v3.26.1
Business Acquisitions
 3 Months Ended
Mar. 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Acquisitions Business Acquisitions
2026 - Build38 Acquisition
On February 27, 2026, the Company completed the acquisition of Build38 GmbH ("Build38") pursuant to a merger agreement (the "B38 Merger Agreement") entered into on December 23, 2025 that resulted in the Company purchasing all of the outstanding equity interests of Build38. Build38 is a provider of next-generation mobile application protection solutions and will extend the Company's investment in advanced mobile security technologies. The acquisition is expected to enhance OneSpan’s App Shielding offering by adding SDK-based security solutions that integrate in-app, cloud, and AI technologies. These enhancements are designed to provide businesses with strong protection against the growing wave of attacks targeting the mobile channel, as well as critical intelligence and telemetry on the mobile devices where the applications are deployed. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations, using the acquisition method of accounting. Under this method, the Company recognized the identifiable assets acquired and liabilities assumed at their estimated fair values as of the acquisition date.
Pursuant to the terms of the B38 Merger Agreement, the total provisional purchase consideration for the acquisition was $37.9 million, consisting of $34.6 million in cash consideration paid, $0.9 million in cash acquired, and $2.4 million in deferred consideration. Of the deferred amount, $1.9 million (the "Holdback Amount") has been held back as security for certain potential liabilities of Build38. Any unused portion of the Holdback Amount will be released to Build38 security holders 18 months after the closing date. The remaining deferred amount of $0.5 million has been held back as a buffer for adjustments to the purchase consideration based upon the closing date financial statements, which are expected to be finalized by the third quarter of 2026. The Company incurred transaction related expenses of $1.9 million in connection with the acquisition of Build38, of which $1.6 million was expensed on the consolidated statement of operations for the year ended December 31, 2025 while the remaining $0.3 million was expensed during the three months ended March 31, 2026.
Build38 is allocated entirely to the Company's Cybersecurity reportable operating segment. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed:
(In thousands)

 Fair value of assets acquired and liabilities assumed:
Cash and cash equivalents$936 
Accounts receivable, net1,575 
Prepaid expenses852 
Property and equipment, net75 
Other assets51 
Operating lease right-of-use assets385 
Developed technology7,327 
Customer relationships473 
Goodwill26,069 
Deferred tax asset, net of valuation allowance7,035 
Accounts payable(271)
Other accrued expenses(1,843)
Short-term lease liabilities(304)
Deferred revenue(1,915)
Deferred tax liability(2,571)
Total net assets acquired$37,874 
Total consideration$37,874 
Hold back(1,911)
Deferred consideration(473)
Cash acquired(936)
Cash paid for acquisition of business, net of cash acquired$34,554 
As part of the purchase price allocation, the Company determined intangible assets were developed technology and customer relationships. The fair value of the intangible assets was estimated using an income based approach for the technology and replacement cost approach for the customer relationships. The estimated useful lives over which intangible assets will be amortized are as follows: developed technology (7 years) and customer relationships (1 year).
The excess of the provisional purchase price over the estimated fair value of the tangible and intangible assets acquired and liabilities assumed has been recorded as goodwill. The acquisition resulted in recorded goodwill attributable to expected growth opportunities, potential synergies from combining the acquired business into the Company’s existing businesses and an assembled workforce. Goodwill is not expected to be deductible for tax purposes.
Deferred revenue was recorded under ASC 606 in accordance with ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers; therefore, a reduction in deferred revenues related to the estimated fair values of the acquired deferred revenues was not required.
The Build38 operating results since completion of the acquisition are not material and are included in the condensed consolidated financial statements. The Company has not presented pro forma results of operations for the acquisition since the financial impact was not material to the condensed consolidated financial statements.
2025 - Nok Nok Labs, Inc. Acquisition
On June 4, 2025, the Company acquired Nok Nok Labs, Inc ("Nok Nok Labs") pursuant to a merger agreement (the "NNL Merger Agreement") that resulted in the Company purchasing all of the outstanding equity interests of Nok Nok Labs. Nok Nok Labs is a leading provider of passwordless software authentication solutions that use FIDO (Fast IDentity Online) authentication protocols. The technology acquired in the acquisition is expected to provide OneSpan's customers with a wider range of flexible, adaptable authentication options. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations, using the acquisition method of accounting. Under this method, the Company recognized the identifiable assets acquired and liabilities assumed at their fair values as of the acquisition date.
Pursuant to the terms of the NNL Merger Agreement, the total purchase consideration for the acquisition was $19.2 million, consisting of $14.7 million in cash consideration paid, $1.8 million in cash acquired, and $2.7 million in deferred consideration. The $2.7 million (the "Holdback Amount") was held back as security for potential indemnity claims made by the Company. Any unused portion of the Holdback Amount will be released to Nok Nok Labs security holders 18 months after the acquisition date.