Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations (in thousands, except head count, ratios, time periods and percentages)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. In addition to historical financial information, the following discussion may contain predictions, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under Item 1A, Risk Factors and elsewhere in this Form 10-K. These risks could cause our actual results to differ materially from any future performance suggested below. Please see “Cautionary Note Regarding Forward Looking Statements” at the beginning of this Form 10-K.
For a comparison of our results of operations for the fiscal years ended December 31, 2024 and 2023, see “Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023, filed on March 6, 2024.
37
Overview
OneSpan helps organizations build secure, seamless, and trusted digital experiences through two solution portfolios: Cybersecurity and Digital Agreements. Our cybersecurity solutions protect identities, secure mobile apps, and safeguard access through advanced high-assurance authentication, threat intelligence, fraud prevention, and mobile app protection, defending users, devices, and applications against sophisticated attacks. Our digital agreement solutions streamline agreement workflows with secure e-signatures, identity verification, and smart digital forms, built to enable speed, compliance and exceptional customer experiences. Trusted by leading global enterprises, including more than 60% of the world’s 100 largest banks, OneSpan processes over a hundred million digital agreements and billions of secure authentication transactions across more than 120 countries each year.
We offer our products primarily through a subscription licensing model and provide multiple deployment options, including cloud-based and on-premises solutions. Our solutions are sold worldwide through our direct sales force, as well as through distributors, resellers, systems integrators, and original equipment manufacturers.
We report our financial results under the following two business divisions, which are our reportable operating segments: Cybersecurity and Digital Agreements.
•Cybersecurity. Cybersecurity, formerlySecurity 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 Cybersecurity segment are delivered through on-premises and cloud-based deployment models and include standards-based authentication technologies such as Fast Identity Online ("FIDO") authentication and passkeys, multi-factor authentication, transaction signing solutions and mobile application security.
•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 cloud-based, include OneSpan Sign e-signature, OneSpan Notary, and OneSpan Identity Verification.
Beginning in mid-2023 and through the third quarter of 2024, our focus was on adjusting our cost structure to enable both business divisions to operate profitably. These cost optimization efforts were a major factor in the overall business returning to operating profitability in the fourth quarter of 2023. The subsequent increase in profitability, combined with high levels of cash generation, enabled us to return approximately $31.6 million to shareholders in 2025 in the form of quarterly dividends and share repurchases. Beginning in the fourth quarter of 2024 and continuing through 2025, we continued to operate profitably while taking a number of important steps to generate future revenue growth:
•In December 2024, we hired a new Chief Technology Officer, Ashish Jain, to lead our research and development efforts.
•In June 2025, we acquired Nok Nok Labs, a provider of passwordless software authentication solutions, which brought S3, a leading FIDO software product, to our product portfolio. This acquisition provides OneSpan's customers with a wider range of flexible, adaptable authentication options. See Note 6, Business Acquisitions, for additional information.
•In June 2025, we entered into the Credit Agreement with MUFG and other lenders party thereto. The Credit Agreement provides for a $100.0 million revolving credit facility with a $10.0 million letter of credit sublimit and a $10.0 million swingline loan sublimit. The proceeds of borrowings under the Credit Agreement may be used for general corporate purposes. We may borrow, repay and reborrow funds under the revolving credit facility until its maturity on June 23, 2030. See Note 12, Debt, for additional information.
•In October 2025, we announced a strategic investment in, and partnership with, ThreatFabric Holding B.V., a Dutch company that provides mobile threat intelligence, malware risk detection, and behavioral analytics, to further enhance the value we offer by providing fraud detection solutions to our customers. See Note 2, Summary of Significant Accounting Policies, for additional information.
•In December 2025, we hired a new Chief Revenue Officer, Shaun Bierweiler, to lead our go-to-market efforts, and to drive growth and customer success.
38
•Later in December 2025, we entered into a definitive agreement to acquire Build38, a leader in next-generation mobile application protection solutions, to extend our investment in advanced mobile security technologies. See Note 6, Business Acquisitions, for additional information.
Our efforts to broaden and strengthen our product offerings are driven in part by a secular shift away from physical authentication devices such as our Digipass tokens. Because consumers increasingly interact with their banks through their mobile devices rather than desktop computers, they are more likely to prefer authentication methods that enable secure, convenient access to mobile banking apps without the need for a physical device. In response to this trend, our bank and financial institution customers have increasingly adopted a “mobile first” approach to consumer authentication that prioritizes the mobile user experience over traditional desktop experiences. This approach has resulted in a reduction of Digipass hardware authenticator sales and an increase in sales of software authentication licenses delivered through software applications on mobile devices. Due largely to the mobile first trend, our revenue from Digipass devices declined from 78% of our revenue in 2015 to 20% of our revenue in 2025. Although we plan to continue to invest in our Digipass authenticators, including our newer FIDO2 Digipass devices, as an important component of our broad authentication solution portfolio, we are focused on driving revenue growth in higher–margin software solutions, both through further expansion of our Cybersecurity software solutions and through continued growth in our Digital Agreements division.
Restructuring Plan
In 2021 and 2022, our board of directors approved cost reduction actions designed to advance our operating model, streamline our business, improve efficiency, and enhance our capital resources.
In August 3, 2023, our board of directors approved further cost reduction actions (the "2023 Actions"). In connection with the 2023 Actions, we have incurred restructuring charges, most of which relate to employee transition and severance payments and employee benefits, with a significantly smaller amount of charges relating to vendor contract termination and rationalization actions. We terminated our restructuring plan as of December 31, 2025, as we substantially completed all of the workforce reductions and vendor contract termination and rationalization actions planned as part of the 2023 Actions from 2023 through 2025.
As part of the restructuring plan (including the 2023 Actions), we reduced headcount by eliminating approximately 345 positions. We incurred severance and related benefits costs, recorded in “Restructuring and other related charges” in the consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023.
Recent Developments
On February 26, 2026, our board of directors declared a quarterly cash dividend as part of our recurring quarterly dividend program announced in December 2024. A cash dividend of $0.13 per share, which represents a year-over-year increase of 8.3%, will be paid on March 27, 2026 to shareholders of record as of the close of business on March 13, 2026. The declaration and payment of future dividends is subject to the sole discretion of the board.
Components of Operating Results
Revenue
We generate revenue from the sale of our subscriptions, maintenance and support, professional services, and Digipass hardware products. We believe comparison of revenues between periods is heavily influenced by the timing of orders and shipments reflecting the transactional nature of significant parts of our business.
•Product and license revenue. Product and license revenue includes Digipass hardware products and software licenses, which are provided on a perpetual or term basis subscription model.
•Service and other revenue. Service and other revenue includes solutions that are provided on a cloud-based subscription model, maintenance and support, and professional services.
Cost of Goods Sold
Our total cost of goods sold consists of cost of product and license revenue and cost of service and other revenue. We expect our cost of goods sold to increase in absolute dollars as our business grows, although it may fluctuate as a percentage of total revenue from period to period.
39
•Cost of product and license revenue. Cost of product and license revenue primarily consists of direct product and license costs, including personnel costs, production costs, freight, and inventory write-off adjustments for discontinued products and services.
•Cost of service and other revenue. Cost of service and other revenue primarily consists of costs related to cloud subscription solutions, including personnel and equipment costs, depreciation, amortization, and personnel costs of employees providing professional services and maintenance and support.
Gross Profit
Gross profit is revenue net of the cost of goods sold. Gross profit as a percentage of total revenue, or gross margin, has been and will continue to be affected by a variety of factors, including our average selling price, manufacturing costs, the mix of products sold, and the mix of revenue among products, subscriptions and services. We expect our gross margins to fluctuate over time depending on these factors.
Operating Expenses
Our operating expenses are generally based on anticipated revenue levels and fixed over short periods of time. As a result, small variations in revenue may cause significant variations in the period-to-period comparisons of operating income or operating income as a percentage of revenue.
Generally, the most significant factor driving our operating expenses is headcount. Direct compensation and benefit plan expenses generally represent between 50% and 60% of our operating expenses. In addition, a number of other expense categories are directly related to headcount. We attempt to manage our headcount within the context of the economic environments in which we operate, restructuring activities, and the investments we believe we need to make for our infrastructure to support future growth and for our products to remain competitive.
Historically, operating expenses have been impacted by changes in foreign exchange rates. We estimate the change in currency rates in 2025 compared to 2024 resulted in an increase in operating expenses of $1.3 million in 2025.
The comparison of operating expenses can also be impacted significantly by costs related to our share-based and long-term incentive plans. In 2025, 2024, and 2023, operating expenses included $11.3 million, $9.2 million, and $14.6 million, respectively, of expenses related to share-based and long-term incentive plans. Long-term incentive plan compensation expense consists of share-based incentives and an immaterial amount of cash-based incentives.
•Sales and marketing. Sales and marketing expenses consist primarily of personnel costs, commissions and bonuses, trade shows, marketing programs and other marketing activities, travel, outside consulting costs, and long-term incentive compensation. Our sales and marketing expenses may fluctuate as a percentage of total revenue.
•Research and development. Research and development expenses consist primarily of personnel costs (net of capitalized software costs), bonuses, and long-term incentive compensation. Our research and development expenses may fluctuate as a percentage of total revenue.
•General and administrative. General and administrative expenses consist primarily of personnel costs, bonuses, legal, consulting and other professional fees, transaction related expenses, and long-term incentive compensation. Our general and administrative expenses may fluctuate as a percentage of total revenue.
•Amortization of intangible assets. Acquired intangible assets are amortized over their respective amortization periods and are periodically evaluated for impairment or changes in estimated useful life.
•Restructuring and other related charges. Restructuring and other related charges consists of employee costs which include severance, retention pay, and related benefits incurred in connection with headcount reductions as part of our restructuring plan, including the 2023 Actions; real estate rationalization costs incurred to optimize our real estate footprint, which include lease contract termination costs, asset impairment charges, and lease right-of-use asset and lease liability write-off gains or losses; product and services optimization costs incurred to advance our operating model, which include write-offs of capitalized software assets no longer in use; write-offs of acquired blockchain technology and related capitalized software due to the discontinuation of incremental development investments in this technology and related commercial efforts; and vendor rationalization costs for contractually committed services that we are no longer utilizing. We terminated our restructuring plan as of December 31, 2025, as we substantially completed all of the workforce reductions and vendor contract termination and rationalization actions planned as part of the 2023 Actions in 2023 through 2025.
