GICS Sector : Technology
OneSpan Inc., together with its subsidiaries, designs, develops, and markets digital solutions for identity, security, and business productivity worldwide.The company offers OneSpan Sign, a range of e-signature requirements for occasional agreement to processing tens of thousands of transactions; OneSpan Cloud Authentication, a cloud-based multifactor authentication solution that supports a range of authentication options, including biometrics, push notification, and visual cryptograms for transaction data signing, SMS, and hardware authenticators; and OneSpan Identity Verification, which enables banks and financial institutions identity verification services.It also provides Mobile Security Suite, a software development kit; Mobile Authenticator Studio, a mobile authenticator that operates as a discrete mobile application; and authentication servers, which enables customers to administer a high level of access control.
OneSpan reported a strong quarter, with total revenue growing 1% to $57 million, driven by double-digit organic subscription revenue growth. However, this growth was offset by a reduction in security hardware revenue due to the shift towards mobile-first authentication approaches. The company's adjusted EBITDA was $17.5 million, up 2% YoY, and EPS came in at $0.33, beating estimates of $0.28. The company's subscription revenue grew 12%, with security and digital agreements growing 13% and 11%, respectively.
Publication Date: Nov -25
The company's revenue mix continues to shift towards software and services, with software accounting for about 80% of the business. The company has updated its revenue guidance to $239-241 million, with software and services revenue expected to grow 3-4% and hardware revenue expected to decline 16%. According to Jorge Martell, CFO, the reduction in guidance was primarily due to a higher headwind in the hardware business and lower net expansions and new logos in the security business, primarily in EMEA.
OneSpan's valuation metrics suggest that the market is pricing in moderate growth prospects. The company's P/S Ratio is 1.91, and EV/EBITDA is 6.74, indicating that the market is expecting stable cash flows. However, the company's ROE is 25.16%, and ROIC is 21.73%, indicating strong profitability. The company's ARR growth is expected to accelerate in 2026, driven by the expansion of its software offerings, particularly with the adoption of passkeys.
The company's key drivers include the adoption of its mobile authentication technology, the success of its FIDO2 push, and the integration of ThreatFabric's capabilities. However, the company faces challenges in the EMEA region, where economic conditions have been challenging. The company's hardware revenue decline is also a headwind, although the impact is expected to decrease over time.
OneSpan's focus remains on delivering strong profitability, cash generation, and shareholder returns, while investing in internal R&D and targeted technology-driven investments to enhance its product portfolio. The company's dividend yield is 3.98%, and free cash flow yield is 11.11%, making it an attractive option for income investors. Analysts estimate next year's revenue growth at 2.0%, which is modest, but the company's strong profitability and cash generation capabilities make it a compelling investment opportunity.
OneSpan Appoints Shaun Bierweiler as Chief Revenue Officer
Dec -02
ONESPAN INC (OSPN) Is a Trending Stock: Facts to Know Before Betting on It
Nov -20
Sumitomo Mitsui Trust Bank Advances Mobile Banking Security with SCSK and OneSpan's FIDO Cloud Authentication Solution
Nov -17
Aviva PLC Has $495,000 Stake in Onespan Inc $OSPN
Nov -14
Investors Heavily Search ONESPAN INC (OSPN): Here is What You Need to Know
Nov -06
OneSpan Got Cheaper, But Earnings Expectations Are Lower Too
Nov -05
OneSpan Inc. (OSPN) Q3 2025 Earnings Call Transcript
Oct -30
OneSpan (OSPN) Q3 Earnings Beat Estimates
Oct -30
OneSpan Inc.'s Security Solutions segment growth of 1.8% is driven by increasing demand for digital identity verification, cloud-based security, and anti-fraud solutions. Growing adoption of online and mobile banking, coupled with rising cyber threats, fuels the need for robust security measures. OneSpan's innovative solutions, such as e-signatures and risk analytics, position the company for continued growth in this segment.
OneSpan Inc.'s Digital Agreements growth is driven by increasing demand for digital transformation, rising adoption of cloud-based solutions, and growing need for secure and compliant electronic agreements. Additionally, the shift towards remote work and digital customer experiences, as well as the need for cost reduction and process efficiency, are contributing to the 2.2% growth.
OneSpan's e-Signatures allow users to electronically sign documents and agreements, providing a secure and compliant way to obtain consent and approvals.
OneSpan's Identity Verification solution uses AI-powered technology to verify the identity of users, ensuring that they are who they claim to be.
OneSpan's Risk Analytics solution uses machine learning and predictive analytics to identify and mitigate fraud risks in real-time.
OneSpan's Authentication solutions provide secure and convenient authentication methods, including biometric, behavioral, and risk-based authentication.
OneSpan's Compliance and Regulatory Solutions help organizations comply with regulations such as GDPR, PSD2, and AML, reducing the risk of non-compliance.
OneSpan Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the digital identity verification and e-signature industry.
OneSpan Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are often critical to its customers' operations, making it difficult for customers to negotiate prices or terms.
OneSpan Inc. has a diversified supply chain, which reduces its dependence on individual suppliers. The company's suppliers are also relatively small compared to OneSpan's size, giving the company bargaining power in negotiations.
The threat of new entrants in the digital identity verification and e-signature industry is moderate due to the presence of barriers to entry, such as regulatory hurdles and the need for significant investments in technology and infrastructure.
The digital identity verification and e-signature industry is highly competitive, with several established players competing for market share. OneSpan Inc. faces intense competition from companies such as DocuSign, Adobe, and others.
| Value | |
|---|---|
| Debt Weight | 5.27% |
| Debt Cost | 8.01% |
| Equity Weight | 94.73% |
| Equity Cost | 8.01% |
| WACC | 8.01% |
| Leverage | 5.56% |
Value: 6.0
Growth: 6.6
Quality: 8.8
Yield: 2.0
Momentum: 5.0
Volatility: 3.3
1-Year Total Return ->
Value: 7.4
Growth: 6.6
Quality: 4.5
Yield: 0.0
Momentum: 10.0
Volatility: 0.3
1-Year Total Return ->
Value: 8.4
Growth: 3.7
Quality: 3.9
Yield: 0.0
Momentum: 9.5
Volatility: 0.0
1-Year Total Return ->
Value: 6.4
Growth: 3.3
Quality: 3.5
Yield: 0.0
Momentum: 8.0
Volatility: 0.3
1-Year Total Return ->
Value: 6.6
Growth: 3.3
Quality: 3.5
Yield: 0.0
Momentum: 6.5
Volatility: 0.0
1-Year Total Return ->
Value: 9.2
Growth: 1.6
Quality: 3.7
Yield: 0.0
Momentum: 1.0
Volatility: 1.3
1-Year Total Return ->