Q3 2024 OneSpan Inc Earnings Call Transcript
Key Points
- OneSpan Inc (OSPN) reported a solid profitable quarter with an adjusted EBITDA of $17 million, representing 30% of revenue.
- The digital agreements segment was profitable for the first time on a fully burdened basis, including corporate allocations.
- Subscription revenue grew 29% and accounted for 60% of total revenue, indicating strong growth in recurring revenue streams.
- The company generated $14 million in cash from operations in the third quarter and $43 million year to date, showing significant improvement from the prior year.
- OneSpan Inc (OSPN) achieved substantial cost savings, realizing $3 million in annualized cost savings in Q3, bringing cumulative savings to $76.5 million since May 2022.
- Overall revenue declined by 4%, primarily due to an anticipated decline in hardware sales.
- ARR growth was impacted by approximately $2 million from products that were sunsetted, contributing to top-line and ARR headwinds.
- The security business unit experienced an 11% decline in revenue, primarily due to a decrease in hardware revenues.
- Maintenance revenue declined as the company continued transitioning to a SaaS and subscription license model.
- The company anticipates a continued decline in hardware revenues into the next fiscal year, which may challenge security growth in the near term.
Good day, and thank you for standing by. Welcome to the OneSpan Q3 2024 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your first speaker today, Joe Maxa, Vice President of Investor Relations. Please go ahead.
Thank you, operator. Good afternoon, everyone, and welcome to the OneSpan third-quarter 2024 earnings conference call. This call is being webcast and can be accessed on the Investor Relations section of OneSpan's website at investors.onespan.com. Joining me on the call today is Victor Limongelli, our Chief Executive Officer; and Jorge Martell, our Chief Financial Officer. This afternoon, after market closed, OneSpan issued a press release announcing results for our third quarter 2024.
To access a copy of the press release and other investor information, please visit our website. Following our prepared comments, we will open the call for questions. Please note that
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