenue1,2 Adjusted EBITDA1 $64M $235M $245M $214M $219M $12M $6M $(5M) FY'21 FY'22 FY'23 TTM Security SW & Services Security Hardware Digital Agreements FY'21 FY'22 FY'23 TTM 1 TTM (Trailing-twelve month) through September 30, 2024. PR
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: Security Solutions & Digital Agreements Business Units
Security Solutions & Digital Agreements Business Units Total Revenue: $245M1 Common BU Attributes Operation Excellence Profitable Revenue Growth Enterprise Class Solutions Security Digital Solutions Agreements Key Verticals – BFSI, Healthcare, Government $185M $60M 76% 24% Revenue by Geography1 EMEA
Slide 8: Security Solutions
SECURITY SOLUTIONS Industry Leader in Securing Digital Banking Transactions • Trusted by the who’s who of global banks to secure high value digital transactions • 3% TTM revenue growth1 • 25% TTM subscription revenue growth1 • 47% segment operating margin1 MFA & Passwordless Digital Transaction Mobi
Slide 9: Digital Agreements
DIGITAL AGREEMENTS Key Enterprise-Class Solutions • Robust security, white-labelling and pricing model differentiate; transition to SaaS substantially complete • 22% TTM revenue growth1 • 29% TTM subscription revenue growth1 • 22% segment operating margin in Q3’24; first quarter E-Signatures Identit
Slide 10: 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 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: Financial Highlights & Outlook
Financial Highlights & Outlook
Slide 13: Q3 2024 Financial Highlights
Q3 2024 Financial Highlights $56M $164M $17M Revenue ARR1 Adjusted EBITDA (-4% growth; +6% (9% growth) (30% Margin) ytd growth) $34M 106 % $77M Subscription Revenue NRR2 Cash and Equiv. (29% growth; 31% ytd no long-term debt growth) 1,2 See Appendix for definition. PROPRIETARY AND CONFIDENTIAL. ALL
Slide 14: Q3 2024 Revenue Growth
Q3 2024 Revenue Growth1,2 Security Solutions Digital Agreements Total Company 4% 11% $58.8M $56.2M $45.8M $40.6M 18% $15.4M $13.0M Q3'23 Q3'24 Q3'23 Q3'24 Q3'23 Q3'24 Subscription Maintenance Subscription Maintenance Subscription Maintenance PS & Other Digipass PS & Other PA & Other Digipass ▪ Subsc
Slide 15: Q3 2024 ARR Growth
Q3 2024 ARR Growth1,2 Security Solutions Digital Agreements Total Company 9% 6% $164M 16% $150M $104M $98M $60M $51M Q3'23 Q3'24 Q3'23 Q3'24 Q3'23 Q3'24 1 ARR is approximate. The sum of Security Solutions and Digital Agreements ARR may differ from total company ARR due to rounding. 2 On 1/1/24, we t
Slide 16: 2024 Guidance Metrics
2024 Guidance Metrics FY24 Previous FY24 Current Metric Guidance Guidance Revenue $238M - $246M $238M - $242M Adjusted EBITDA1 $55M - $59M $65M - $67M ARR2 $166M - $170M $166M - $170M - Revenue guidance was narrowed to reflect a reduction in anticipated hardware token shipments, partially offset by
Slide 17: Revenue and ARR
Revenue and ARR Revenue1,2,3 ARR2,3 FY’24 Guidance: FY’24 Guidance: $235M $238M - $242M $166M - $170M $214M $219M $155M $139M $124M FY'21 FY'22 FY'23 FY'24E FY'21 FY'22 FY'23 FY'24E Security SW & Services Security Hardware Digital Agreements Security Solutions Digital Agreements 1 Security SW & Serv
Slide 18: Adjusted EBITDA – Sharp Increase Driven by Cost Reductions
Adjusted EBITDA – Sharp Increase Driven by Cost Reductions Adjusted EBITDA FY’24 Guidance Cumulative Annualized Cost Savings1,2 $65M - $67M December 31, 2022: $10.0 million December 31, 2023: $58.5 million September 30, 2024: $76.5 million* * Annualized cost savings approximated $3.0 million and $12
Slide 19: Appendix
Appendix O OneSpan
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Net Income to Adjusted EBITDA5 (in thousands, unaudited) Three months ended Nine months ended September 30, September 30, 2023 2024 2023 2024 Net income (loss) $ (4,133) $ 8,273 $ (30,240) $ 28,295 Interest income, net (587) (624) (1,675) (1,246) Provision f
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