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Segment Information | 12 Months Ended
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Dec. 31, 2022
Segment Reporting [Abstract] |
Segment Information | Segment Information In May 2022, the Company announced a three-year strategic transformation plan begins on January 1, 2023. The Company expects this transformation plan that will enable it to build on its strong solution portfolio and market position, enhance its enterprise go-to-market strategy, accelerate revenue growth, and drive efficiencies to support margin expansion and increased profitability. In conjunction with the strategic transformation plan and to enable a more efficient capital deployment model, effective with the quarter ended June 30, 2022, the Company began reporting under the following two lines of business, which are its reportable operating segments: Digital Agreements and Security Solutions. The Company expects to manage Digital Agreements for accelerated growth and market share gains and Security Solutions for cash flow given its more modest growth profile. 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. •Digital Agreements. Digital Agreements consists of solutions that enable the Company’s 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 largely cloud-based, include the Company’s OneSpan Sign e-signature solution and its recently introduced OneSpan Notary and Virtual Room solutions. As the transformation plan progresses, the Company expects to include other cloud-based security modules associated with the secure transaction lifecycle of identity verification, authentication, virtual interactions and transactions, and secure digital storage in the Digital Agreements segment. This segment also includes costs attributable to our next-generation transaction-cloud platform. •Security Solutions. Security Solutions consists of a broad portfolio of software products and/or software development kits (SDKs) that are used to build applications designed to defend against attacks on digital transactions across online environments, devices and applications. These solutions, which are largely on-premises software products, include identity verification, multi-factor authentication and transaction signing, such as mobile application security, mobile software tokens, and Digipass authenticators that are not cloud-connected devices. Segment operating income consists of the revenues generated by a segment, less the direct costs of revenue, sales and marketing, research and development expenses, amortization expense, and restructuring and other related charges that are incurred directly by a segment. The Company recorded $2.3 million and $1.8 million of amortization expense in Digital Agreements operating income and Security Solutions operating income, respectively, during the year ended December 31, 2022. During the year ended December 31, 2021, the Company recorded $2.5 million and $3.3 million of amortization expense in Digital Agreements operating income and Security Solutions operating income, respectively. The Company recorded $5.9 million and $3.1 million of amortization expense in Digital Agreements operating income and Security Solutions operating income, respectively, during the year ended December 31, 2020.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 tables below set forth information about the Company’s operating segments for the years ended December 31, 2022, 2021, and 2020, along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements.
| Years Ended December 31,
2022 |  | 2021 |  |  | 2020
(In thousands, except percentages) |  |  |  |  |  |
Digital Agreements |  |  |  |  |  |
Revenue | $ | 48,401 |  |  | $ | 40,551 |  |  |  | $ | 29,633 |
Gross profit | $ | 37,488 |  |  | $ | 29,557 |  |  |  | $ | 20,361 |
Gross margin | 77 | % |  | 73 | % |  |  | 69 | %
Operating income | $ | 5,348 |  |  | $ | (1,612) |  |  |  | $ | (7,559) |
Security |  |  |  |  |  |
Revenue | $ | 170,605 |  |  | $ | 173,930 |  |  |  | $ | 186,058 |
Gross profit | $ | 111,082 |  |  | $ | 113,378 |  |  |  | $ | 127,698 |
Gross margin | 65 | % |  | 65 | % |  |  | 69 | %
Operating income | $ | 32,051 |  |  | $ | 35,395 |  |  |  | $ | 55,295 |
Total Company: |  |  |  |  |  |
Revenue | $ | 219,006 |  |  | $ | 214,481 |  |  |  | $ | 215,691 |
Gross profit | $ | 148,570 |  |  | $ | 142,935 |  |  |  | $ | 148,059 |
Gross margin | 68 | % |  | 67 | % |  |  | 69 | %
Statements of operations reconciliation: |  |  |  |  |  |
Segment operating income | $ | 37,399 |  |  | $ | 33,783 |  |  |  | $ | 47,736 |
Corporate operating expenses not allocated at the segment level | 64,514 |  |  | 59,911 |  |  |  | 52,994 |
Operating loss | $ | (27,115) |  |  | $ | (26,128) |  |  |  | $ | (5,258) |
Interest income, net | 595 |  |  | (1) |  |  |  | 404 |
Other income (expense), net | 14,827 |  |  | (14) |  |  |  | 1,434 |
Loss before income taxes | $ | (11,693) |  |  | $ | (26,143) |  |  |  | $ | (3,420) |
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, 2022, 2021, and 2020.
