OneSpan Inc. reported its financial results for the three and nine months ended September 30, 2024, showing a mixed performance in revenue and significant improvements in profitability compared to the same periods in 2023.
For the third quarter of 2024, OneSpan's total revenue decreased to $56.2 million from $58.8 million in Q3 2023. However, for the nine months ended September 30, 2024, total revenue increased to $182.0 million, up from $172.2 million in the prior year. The Digital Agreements segment saw revenue growth, with Q3 2024 revenue rising to $15.4 million from $13.0 million in Q3 2023, while Security Solutions revenue fell to $40.8 million from $45.8 million in the same period. Year-to-date, Digital Agreements revenue increased by 24%, while Security Solutions revenue grew by 1%.
Gross profit for Q3 2024 was $41.5 million, slightly up from $40.7 million in Q3 2023, with a gross margin improvement to 74% from 69%. For the nine-month period, gross profit rose to $129.3 million from $114.2 million, reflecting a gross margin increase to 71% from 66%. Operating income for Q3 2024 was $11.3 million, a recovery from an operating loss of $4.8 million in Q3 2023. For the nine months, operating income reached $33.0 million, compared to an operating loss of $30.7 million in the previous year. Net income for Q3 2024 was $8.3 million, reversing a net loss of $4.1 million in Q3 2023, while net income for the nine months was $28.3 million, compared to a net loss of $30.2 million in 2023.
The company’s restructuring efforts, initiated in December 2021, have led to a significant reduction in operating expenses, which decreased by 33% in Q3 2024 and 34% year-to-date. The average full-time employee headcount dropped to 148 in Q3 2024 from 336 in Q3 2023, reflecting a reduction of approximately 330 positions as part of the restructuring plan.
OneSpan's cash and cash equivalents increased to $77.5 million as of September 30, 2024, up from $43.0 million at the end of 2023. The company reported net cash provided by operating activities of $43.2 million for the nine months ended September 30, 2024, compared to cash used of $13.8 million in the same period of 2023.
The company also noted a strategic transformation plan initiated in January 2023, focusing on revenue growth in Digital Agreements, while managing Security Solutions for modest growth. In August 2023, the Board approved cost reduction actions to enhance profitability margins.
Overall, OneSpan's financial results reflect a strategic shift towards improving operational efficiency and profitability, despite challenges in revenue generation in certain segments.
About OneSpan Inc.
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