Second Quarter Financial Results
- Second quarter revenue grew 6% year-over-year to $55.7
million
- Second quarter subscription revenue grew 16% year-over-year to
$23.0 million
- Annual Recurring Revenue (ARR) grew 8% year-over-year to $144.4
million1
- Net Retention Rate (NRR) of 106%2
OneSpan Inc. (Nasdaq: OSPN), the digital agreements security
company, today reported financial results for the second quarter
ended June 30, 2023.
“We continued to make good progress during the quarter on
transforming OneSpan into an enterprise-class company with
increased operational rigor across the organization. Our visibility
into the execution of our transformation has increased meaningfully
over the first two quarters of the plan, and it is apparent that
maturing our sales productivity and marketing demand generation
engine will take longer than we originally expected, exacerbated in
part by current market conditions,” stated OneSpan CEO, Matt
Moynahan. “We believe our five-pillar solution strategy, designed
to secure an entire digital transaction lifecycle is sound, as it
continues to resonate with customers and serves as a foundational
element of our transformation strategy. With this backdrop, we are
making adjustments to our operating model that are intended to
accelerate adjusted EBITDA growth, enable us to return capital to
shareholders, and drive value creation by growing profitably over
the long term.”
Key Financial Results
Second Quarter 2023 Financial Highlights
- Total revenue was $55.7 million, an increase of 6%
compared to $52.8 million for the same quarter of 2022. Digital
Agreements revenue was $11.9 million, an increase of 13%
year-over-year. Security Solutions revenue was $43.9 million, an
increase of 4% year-over-year.
- ARR increased 8% year-over-year to $144.4 million.
- Gross profit was $34.3 million, or 62% gross margin,
compared to $35.5 million, or 67% in the same period last
year.
- Operating loss was $17.8 million, compared to operating
loss of $8.2 million in the same period last year.
- Net loss was $17.8 million, or $(0.44) per diluted share
compared to net loss of $9.4 million, or $(0.23) per diluted share
in the same period last year. Non-GAAP net loss was $7.4 million,
or $(0.18) per diluted share, compared to net loss of $4.0 million,
or $(0.10) per diluted share, in the same period last year.3
- Adjusted EBITDA was $(3.8) million compared to $(1.5)
million in the same period last year.3
- Cash, cash equivalents and short-term investments were
$83.1 million at June 30, 2023 compared to $98.5 million at
December 31, 2022 and $97.8 million at June 30, 2022.
Restructuring Plan Expansion
As part of the adjustments to our operating model to focus on
profitable long-term growth, OneSpan’s Board has approved
additional cost reduction actions. OneSpan anticipates that these
actions, which are expected to consist primarily of workforce
reductions, will result in approximately $30 million of annualized
savings by the end of 2025, and total expected savings in the range
of $50 million to $55 million when combined with the expected
savings from the Company’s restructuring plan originally adopted in
December 2021. In addition, we believe these savings will result in
OneSpan achieving an adjusted EBITDA margin of 20% to 23% for the
full year 2024. The Company preliminarily estimates that it will
incur from $15 million to $20 million in restructuring charges
associated with the additional cost reduction actions. Please see
the Company’s Form 8-K to be filed August 9, 2023 with the U.S.
Securities & Exchange Commission for further information about
these additional actions.
Financial Outlook
For the full year 2023, OneSpan expects:
- Revenue to be in the range of $226 million to $232 million, as
compared to our previous guidance range of $232 million to $242
million
- ARR to be in the range of $148 million to $152 million, as
compared to our previous guidance range of $157 million to $164
million
- Adjusted EBITDA to be in the range of $0 million to $3 million,
as compared to our previous guidance range of $3 million to $6
million3
For the Full Year 2024, OneSpan is targeting:
- Revenue growth in the low to mid single digits
- Adjusted EBITDA margin to be in the range of 20% to 23%3
Conference Call Details
In conjunction with this announcement, OneSpan Inc. will host a
conference call today, August 9, 2023, at 4:30 p.m. ET. During the
conference call, Mr. Matthew Moynahan, CEO, and Mr. Jorge Martell,
CFO, will discuss OneSpan’s results for the second quarter
2023.