40
Segment Results
Segment operating income (loss) consists of the revenue generated by a segment, less the direct costs of revenue, sales and marketing, research and development and amortization and any impairment charges that are incurred directly by a segment. Unallocated corporate costs include general and administrative expense and other company-wide costs that are not attributable to a particular segment. Financial results by operating segment are included below under Results of Operations. As of December 31, 2024, we adopted ASU 2023-07, Segment Reporting (Topic 280) to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. See Note 3, Segment Information, for additional information.
Interest Income, Net
Interest income, net, consists of income earned on our cash equivalents, which are invested in short-term instruments at current market rates. Interest expense is primarily related to the amortization of debt issuance costs associated with our credit facilities.
Other Expense, Net
Other expense, net, primarily includes exchange gains (losses) on transactions that are denominated in currencies other than our subsidiaries’ functional currencies, subsidies received from foreign governments in support of our research and development in those countries, and other miscellaneous non-operational expenses.
Income Taxes
Our effective tax rate reflects our global structure related to the ownership of our intellectual property (“IP”). Our IP in our Cybersecurity division is owned by our U.S. subsidiaries. The e-signature IP in our Digital Agreements division is owned by a subsidiary in Canada. These subsidiaries have entered into agreements with most of the other OneSpan entities under which those other entities provide services to the IP owners on a cost plus basis. In addition, many of our OneSpan entities operate as distributors for all of our OneSpan products. Under this structure, the earnings of our service provider and distributor subsidiaries are relatively constant. These subsidiaries tend to be in jurisdictions with higher effective tax rates. Fluctuations in earnings flow to the IP owners.
We record changes in valuation allowance against deferred tax assets that, based on management’s assessment, are considered not to be more likely than not to be realized. The decrease in the valuation allowance in 2025 and 2024 reflects a change in management's assessment of our ability to use existing deferred tax assets, including NOLs and credits and other carryforwards, due to an increase in the operating profit and the intra-entity asset transfer of certain intellectual property ("IP Transfer") discussed in Note 14, Income Taxes.
Management assesses the need for a valuation allowance on a regular basis, weighing all positive and negative evidence to determine whether a deferred tax asset will be fully or partially realized. In evaluating the realizability of deferred tax assets, significant pieces of negative evidence such as 3-year cumulative losses are considered. Management also reviews reversal patterns of temporary differences to determine if the Company would have sufficient taxable income due to the reversal of temporary differences to support the realization of deferred tax assets. Management continues to maintain a valuation allowance against certain deferred tax assets in jurisdictions where assets are not more likely than not to be realized. For all other remaining deferred tax assets, management believes it is still more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.
As of December 31, 2025, we adopted ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures. See Note 14, Income Taxes, for additional information.
Impact of Currency Fluctuations
In 2025 and 2024, we generated approximately 79% and 83%, of our revenue and incurred approximately 54% and 59% of our operating expenses outside of the U.S., respectively. As a result, changes in currency exchange rates, especially the Euro exchange rate and the Canadian dollar exchange rate, can have a significant impact on our revenue and operating expenses.
41
While the majority of our revenue is generated outside of the U.S., a significant amount of our revenue earned during the year ended December 31, 2025 was denominated in U.S. dollars. In 2025, approximately 57% of our revenue was denominated in U.S. dollars, 40% was denominated in Euros and 3% was denominated in other currencies. In 2024, approximately 55% of our revenue was denominated in U.S. dollars, 41% was denominated in Euros and 4% was denominated in other currencies.
In general, to minimize the net impact of currency fluctuations on operating income, we attempt to denominate an amount of billings in a currency such that it would provide a natural hedge against the operating expenses being incurred in that currency. We expect that changes in currency rates may impact our future results if we are unable to match amounts of revenue with our operating expenses in the same currency. If the amount of our revenue in Europe denominated in Euros continues as it is now or declines, we may not be able to fully balance the exposures of currency exchange rates on revenue and operating expenses.
The financial position and the results of operations of our foreign subsidiaries, with the exception of our subsidiaries in Switzerland, Singapore and Canada, are measured using the local currency as the functional currency. The functional currency for our subsidiaries in Switzerland, Singapore and Canada is the U.S. dollar. Accordingly, assets and liabilities are translated into U.S. dollars using current exchange rates as of the balance sheet date. Revenues and expenses are translated at average exchange rates prevailing during the year. Translation adjustments arising from differences in exchange rates generated comprehensive loss of $7.4 million in 2025 and a comprehensive gain of $3.3 million in 2024. These amounts are included as a separate component of stockholders’ equity.
Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations in other expense, net. Foreign exchange transaction losses aggregated $1.6 million and $0.9 million for the years ended December 31, 2025 and 2024, respectively.
Results of Operations
The following table sets forth information about the Company's two operating segments, for the periods indicated, and selected segment and consolidated operating results. Unallocated corporate costs include costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment.
(In thousands) Cybersecurity Digital Agreements Corporate and Other Total
Interest income, net — — 1,985
Other expense, net — — — (1,069)
Income before income taxes 49,362
Benefit from income taxes (23,542)
42
(In thousands) Cybersecurity Digital Agreements Corporate and Other Total
Interest income, net 1,807
Other expense, net (125)
Income before income taxes $ 46,487
Benefit from income taxes $ (10,595)
* Percentage not meaningful
(1) Digital Agreements gross profit includes an intangible asset write-off of $0.8 million and an internal capitalized software write-off of $0.7 million for the year ended December 31, 2024 (see Note 8, Intangible Assets, net and Note 9, Property and Equipment, net).
(2) Cybersecurity other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the years ended December 31, 2025 and 2024.
(3) Cybersecurity operating income includes $1.3 million and $0.9 million of total amortization and depreciation expense for the years ended December 31, 2025 and 2024, respectively.
Cybersecurity operating income includes $0.3 million and $2.0 million of restructuring and other related charges for the years ended December 31, 2025 and 2024, respectively.
(4) Digital Agreements other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the years ended December 31, 2025 and 2024.
(5) Digital Agreements operating income includes $7.5 million and $6.2 million of total amortization and depreciation for the years ended December 31, 2025 and 2024, respectively.
Digital Agreements operating income includes $1.0 million and $1.7 million of restructuring and other related charges for the years ended December 31, 2025 and 2024, respectively.
Revenue by products and services allocated to the segments for the years ended December 31, 2025 and 2024 is as follows:
43
Years Ended December 31,
(In thousands) Cybersecurity Digital Agreements Cybersecurity Digital Agreements
For the year ended December 31, 2025, total revenue was flat compared to the year ended December 31, 2024. Changes in foreign exchange rates as compared to the same period in 2024 favorably impacted total revenue by approximately $3.7 million.
Additional information on our revenue by segment follows.
•Cybersecurity revenue decreased $4.5 million, or approximately 2%, during the year ended December 31, 2025 compared to the year ended December 31, 2024. This decrease was primarily attributable to lower volumes of hardware devices sold due to the mobile-first trend, and to a lesser extent, lower perpetual-based maintenance and professional services revenues due to our transition to term licenses and cloud subscription license models and the sunsetting of our Dealflo solution. The decrease was partially offset by higher term license subscription revenues, primarily from existing customers, increased cloud subscription revenue, and revenue from customers acquired in our acquisition of Nok Nok Labs. Changes in foreign exchange rates compared to the same period in 2024 favorably impacted Cybersecurity revenue by $3.5 million.
•Digital Agreements revenue increased $4.5 million, or approximately 7%, during the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase in Digital Agreements revenue was primarily attributable to higher cloud subscription revenue from existing customer expansions and, to a lesser extent, customers new to OneSpan ("new logos") and overages, partially offset by lower term-based maintenance revenue due to our transition to cloud subscription licenses. Changes in foreign exchange rates as compared to the same period in 2024 favorably impacted Digital Agreements revenue by $0.2 million.
Revenue by Geographic Regions: We classify our sales by customer location in three geographic regions: 1) EMEA, which includes Europe, Middle East and Africa; 2) the Americas, which includes North, Central, and South America; and 3) Asia Pacific (APAC), which also includes Australia and New Zealand. The breakdown of revenue in each of our major geographic areas was as follows:
Years Ended December 31,
(In thousands, except percentages) 2025 2024 Change ($) Change (%)
Revenue
% of Total Revenue
44
For the year ended December 31, 2025, revenue generated in EMEA was $6.0 million, or 5%, lower than the same period in 2024, primarily due to lower hardware volumes attributed to the mobile-first trend and end-of-life products, partially offset by an increase in revenue from mobile application security products.
For the year ended December 31, 2025, revenue generated in the Americas was $8.9 million, or 10%, higher than the same period in 2024, primarily due to an increase in revenue from software authentication products and Digital Agreements revenue.
For the year ended December 31, 2025, revenue generated in APAC was $3.0 million, or 6%, lower than the same period in 2024, primarily attributable to lower hardware volumes and a decrease in revenue from software authentication products, partially offset by an increase in revenue from mobile application security products.
Cost of Goods Sold, Gross Profit and Gross Margin
The following table presents costs of goods sold for our products and services for the years ended December 31, 2025 and 2024:
Years Ended December 31,
(In thousands, except percentages) 2025 2024 Change ($) Change (%)
Cost of goods sold
Gross margin
Product and license 75 % 72 %
Services and other 72 % 71 %
Total gross margin 74 % 72 %
The cost of product and license revenue decreased $4.6 million or 13% for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease in cost of product and license revenue was primarily driven by lower hardware revenue and hardware costs, partially offset by higher third-party license costs.
The cost of services and other revenue decreased $0.2 million or 1% for the year ended December 31, 2025, compared to the year ended December 31, 2024. This was due to the impact of our 2024 write-off of costs associated with our decision to discontinue investment in blockchain technology (see Note 8, Intangible Assets - net) (the "2024 write-off") and lower cloud platform costs in 2025.
Gross profit increased $4.8 million, or 3% for the year ended December 31, 2025 compared to the year ended December 31, 2024. Total gross margin was 74% for the year ended December 31, 2025, compared to 72% for the year ended December 31, 2024. The change was primarily driven by an increase in software revenue and decrease in hardware revenue, and the prior year impact of the 2024 write-off.
