v3.26.3
Segment Information
 9 Months Ended
Sep. 30, 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 and nine months ended September 30, 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 September 30, 2026
(In thousands, except percentages)CybersecurityDigital AgreementsCorporate and OtherTotal
Revenue$44,886 $18,999 $— $63,885 
Cost of goods sold10,291 4,859 — 15,150 
Gross profit34,595 14,140 — 48,735 
Gross margin77 %74 %*76 %
Sales and marketing9,117 3,375 1,507 13,999 
Research and development6,174 2,815 918 9,907 
Other segment items (1)(3)
768 1,015 13,803 15,586 
Operating income (loss) (2)(4)
18,536 6,935 (16,228)9,243 
Interest (expense) income, net(80)
Other income (expense), net292 
Income before income taxes$9,455 
Three Months Ended September 30, 2025
(In thousands, except percentages)CybersecurityDigital AgreementsCorporate and OtherTotal
Revenue$40,322 $16,734 $— $57,056 
Cost of goods sold10,325 4,728 — 15,053 
Gross profit29,997 12,006 — 42,003 
Gross margin74 %72 %*74 %
Sales and marketing7,202 3,443 746 11,391 
Research and development5,689 2,917 190 8,796 
Other segment items (1)(3)
431 1,487 11,671 13,589 
Operating income (loss) (2)(4)
16,675 4,159 (12,607)8,227 
Interest (expense) income, net388 
Other income (expense), net(208)
Income before income taxes$8,407 
Nine Months Ended September 30, 2026
(In thousands, except percentages)CybersecurityDigital AgreementsCorporate and OtherTotal
Revenue$134,362 $55,936 $— $190,298 
Cost of goods sold33,969 14,597 — 48,566 
Gross profit100,393 41,339 — 141,732 
Gross margin75 %74 %*74 %
Sales and marketing26,503 10,125 3,124 39,752 
Research and development18,429 8,699 1,763 28,891 
Other segment items (1)(3)
2,320 3,326 34,641 40,287 
Operating income (loss) (2)(4)
53,141 19,189 (39,528)32,802 
Interest (expense) income, net(253)
Other income (expense), net(47)
Income before income taxes$32,502 

Nine Months Ended September 30, 2025
(In thousands, except percentages)CybersecurityDigital AgreementsCorporate and OtherTotal
Revenue$132,270 $47,995 $— $180,265 
Cost of goods sold33,365 13,839 — 47,204 
Gross profit98,905 34,156 — 133,061 
Gross margin75 %71 %*74 %
Sales and marketing21,402 10,313 2,638 34,353 
Research and development15,966 9,510 692 26,168 
Other segment items (1)(3)
902 3,930 31,793 36,625 
Operating income (loss) (2)(4)
60,635 10,403 (35,123)35,915 
Interest (expense) income, net1,812 
Other income (expense), net(886)
Income before income taxes$36,841 
*Percentage not meaningful.
(1) Cybersecurity other segment items includes general and administrative expense and amortization of intangibles for the three months ended September 30, 2026, and general and administrative expense, write-off of assets, and amortization of intangibles for the nine months ended September 30, 2026. Cybersecurity other segment items includes general and administrative expense and restructuring and other related charges for the three and nine months ended September 30, 2025.
(2) Cybersecurity operating income includes $1.1 million and $2.8 million of total amortization and depreciation expense for the three and nine months ended September 30, 2026, respectively. Cybersecurity operating income includes $0.4 million and $0.7 million of total amortization and depreciation expense for the three and nine months ended September 30, 2025, respectively.
Cybersecurity operating income does not include any restructuring and other related charges for the three and nine months ended September 30, 2026. Cybersecurity operating income includes less than $0.1 million and $0.3 million of restructuring and other related charges for the three and nine months ended September 30, 2025, respectively.
(3) Digital Agreements other segment items includes general and administrative expense and amortization of intangibles for the three and nine months ended September 30, 2026. Digital Agreements other segment items includes general and administrative expense and restructuring and other related charges for the three and nine months ended September 30, 2025.
(4) Digital Agreements operating income includes $2.1 million and $6.4 million of total amortization and depreciation expense for the three and nine months ended September 30, 2026, respectively. Digital Agreements operating income includes $1.9 million and $5.5 million of total amortization and depreciation expense for the three and nine months ended September 30, 2025, respectively.
Digital Agreements operating income does not include any restructuring and other related charges for the three and nine months ended September 30, 2026.
Digital Agreements operating income includes less than $0.1 million and $0.2 million of restructuring and other related charges for the three and nine months ended September 30, 2025, 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 nine months ended September 30, 2026 and 2025:
Three Months Ended September 30,
20262025
(In thousands)CybersecurityDigital AgreementsCybersecurityDigital Agreements
Subscription (1)
$32,515 $18,978 $27,691 $16,705 
Perpetual maintenance and services1,920 21 2,901 29 
Hardware products10,451 — 9,730 — 
Total Revenue$44,886 $18,999 $40,322 $16,734 
Nine Months Ended September 30,
20262025
(In thousands)CybersecurityDigital AgreementsCybersecurityDigital Agreements
Subscription (1)
$95,026 $55,855 $87,345 $47,874 
Perpetual maintenance and services6,859 81 10,116 121 
Hardware products32,477 — 34,809 — 
Total Revenue$134,362 $55,936 $132,270 $47,995 
(1) Cybersecurity subscription revenue during the three and nine months ended September 30, 2025 includes $6.6 million and $17.6 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. Digital Agreements subscription revenue during the three and nine months ended September 30, 2025 includes less than $0.1 million for all periods related to the reclassification from maintenance and services to align with the revised presentation of revenue.
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.