For investors and analysts accessing the conference call by
phone, please refer to the press release dated July 17, 2023,
announcing the date of OneSpan’s second quarter 2023 earnings
release. It can be found on the OneSpan investor relations website
at investors.onespan.com.
The conference call is also available in listen-only mode at
investors.onespan.com. Shortly after the conclusion of the call, a
replay of the webcast will be available on the same website for
approximately one year.
____________________________________________
- ARR is calculated as the approximate annualized value of our
customer recurring contracts as of the measurement date. These
include subscription, term-based license, and maintenance and
support contracts and exclude one-time fees. To the extent that we
are negotiating a renewal with a customer within 90 days after the
expiration of a recurring contract, we continue to include that
revenue in ARR if we are actively in discussion with the customer
for a new recurring contract or renewal and the customer has not
notified us of an intention to not renew. See our Quarterly Report
on Form 10-Q for the quarter ended June 30, 2023 for additional
information describing how we define ARR, including how ARR differs
from GAAP revenue.
- NRR is defined as the approximate year-over-year growth in ARR
from the same set of customers at the end of the prior year
period.
- An explanation of the use of Non-GAAP financial measures is
included below under the heading “Non-GAAP Financial Measures.” A
reconciliation of each Non-GAAP financial measure to the most
directly comparable GAAP financial measure has also been provided
in the tables below. We are not providing a reconciliation of
Adjusted EBITDA guidance to GAAP net income, the most directly
comparable GAAP measure, because we are unable to predict certain
items included in GAAP net income without unreasonable
efforts.
About OneSpan
OneSpan helps organizations accelerate digital transformations
by enabling secure, compliant, and refreshingly easy customer
agreements and transaction experiences. Organizations requiring
high assurance security, including the integrity of end-users and
the fidelity of transaction records behind every agreement, choose
OneSpan to simplify and secure business processes with their
partners and customers. Trusted by global blue-chip enterprises,
including more than 60% of the world’s largest 100 banks, OneSpan
processes millions of digital agreements and billions of
transactions in 100+ countries annually.
For more information, go to www.onespan.com. You can also follow
@OneSpan on Twitter or visit us on LinkedIn and Facebook.
Forward-Looking Statements
This Press Release contains forward-looking statements within
the meaning of applicable U.S. securities laws, including
statements regarding our plan to drive adjusted EBITDA growth; the
outcomes we expect from our recently approved cost reduction
actions, including the ability of those actions and our prior
restructuring plan to enable us to accelerate adjusted EBITDA
growth, enable us to return capital to stockholders, and drive
value creation by growing profitably over the long term; estimates
concerning the timing and amount of savings, adjusted EBITDA margin
and/or restructuring charges that may result from the recently
approved cost reduction actions and our prior restructuring plan;
our 2023 financial guidance and our financial expectations for
2024; and our general expectations regarding our operational or
financial performance in the future. Forward-looking statements may
be identified by words such as "seek", "believe", "plan",
"estimate", "anticipate", “expect", "intend", "continue",
"outlook", "may", "will", "should", "could", “confident”, or
"might", and other similar expressions. These forward-looking
statements involve risks and uncertainties, as well as assumptions
that, if they do not fully materialize or prove incorrect, could
cause our results to differ materially from those expressed or
implied by such forward-looking statements. Important factors that
could materially affect our business and financial results include,
but are not limited to: our ability to execute our strategic
transformation plan, or restructuring plan and the recently
approved cost reduction actions in the expected timeframes and to
achieve the outcomes we expect from them; unintended costs and
consequences of our restructuring plan and our planned cost
reduction actions, including higher than anticipated restructuring
charges, disruption to our operations, litigation or regulatory
actions, reduced employee morale, attrition of valued employees,