The majority of our inventory purchases are denominated in U.S. dollars. Our sales are denominated in various currencies, including the Euro. The impact of changes in currency rates are estimated to have had a unfavorable impact on overall cost of goods sold of less than $0.1 million for the year ended December 31, 2025. Had currency rates in 2025 been equal to rates in the comparable period of 2024, the gross profit margin would have been less than 1 percentage point lower for the year ended December 31, 2025.
Additional information on our gross profit by segment follows.
45
•Cybersecurity gross profit decreased $0.6 million for the year ended December 31, 2025 compared to the prior year. Cybersecurity gross margin was 74% and 73% for the years ended December 31, 2025 and 2024, respectively. The increase in the gross margin of 1% was due to an increase in higher-margin hardware revenue, despite lower overall hardware revenue, due to favorable hardware product and customer mix partially offset by slightly lower margins in software revenue, despite higher overall software revenue, primarily due to incremental third party costs.
•Digital Agreements gross profit increased $5.3 million, or approximately 13%, for the year ended December 31, 2025 compared to the prior year. Digital Agreements gross margin for the years ended December 31, 2025 and 2024 was 72% and 68%, respectively. The increase in gross profit and gross margin was driven by higher cloud subscription revenue, lower cloud platform costs, and the prior year impact of the 2024 write-off.
Operating Expenses
For the year ended December 31, 2025, operating expenses increased by $1.1 million, or 1%, compared to the year ended December 31, 2024. Changes in foreign exchange rates unfavorably impacted operating expenses by approximately $1.3 million as compared to the year ended December 31, 2024.
The following table presents the breakout of operating expenses by category as of December 31, 2025 and 2024:
Years Ended December 31,
(In thousands, except percentages) 2025 2024 Change ($) Change (%)
Operating costs
Sales and Marketing Expenses
Sales and marketing expenses increased $2.4 million, or 5%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was driven primarily by higher employee compensation costs, which included increases in salaries, benefits and commission as a result of headcount additions, including the acquisition of Nok Nok Labs. This increase was partially offset by decreased software licensing costs and lead generation costs due to rationalization efforts.
Average full-time sales and marketing employee headcount for year ended December 31, 2025 was 165, compared to 161 for year ended December 31, 2024.
Research and Development Expenses
Research and development expenses increased $1.7 million, or 5%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase in expense for the period was primarily driven by higher compensation and related benefit costs, including the acquisition of Nok Nok Labs, and lower internal software capitalization costs in 2025 compared to 2024.
Average full-time research and development employee headcount for the year ended December 31, 2025 was 232, compared to 234 for year ended December 31, 2024.
46
General and Administrative Expenses
General and administrative expenses decreased $0.3 million, or 1%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. This decrease was largely driven by lower employee compensation costs, which included a decrease in salaries, payroll taxes, and related benefits as a result of lower headcount as well as lower bonus accruals, partially offset by by increased stock-based compensation expense and higher external advisor costs in 2025 compared to the prior year.
Average full-time general and administrative employee headcount for the year ended December 31, 2025 was 87, compared to 100 for the year ended December 31, 2024.
Restructuring and Other Related Charges
Restructuring and other related charges were $1.6 million for the year ended December 31, 2025, compared to $4.4 million for the year ended December 31, 2024, a decrease of $2.8 million or 63%. The year-over-year decrease was largely due to minimal headcount reductions, vendor rationalization and capitalized software write-off costs in 2025 compared to 2024.
Amortization of Intangible Assets
Amortization of intangible assets was $2.5 million and $2.4 million for years ended December 31, 2025 and 2024, respectively. The increase in 2025 as compared to 2024 relates to increased amortization from the intangible assets associated with the acquisition of Nok Nok Labs.
Segment Operating Income
Information on our operating income by segment follows.
•Cybersecurity: For the year ended December 31, 2025, Cybersecurity operating income was $80.0 million, which was $10.1 million, or 11%, lower than the prior year. This decrease was largely due to higher sales and marketing expenses and research and development expenses, including employee compensation and external advisor expenses, partially offset by lower restructuring costs.
•Digital Agreements: Operating income for the year ended December 31, 2025 was $16.0 million, compared to $5.6 million in the prior year. The increase was driven by higher gross profit as discussed in the gross profit section above and lower operating expenses primarily due to lower employee compensation costs.
Interest Income, net
Years Ended December 31,
(In thousands, except percentages) 2025 2024 Change ($) Change (%)
Interest income, net, was $2.0 million for the year ended December 31, 2025, compared to $1.8 million for the year ended December 31, 2024. The increase in interest income was due to higher average excess cash invested in the period compared to the prior year period, partially offset by interest charges related to the Credit Agreement in 2025.
Other Expense, Net
Years Ended December 31,
(In thousands, except percentages) 2025 2024 Change ($) Change (%)
Other expense, net, includes the net impact of subsidies received from foreign governments in support of our research and development in those countries, exchange gains (losses) on transactions that are denominated in currencies other than our subsidiaries’ functional currencies, and other miscellaneous non-operational, non-recurring income and expenses.
47
For the year ended December 31, 2025, other expense, net was $1.1 million, compared to $0.1 million for the year ended December 31, 2024. The change was largely driven by increased foreign exchange transaction losses in 2025 compared to foreign exchange transaction losses in 2024, as well as lower income from foreign government subsidies.
Benefit from income taxes
Years Ended December 31,
(In thousands, except percentages) 2025 2024 Change ($) Change (%)
We recorded income tax benefits of $23.5 million and $10.6 million for the years ended December 31, 2025 and 2024, respectively. The income tax benefit recorded for the year ended December 31, 2025 was primarily attributable to the release of valuation allowance for our Canadian entity, offset by income tax provision expense on profits. The income tax benefit recorded for the year ended December 31, 2024 was primarily attributable to a worthless stock deduction for our investment in one of our wholly owned subsidiaries, the release of valuation allowance for our U.S. entity, and the income tax benefit attributable to the IP Transfer, offset by income tax expense attributable to an increase in income before taxes. See Note 14, Income Taxes for additional information.
Loss Carryforwards Available
At December 31, 2025, we have gross deferred tax assets of $51.8 million resulting from U.S. federal, foreign and state NOL carryforwards of $129.9 million and other foreign deductible carryforwards of $144.2 million. At December 31, 2025, we have a valuation allowance of $1.7 million against deferred tax assets related to certain carryforwards. See Note 14, Income Taxes, for additional information.
Key Business Metrics and Non-GAAP Financial Measures
In our quarterly earnings press releases and conference calls, we discuss the below key metrics and financial measures that are not calculated according to generally accepted accounting principles (“GAAP”). These metrics and non-GAAP financial measures help us monitor and evaluate the effectiveness of our operations and evaluate period-to-period comparisons. Management believes that these metrics and non-GAAP financial measures help illustrate underlying trends in our business. We use these metrics and non-GAAP financial measures to establish budgets and operational goals (communicated internally and externally), manage our business and evaluate our performance. We also believe that both management and investors benefit from referring to these metrics and non-GAAP financial measures as supplemental information in assessing our performance and when planning, forecasting, and analyzing future periods. We believe these metrics and non-GAAP financial measures are useful to investors both because they allow for greater transparency with respect to financial measures used by management in their financial and operational decision-making and also because they are used by investors and the analyst community to help evaluate the health of our business.
Annual Recurring Revenue
We use annual recurring revenue ("ARR") as an approximate measure to monitor the revenue growth of our recurring business. ARR represents the annualized value of the active portion of SaaS, term-based license, and maintenance and support contracts at the end of the reporting period. For term-based license arrangements, the amount included in ARR is consistent with the amount that we invoice the customer annually for the term-based license transaction. A customer with a one-year term-based license contract will be invoiced for the total value of the contract at the beginning of the contractual term, while a customer with a multi-year term-based license contract will be invoiced for each annual period at the beginning of each year of the contract. For contracts that include annual values that increase over time because there are additional deliverables in subsequent periods, we include in ARR only the annualized value of components of the contract that are considered active as of the date of the ARR calculation. We do not include the future committed increases in the contract value as of the date of the ARR calculation.
We consider a contract to be active from when the product or service contractual term commences (the “start date”) until the right to use the product or service ends (the “expiration date”). Even if the contract with the customer is executed before the start date, the contract will not count toward ARR until the customer's right to receive the benefit of the products or services has commenced.
48
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 discussions with the customer for a new recurring contract or renewal and the customer has not notified us of an intention not to renew. We exclude from the calculation of ARR renewal contracts that are more than 90 days after their expiration date, even if we are continuing to negotiate a renewal at that time.
ARR is not calculated based on recognized or unearned revenue and there is no direct relationship between revenue recognized in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, and the Company’s ARR business metric. We believe ARR is a valuable operating measure to assess the health of our SaaS, term-based license, and maintenance and support contracts because it illustrates our customer recurring contracts as of the measurement date. ARR is not a forecast of future revenue, which can be impacted by contract start and end dates and renewal rates, and does not include revenue from perpetual licenses, purchases of Digipass authenticators, training, professional services or other sources of revenue that are not deemed to be recurring in nature.
ARR does not have any standardized meaning and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue as ARR is an operating metric and is not intended to be combined with or replace these items. Investors should consider our ARR operating measure only in conjunction with our GAAP financial results.
At December 31, 2025, we reported ARR of $186.9 million, which was 11% higher than 2024 ARR of $167.7 million. 2025 ARR included the contribution from our acquisition of Nok Nok Labs, which closed on June 4, 2025. Changes in foreign exchange rates during the year ended December 31, 2025 as compared to the prior year positively impacted ARR by approximately $0.6 million. ARR growth was primarily driven by an increase in subscription contracts and new logos, partially offset by the sunsetting of our on-premises e-signature and Dealflo solutions.
Net Retention Rate
Net Retention Rate ("NRR") is defined as the approximate year-over-year percentage growth in ARR from the same set of customers at the end of the prior year period. It measures the Company’s ability to increase revenue across our existing customer base through expanded use of our platform, offset by customers whose subscription contracts with us are not renewed or renew at a lower amount. The Company’s ability to drive growth and generate incremental revenue depends, in part, on our ability to maintain and grow our relationships with customers. NRR is an important way in which we track our performance in this area.
We reported NRR of 104% and 106% at December 31, 2025 and 2024, respectively. The year-over-year change in NRR was primarily due to a decrease in contracts that increased in value and to a lesser extent, an increase in contracts that decreased in value, or contracted, partially offset by a reduction in churned contracts.
