OneSpan Inc.OSPN
OneSpan Inc. Segments Disclosure
Segment Information
For the years 2025, 2024, and 2023, the top 10 customers contributed 18%, 20% and 22%, respectively, of total worldwide revenue. During 2025, all of the Company's hardware products were assembled by three independent factories in China and one independent factory in Romania
Segments are defined as components of a company that engage in business activities from which they may earn revenues and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company's reportable segments are divisions that offer different products and services and are as follows:
•Cybersecurity. Cybersecurity, formerly Security Solutions, consists of our broad portfolio of software products, software development kits ("SDKs") and Digipass authenticator devices that are used to build applications designed to defend against attacks on digital transactions across online environments, devices, and applications. The software products and SDKs included in the Cybersecurity segment are delivered through on-premises and cloud-based deployment models and include standards-based authentication technologies such as Fast Identity Online ("FIDO") authentication and passkeys, multi-factor authentication, transaction signing solutions and mobile application security.
•Digital Agreements. Digital Agreements consists of solutions that enable our clients to secure and automate business processes associated with their digital agreement and customer transaction lifecycles that require consent, non-repudiation and compliance. These solutions, which are cloud-based, include OneSpan Sign e-signature, OneSpan Notary, and OneSpan Identity Verification.
The CODM evaluates performance for both reportable segments based on segment revenue, gross margins and operating income (loss). When using these metrics, the CODM considers forecast-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses these metrics for evaluating pricing strategy to assess the performance of each segment by comparing the results of each segment with one another and in determining the compensation of certain employees.
Segment operating income (loss) consists of the revenues generated by a segment, less the direct costs of revenue, sales and marketing expenses, research and development expenses, general and administrative expenses, restructuring and other related charges, and amortization of intangible assets expense that are incurred directly by a segment. Sales and marketing and research and development expenses were determined to be significant segment expenses. Unallocated corporate costs include costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. The accounting policies of both reportable segments are the same as those described in Note 2, Summary of Significant Accounting Policies.
Prior to 2023, the Company allocated certain cost of goods sold and operating expenses to its two reportable operating segments using a direct cost allocation and an allocation based on revenue split between the segments. In 2023, the Company refined its operating segment allocation methodology to better align internal and external costs more directly to where the employee efforts were being spent on each segment. The revised methodology was applied on a prospective basis beginning in 2023. As a result of this change, there was an increase in cost of goods sold and operating expenses allocated to the Digital Agreements segment.
The tables below set forth information about the Company’s operating segments for the years ended December 31, 2025, 2024, and 2023, along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements.
| Year Ended December 31, 2025 | |||||||||||||||||||||||
| (In thousands) | Cybersecurity | Digital Agreements | Corporate and Other | Total | |||||||||||||||||||
Revenue | $ | 177,688 | $ | 65,492 | $ | — | $ | 243,180 | |||||||||||||||
| Cost of goods sold | 45,373 | 18,453 | — | 63,826 | |||||||||||||||||||
| Gross profit | 132,315 | 47,039 | — | 179,354 | |||||||||||||||||||
| Gross margin | 74% | 72% | * | 74% | |||||||||||||||||||
| Sales and marketing | 29,752 | 13,885 | 3,313 | 46,950 | |||||||||||||||||||
| Research and development | 21,559 | 11,711 | 886 | 34,156 | |||||||||||||||||||
| Other segment items (2)(4) | 999 | 5,482 | 43,321 | 49,802 | |||||||||||||||||||
| Operating income (loss) (3)(5) | 80,005 | 15,961 | (47,520) | 48,446 | |||||||||||||||||||
Interest income, net | 1,985 | ||||||||||||||||||||||
| Other expense, net | (1,069) | ||||||||||||||||||||||
| Income before income taxes | $ | 49,362 | |||||||||||||||||||||
| Year Ended December 31, 2024 | |||||||||||||||||||||||
| (In thousands) | Cybersecurity | Digital Agreements | Corporate and Other | Total | |||||||||||||||||||
Revenue | $ | 182,187 | $ | 60,992 | $ | — | $ | 243,179 | |||||||||||||||
| Cost of goods sold | 49,319 | 19,281 | 3 | 68,603 | |||||||||||||||||||
| Gross profit (1) | 132,868 | 41,711 | (3) | 174,576 | |||||||||||||||||||
| Gross margin | 73% | 68% | * | 72% | |||||||||||||||||||
| Sales and marketing | 24,684 | 15,658 | 4,204 | 44,546 | |||||||||||||||||||
| Research and development | 16,132 | 16,117 | 174 | 32,423 | |||||||||||||||||||
| Other segment items (2)(4) | 1,990 | 4,321 | 46,491 | 52,802 | |||||||||||||||||||
| Operating (loss) income (3)(5) | 90,062 | 5,615 | (50,872) | 44,805 | |||||||||||||||||||
Interest income, net | 1,807 | ||||||||||||||||||||||
| Other expense, net | (125) | ||||||||||||||||||||||
| Income before income taxes | $ | 46,487 | |||||||||||||||||||||
| Year Ended December 31, 2023 | |||||||||||||||||||||||
| (In thousands) | Cybersecurity | Digital Agreements | Corporate and Other | Total | |||||||||||||||||||
Revenue | $ | 184,181 | $ | 50,925 | $ | — | $ | 235,106 | |||||||||||||||
| Cost of goods sold | 64,207 | 13,183 | 1 | 77,391 | |||||||||||||||||||
Gross profit | 119,974 | 37,742 | (1) | 157,715 | |||||||||||||||||||
| Gross margin | 65% | 74% | * | 67% | |||||||||||||||||||
| Sales and marketing | 35,356 | 31,566 | 3,313 | 70,235 | |||||||||||||||||||
| Research and development | 18,894 | 18,687 | 839 | 38,420 | |||||||||||||||||||
| Other segment items (2)(4) | 5,534 | 6,014 | 66,383 | 77,931 | |||||||||||||||||||
| Operating income (loss) (3)(5) | 60,190 | (18,525) | (70,536) | (28,871) | |||||||||||||||||||
Interest income, net | 2,090 | ||||||||||||||||||||||
| Other expense, net | (532) | ||||||||||||||||||||||
Income (loss) before income taxes | $ | (27,313) | |||||||||||||||||||||
* Percentage not meaningful
(1) Digital Agreements gross profit includes an intangible asset write-off of $0.8 million and an internal capitalized software write-off of $0.7 million for the year ended December 31, 2024 (see Note 8, Intangible Assets, net and Note 9, Property and Equipment, net).