adverse effects on our reputation as an employer, loss of
institutional know-how, slower customer service response times, and
reduced ability to complete or undertake new product development
projects and other business, product, technical, compliance or risk
mitigation initiatives; our ability to attract new customers and
retain and expand sales to existing customers; our ability to
effectively develop and expand our sales and marketing
capabilities; our ability to hire, train, and retain sales and
other employees necessary to implement our strategic transformation
plan; our ability to successfully develop and market new product
offerings and product enhancements; the loss of one or more large
customers; difficulties enhancing and maintaining our brand
recognition; competition; lengthy sales cycles; departures of
senior management or other key employees; changes in customer
requirements; interruptions or delays in the performance of our
products and solutions; real or perceived malfunctions or errors in
our products; the potential effects of technological changes;
economic recession, inflation, and political instability; our
ability to effectively manage third party partnerships,
acquisitions, divestitures, alliances, or joint ventures; security
breaches or cyber-attacks; claims that we have infringed the
intellectual property rights of others; litigation or regulatory
actions; price competitive bidding; changing laws, government
regulations or policies; pressures on price levels; component
shortages; delays and disruption in global transportation and
supply chains; reliance on third parties for certain products and
data center services; impairment of goodwill or amortizable
intangible assets causing a significant charge to earnings; actions
of activist stockholders; and exposure to increased economic and
operational uncertainties from operating a global business, as well
as other factors described in the “Risk Factors” section of our
most recent Annual Report on Form 10-K, as updated by the “Risk
Factors” section of our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2023. Our filings with the Securities and
Exchange Commission (the “SEC”) and other important information can
be found in the Investor Relations section of our website at
investors.onespan.com. We do not have any intent, and disclaim any
obligation, to update the forward-looking information to reflect
events that occur, circumstances that exist or changes in our
expectations after the date of this press release, except as
required by law.
Unless otherwise noted, references in this press release to
“OneSpan”, “Company”, “we”, “our”, and “us” refer to OneSpan Inc.
and its subsidiaries.
OneSpan Inc.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per share
data)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenue
Product and license
$
30,583
$
28,731
$
63,729
$
58,216
Services and other
25,150
24,059
49,611
47,021
Total revenue
55,733
52,790
113,340
105,237
Cost of goods sold
Product and license
14,038
10,947
25,326
20,026
Services and other
7,401
6,337
14,434
13,027
Total cost of goods sold
21,439
17,284
39,760
33,053
Gross profit
34,294
35,506
73,580
72,184
Operating costs
Sales and marketing
19,713
14,928
39,724
29,928
Research and development
10,090
11,959
19,553
24,055
General and administrative
15,826
12,952
32,479
27,736
Restructuring and other related
charges
5,846
2,688
6,552
5,347
Amortization of intangible assets
583
1,217
1,166
2,599
Total operating costs
52,058
43,744
99,474
89,665
Operating loss
(17,764
)
(8,238
)
(25,894
)
(17,481
)
Interest income, net
585
35
1,088
18
Other income (expense), net
29
(675
)
(11
)
14,972
Loss before income taxes
(17,150
)
(8,878
)
(24,817
)
(2,491
)
Provision for income taxes
601
472
1,290
1,645
Net loss
$
(17,751
)
$
(9,350
)
$
(26,107
)
$
(4,136
)
Net loss per share
Basic
$
(0.44
)
$
(0.23
)
$
(0.65
)
$
(0.10
)
Diluted
$
(0.44
)
$
(0.23
)
$
(0.65
)
$
(0.10
)
Weighted average common shares
outstanding
Basic
40,399
40,157
40,435
39,870
Diluted
40,399
40,157
40,435
39,870
OneSpan Inc.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except par
value)
(Unaudited)
June 30,
December 31,
2023
2022
ASSETS
Current assets
Cash and cash equivalents
$
83,094
$
96,167
Restricted cash
993
1,208
Short-term investments
—
2,328
Accounts receivable, net of allowances
38,154
65,132
Inventories, net
15,003
12,054
Prepaid expenses
7,909
6,222
Contract assets
5,480
4,520
Other current assets
9,318
10,757
Total current assets
159,951
198,387
Property and equipment, net
15,599
12,681
Operating lease right-of-use assets
4,677
8,022
Goodwill
93,294
90,514
