XML 23 R10.htm IDEA: XBRL DOCUMENT v3.24.1.u1
Segment Information
 3 Months Ended
Mar. 31, 2024
Segment Reporting [Abstract]  
Segment 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, Identity Verification, 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 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.
The tables below set forth information about the Company’s reportable operating segments for the three months ended March 31, 2024 and 2023, along with the items necessary to reconcile the segment information to the totals reported in the accompanying condensed consolidated financial statements.
Three Months Ended
March 31,
(In thousands, except percentages)20242023
Digital Agreements
Revenue$14,414 $11,552 
Gross profit$9,892 $8,448 
Gross margin69 %73 %
Operating loss (1)$(265)$(6,033)
Security Solutions
Revenue$50,429 $46,055 
Gross profit$37,503 $30,838 
Gross margin74 %67 %
Operating income $25,878 $15,631 
Total Company:
Revenue$64,843 $57,607 
Gross profit$47,395 $39,286 
Gross margin73 %68 %
Statements of Operations reconciliation:
Segment operating income$25,613 $9,598 
Corporate operating expenses not allocated at the segment level11,503 17,728 
Operating income (loss)$14,110 $(8,130)
Interest income, net101 503 
Other income (expense), net291 (40)
Income (loss) before income taxes$14,502 $(7,667)
(1) Digital Agreements operating loss includes $0.6 million of amortization of intangible assets expense for both the three months ended March 31, 2024 and 2023.
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 reportable operating segments for the three months ended March 31, 2024 and 2023:
Three Months Ended March 31,
20242023
(In thousands)Digital AgreementsSecurity SolutionsDigital AgreementsSecurity Solutions
Subscription$13,812 $26,182 $10,348 $19,608 
Maintenance and support505 10,066 996 10,165 
Professional services and other (1)97 1,605 208 1,416 
Hardware products— 12,576 — 14,866 
Total Revenue$14,414 $50,429 $11,552 $46,055 
(1) Professional services and other includes perpetual software licenses revenue, which was approximately 1% of total revenue for both the three months ended March 31, 2024 and 2023.
The Company allocates goodwill by reporting unit, in accordance with Accounting Standards Codification (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.