OneSpan Q3 2026 slides: subscription surge drives guidance raise

OneSpan Inc. (NASDAQ:OSPN) unveiled its third-quarter 2026 financials on October 29, 2026, highlighting a subscription revenue surge that propelled management to raise guidance for the year. The company reported $63.9 million in revenue, which grew 12% year-over-year, while subscription revenue climbed 16% to $51.5 million, marking 81% of total revenue for the period.

This performance prompted the company to increase its full-year 2026 earnings forecast across key metrics, including revenue, annual recurring revenue (ARR), and adjusted EBITDA. Shares jumped 19.5% in after-hours trading to $24.08, surpassing the stock's previous 52-week high of $20.82. OneSpan has been transitioning from a hardware-focused authentication provider to a software-centric platform, fueled by recent acquisitions and the introduction of its unified DigipassONE authentication platform in Q3.

The presentation showcased the company's robust execution in multiple performance indicators, with subscription revenue expanding at 16% compared to total revenue growth of 12%. Subscription revenue now accounts for 81% of total revenue, up from 78% in the previous year. As of September 30, 2026, annual recurring revenue stood at $195.5 million, reflecting a 9% increase year-over-year.

The company achieved a 30% margin on adjusted EBITDA of $19.3 million and generated $16.5 million in operating cash flow during the quarter. Revenue growth was particularly strong in the Cybersecurity Division, which grew 11% year-over-year to $44.9 million, driven by the launch of DigipassONE and demand from global banking customers.

The Digital Agreements Division, operating entirely on a subscription basis, saw 14% revenue growth, reaching $19.0 million. Both divisions demonstrated solid momentum in building recurring revenue streams, with ARR increasing by 10% and 6% respectively. OneSpan's strategic initiatives and platform innovation were key highlights, with the newly launched DigipassONE platform consolidating the company's cybersecurity offerings into a unified solution for digital banking customers.

Management emphasized that the platform is already improving customer conversations and retention metrics, contributing to GRR (gross revenue retention) improvements. The Digital Agreements Division continues to differentiate itself through robust security, white-labeling capabilities, and flexible pricing models, generating $73 million in trailing twelve-month revenue with a 15% year-over-year increase.

Profitability metrics have seen substantial improvements over the past three years, with adjusted EBITDA reaching $57 million for the nine months ended September 30, 2026, maintaining a 30% margin. The company has increased capital returns to shareholders since 2025, returning $54.6 million through dividends and share repurchases.