Intangible assets, net of accumulated
amortization
12,628
12,482
Deferred income taxes
1,887
1,901
Other assets
10,609
11,095
Total assets
$
298,645
$
335,082
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities
Accounts payable
$
17,605
$
17,357
Deferred revenue
52,372
64,637
Accrued wages and payroll taxes
16,213
18,345
Short-term income taxes payable
2,372
2,438
Other accrued expenses
8,494
7,664
Deferred compensation
251
373
Total current liabilities
97,307
110,814
Long-term deferred revenue
4,909
6,269
Long-term lease liabilities
5,543
8,442
Long-term income taxes payable
—
2,565
Deferred income taxes
1,240
1,197
Other long-term liabilities
3,047
2,484
Total liabilities
112,046
131,771
Stockholders' equity
Preferred stock: 500 shares authorized,
none issued and outstanding at June 30, 2023 and December 31,
2022
—
—
Common stock: $0.001 par value per share,
75,000 shares authorized; 41,017 and 40,764 shares issued; 39,979
and 39,726 shares outstanding at June 30, 2023 and December 31,
2022, respectively
40
40
Additional paid-in capital
114,073
107,305
Treasury stock, at cost, 1,038 shares
outstanding at June 30, 2023 and December 31, 2022
(18,222
)
(18,222
)
Retained earnings
102,631
128,738
Accumulated other comprehensive loss
(11,923
)
(14,550
)
Total stockholders' equity
186,599
203,311
Total liabilities and stockholders'
equity
$
298,645
$
335,082
OneSpan Inc.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended June
30,
2023
2022
Cash flows from operating activities:
Net loss
$
(26,107
)
$
(4,136
)
Adjustments to reconcile net loss from
operations to net cash used in operations:
Depreciation and amortization of
intangible assets
2,835
4,043
Impairments of property and equipment,
net
2,087
—
Impairments of inventories, net
1,568
—
Gain on sale of equity-method
investment
—
(14,810
)
Deferred tax benefit
66
729
Stock-based compensation
8,315
2,613
Changes in operating assets and
liabilities:
Accounts receivable and allowance for
doubtful accounts
27,307
15,429
Inventories, net
(4,299
)
(465
)
Contract assets
(1,017
)
(1,033
)
Accounts payable
35
1,202
Income taxes payable
(2,638
)
(1,608
)
Accrued expenses
(1,728
)
(3,454
)
Deferred compensation
(122
)
(764
)
Deferred revenue
(13,940
)
(7,160
)
Other assets and liabilities
1,248
(1,870
)
Net cash used in operating activities
(6,390
)
(11,284
)
Cash flows from investing activities:
Purchase of short-term investments
—
(15,812
)
Maturities of short-term investments
2,330
30,550
Additions to property and equipment
(6,491
)
(1,039
)
Cash paid for acquisition of business
(1,800
)
—
Additions to intangible assets
(14
)
(13
)
Sale of equity-method investment
—
18,874
Net cash (used in) provided by investing
activities
(5,975
)
32,560
Cash flows from financing activities:
Repurchase of common stock
—
—
Tax payments for restricted stock
issuances
(1,546
)
(722
)
Repurchase of common stock
—
(5,721
)
Net cash used in financing activities
(1,546
)
(6,443
)
Effect of exchange rate changes on
cash
624
(631
)
Net (decrease) increase in cash
(13,287
)
14,202
Cash, cash equivalents, and restricted
cash, beginning of period
97,374
64,228
Cash, cash equivalents, and restricted
cash, end of period
$
84,087
$
78,430
Business Transformation
We are currently in the midst of a business transformation. In
May 2022, we announced a three-year strategic transformation plan
that began on January 1, 2023. In conjunction with the strategic
transformation plan and to enable a more efficient capital
deployment model, effective with the quarter ended June 30, 2022,
we began reporting under the following two lines of business, which
are our reportable operating segments: Digital Agreements and
Security Solutions.
- 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 largely cloud-based, include
OneSpan Sign e-signature and OneSpan Notary. This segment also
includes costs attributable to our transaction cloud platform.
- Security Solutions. 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 Security Solutions
segment are largely on-premises software products and include
identity verification, multi-factor authentication and transaction
signing solutions, such as mobile application security and mobile
software tokens..
Segment operating income consists of the revenues generated by a
segment, less the direct costs of revenue, sales and marketing,
research and development expenses, amortization expense, and
restructuring and other related charges that are incurred directly
by a segment. Unallocated corporate costs include costs related to
administrative functions that are performed in a centralized manner
that are not attributable to a particular segment.