Adjusted EBITDA
We define Adjusted EBITDA as net income before interest, taxes, depreciation, amortization, long-term incentive compensation and related payroll tax expense, restructuring and other related charges, and certain non-recurring items, including acquisition related costs, rebranding costs, and non-routine shareholder matters. Adjusted EBITDA is a non-GAAP financial metric. 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 and related payroll tax expense, restructuring costs and other related 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 and related payroll tax expense, 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.
49
Non-GAAP financial metrics such as Adjusted EBITDA 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, but, rather, should be considered together with our consolidated financial statements, which are prepared in accordance with GAAP and included in Part IV, Item 15, Exhibits and Financial Statement Schedules.
The following table reconciles net income as reported on our consolidated statements of operations to non-GAAP Adjusted EBITDA:
Years EndedDecember 31,
Depreciation and amortization of intangible assets (1) 10,070 8,364
Restructuring and other related charges (3) 2,057 6,063
(1) Includes cost of sales depreciation and amortization expense directly related to delivering cloud subscription revenue of $5.6 million and $3.4 million for the years ended December 31, 2025 and 2024, respectively. Costs are recorded in “Services and other cost of goods sold” on the consolidated statements of operations.
(2) Long-term incentive compensation and related payroll tax expense includes share-based compensation and related payroll tax expense, and cash incentive grants awarded to employees located in jurisdictions where we do not issue share-based compensation due to tax, regulatory or similar reasons. The expense associated with these cash incentive grants was immaterial for the years ended December 31, 2025 and 2024, respectively.
Starting January 1, 2025, employer payroll taxes related to employee stock-based award transactions are included in long-term incentive compensation and related payroll tax expense. Prior period amounts have been adjusted to reflect these changes. We are excluding these payroll taxes from Adjusted EBITDA results since they are tied to the timing and size of the vesting of the underlying stock-based awards and the price of our common stock at the time of vesting, which may vary from period to period independent of our operating performance. Employer payroll taxes related to employee stock-based award transactions amounted to $1.0 million and $0.9 million for the years ended December 31, 2025 and 2024, respectively.
(3) Includes write-offs of property and equipment, net, of $0.7 million for the year ended December 31, 2025. Includes write-offs of intangible assets and property and equipment, net, of $0.8 million and $1.0 million, respectively, for the year endedDecember 31, 2024. Costs are recorded in "Services and other costs of good sold" and "Restructuring and other related charges," respectively, on the consolidated statements of operations.
(4) For the year ended December 31, 2025, other non-recurring items consist of $5.9 million of fees related to non-recurring projects, including transaction costs related to acquisition projects. For the year ended December 31, 2024, other non-recurring items consisted of $4.2 million of fees related to non-recurring projects.
Adjusted EBITDA increased during the year ended December 31, 2025 compared to 2024, primarily due to lower costs of goods sold, partially offset by increased sales and marketing and research and development expenses. Year-over-year changes in foreign exchange rates favorably impacted Adjusted EBITDA by approximately $0.1 million for the year ended December 31, 2025.
Please see further discussion in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations for an analysis of the components of net income (loss) in the consolidated statements of operations for the years ended December 31, 2025 and 2024, and additional detail regarding items excluded from Adjusted EBITDA.
50
Liquidity and Capital Resources
As of December 31, 2025 and 2024, we had cash and cash equivalents balances of $70.5 million and $83.2 million, respectively. Our cash and cash equivalents balance included money market funds as of December 31, 2025 and money market funds and U.S. treasury bills with maturities at acquisition of less than three months as of December 31, 2024.
We were party to lease agreements that required letters of credit and guarantees to secure the obligations and a cash guarantee with a payroll vendor which totaled $0.2 million at December 31, 2024. Our restricted cash at December 31, 2024 related to letters of credit that were recorded as "Other assets" on the consolidated balance sheet as its requirement was for a period greater than 12 months. This balance is no longer on the consolidated balance sheet as of December 31, 2025 as the restricted cash was replaced by a bank guarantee in conjunction with the Credit Agreement.
As of December 31, 2025, we held $50.3 million of cash and cash equivalents in subsidiaries outside of the United States. Of that amount, $49.5 million is not subject to repatriation restrictions, but may be subject to taxes upon repatriation.
We expect that our existing cash and cash equivalents will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next 12 months.
Our cash flows are as follows:
Years Ended December 31,
Cash provided by (used in):
Operating Activities
Cash provided by (used in) operating activities is primarily comprised of net income (loss), as adjusted for non-cash items, and changes in operating assets and liabilities. Non-cash adjustments consist primarily of allowance for credit losses, amortization of intangible assets, deferred taxes, depreciation of property and equipment, and share-based compensation. We expect cash inflows from operating activities to be affected by increases or decreases in sales and timing of collections. Our primary uses of cash from operating activities have been for personnel and vendor costs. We expect cash outflows from operating activities to be affected by changes in personnel costs and the payments of expenditures.
For the year ended December 31, 2025, $59.5 million of cash was provided by operating activities. This was primarily driven by an increase in operating income for the period as a result of improved gross margins, restructuring and cost savings initiatives partially offset by an increase in deal transaction costs. For the year ended December 31, 2024, $55.7 million of cash was provided by operating activities.
Investing Activities
The changes in cash flows from investing activities primarily relate to timing of purchases of property and equipment, capitalized software activities, and activity in connection with acquisitions and an equity investment. We expect to continue to purchase property and equipment to support the growth of our business as well as to continue to invest in our infrastructure, and we may also make additional acquisitions and equity investments.
For the year ended December 31, 2025 cash of $35.6 million was used in investing activities, compared to cash of $9.3 million used in investing activities during the year ended December 31, 2024. Cash used in investing activities primarily consisted of cash paid for the acquisition of Nok Nok Labs, the equity investment in ThreatFabric and additions to property and equipment.
51
Financing Activities
The changes in cash flows from financing activities primarily relate to the purchases of common stock under our share repurchase program, dividend payments, and tax payments for restricted stock issuances.
For the year ended December 31, 2025, net cash used in financing activities was $38.4 million, which was attributable to dividends paid, cash paid for share repurchases, tax payments for stock issuances, and payment of debt issuance costs.
For the year ended December 31, 2024, net cash used in financing activities was $5.2 million, which consisted primarily of $5.0 million of tax payments for restricted stock issuances and cash paid for the holdback component of our acquisition of substantially all of the assets of the ProvenDB business of Southbank Software Pty Ltd. in February 2023.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Contractual Obligations and Commitments
As of December 31, 2025, we have unrecognized purchase obligations of $11.9 million for software agreements related to the administration of our business which range from 1 to 3 years.
As of December 31, 2025, we have operating lease obligations of $8.4 million which will expire in the next 1 to 8 years. The operating lease obligations do not include common area maintenance charges or real estate taxes under our operating leases, for which we are also obligated. These charges are generally not fixed and can fluctuate from year to year.
Critical Accounting Policies and Estimates
Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.
On an on-going basis, management evaluates its estimates and judgments, including those related to bad debts, net realizable value of inventory and intangible assets. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes the following critical accounting policies affect significant judgments and estimates used in the preparation of its consolidated financial statements.
Revenue Recognition
We record revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. We determine revenue recognition through the following steps:
•Identification of the contract, or contracts, with a customer;
•Identification of the performance obligations in the contract;
•Determination of the transaction price;
•Allocation of the transaction price to the performance obligations in the contract; and
•Recognition of revenue when, or as, we satisfy a performance obligation.
52
Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services, which excludes any sales incentives and amounts collected on behalf of third parties. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight before control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in "Cost of goods sold".
Nature of Goods and Services
We derive our revenues primarily from product and license revenue, which includes hardware products and on-premises subscription revenue, and services and other, which is inclusive of cloud subscription revenue, maintenance and support, and professional services.
Subscription: Subscription includes cloud and on-premises subscription revenue.
We generate cloud subscription revenues from our Cybersecurity and Digital Agreements cloud service offerings. Our standard customer arrangements do not provide the customer with the right to take possession of the software supporting the cloud-based application service at any time. As such, these arrangements are considered service contracts and revenue is recognized ratably over the service period of the contract. Customer payments are normally in advance for annual service.
Revenue from the sale of on-premises subscription revenue is recorded upon delivery which is the latter of when the customer receives the ability to access the software or when they are legally allowed to use the software. No significant obligations or contingencies exist with regard to delivery, customer acceptance or rights of return at the time revenue is recognized. We offer term licenses for on-premises subscription revenue ranging from one to five years in length. For term licenses, payments are either on installment or in advance. In limited circumstances, we integrate third-party software solutions into our software products. We have determined that, consistent with our conclusion under prior revenue recognition rules, generally we act as the principal with respect to the satisfaction of the related performance obligation and record the corresponding revenue on a gross basis from these transactions. For transactions in which we do not act as the principal, we recognize revenue on a net basis. The fees owed to the third parties are recognized as a component of cost of goods sold when the revenue is recognized.
In addition, we also offer annual or multi-year customer support subscription services, whereby customers can buy different levels of customer support packages for an annual recurring subscription fee.
Maintenance and support: Maintenance and support agreements generally call for us to provide software updates and technical support, respectively, to customers. The annual fee for maintenance and technical support is recognized ratably over the term of the maintenance and support agreement as this is the period the services are delivered. Customer payments are normally in advance for annual service.
Professional services and other revenue: Professional services revenues are primarily comprised of implementing, automating and extending business processes, technology infrastructure, and software applications. Professional services revenues are recognized over time as services are rendered, usually over a period of time that is generally less than 12 months. Most projects are performed on a time and materials basis while a portion of revenues is derived from projects performed on a fixed fee. For time and material contracts, revenues are generally recognized and invoiced by multiplying the number of hours expended in the performance of the contract by the contractual hourly rates. For fixed fee contracts, revenues are generally recognized using an input method based on the ratio of hours expended to total estimated hours to complete the services. Customer payments normally correspond with delivery.
Hardware products: Revenue from the sale of security hardware is recorded upon shipment, which is the point at which control of the goods are transferred and the completion of the performance obligations, unless there are specific terms that would suggest control is transferred at a later date (e.g. delivery). No significant obligations or contingencies typically exist with regard to delivery, customer acceptance or rights of return at the time revenue is recognized. Customer invoices and subsequent payments normally correspond with delivery.
