v3.26.1
Segment Information
 3 Months Ended
Mar. 31, 2026
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 regularly provided to 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:
•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 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 months ended March 31, 2026 and 2025, along with the items necessary to reconcile the segment information to the totals reported in the accompanying condensed consolidated financial statements.
Three Months Ended March 31, 2026
(In thousands, except percentages)CybersecurityDigital AgreementsCorporate and OtherTotal
Revenue$48,546 $17,401 $— $65,947 
Cost of goods sold12,640 4,793 — 17,433 
Gross profit35,906 12,608 — 48,514 
Gross margin74 %72 %*74 %
Sales and marketing8,489 3,433 757 12,679 
Research and development5,941 2,820 317 9,078 
Other segment items (1)(3)
691 1,073 10,176 11,940 
Operating income (loss) (2)(4)
20,785 5,282 (11,250)14,817 
Interest (expense) income, net(19)
Other income (expense), net(386)
Income before income taxes$14,412 
Three Months Ended March 31, 2025
(In thousands, except percentages)CybersecurityDigital AgreementsCorporate and OtherTotal
Revenue$47,713 $15,653 $— $63,366 
Cost of goods sold11,628 4,647 — 16,275 
Gross profit36,085 11,006 — 47,091 
Gross margin76 %70 %*74 %
Sales and marketing6,872 3,402 1,183 11,457 
Research and development4,919 3,006 3 7,928 
Other segment items (1)(3)
134 1,231 9,159 10,524 
Operating income (loss) (2)(4)
24,160 3,367 (10,345)17,182 
Interest (expense) income, net692 
Other income (expense), net(9)
Income before income taxes$17,865 
*Percentage not meaningful.
(1) Cybersecurity other segment items includes general and administrative expense, write-off of assets and amortization of intangibles for the three months ended March 31, 2026. Cybersecurity other segment items includes general and administrative expense, restructuring and other related charges for the three months ended March 31, 2025.
(2) Cybersecurity operating income includes $0.7 million and $0.2 million of total amortization and depreciation expense for the three months ended March 31, 2026 and 2025, respectively. Cybersecurity operating income also includes $0.3 million related to write-off of assets for the three months ended March 31, 2026. There were no write-off of assets for the three months ended March 31, 2025. Cybersecurity operating income includes $0.2 million of restructuring and other related charges for the three months ended March 31, 2025.
(3) Digital Agreements other segment items includes general and administrative expense and amortization of intangibles for the three months ended March 31, 2026. Digital Agreements other segment items includes general and administrative expense, restructuring and other related charges for the three months ended March 31, 2025.
(4) Digital Agreements operating income includes $2.2 million and $1.7 million of total amortization and depreciation expense for the three months ended March 31, 2026 and 2025, respectively. Digital Agreements operating income includes $0.2 million of restructuring and other related charges for the three months ended March 31, 2025.
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 months ended March 31, 2026 and 2025:
Three Months Ended March 31,
20262025
(In thousands)CybersecurityDigital AgreementsCybersecurityDigital Agreements
Subscription (1)
$35,312 $17,355 $33,123 $15,569 
Perpetual maintenance and services2,647 46 3,527 84 
Hardware products10,587 — 11,063 — 
Total Revenue$48,546 $17,401 $47,713 $15,653 
(1) Cybersecurity and Digital Agreements Subscription revenue during the three months ended March 31, 2025 includes $5.1 million and less than $0.1 million, respectively, of term maintenance that has been reclassified from maintenance and services to align with the revised presentation of revenue described in Note 4 below.
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.