| Years Ended December 31,
| 2022 |  | 2021 |  | 2020
| Digital Agreements |  | Security Solutions |  | Digital Agreements |  | Security Solutions |  | Digital Agreements |  | Security Solutions
(In thousands) |  |  |  |  |  |  |  |  |  |  |
Subscription (1) | $ | 42,029 |  |  | $ | 47,124 |  |  | $ | 33,283 |  |  | $ | 35,224 |  |  | $ | 22,632 |  |  | $ | 29,757 |
Maintenance and support | 5,451 |  |  | 42,894 |  |  | 5,709 |  |  | 45,567 |  |  | 5,035 |  |  | 44,193 |
Professional services and other (2) | 921 |  |  | 7,087 |  |  | 1,494 |  |  | 13,703 |  |  | 1,966 |  |  | 30,259 |
Hardware products | — |  |  | 73,500 |  |  | 65 |  |  | 79,436 |  |  | — |  |  | 81,849 |
Total Revenue | $ | 48,401 |  |  | $ | 170,605 |  |  | $ | 40,551 |  |  | $ | 173,930 |  |  | $ | 29,633 |  |  | $ | 186,058 |
1. Subscription includes cloud and on-premises subscription revenue, previously referred to as “subscription” and “term-based software licenses”, respectively. 2. Professional services and other includes perpetual software licenses revenue, which was approximately 2%, 5%, and 12% of total revenue for the years ended December 31, 2022, 2021, and 2020, respectively. The Company allocates goodwill by reporting unit, in accordance with ASC 350 – Goodwill and Other. 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. Geographic, Customer and Supplier Information The Company classifies sales by customers’ locations in three geographic regions: 1) EMEA, which includes Europe, the Middle East, and Africa; 2) the Americas, which includes sales in North, Central, and South America and Canada; and 3) Asia Pacific, which also includes Australia and New Zealand.
(In thousands) |  | Europe, Middle East, Africa (EMEA) |  | Americas |  | Asia Pacific |  | Total
2022 |  |  |  |  |  |  |  |
Revenue |  | $ | 100,298 |  |  | $ | 77,740 |  |  | $ | 40,968 |  |  | $ | 219,006 |
Gross profit |  | 68,040 |  |  | 52,738 |  |  | 27,792 |  |  | 148,570 |
Long-lived assets |  | 4,856 |  |  | 15,270 |  |  | 577 |  |  | 20,703 |
2021 |  |  |  |  |  |  |  |
Revenue |  | $ | 104,878 |  |  | $ | 68,646 |  |  | $ | 40,957 |  |  | $ | 214,481 |
Gross profit |  | 69,893 |  |  | 45,747 |  |  | 27,295 |  |  | 142,935 |
Long-lived assets |  | 5,978 |  |  | 13,634 |  |  | 342 |  |  | 19,954 |
2020 |  |  |  |  |  |  |  |
Revenue |  | $ | 117,086 |  |  | $ | 53,171 |  |  | $ | 45,434 |  |  | $ | 215,691 |
Gross profit |  | 78,456 |  |  | 37,532 |  |  | 32,071 |  |  | 148,059 |
Long-lived assets |  | 7,482 |  |  | 14,968 |  |  | 741 |  |  | 23,191 |
For the years 2022, 2021, and 2020, the top 10 customers contributed 23%, 22% and 21%, respectively, of total worldwide revenue. The majority of the Company's hardware products are assembled by four independent factories in China and one independent factory in Romania.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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