Multiple-Element Arrangements
In our typical multiple-element arrangement, the primary deliverables include:
53
1.A client component (i.e. an item that is used by the person being authenticated in the form of either a new standalone hardware device or software that is downloaded onto a device that the customer already owns);
2.Server system software that is installed on the customer’s systems (i.e., software on the server system that verifies the identity of the person being authenticated) or licenses for additional users on the server system software if the server system software had been installed previously; and
3.Post contract support in the form of maintenance on the server system software or support.
Our multiple-element arrangements may also include other items that are usually delivered prior to the recognition of any revenue and are incidental to the overall transaction such as initialization of the hardware device, customization of the hardware device itself or the packaging in which it is delivered, deployment services where we deliver the device to our customer’s end-use customer or employee and, in some limited cases, professional services to assist with the initial implementation of a new customer.
Significant Judgments
We enter into contracts to deliver a combination of hardware devices, software licenses, subscriptions, maintenance and support and, in some situations, professional services. We evaluate the nature of the goods or services promised in these arrangements to identify the distinct performance obligations. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment depending on the terms and conditions of the respective customer arrangement. When a hardware client device and licenses to server software are sold in a contract, they are treated as a single performance obligation because the software license is deemed to be a component of the hardware that is integral to the functionality of the hardware that is used by our customers for identity authentication. When a software client device is sold in a contract server software, the licenses are considered a single performance obligation to deliver the authentication solution to the customer. In either of these types of arrangements, maintenance and support and professional services are typically distinct separate performance obligations from the hardware or software solutions. Our contracts to deliver subscription services typically do not include multiple performance obligations; however, in certain limited cases customers may purchase professional services that are distinct performance obligations.
For contracts that contain multiple performance obligations, the transaction price is allocated to the separate performance obligations based on their estimated relative standalone selling price. Judgment is required to determine the stand-alone selling price (“SSP”) of each distinct performance obligation. We determine SSP for maintenance and support, based on observable inputs; specifically, the range of prices charged to customers to renew annual maintenance and support contracts. In instances where SSP is not directly observable, and when we sell at a highly variable price range, such as for transactions involving software licenses or subscriptions, we determine the SSP for those performance obligations using the residual approach.
Income Taxes
As a global company, we calculate and provide for income taxes in each tax jurisdiction in which we operate. The provision for income taxes includes the amounts payable or refundable for the current year, the effect of deferred taxes and impacts from uncertain tax positions. Our provision for income taxes is significantly affected by shifts in the geographic mix of our pre-tax earnings across tax jurisdictions, changes in valuation allowance, changes in tax laws and regulations, and tax planning opportunities available in each tax jurisdiction.
Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement and tax bases of our assets and liabilities and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates that will apply to taxable income in the years in which those differences are expected to be recovered or settled. Valuation allowances are established for deferred tax assets when it is more likely than not that a tax benefit will not be realized. We recognize the effect of a change in tax rates on deferred tax assets and liabilities and in income in the period that includes the enactment date.
54
We recognize tax benefits for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in our income tax returns that do not meet these recognition and measurement standards. Assumptions, judgments, and the use of estimates are required in determining whether the “more-likely-than-not” standard has been met when developing the provision for income taxes.
We recognize the tax impact of including certain foreign earnings in U.S. taxable income as a period cost. We have recognized deferred income taxes for local country income and withholding taxes that could be incurred on distributions of non-U.S. earnings because we do not plan to indefinitely reinvest such earnings.
We monitor for changes in tax laws and reflect the impacts of tax law changes in the period of enactment.
Recently Issued Accounting Pronouncements
For information regarding our new accounting pronouncements, see Note 2, Summary of Significant Accounting Policies, in the notes to consolidated financial statements included in Part IV, Item 15, Exhibits and Financial Statements Schedules.
Item 7A - Quantitative and Qualitative Disclosures about Market Risk (In thousands)
Foreign Currency Exchange Risk – In 2025, we generated approximately 79% of our revenue outside the United States, primarily in Europe, Latin America and Asia Pacific. A significant portion of our business operations is transacted in foreign currencies. As a result, we have exposure to foreign exchange fluctuations. We are affected by both foreign currency translation and transaction adjustments. Translation adjustments result from the conversion of the foreign subsidiaries’ balance sheets and income statements to U.S. dollars at year-end exchange rates and weighted average exchange rates, respectively. Translation adjustments resulting from this process are recorded directly into stockholders’ equity. Transaction adjustments result from currency exchange movements when one of our companies transacts business in a currency that differs from its local currency. These adjustments are recorded as gains or losses in our consolidated statements of operations. Our business transactions are spread across numerous countries and currencies. As noted in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations above, we attempt to minimize the net impact of currency on operating earnings by denominating an amount of billings in a currency such that it would provide a natural hedge against the operating expenses being incurred in that currency. We do not believe that an immediate 10% increase or decrease in the relative value of the U.S. dollar to other currencies would have a material effect on our operating results.
Interest Rate Risk – We have minimal interest rate risk. We had no debt outstanding at December 31, 2025. Our cash and cash equivalents are invested in short-term instruments at current market rates. The effect of a hypothetical one percentage point increase or decrease would not have a material impact on our consolidated financial statements.
Item 8 - Financial Statements and Supplementary Data
The information in response to this item is included in our consolidated financial statements, together with the report thereon of KPMG LLP, in Item 15, Exhibits and Financial Statement Schedules.
Item 9 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A - Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 as amended (the "Exchange Act")) as of December 31, 2025.
55
Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2025, to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time period specified in the rules and forms of the SEC, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
The management of OneSpan Inc. is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act ). Management, led by our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting based upon the criteria set forth in the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control—Integrated Framework (2013).
Management has concluded that its internal control over financial reporting was effective as of December 31, 2025 to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements in accordance with U.S. GAAP.
KPMG LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2025, included on page F-2 of this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as that term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
Management believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Item 9B - Other Information
Director and Officer Trading Arrangements
None of our directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as those terms are defined in Item 408(c) of Regulation S-K) during the fourth quarter of 2025.
Item 9C - Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
56
PART III
Item 10 - Directors, Executive Officers and Corporate Governance
All information in response to this Item, other than the required information on executive officers and the required information under Regulation S-K Items 406 and 408, is incorporated by reference to the “Information regarding our Board of Directors” and, if applicable, “Delinquent Section 16(a) Reports” sections of OneSpan’s Proxy Statement to be filed with the SEC for the 2026 Annual Meeting of Stockholders. The required information on executive officers is set forth in Part I of this Form 10-K under the heading "Information about our Executive Officers."
We have adopted a written code of business conduct and ethics that applies to our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the code is posted on the Corporate Governance section of our website, which is located at www.onespan.com. If we make any substantive amendments to, or grant any waivers from, the code of business conduct and ethics for any officer or director, we will disclose the nature of such amendment or waiver on our website pursuant to the disclosure requirements of Item 5.05 of Form 8-K. We will provide any person, without charge, a copy of our code of conduct and ethics upon written request, which may be mailed to Corporate Secretary, OneSpan Inc.,1 Marina Park Drive, Unit 1410, Boston, Massachusetts, 02210.
We have adopted an insider trading policy that governs the purchase, sale and/or other dispositions of Company securities by our directors, officers, employees, designated consultants and contractors, and other covered persons. We believe our insider trading policy is reasonably designed to promote compliance with insider trading laws, rules, regulations and Nasdaq listing standards. A copy of our insider trading policy is filed as Exhibit 19 to this Form 10-K. In addition, the Company does not engage in transactions in Company securities while in possession of material nonpublic information concerning the Company or its securities.
Item 11 - Executive Compensation
The information in response to this Item is incorporated by reference to the “Executive Compensation” and "Director Compensation" sections of OneSpan’s Proxy Statement (except for the section titled "Executive Compensation - Pay versus Performance") to be filed with the SEC for the 2026 Annual Meeting of Stockholders.
Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information in response to this Item is incorporated by reference to the “Security Ownership of Certain Beneficial Owners, Directors and Management” and “Equity Compensation Plan Information” sections of OneSpan’s Proxy Statement to be filed with the SEC for the 2026 Annual Meeting of Stockholders.
Item 13 - Certain Relationships and Related Transactions, and Director Independence
The information in response to this Item is incorporated by reference to the “Information regarding our Board of Directors” and “Transactions with Related Persons” sections of OneSpan’s Proxy Statement to be filed with the SEC for the 2026 Annual Meeting of Stockholders.
Item 14 - Principal Accounting Fees and Services
The information in response to this Item is incorporated by reference to the “Fees Paid to Independent Registered Public Accounting Firm for 2025 and 2024” section of OneSpan’s Proxy Statement to be filed with the SEC for the 2026 Annual Meeting of Stockholders.
57
PART IV
Item 15 - Exhibits and Financial Statement Schedules
(a)The following documents are filed as part of this Annual Report on Form 10-K.
(1)The following consolidated financial statements and notes thereto, and the related independent auditors’ report, are included on pages F-1 through F-42 of this Annual Report on Form 10-K:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2025 and 2024
Consolidated Statements of Operations for the Years Ended December 31, 2025, 2024 and 2023
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2025, 2024 and 2023
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024 and 2023
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023
Notes to Consolidated Financial Statements
(2)All other financial statement schedules are omitted because such schedules are not required or the information required has been presented in the aforementioned consolidated financial statements.
(3)The following exhibits are filed with this Annual Report on Form 10-K or incorporated by reference as set forth at the end of the list of exhibits:
ExhibitNumber Description
58
ExhibitNumber Description
59
ExhibitNumber Description
21 Subsidiaries of Registrant
23 Consent of KPMG LLP
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
___________________________
*Compensatory plan or management contract.
OneSpan Inc. will furnish any of the above exhibits to stockholders upon written request addressed to the Secretary at the address given on the cover page of this Form 10-K.
60
OneSpan Inc.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Financial Statements
Report of Independent Registered Public Accounting Firm F-2
Consolidated Balance Sheets as of December 31, 2025 and 2024 F-4
Notes to Consolidated Financial Statements F-9
All other financial statement schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.