Prior to 2023, the Company allocated certain cost of goods sold
and operating expenses to its two reportable operating segments
using a direct cost allocation and an allocation based on revenue
split between the segments. During the three months ended March 31,
2023, and as a result of the ongoing strategic transformation, the
Company refined its allocation methodology to better align internal
and external costs more directly to where the employee efforts are
being spent on each segment moving forward. As a result of this
change, there was an increase in cost of goods sold and operating
expenses being allocated to the Digital Agreements segment, which
better aligns with the investments the Company is making to grow
that segment as compared to its Security Solutions segment.
Effective with the three months ended September 30, 2022, the
Company began allocating amortization of intangible assets expense
to operating income (loss) for each of its reportable operating
segments in order to better align the expense with the operations
of each segment. The Company has updated segment operating income
(loss) for the three and six months ended June 30, 2022 to reflect
the change in presentation. The allocation change had no impact to
the Company's unaudited condensed consolidated financial
statements.
Segment and consolidated operating results
(unaudited):
Three Months Ended June
30,
Six Months Ended June
30,
(In thousands, except percentages)
2023
2022
2023
2022
Digital Agreements
Revenue
$
11,862
$
10,454
$
23,414
$
23,755
Gross profit
$
8,583
$
7,647
$
17,031
$
17,933
Gross margin
72
%
73
%
73
%
75
%
Operating income (loss)
$
(7,121
)
$
(462
)
$
(13,154
)
$
664
Security Solutions
Revenue
$
43,871
$
42,336
$
89,926
$
81,482
Gross profit (1)
$
25,711
$
27,859
$
56,549
$
54,251
Gross margin
59
%
66
%
63
%
67
%
Operating income (2)
$
8,523
$
7,999
$
24,154
$
15,688
Total Company:
Revenue
$
55,733
$
52,790
$
113,340
$
105,237
Gross profit
$
34,294
$
35,506
$
73,580
$
72,184
Gross margin
62
%
67
%
65
%
69
%
Statements of Operations
reconciliation:
Segment operating income
$
1,402
$
7,537
$
11,000
$
16,352
Corporate operating expenses not allocated
at the segment level
(19,166
)
(15,775
)
(36,894
)
(33,833
)
Operating loss
$
(17,764
)
$
(8,238
)
$
(25,894
)
$
(17,481
)
Interest income, net
585
35
1,088
18
Other income (expense), net
29
(675
)
(11
)
14,972
Loss before income taxes
$
(17,150
)
$
(8,878
)
$
(24,817
)
$
(2,491
)
(1)
Security Solutions gross profit includes
$1.6 million of inventory impairments related to discontinuation of
investments in our Digipass CX product for the three and six months
ended June 30, 2023.
(2)
Security Solutions operating income
includes $1.6 million of inventory impairments and $1.4 million of
capitalized software write-offs related to discontinuation of
investments in our Digipass CX product for the three and six months
ended June 30, 2023.
Revenue by major products and services (unaudited):
Three Months Ended June
30,
2023
2022
Digital Agreements
Security Solutions
Digital Agreements
Security Solutions
(In thousands)
Subscription
$
10,486
$
12,499
$
8,736
$
11,093
Maintenance and support
1,130
10,473
1,408
10,770
Professional services and other (1)
246
1,253
310
1,690
Hardware products
—
19,646
—
18,783
Total Revenue
$
11,862
$
43,871
$
10,454
$
42,336
Six Months Ended June
30,
2023
2022
Digital Agreements
Security Solutions
Digital Agreements
Security Solutions
(In thousands)
Subscription
$
20,834
$
32,107
$
20,407
$
22,691
Maintenance and support
2,126
20,638
2,760
21,364
Professional services and other (1)
454
2,669
588
3,293
Hardware products
—
34,512
—
34,134
Total Revenue
$
23,414
$
89,926
$
23,755
$
81,482
(1)
Professional services and other includes
perpetual software licenses revenue, which was less than 2% of
total revenue for the three and six months ended June 30, 2023 and
2022, respectively.
