v3.25.2
Segment Information
 6 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
Segment Information Segment Information
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 business units that offer different products and services and are as follows:
•Security Solutions. 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 Security Solutions segment are on-premises and, to a lesser extent, cloud software products, and include multi-factor authentication, transaction signing, and mobile application security solutions.
•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 largely cloud-based, include OneSpan Sign e-signature, OneSpan Notary, and Identity Verification.
Segment operating income (loss) consists of the revenues generated by a segment, less the direct costs of revenue, sales and marketing, 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 directly attributable to a particular segment.
The tables below set forth information about the Company’s operating segments for the three and six months ended June 30, 2025 and 2024, along with the items necessary to reconcile the segment information to the totals reported in the accompanying condensed consolidated financial statements.
Three Months Ended June 30, 2025
(In thousands, except percentages)Security SolutionsDigital AgreementsCorporate and OtherTotal
Revenue$44,235 $15,608 $— $59,843 
Cost of goods sold11,413 4,463 — 15,876 
Gross profit32,822 11,145 — 43,967 
Gross margin74 %71 %*73 %
Sales and marketing7,329 3,467 709 11,505 
Research and development5,358 3,587 499 9,444 
Other segment items (1)(3)
336 1,212 10,964 12,512 
Operating income (loss) (2)(4)
19,799 2,879 (12,172)10,506 
Interest income, net732 
Other income (expense), net(669)
Income before income taxes$10,569 
Three Months Ended June 30, 2024
(In thousands, except percentages)Security SolutionsDigital AgreementsCorporate and OtherTotal
Revenue$45,461 $15,463 $— $60,924 
Cost of goods sold14,861 5,722 — 20,583 
Gross profit30,600 9,741 — 40,341 
Gross margin67 %63 %*66 %
Sales and marketing5,533 3,891 1,086 10,510 
Research and development4,097 4,217 27 8,341 
Other segment items (1)(3)
278 1,788 11,787 13,853 
Operating income (loss) (2)(4)
20,692 (155)(12,900)7,637 
Interest income, net521 
Other income (expense), net331 
Income before income taxes$8,489 
Six Months Ended June 30, 2025
(In thousands, except percentages)Security SolutionsDigital AgreementsCorporate and OtherTotal
Revenue$91,948 $31,261 $— $123,209 
Cost of goods sold23,041 9,110 — 32,151 
Gross profit68,907 22,151 — 91,058 
Gross margin75 %71 %*74 %
Sales and marketing14,201 6,870 1,891 22,962 
Research and development10,277 6,593 502 17,372 
Other segment items (1)(3)
471 2,443 20,122 23,036 
Operating income (loss) (2)(4)
43,958 6,245 (22,515)27,688 
Interest income, net1,424 
Other income (expense), net(678)
Income before income taxes$28,434 

Six Months Ended June 30, 2024
(In thousands, except percentages)Security SolutionsDigital AgreementsCorporate and OtherTotal
Revenue$95,891 $29,876 $— $125,767 
Cost of goods sold27,788 10,243 — 38,031 
Gross profit68,103 19,633 — 87,736 
Gross margin71 %66 %*70 %
Sales and marketing12,077 9,121 2,239 23,437 
Research and development8,098 8,448 54 16,600 
Other segment items (1)(3)
1,357 2,484 22,111 25,952 
Operating income (loss) (2)(4)
46,571 (420)(24,404)21,747 
Interest income, net622 
Other income (expense), net622 
Income before income taxes$22,991 
*Percentage not meaningful.
(1)     Security Solutions other segment items includes general and administrative expense and restructuring and other related charges for the three and six months ended June 30, 2025 and 2024.
(2)     Security Solutions operating income includes $0.2 million and $0.4 million of total amortization and depreciation expense for both the three and six months ended June 30, 2025 and 2024, respectively.
Security Solutions operating income includes $0.1 million and $0.2 million of restructuring and other related charges for the three and six months ended June 30, 2025, respectively. Security Solutions operating income includes $0.3 million and $1.4 million of restructuring and other related charges for the three and six months ended June 30, 2024, respectively.
(3)     Digital Agreements other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the three and six months ended June 30, 2025 and 2024.
(4) Digital Agreements operating income includes $1.8 million and $3.5 million of total amortization and depreciation expense for three and six months ended June 30, 2025, respectively. Digital Agreements operating loss includes $1.6 million and $3.2 million of total amortization and depreciation expense for three and six months ended June 30, 2024, respectively.
Digital Agreements operating income includes $0.1 million and $0.2 million of restructuring and other related charges for the three and six months ended June 30, 2025, respectively. Digital Agreements operating loss includes $1.2 million and $1.3 million of restructuring and other related charges for the three and six months ended June 30, 2024, 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 reportable operating segments for the three and six months ended June 30, 2025 and 2024:
Three Months Ended June 30,
20252024
(In thousands)Security SolutionsDigital AgreementsSecurity SolutionsDigital Agreements
Subscription$20,602 $15,574 $14,857 $14,785 
Maintenance and support8,666 25 9,742 490 
Professional services and other (1)
951 9 1,123 188 
Hardware products14,016 — 19,739 — 
Total Revenue$44,235 $15,608 $45,461 $15,463 
Six Months Ended June 30,
20252024
(In thousands)Security SolutionsDigital AgreementsSecurity SolutionsDigital Agreements
Subscription$48,674 $31,119 $41,039 $28,597 
Maintenance and support16,650 49 19,808 994 
Professional services and other (1)
1,545 93 2,728 285 
Hardware products25,079 — 32,316 — 
Total Revenue$91,948 $31,261 $95,891 $29,876 
(1) Professional services and other includes perpetual software licenses revenue, which was immaterial for the three and six months ended June 30, 2025 and approximately 1% of total revenue for the three and six months ended June 30, 2024.
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.