F-1
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
OneSpan Inc.:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of OneSpan Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
F-2
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Identification of performance obligations in contracts containing multiple goods and services
As discussed in Notes 2 and 4 to the consolidated financial statements, the Company enters into contracts to deliver a combination of hardware devices, software licenses, subscriptions, maintenance and support and, in some situations, professional services. The Company evaluates the nature of the goods and services promised in these arrangements to identify the distinct performance obligations. The Company recognized total revenue of $243 million, a portion of which related to contracts containing multiple performance obligations, for the year ended December 31, 2025. We identified the evaluation of the Company’s identification of performance obligations in contracts containing multiple goods and services as a critical audit matter. Specifically, complex auditor judgment was required to evaluate the Company's identification of performance obligations in such contracts, including for contracts with new customers or contracts that were amended with existing customers.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s revenue recognition process. This included controls related to the identification of performance obligations and evaluation of terms and conditions present in individual contracts containing multiple goods and services. We tested a selection of contracts, including contracts with new customers and contracts that were amended with existing customers, by obtaining and reading the underlying contract and accounting analysis to evaluate the Company’s identification of performance obligations. Specifically, we evaluated the completeness and accuracy of the Company’s identification of terms and conditions that were unique to the selected contracts and the Company’s determination of the impact of those terms and conditions on revenue recognition.
/s/ KPMG LLP
We have served as the Company’s auditor since 1996.
Chicago, Illinois
February 26, 2026
F-3
OneSpan Inc.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
December 31,
ASSETS
Current assets
Operating lease right-of-use assets 7,356 7,725
Intangible assets, net of accumulated amortization 9,741 7,481
Equity investment 11,834 —
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term income taxes payable 3,079 4,403
Deferred compensation 42 200
Commitments and contingencies
Stockholders' equity
Accumulated other comprehensive loss (6,145) (13,918)
Total liabilities and stockholders' equity $ 397,702 $ 338,734
See accompanying notes to consolidated financial statements.
F-4
OneSpan Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Years Ended December 31,
Revenue
Cost of goods sold
Operating costs
Net income (loss) per share
Weighted average common shares outstanding
See accompanying notes to consolidated financial statements.
F-5
OneSpan Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
Years Ended December 31,
Other comprehensive income (loss)
Cumulative translation adjustment, net of tax 7,387 (3,321) 3,689
Unrealized gain on available-for-sale securities — — 4
See accompanying notes to consolidated financial statements.
F-6
OneSpan Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
Description Shares Amount Shares Amount
Foreign currency translation adjustment, net of tax — — — — — — 3,689 3,689
Vesting of restricted stock awards 741 — — — — — — —
Tax payments for stock issuances (262) — — — (2,939) — — (2,939)
Unrealized gain (loss) on available-for-sale securities — — — — — — 4 4
Pension adjustment, net of tax — — — — — — (222) (222)
Foreign currency translation adjustment, net of tax — — — — — — (3,321) (3,321)
Share-based compensation — — — — 8,955 — — 8,955
Vesting of restricted stock awards 902 — — — — — — —
Tax payments for stock issuances (363) — — — (5,041) — — (5,041)
Excise tax on share repurchases — — — (3) — — — (3)
Dividends declared ($0.12 per share) — — — — — (4,765) — (4,765)
Pension adjustment, net of tax — — — — — — 482 482
Foreign currency translation adjustment, net of tax — — — — — — 7,387 7,387
Vesting of restricted stock awards 644 — — — — — — —
Tax payments for stock issuances (335) — — — (5,079) — — (5,079)
Dividends declared ($0.12 per share) — — — — — (14,339) — (14,339)
Pension adjustment, net of tax — — — — — — 386 386
See accompanying notes to consolidated financial statements.
F-7
OneSpan Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Years Ended December 31,
Cash flows from operating activities:
Depreciation and amortization of intangible assets 10,070 8,364 6,479
Loss on disposal of asset 55 — —
Write-off of intangible assets — 804 —
Write-off of property and equipment, net 709 1,081 3,183
Impairment of inventories, net — — 143
Changes in operating assets and liabilities, net of impact of acquisition:
Cash flows from investing activities:
Maturities of short-term investments — — 2,330
Equity investment (11,834) — —
Additions to intangible assets (86) (60) (59)
Cash paid for acquisition of business (14,705) — (1,800)
Cash flows from financing activities:
Contingent payment related to acquisition — (200) —
Payments of deferred finance costs (1,739) — —
Dividends paid (18,460) — —
Repurchase of common stock, net of excise tax (13,142) (3) (29,155)
Tax payments for restricted stock issuances (5,079) (5,041) (2,939)
Effect of exchange rate changes on cash 1,718 (1,317) 997
Supplemental cash flow disclosures:
Cash paid for income taxes, net of refunds $ 9,641 $ 2,302 $ 4,989
Supplemental disclosure of noncash financing information:
Cash dividend declared, but not yet paid $ 671 $ 4,765 $ —
See accompanying notes to consolidated financial statements.
F-8
OneSpan Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unless otherwise noted, references in this Annual Report on Form 10-K to “OneSpan” and “Company” refer to OneSpan Inc. and its subsidiaries.
Note 1 – Description of the Company and Basis of Presentation
Description of the Company
OneSpan helps organizations build secure, seamless, and trusted digital experiences through two solution portfolios: Cybersecurity and Digital Agreements. Our cybersecurity solutions protect identities, secure mobile apps, and safeguard access through advanced high-assurance authentication, threat intelligence, fraud prevention, and mobile app protection, defending users, devices, and applications against sophisticated attacks. Our digital agreement solutions streamline agreement workflows with secure e-signatures, identity verification, and smart digital forms, built to enable speed, compliance and exceptional customer experiences. Trusted by leading global enterprises, including more than 60% of the world’s 100 largest banks, OneSpan processes over a hundred million digital agreements and billions of secure authentication transactions across more than 120 countries each year. OneSpan has operations in Austria, Australia, Belgium, Canada, China, France, Japan, The Netherlands, Singapore, Switzerland, the United Arab Emirates, the United Kingdom (U.K.), and the United States (U.S.).
Business Developments
The Company's two divisions, Cybersecurity and Digital Agreements, are also its reportable operating segments. Beginning in mid-2023 and through the third quarter of 2024, the Company's focus was on adjusting its cost structure to enable both business divisions to operate profitably. These cost optimization efforts were a major factor in the overall business returning to operating profitability starting in the fourth quarter of 2023. The subsequent increase in profitability, combined with high levels of cash generation, enabled the Company to return approximately $31.6 million to shareholders in 2025 in the form of quarterly dividends and share repurchases. Beginning in the fourth quarter of 2024 and continuing through 2025, the Company continued to operate profitably while taking a number of important steps to generate future revenue growth, including: the hiring of a Chief Technology Officer in December 2024; the acquisition of Nok Nok Labs, Inc. ("Nok Nok Labs") in June 2025; a strategic investment in ThreatFabric Holding B.V. ("ThreatFabric") in October 2025; and the hiring of a Chief Revenue Officer and the entry into a definitive agreement for the acquisition of Build38 GmbH ("Build 38") in December 2025.
The Company's efforts to broaden and strengthen its product offerings are driven in part by a secular shift away from physical authentication devices such as Digipass tokens. Because consumers increasingly interact with their banks through their mobile devices rather than desktop computers, they are more likely to prefer authentication methods that enable secure, convenient access to mobile banking apps without the need for a physical device. In response to this trend, the Company's bank and financial institution customers have increasingly adopted a “mobile first” approach to consumer authentication that prioritizes the mobile user experience over traditional desktop experiences. This approach has resulted in a reduction of Digipass hardware authenticator sales and an increase in sales of software authentication licenses delivered through software applications on mobile devices. The Company plans to continue to invest in Digipass authenticators, including its newer FIDO2 Digipass devices, as an important component of its broad authentication solution portfolio. The Company is focused on driving revenue growth in higher–margin software solutions, both through further expansion of its Cybersecurity software solutions and through continued growth in its Digital Agreements division.
Dividends
During the year ended December 31, 2025, the Company paid a quarterly cash dividend as part of a recurring quarterly dividend program. The quarterly cash dividend of $0.12 per share was paid to shareholders of record as of the close of business on January 31, 2025, May 16, 2025, August 15, 2025, and November 14, 2025. The declaration and payment of future dividends is subject to the sole discretion of the board of directors.
Basis of Presentation
The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
Principles of Consolidation
The consolidated financial statements include the accounts of OneSpan Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
The Company regularly assesses its estimates. Estimates are based on historical experience and on various other market-specific and relevant assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.
Foreign Currency Translation and Transactions
The financial position and results of operations of the majority of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. Accordingly, assets and liabilities are translated into U.S. dollars using current exchange rates as of the balance sheet date. Revenue and expenses are translated at average exchange rates prevailing during the year. Translation adjustments arising from differences in exchange rates are charged or credited to other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations in other expense, net. Foreign exchange transaction losses aggregated to $1.6 million, $0.9 million, and $1.1 million in 2025, 2024, and 2023, respectively.
Note 2 – Summary of Significant Accounting Policies
Cash and Cash Equivalents and Restricted Cash
Cash and cash equivalents are stated at cost plus accrued interest, which approximates fair value. Cash equivalents are high-quality short-term money market instruments and commercial paper with maturities at acquisition of three months or less. Cash and cash equivalents are held by a number of U.S. and non-U.S. commercial banks and money market investment funds.
The Company was a party to lease agreements that required letters of credit to secure the obligations, which totaled $0.2 million as of December 31, 2024. The restricted cash at December 31, 2024 related to letters of credit that were recorded as "Other assets" on the consolidated balance sheet as its requirement was for a period greater than 12 months. This balance is no longer on the consolidated balance sheet as of December 31, 2025 as the restricted cash was replaced by a bank guarantee in conjunction with the Credit Agreement.
Credit Losses
Reasonable assurance of collection is a requirement for revenue recognition. Credit limit adjustments for existing customers may result from the periodic review of outstanding accounts receivable. The Company records trade accounts receivable at invoice values, which are generally equal to fair value.
In accordance with accounting standards update ("ASU") No. 2016-13, the Company evaluates its allowance based on expected losses rather than incurred losses, which is known as the current expected credit loss (“CECL”) model. The allowance is determined using the loss rate approach and is measured on a collective (pool) basis when similar risk characteristics exist. Where financial instruments do not share risk characteristics, they are evaluated on an individual basis. The allowance is based on relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.
F-10
Fair Value of Financial Instruments
At December 31, 2025 and 2024, the Company's financial instruments were cash and cash equivalents, restricted cash, accounts receivable, equity investments, accounts payable, and accrued liabilities. The estimated fair value of financial instruments has been determined by using available market information and appropriate valuation methodologies, as defined in Accounting Standards Codification "ASC" 820, Fair Value Measurements. The fair values of the financial instruments were not materially different from their carrying amounts at December 31, 2025 and 2024. See Note 10, Fair Value Measurements, for additional detail.
