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OneSpan Q3 revenue beats estimates on subscription growth; raises FY2026 outlook

By Reuters News


Overview

  • US cybersecurity and digital agreements firm's Q3 revenue rose 12% yr/yr, beating analyst expectations

  • Q3 adjusted net income of $13.6 mln and adjusted EBITDA of $19.3 mln beat analyst expectations

  • Company saw 16% yr/yr growth in subscription revenue


Outlook

  • OneSpan raises FY2026 revenue outlook to $254 mln-$258 mln from $248 mln-$252 mln

  • Company increases FY2026 software and services revenue forecast to $208 mln-$210 mln

  • Company lifts FY2026 adjusted EBITDA guidance to $72 mln-$76 mln from $67 mln-$71 mln


Result Drivers

  • SUBSCRIPTION GROWTH - Subscription revenue rose 16% yr/yr to $51.5 mln, supporting overall revenue growth

  • SEGMENT EXECUTION - Cybersecurity revenue rose 11% and Digital Agreements revenue increased 14% as Co cited improved execution in both businesses

  • MARGIN EXPANSION - Gross margin increased to 76% from 74%, supporting higher operating income


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Beat

$63.90 mln

$57.43 mln (5 Analysts)

Q3 Adjusted Net Income

Beat

$13.60 mln

$10.02 mln (5 Analysts)

Q3 Adjusted EBITDA

Beat

$19.30 mln

$13.58 mln (5 Analysts)

Q3 Annual Recurring Revenue

$195.50 mln

Q3 Gross Profit

$48.70 mln

Q3 Operating Income

$9.20 mln

Q3 Subscription Revenue

$51.50 mln


Analyst Coverage

  • The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the software peer group is "buy."

  • Wall Street's median 12-month price target for OneSpan Inc. is $17.00, about 15.3% below its October 28 closing price of $20.08

  • The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 11 three months ago


Reuters Recommended Reads

  • Oct 28 - Cybersecurity firm Fortinet's Q3 revenue rises 20%, adj EPS beats estimates

  • Oct 28 - Tenable Q3 revenue beats estimates; raises FY outlook

  • Oct 28 - Gen Digital raises annual revenue forecast on strong cybersecurity demand


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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