OneSpan (OSPN) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $63.4M, down 2% year-over-year, with subscription revenue up 9% to $43.6M and ARR up 9% to $168.4M.

• Adjusted EBITDA reached a record $23M (36% margin), up from $20.2M, and net income rose to $14.5M ($0.37/diluted share).

• Both Security Solutions and Digital Agreements segments were profitable, with Security generating $24.2M and Digital Agreements $3.4M in operating income.

• Net retention rate (NRR) remained strong at 107%.

• Cash and equivalents stood at $105.2M, with no long-term debt, and a $0.12 per share dividend was paid.

Financial highlights

• Gross margin improved to 74% from 73% year-over-year; Security Solutions at 76%, Digital Agreements at 70%.

• Adjusted EBITDA margin reached 36.4%, up from 31.2% last year.

• GAAP operating income was $17.2M, up 22% year-over-year.

• Cash flow from operations was $29.4M, with working capital at $83.5M.

• Net income margin improved to 23% from 21% year-over-year.

Outlook and guidance

• Affirmed full-year 2025 guidance: revenue of $245M–$251M, ARR of $180M–$186M, and adjusted EBITDA of $72M–$76M.

• Expects double-digit subscription revenue growth for 2025.

• Management expects continued focus on subscription growth and operational efficiency.

• Restructuring actions expected to conclude by year-end 2025, with minimal additional charges.

• Monitoring potential $1M in incremental tariff-related costs and FX impacts.