Inventories, net
Inventories, consisting principally of hardware and component parts, are stated at the lower of cost or net realizable value. Cost is determined using the first-in-first-out (FIFO) method. The Company writes down inventory when it appears that the carrying cost of the inventory may not be recovered through subsequent sale of the inventory. The Company analyzes the quantity of inventory on hand, the quantity sold in the past year, the anticipated sales volume in the form of sales to new customers as well as sales to previous customers, the expected sales price and the cost of making the sale when evaluating the valuation of inventory.
Property and Equipment, net
Property and equipment, net, is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets ranging from three to ten years. Leasehold improvements are depreciated over the lesser of the remaining lease term or ten years. Additions and improvements are capitalized, while expenditures for maintenance and repairs are charged to operations as incurred. Gains or losses resulting from sales or retirements are recorded as incurred, at which time related costs and accumulated depreciation are removed from the accounts.
Leases
The Company determines if an arrangement is a lease at inception. All of the Company's leases are classified as operating leases. Operating lease right-of-use ("ROU") assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Operating lease ROU assets are comprised of the lease liability plus prepaid rents and are reduced by lease incentives. The Company recognizes lease expense for operating leases on a straight-line basis over the lease term.
Under Topic ASC 842, Leases, the Company made an accounting policy election to not recognize ROU assets and lease liabilities for leases with a term of twelve months or less. Certain lease agreements contain lease and non-lease components. For automobile leases, lease and non-lease components are accounted for together, and for office leases, the components are accounted for separately using a relative standalone selling basis. The Company applies the portfolio approach to automobile leases with similar characteristics that commence in the same period. The majority of the Company’s leases do not provide an implicit rate of return. As a result, the Company uses its imputed collateralized rate based on the information available at the commencement date in determining the present value of lease payments. Certain lease agreements include payments adjusted periodically for inflation based on the consumer price index. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Long-Lived and Intangible Assets, net
Finite-lived intangible assets include proprietary technology, customer relationships, and other intangible assets. Intangible assets, other than certain patents and trademarks with indefinite lives, are amortized over the useful life, which range from three to seven years for proprietary technology, five to twelve years for customer relationships, and ten to twenty years for patents and trademarks. Intangible assets arising from business combinations, such as acquired technology, customer relationships, and other intangible assets, are originally recorded at fair value.
F-11
Long-lived assets, including property, plant and equipment, operating lease right-of-use assets, finite-lived intangible assets being amortized and capitalized software costs for internal use, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset group may not be recoverable. An impairment loss shall be recognized if the carrying amount of a long-lived asset group exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the loss is measured as the amount by which the carrying amount of the long-lived asset group exceeds its fair value. Long-lived assets held for sale are reported at the lower of carrying value or fair value less cost to sell.
Goodwill
Goodwill represents the excess of purchase price over the fair value of net identifiable assets acquired in a business combination. The Company assesses the impairment of goodwill annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The annual impairment test date is October 1.
The Company’s impairment assessment begins with a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. The qualitative assessment includes comparing the overall financial performance of the reporting unit against the planned results. Additionally, the reporting unit’s fair value is assessed in light of certain events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity and reporting unit specific events. The selection and assessment of qualitative factors used to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value involves significant judgments. If it is determined under the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the estimated fair value of the reporting unit is compared with its carrying value. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value.
Equity Investment
On October 3, 2025, the Company purchased a 15% equity interest in ThreatFabric Holding B.V. ("ThreatFabric") for $11.7 million. The Company also incurred $0.1 million of transaction costs which were capitalized and included in the initial investment balances. ThreatFabric is a Dutch company that provides mobile threat intelligence, malware risk detection, and behavioral analytics.
The Company applies the cost method of accounting to its non-marketable equity investment in ThreatFabric under ASC 321, Investments - Equity Securities. Equity investments without readily determinable fair values are generally classified as non-marketable equity securities. These investments are carried at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Under the cost method of accounting, the Company performs a qualitative assessment at each reporting period to determine if an investment is impaired. If an impairment exists, the investment is written down to its fair value. All gains and losses, realized and unrealized, are recognized in Other expense, net on the consolidated statements of operations. There were no investment impairments for the year ended December 31, 2025.
Other Accrued Expenses
Other accrued expenses consist of the following:
December 31,
Current operating lease liabilities $ 2,262 $ 2,351
Acquisition hold back 2,700 —
F-12
Share Repurchase Program
On May 9, 2024, the board of directors terminated the stock repurchase program adopted on May 11, 2022 and adopted a new stock repurchase program under which the Company is authorized to repurchase up to $50.0 million of its issued and outstanding shares of common stock. Share purchases under the program will take place in open market transactions, privately negotiated transactions or tender offers, and may be made from time to time depending on market conditions, share price, trading volume, and other factors. The timing of the repurchases and the amount of stock repurchased in each transaction is subject to OneSpan’s sole discretion and will depend upon market and business conditions, applicable legal and credit requirements and other corporate considerations. The authorization is effective until May 9, 2026 unless the total amount has been used or the repurchase program is terminated by the board of directors. The Company repurchased 1,006,376 shares of its issued and outstanding common shares pursuant to this program in the year ended December 31, 2025. The average purchase price paid for these shares was $12.99, or an aggregate cost of approximately $13.1 million. As of December 31, 2025, approximately $36.9 million remained available for potential future repurchases under the repurchase program. The Company did not repurchase any shares under this plan during the year ended December 31, 2024.
In December 2023 and under the previous stock repurchase program, the Company repurchased 2,380,834 shares of its issued and outstanding common stock pursuant to a modified “Dutch auction” tender offer (the "Tender Offer"). The purchase price paid for these shares was $10.50, or an aggregate cost of approximately $25.0 million, excluding fees and expenses related to the Tender Offer. During the year ended December 31, 2023, the Company repurchased 2.7 million shares of the Company’s stock for $29.2 million in the aggregate, both in open market transactions and pursuant to the Tender Offer, at an average cost of $10.62 per share under its previous repurchase program.
Revenue Recognition
The Company records revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. It determines revenue recognition through the following steps:
•Identification of the contract, or contracts, with a customer;
•Identification of the performance obligations in the contract;
•Determination of the transaction price;
•Allocation of the transaction price to the performance obligations in the contract; and
•Recognition of revenue when, or as, we satisfy a performance obligation.
Revenues are recognized when control of the promised goods or services is transferred to the Company's customers in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services, which excludes any sales incentives and amounts collected on behalf of third parties. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight before control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in Cost of goods sold.
Nature of Goods and Services
The Company derives its revenues primarily from product and license revenue, which includes hardware products and on-premises subscription revenue, and services and other, which is inclusive of cloud subscription revenue, maintenance and support, and professional services.
Subscription: Subscription includes cloud and on-premises subscription revenue.
Cloud subscription revenues are generated from the Company's Cybersecurity and Digital Agreements service offerings. Standard customer arrangements do not provide the customer with the right to take possession of the software supporting the cloud-based application service at any time. As such, these arrangements are considered service contracts and revenue is recognized ratably over the service period of the contract. Customer payments are normally in advance for annual service.
F-13
Revenue from the sale of on-premises subscription revenue is recorded upon delivery which is the later of when the customer receives the ability to access the software or when they are legally allowed to use the software. No significant obligations or contingencies exist with regard to delivery, customer acceptance or rights of return at the time revenue is recognized. The Company offers term licenses for on-premises subscription revenue ranging from one to five years in length. For term licenses, payments are either on installment or in advance. In limited circumstances, the Company integrates third-party software solutions into its software products. The Company has determined that, consistent with its conclusion under prior revenue recognition rules, the Company acts as the principal with respect to the satisfaction of the related performance obligation and records the corresponding revenue on a gross basis from these transactions. The fees owed to the third parties are recognized as a component of cost of goods sold when the revenue is recognized. For transactions in which the Company does not act as the principal, the Company recognizes revenue on a net basis which is immaterial for the years ended December 31, 2025, 2024, and 2023.
Maintenance and support: Maintenance and support agreements generally call for the Company to provide software updates and technical support to customers. The annual fee for maintenance and support is recognized ratably over the term of the maintenance and support agreement as this is the period the services are delivered. Customer payments are normally in advance for annual service.
Professional services and other revenue: Professional services revenues are primarily comprised of implementing, automating and extending business processes, technology infrastructure, and software applications. Professional services revenues are recognized over time as services are rendered, usually over a period of time that is generally less than 12 months, most of which, are derived from projects performed on a fixed fee. For fixed fee contracts, revenues are generally recognized using an input method based on the ratio of hours expended to total estimated hours to complete the services. Customer payments normally correspond with delivery. Professional services and other includes perpetual software licenses revenue, which was immaterial for the years ended December 31, 2025 and 2024 and approximately 1% of total revenue for the year ended December 31, 2023. Perpetual licenses grant the customer unlimited access to the software.
Hardware products: Revenue from the sale of security hardware is recorded upon shipment, which is the point at which control of the goods are transferred and the performance obligations are completed, unless there are specific terms that would suggest control is transferred at a later date (e.g. delivery). No significant obligations or contingencies typically exist with regard to delivery, customer acceptance or rights of return at the time revenue is recognized. Customer invoices and subsequent payments normally correspond with delivery.
Multiple-Element Arrangements
In the Company's typical multiple-element arrangement, the primary deliverables include:
1.A client component (i.e. an item that is used by the person being authenticated in the form of either a new standalone hardware device or software that is downloaded onto a device that the customer already owns);
2.Server system software that is installed on the customer’s systems (i.e. software on the server system that verifies the identity of the person being authenticated) or licenses for additional users on the server system software if the server system software had been installed previously; and
3.Post contract support in the form of maintenance on the server system software or support.
The Company's multiple-element arrangements may also include other items that are usually delivered prior to the recognition of any revenue and are incidental to the overall transaction such as initialization of the hardware device, customization of the hardware device itself or the packaging in which it is delivered, deployment services where the Company delivers the device to its customer’s end-use customer or employee and, in some limited cases, professional services to assist with the initial implementation of a new customer.
