OneSpan (OSPN) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue grew 1% year-over-year to $57.1M, with subscription revenue up 12% and ARR up 10% to $180.2M; software now represents over 80% of the business, driving double-digit growth.

• Adjusted EBITDA for Q3 2025 was $18M (31% margin), with non-GAAP EPS at $0.33 and operating cash flow of $11M; net income was $6.5M.

• Completed the acquisition of Nok Nok Labs (FIDO2 software) and a strategic investment in ThreatFabric, both funded by cash flow.

• Returned over $20M to shareholders in the first nine months via dividends and buybacks, including a $0.12/share dividend for Q3 and Q4.

• Over 60% of the world’s 100 largest banks are customers, with a global presence in 100+ countries.

Financial highlights

• Q3 2025 revenue: $57.1M (up 1% YoY); subscription revenue up 12%; ARR reached $180.2M (up 10% YoY); NRR was 103%.

• Adjusted EBITDA was $18M (31% margin), up from $17M last year; gross margin held steady at 74%.

• GAAP operating income was $8.2M, down 27% year-over-year; GAAP EPS was $0.17; non-GAAP EPS was $0.33.

• Cash and equivalents at quarter-end were $85.6M–$86M, with no long-term debt.

• Cash from operations was $47M for the first nine months.

Outlook and guidance

• FY 2025 revenue guidance lowered to $239M–$241M (from $245M–$251M), reflecting hardware headwinds and lower net expansion activity.

• Software/services revenue expected at $190M–$192M; hardware revenue at $49M–$50M (–16%).

• ARR guidance revised to $183M–$187M (was $186M–$192M); adjusted EBITDA guidance maintained at $72M–$76M.

• Expect further acceleration in software subscription growth in 2026, with new products contributing more meaningfully.

• Management expects continued focus on profitable, efficient growth, especially in subscription revenue.