Non-GAAP Financial Measures
We report financial results in accordance with GAAP. We also
evaluate our performance using certain Non-GAAP financial metrics,
namely Adjusted EBITDA, Non-GAAP Net Income (Loss) and Non-GAAP
Diluted Net Income (Loss) Per Share. Our management believes that
these measures, when taken together with the corresponding GAAP
financial metrics, provide useful supplemental information
regarding the performance of our business, as further discussed in
the descriptions of each of these Non-GAAP metrics below.
These Non-GAAP financial measures are not measures of
performance under GAAP and should not be considered in isolation or
as alternatives or substitutes for the most directly comparable
financial measures calculated in accordance with GAAP. While we
believe that these Non-GAAP financial measures are useful for the
purposes described below, they have limitations associated with
their use, since they exclude items that may have a material impact
on our reported results and may be different from similar measures
used by other companies. Additional information about the Non-GAAP
financial measures and reconciliations to their most directly
comparable GAAP financial measures appear below.
Adjusted EBITDA
We define Adjusted EBITDA as net income (loss) before interest,
taxes, depreciation, amortization, long-term incentive
compensation, restructuring and other related charges, and certain
non-recurring items, including acquisition related costs, lease
exit costs, rebranding costs, and non-routine shareholder matters.
We use Adjusted EBITDA as a simplified measure of performance for
use in communicating our performance to investors and analysts and
for comparisons to other companies within our industry. As a
performance measure, we believe that Adjusted EBITDA presents a
view of our operating results that is most closely related to
serving our customers. By excluding interest, taxes, depreciation,
amortization, long-term incentive compensation, impairment of
intangible assets, restructuring costs, and certain other
non-recurring items, we are able to evaluate performance without
considering decisions that, in most cases, are not directly related
to meeting our customers’ requirements and were either made in
prior periods (e.g., depreciation, amortization, long-term
incentive compensation, non-routine shareholder matters), deal with
the structure or financing of the business (e.g., interest,
one-time strategic action costs, restructuring costs, impairment
charges) or reflect the application of regulations that are outside
of the control of our management team (e.g., taxes). In addition,
removing the impact of these items helps us compare our core
business performance with that of our competitors.
Reconciliation of Net Income
(Loss) to Adjusted EBITDA
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(In thousands)
2023
2022
2023
2022
Net loss
$
(17,751
)
$
(9,350
)
$
(26,107
)
$
(4,136
)
Interest income, net
(585
)
(35
)
(1,088
)
(18
)
Provision for income taxes
601
472
1,290
1,645
Depreciation and amortization of
intangible assets (1)
1,516
1,946
2,835
4,043
Long-term incentive compensation (2)
4,571
1,277
8,494
2,501
Restructuring and other related
charges
5,846
2,688
6,552
5,347
Other non-recurring items (3)
1,974
1,462
2,559
(10,682
)
Adjusted EBITDA
$
(3,828
)
$
(1,540
)
$
(5,465
)
$
(1,300
)
(1)
Includes depreciation and amortization
expense directly related to generating cloud subscription revenue
of $0.1 million and $0.3 million for the three and six months ended
June 30,2023, respectively, and $0 for the three and six months
ended June 30, 2022. Costs are recorded in Cost of service and
other revenue.
(2)
Long-term incentive compensation includes
immaterial expense for cash incentive grants awarded to employees
located in jurisdictions where we do not issue stock-based
compensation due to tax, regulatory or similar reasons. The expense
associated with these cash incentive grants was $0.1 million and
less than $0.1 million for the three months ended June 30, 2023 and
2022, respectively, and $0.2 million and less than $0.1 million for
the six months ended June 30, 2023 and 2022, respectively.
(3)
For the three months ended June 30, 2023,
other non-recurring items consist of $1.6 million of inventory
impairment charges and $0.4 million of fees related to
non-recurring projects.
For the three months ended June 30, 2022,
other non-recurring items consist of outside services related to
our strategic action plan.
For the six months ended June 30, 2023,
other non-recurring items consist of $1.6 million of inventory
impairment charges and $1.0 million of fees related to
non-recurring projects and our acquisition of ProvenDB.