F-14
For contracts that contain multiple performance obligations, the transaction price is allocated to the separate performance obligations based on their estimated relative standalone selling price. Judgment is required to determine the stand-alone selling price (“SSP”) of each distinct performance obligation. We determine SSP for maintenance and support based on observable inputs; specifically, the range of prices charged to customers to renew annual maintenance and support contracts. In instances where SSP is not directly observable, and when we sell at a highly variable price range, such as for transactions involving cloud and on-premise subscription-based licenses or hardware, we determine the SSP for those performance obligations using the residual approach.
Significant Judgments
The Company enters into contracts to deliver a combination of hardware devices, software licenses, subscriptions, maintenance and support and, in some situations, professional services. The Company evaluates the nature of the goods or services promised in these arrangements to identify the distinct performance obligations. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment depending on the terms and conditions of the respective customer arrangement. When a hardware client device and licenses to server software are sold in a contract, they are treated as a single performance obligation because the software license is deemed to be a component of the hardware that is integral to the functionality of the hardware that is used by customers for identity authentication. When a software client device is sold in a contract server software, the licenses are considered a single performance obligation to deliver the authentication solution to the customer. In either of these types of arrangements, maintenance and support and professional services are typically distinct separate performance obligations from the hardware or software solutions. Contracts to deliver subscription services typically do not include multiple performance obligations; however, in certain limited cases customers may purchase professional services that are distinct performance obligations.
Cost of Goods Sold
Cost of goods sold related to product and license include direct product costs and direct costs, including personnel costs, production costs, and freight costs. Cost of goods sold related to service and other revenues are primarily costs related to cloud subscription solutions, including personnel, equipment costs, and capitalized software costs and internal professional services and maintenance support.
Sales and Marketing
Sales and marketing expenses consist primarily of personnel costs, commissions and bonuses, trade shows, marketing programs and other marketing activities, travel, outside consulting costs, and long-term incentive compensation. The Company's solutions are sold worldwide through a direct sales force as well as through distributors, resellers, systems integrators, and original equipment manufacturers.
Research and Development Costs
Research and development expenses primarily include payroll and payroll-related costs for employees who are directly associated with the internal-use software projects, external direct costs of materials and services costs while developing the software. Capitalized software costs are included in “Property and equipment, net” on the consolidated balance sheets and are depreciated using the straight-line method over the estimated life of three years. Capitalization of such costs ceases when the project is substantially complete and ready for its intended purpose. Costs incurred during the preliminary project and post-implementation stages, as well as software maintenance and training costs, are expensed in the period in which they are incurred. Other costs for research and development, principally the design and development of hardware, and the design and development of software prior to the determination of technological feasibility, are also expensed as incurred on a project-by-project basis.
The Company capitalized $8.0 million and $8.3 million of internal-use software during the years ended December 31, 2025 and 2024, respectively.
F-15
Share-Based Compensation
The Company has share-based employee compensation plans, described in Note 15, Share Compensation Plans. ASC 718, Stock Compensation, requires the Company to estimate the fair value of restricted stock granted to employees, directors and others to record compensation expense equal to the estimated fair value. Compensation expense is recorded on a straight-line basis over the vesting period for time-based awards, and performance and market-based awards with cliff vesting provisions and on a graded basis for performance and market-based awards with graded vesting provisions. Forfeitures are recorded as incurred.
Retirement Benefits
The Company records annual expenses relating to defined benefit pension plans based on calculations which include various actuarial assumptions, including discount rates, assumed asset rates of return, compensation increases, and turnover rates. The Company reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends. The effects of gains, losses, and prior service costs and credits are amortized over the average service life. The funded status, or projected benefit obligation less plan assets, for each plan, is reflected in the consolidated financial statements using a December 31 measurement date.
Other Expense, net
Other expense, net, consists primarily of exchange gains (losses) on transactions that are denominated in currencies other than the Company’s subsidiaries’ functional currencies, subsidies received from foreign governments in support of the Company's research and development in those countries and other miscellaneous non-operational income and expenses.
Income Taxes
The Company calculates and provides for income taxes in each tax jurisdiction in which it operates. The provision for income taxes includes the amounts payable or refundable for the current year, the effect of deferred taxes and impacts from uncertain tax positions. The Company’s provision for income taxes is significantly affected by shifts in the geographic mix of its pre-tax earnings across tax jurisdictions, changes in valuation allowance, changes in tax laws and regulations, and tax planning opportunities available in each tax jurisdiction.
Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement and tax bases of the Company's assets and liabilities and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates that will apply to taxable income in the years in which those differences are expected to be recovered or settled. Valuation allowances are established for deferred tax assets when it is more likely than not that a tax benefit will not be realized. The Company recognizes the effect of a change in tax rates on deferred tax assets and liabilities and in income in the period that includes the enactment date.
The Company recognizes tax benefits for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in the Company's income tax returns that do not meet these recognition and measurement standards. Assumptions, judgments, and the use of estimates are required in determining whether the “more-likely-than-not” standard has been met when developing the provision for income taxes.
The Company recognizes the tax impact of including certain foreign earnings in U.S. taxable income as a period cost. The Company has recognized deferred income taxes for local country income and withholding taxes that could be incurred on distributions of non-U.S. earnings because management does not plan to indefinitely reinvest such earnings.
The Company monitors for changes in tax laws and reflect the impacts of tax law changes in the period of enactment.
F-16
Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that are adopted by the Company as of the specified effective date.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures. Public business entities are required to adopt for annual fiscal periods beginning after December 15, 2024 and early adoption is permitted. The Company adopted the standard effective December 31, 2025 (see Note 14, Income Taxes).
In November 2024, the FASB issued ASU 2024-03, Comprehensive Income (Topic 220) – Disaggregation of Income Statement Expenses, to improve financial reporting by requiring disclosures in the notes to financial statements about specific types of expenses included in the expense captions presented on the face of the statement of operations. The requirements of the ASU are effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027, with early adoption permitted. The requirements are able to be applied prospectively with the option for retrospective application. The Company is evaluating the impact the adoption of this guidance will have on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangible – Goodwill and Other – Internal-Use Software (Subtopic 350-40)– Targeted Improvements to the Accounting for Internal Use Software, to improve the guidance for the costs to develop software for internal use. Within the updated guidance, the FASB removed reference to prescriptive sequential software development stages. Instead, management will begin capitalizing eligible cost when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. This update is effective for annual reporting periods beginning after December 15, 2027. This update can be applied on a prospective basis, on a modified basis for in-process projects, or on a retrospective basis. The Company is evaluating the impact the adoption of this guidance will have on its consolidated financial statements and related disclosures.
Note 3 – Segment Information
Segments are defined as components of a company that engage in business activities from which they may earn revenues and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company's reportable segments are divisions that offer different products and services and are as follows:
•Cybersecurity. Cybersecurity, formerlySecurity 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 Cybersecurity segment are delivered through on-premises and cloud-based deployment models and include standards-based authentication technologies such as Fast Identity Online ("FIDO") authentication and passkeys, multi-factor authentication, transaction signing solutions and mobile application security.
•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 cloud-based, include OneSpan Sign e-signature, OneSpan Notary, and OneSpan Identity Verification.
The CODM evaluates performance for both reportable segments based on segment revenue, gross margins and operating income (loss). When using these metrics, the CODM considers forecast-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses these metrics for evaluating pricing strategy to assess the performance of each segment by comparing the results of each segment with one another and in determining the compensation of certain employees.
F-17
Segment operating income (loss) consists of the revenues generated by a segment, less the direct costs of revenue, sales and marketing expenses, research and development expenses, general and administrative expenses, restructuring and other related charges, and amortization of intangible assets expense that are incurred directly by a segment. Sales and marketing and research and development expenses were determined to be significant segment expenses. Unallocated corporate costs include costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. The accounting policies of both reportable segments are the same as those described in Note 2, Summary of Significant Accounting Policies.
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. In 2023, the Company refined its operating segment allocation methodology to better align internal and external costs more directly to where the employee efforts were being spent on each segment. The revised methodology was applied on a prospective basis beginning in 2023. As a result of this change, there was an increase in cost of goods sold and operating expenses allocated to the Digital Agreements segment.
The tables below set forth information about the Company’s operating segments for the years ended December 31, 2025, 2024, and 2023, along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements.
(In thousands) Cybersecurity Digital Agreements Corporate and Other Total
Interest income, net 1,985
Other expense, net (1,069)
Income before income taxes $ 49,362
(In thousands) Cybersecurity Digital Agreements Corporate and Other Total
Interest income, net 1,807
Other expense, net (125)
Income before income taxes $ 46,487
F-18
(In thousands) Cybersecurity Digital Agreements Corporate and Other Total
Interest income, net 2,090
Other expense, net (532)
Income (loss) before income taxes $ (27,313)
* Percentage not meaningful
(1) Digital Agreements gross profit includes an intangible asset write-off of $0.8 million and an internal capitalized software write-off of $0.7 million for the year ended December 31, 2024 (see Note 8, Intangible Assets, net and Note 9, Property and Equipment, net).
(2) Cybersecurity other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the years ended December 31, 2025, 2024, and 2023.
(3) Cybersecurity operating income includes $1.3 million, $0.9 million, and $0 of total amortization and depreciation expense for the years ended December 31, 2025, 2024, and 2023, respectively.
Cybersecurity operating income includes $0.3 million, $2.0 million, and $5.5 million of restructuring and other related charges for the years ended December 31, 2025, 2024, and 2023, respectively.
(4) Digital Agreements other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the years ended December 31, 2025, 2024, and 2023.
(5) Digital Agreements operating income includes $7.5 million, $6.2 million, and $3.7 million of total amortization and depreciation for the years ended December 31, 2025, 2024, and 2023, respectively.
Digital Agreements operating income includes $1.0 million, $1.7 million, and $3.7 million of restructuring and other related charges for the years ended December 31, 2025, 2024, and 2023, respectively.
The following tables illustrate the disaggregation of revenues by category and services, including a reconciliation of the disaggregated revenues to revenues from the Company's two operating segments for the years ended December 31, 2025, 2024, and 2023.
Years Ended December 31,
F-19
Asset information by segment is not reported to or reviewed by the CODM to allocate resources, and therefore, the Company has not disclosed asset information for the segments.
Note 4 – Revenue
Disaggregation of Revenues
The following tables present the Company's revenues disaggregated by major products and services, geographical region and timing of revenue recognition.
Revenue by major products and services
Years Ended December 31,
Revenue by location of customer for the years ended December 31, 2025, 2024, and 2023
Years Ended December 31,
% of Total Revenue
Timing of revenue recognition
Years Ended December 31,
F-20