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Geographic, Customer and Supplier Information | 12 Months Ended
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Dec. 31, 2023
Segment Reporting [Abstract] |
Geographic, Customer and Supplier Information | 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. •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 largely cloud-based, include OneSpan Sign e-signature, OneSpan Notary and OneSpan Trust Vault. This segment also includes costs attributable to our transaction cloud platform. •Security Solutions. Security 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 Security Solutions segment are largely on-premises software products and include identity verification, multi-factor authentication and transaction signing solutions, such as mobile application security and mobile software tokens. 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. Unallocated corporate costs include costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. 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. As a result of the ongoing strategic transformation, the Company refined its operating segment allocation methodology to better align internal and external costs more directly to where the employee efforts are being spent on each segment moving forward. 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 being allocated to the Digital Agreements segment, which better aligns with the investments the Company is making to grow that segment as compared to its Security Solutions segment. The tables below set forth information about the Company’s operating segments for the years ended December 31, 2023, 2022, and 2021, along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements.
| Years Ended December 31,
(In thousands, except percentages) | 2023 |  | 2022 |  |  | 2021
Digital Agreements |  |  |  |  |  |
Revenue | $ | 50,925 |  |  | $ | 48,401 |  |  |  | $ | 40,551 |
Gross profit | $ | 37,742 |  |  | $ | 37,488 |  |  |  | $ | 29,557 |
Gross margin | 74 | % |  | 77 | % |  |  | 73 | %
Operating (loss) income (1) | $ | (18,525) |  |  | $ | 5,348 |  |  |  | $ | (1,612) |
Security Solutions |  |  |  |  |  |
Revenue | $ | 184,181 |  |  | $ | 170,605 |  |  |  | $ | 173,930 |
Gross profit | $ | 119,974 |  |  | $ | 111,082 |  |  |  | $ | 113,378 |
Gross margin | 65 | % |  | 65 | % |  |  | 65 | %
Operating income (2) | $ | 60,190 |  |  | $ | 32,051 |  |  |  | $ | 35,395 |
Total Company: |  |  |  |  |  |
Revenue | $ | 235,106 |  |  | $ | 219,006 |  |  |  | $ | 214,481 |
Gross profit | $ | 157,715 |  |  | $ | 148,570 |  |  |  | $ | 142,935 |
Gross margin | 67 | % |  | 68 | % |  |  | 67 | %
Statements of operations reconciliation: |  |  |  |  |  |
Segment operating income | $ | 41,665 |  |  | $ | 37,399 |  |  |  | $ | 33,783 |
Corporate operating expenses not allocated at the segment level | 70,536 |  |  | 64,514 |  |  |  | 59,911 |
Operating loss | $ | (28,871) |  |  | $ | (27,115) |  |  |  | $ | (26,128) |
Interest income, net | 2,090 |  |  | 595 |  |  |  | (1) |
Other income (expense), net | (532) |  |  | 14,827 |  |  |  | (14) |
Loss before income taxes | $ | (27,313) |  |  | $ | (11,693) |  |  |  | $ | (26,143) |
(1) Digital Agreements operating income includ es $2.3 million, $2.3 million, and $2.5 million of amortization of intangible assets expense for the years ended December 31, 2023, 2022, and 2021, respectively. (2) Security Solutions operating income includes $0, $1.8 million, and $3.3 million of amortization of intangible assets expense for the years ended December 31, 2023, 2022, and 2021, 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, 2023, 2022, and 2021.
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
(In thousands) | Digital Agreements |  | Security Solutions |  | Digital Agreements |  | Security Solutions |  | Digital Agreements |  | Security Solutions
Subscription (1) | $ | 45,886 |  |  | $ | 60,550 |  |  | $ | 42,029 |  |  | $ | 47,124 |  |  | $ | 33,283 |  |  | $ | 35,224 |
Maintenance and support | 4,143 |  |  | 42,240 |  |  | 5,451 |  |  | 42,894 |  |  | 5,709 |  |  | 45,567 |
Professional services and other (2) | 896 |  |  | 5,425 |  |  | 921 |  |  | 7,087 |  |  | 1,494 |  |  | 13,703 |
Hardware products | — |  |  | 75,966 |  |  | — |  |  | 73,500 |  |  | 65 |  |  | 79,436 |
Total Revenue | $ | 50,925 |  |  | $ | 184,181 |  |  | $ | 48,401 |  |  | $ | 170,605 |  |  | $ | 40,551 |  |  | $ | 173,930 |
(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 1%, 2%, and 5% of total revenue for the years ended December 31, 2023, 2022, and 2021, 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
2023 |  |  |  |  |  |  |  |
Revenue |  | $ | 111,568 |  |  | $ | 80,057 |  |  | $ | 43,481 |  |  | $ | 235,106 |
Gross profit |  | $ | 74,843 |  |  | $ | 53,704 |  |  | $ | 29,168 |  |  | $ | 157,715 |
Long-lived assets |  | $ | 5,783 |  |  | $ | 18,795 |  |  | $ | 315 |  |  | $ | 24,893 |
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 |
For the years 2023, 2022, and 2021, the top 10 customers contributed 22%, 23% and 22%, respectively, of total worldwide revenue. All 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 -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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