(2) Cybersecurity other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the years ended December 31, 2025, 2024, and 2023.
(3) Cybersecurity operating income includes $1.3 million, $0.9 million, and $0 of total amortization and depreciation expense for the years ended December 31, 2025, 2024, and 2023, respectively.
Cybersecurity operating income includes $0.3 million, $2.0 million, and $5.5 million of restructuring and other related charges for the years ended December 31, 2025, 2024, and 2023, respectively.
(4) Digital Agreements other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the years ended December 31, 2025, 2024, and 2023.
(5) Digital Agreements operating income includes $7.5 million, $6.2 million, and $3.7 million of total amortization and depreciation for the years ended December 31, 2025, 2024, and 2023, respectively.
Digital Agreements operating income includes $1.0 million, $1.7 million, and $3.7 million of restructuring and other related charges for the years ended December 31, 2025, 2024, and 2023, respectively.
The following tables illustrate the disaggregation of revenues by category and services, including a reconciliation of the disaggregated revenues to revenues from the Company's two operating segments for the years ended December 31, 2025, 2024, and 2023.
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| (In thousands) | Cybersecurity | Digital Agreements | Cybersecurity | Digital Agreements | Cybersecurity | Digital Agreements | |||||||||||||||||||||||||||||
| Subscription | $ | 90,929 | $ | 65,199 | $ | 80,555 | $ | 58,848 | $ | 60,550 | $ | 45,886 | |||||||||||||||||||||||
| Maintenance and support | 34,736 | 90 | 38,342 | 1,736 | 42,240 | 4,143 | |||||||||||||||||||||||||||||
| Professional services and other | 2,916 | 203 | 4,439 | 408 | 5,425 | 896 | |||||||||||||||||||||||||||||
| Hardware products | 49,107 | — | 58,851 | — | 75,966 | — | |||||||||||||||||||||||||||||
| Total Revenue | $ | 177,688 | $ | 65,492 | $ | 182,187 | $ | 60,992 | $ | 184,181 | $ | 50,925 | |||||||||||||||||||||||
Asset information by segment is not reported to or reviewed by the CODM to allocate resources, and therefore, the Company has not disclosed asset information for the segments.
Geographic, Customer and Supplier InformationThe Company classifies sales by customers’ locations in three geographic regions: 1) EMEA, which includes Europe, the Middle East, and Africa; 2) the Americas, which includes North, Central, and South America; and 3) Asia Pacific, which also includes Australia and New Zealand.
| (In thousands) | ||||||||||||||||||||||||||
| Europe, Middle East, Africa (EMEA) | Americas | Asia Pacific | Total | |||||||||||||||||||||||
| 2025 | ||||||||||||||||||||||||||
| Revenue | $ | 102,604 | $ | 95,709 | $ | 44,867 | $ | 243,180 | ||||||||||||||||||
| Long-lived assets | $ | 13,854 | $ | 41,230 | $ | 476 | $ | 55,560 | ||||||||||||||||||
| 2024 | ||||||||||||||||||||||||||
| Revenue | $ | 108,555 | $ | 86,803 | $ | 47,821 | $ | 243,179 | ||||||||||||||||||
| Long-lived assets | $ | 7,479 | $ | 20,699 | $ | 512 | $ | 28,690 | ||||||||||||||||||
| 2023 | ||||||||||||||||||||||||||
| Revenue | $ | 111,568 | $ | 80,057 | $ | 43,481 | $ | 235,106 | ||||||||||||||||||
| Long-lived assets | $ | 5,783 | $ | 18,795 | $ | 315 | $ | 24,893 | ||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Mar 6, 2024 | |
| 2022 | Feb 28, 2023 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.