For the six months ended June 30, 2022,
other non-recurring items include a $(14.8) million non-operating
gain on sale of our investment in Promon and $4.2 million of
outside services related to our strategic action plan.
Non-GAAP Net Income (Loss) and Non-GAAP Diluted Net Income
(Loss) Per Share
We define Non-GAAP Net Income (Loss) and Non-GAAP Diluted Net
Income (Loss) Per Share as net income (loss) or diluted net income
(loss) per share, as applicable, before the consideration of
long-term incentive compensation expenses, the amortization of
intangible assets, impairment of intangible assets, restructuring
costs, and certain other non- recurring items. We use these
measures to assess the impact of our performance excluding items
that can significantly impact the comparison of our results between
periods and the comparison to competitor results.
We exclude long-term incentive compensation expense because our
long-term incentives generally reflect the use of restricted stock
unit grants or cash incentive grants, including incentives directly
tied to the performance of the business, while other companies may
use different forms of incentives that have different cost impacts,
which makes comparison difficult. We exclude amortization of
intangible assets as we believe the amount of such expense in any
given period may not be correlated directly to the performance of
the business operations and that such expenses can vary
significantly between periods as a result of new acquisitions, the
full amortization of previously acquired intangible assets, or the
write down of such assets due to an impairment event. However,
intangible assets contribute to current and future revenue, and
related amortization expense will recur in future periods until
expired or written down.
We also exclude certain non-recurring items including one-time
strategic action costs and non-recurring shareholder matters, as
these items are unrelated to the operations of our core business.
By excluding these items, we are better able to compare the
operating results of our underlying core business from one
reporting period to the next.
We make a tax adjustment based on the above adjustments
resulting in an effective tax rate on a Non-GAAP basis, which may
differ from the GAAP tax rate. We believe the effective tax rates
we use in the adjustment are reasonable estimates of the overall
tax rates for the Company under its global operating structure.
Reconciliation of Net Income
(Loss) to Non-GAAP Net Loss
(unaudited)
Three Months Ended June
30,
Three Months Ended June
30,
2023
2022
2023
2022
Net loss
$
(17,751
)
$
(9,350
)
$
(26,107
)
$
(4,136
)
Long-term incentive compensation (1)
4,571
1,277
8,494
2,501
Amortization of intangible assets (2)
583
1,217
1,166
2,599
Restructuring and other related
charges
5,846
2,688
6,552
5,347
Other non-recurring items (3)
1,974
1,462
2,559
(10,682
)
Tax impact of adjustments (4)
(2,595
)
(1,329
)
(3,754
)
47
Non-GAAP net loss
$
(7,372
)
$
(4,035
)
$
(11,090
)
$
(4,324
)
Non-GAAP net loss per share
$
(0.18
)
$
(0.10
)
$
(0.27
)
$
(0.11
)
Shares
40,399
40,157
40,435
39,870
(1)
Long-term incentive compensation includes
immaterial expense for cash incentive grants awarded to employees
located in jurisdictions where we do not issue stock-based
compensation due to tax, regulatory or similar reasons. The expense
associated with these cash incentive grants was $0.1 million and
less than $0.1 million for the three months ended June 30, 2023 and
2022, respectively, and $0.2 million and less than $0.1 million for
the six months ended June 30, 2023 and 2022, respectively.
(2)
Includes amortization expense directly
related to generating cloud subscription revenue of $0.1 million
and $0.3 million for the three and six months ended June 30,2023,
respectively, and $0 for the three and six months ended June 30,
2022. Costs are recorded in Cost of service and other revenue.
(3)
See the footnotes to the Reconciliation of
Net Income (Loss) to Adjusted EBITDA for a description of the
components of other non-recurring items for each period
presented.
(4)
The tax impact of adjustments is
calculated as 20% of the adjustments in all periods.
Copyright© 2023 OneSpan North America Inc., all rights reserved.
OneSpan™ is a registered or unregistered trademark of OneSpan North
America Inc. or its affiliates in the U.S. and other countries.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230809789465/en/
Joe Maxa Vice President of Investor Relations +1-312-766-4009
joe.maxa@onespan.com
OneSpan (NASDAQ:OSPN)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
OneSpan (NASDAQ:OSPN)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024