What Onespan (OSPN) Said on Its Q3 Earnings Call

Key Points

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• OneSpan delivered strong Q3 growth: Revenue rose 12% to $63.9 million, driven by double-digit gains in Cybersecurity and Digital Agreements, while subscription revenue increased 16% and gross margin expanded to 76.3%.

• Profitability and recurring metrics improved: ARR grew 8.5% to $195.5 million, net retention reached 105%, adjusted EBITDA increased to $19.3 million, and operating cash flow totaled $16.5 million.

• The company raised its 2026 outlook: OneSpan now expects revenue of $254 million to $258 million, ARR of $197 million to $201 million, and adjusted EBITDA of $72 million to $76 million. Hardware revenue guidance was unchanged as some token deliveries shifted into Q3 from Q4.

Onespan (NASDAQ:OSPN) reported third-quarter 2026 revenue growth of 12%, supported by double-digit gains in both its Cybersecurity and Digital Agreements businesses, while raising its full-year revenue, annual recurring revenue and adjusted EBITDA outlook.

Revenue for the quarter totaled $63.9 million, compared with the prior-year period. Subscription revenue increased 16% to $51.5 million and represented 81% of total revenue, up from 78% a year earlier. Hardware revenue rose 7%, while perpetual maintenance revenue declined as customers continued to transition to term licenses.

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Chief Executive Officer Victor Limongelli said the company delivered “an excellent third quarter,” citing 14% growth in Digital Agreements revenue and 11% growth in Cybersecurity revenue. He also highlighted a companywide gross retention rate of 91% and gross margin expansion to 76.3% from 73.6% a year earlier.

ARR, Profitability and Cash Flow

Annual recurring revenue, or ARR, rose 8.5% year over year to $195.5 million. Chief Financial Officer Jorge Martell said ARR growth was driven by expansions within existing customer contracts, new customer additions and the Build38 acquisition, which contributed about 1.5 percentage points to ARR growth. Net retention rate was 105%, compared with 103% in the previous quarter.

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GAAP operating income increased to $9.2 million from $8.2 million in the third quarter of 2025. GAAP earnings per share rose to $0.20 from $0.17, while non-GAAP earnings per share increased to $0.35 from $0.33. Adjusted EBITDA totaled $19.3 million, compared with $17.5 million a year earlier, although adjusted EBITDA margin narrowed slightly to 30.1% from 30.7%.

The company generated $16.5 million in operating cash flow during the quarter and ended the period with $51.4 million in cash and cash equivalents. OneSpan had $5 million outstanding under its credit facility at quarter-end, which it repaid after the quarter closed.

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