OneSpan (OSPN) Q2 2024 earnings summary

Executive summary

• Achieved 9% year-over-year revenue growth to $60.9M–$61M in Q2 2024, with subscription revenue up 29% and ARR up 15% to $165.3M.

• Net income reached $6.6M, reversing a net loss of $17.8M in Q2 2023, reflecting improved profitability from restructuring and cost reductions.

• Adjusted EBITDA for Q2 was $16.1M (26.5%–27% margin), up from $(3.8)M in Q2 2023, due to higher revenue and lower operating expenses.

• Cash and equivalents stood at $63.8M–$64M at June 30, 2024, with no long-term debt.

• The company continues a multi-year transformation plan, focusing on operational efficiency, margin improvement, and cost savings, with cumulative annualized savings reaching $73.5M.

Financial highlights

• Q2 2024 revenue: $60.9M–$61M, up 9% year-over-year; ARR increased 15% to $165M–$165.3M; NRR was 112%.

• Subscription revenue up 29% to $29.6M; Digital Agreements revenue up 30% to $15.5M; Security Solutions revenue up 4% to $45.5M.

• Q2 gross margin was 66%–66.2%, up from 61.5%–62% last year.

• Net income for Q2 2024: $6.6M ($0.17/share) vs. net loss of $17.8M ($0.44/share) in Q2 2023; non-GAAP EPS was $0.31 vs. $(0.18).

• Adjusted EBITDA improved to $16.1M (26.5%–27% margin), up from $(3.8)M (–7%) last year.

Outlook and guidance

• Full-year 2024 revenue guidance reaffirmed at $238M–$246M.

• ARR guidance raised to $166M–$171M (from $160M–$168M); adjusted EBITDA guidance raised to $55M–$59M (from $51M–$55M).

• Expect double-digit subscription revenue growth for the year; maintenance and hardware revenues to decline in the second half.

• Both business units expected to remain profitable in Q3 and Q4.

• Management expects to continue restructuring actions through 2025, targeting further cost reductions and margin expansion.