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Segment Information
 6 Months Ended
Jun. 30, 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, and Identity Verification. 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 directly attributable to a particular segment.
The tables below set forth information about the Company’s reportable operating segments for the three and six months ended June 30, 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
June 30,		Six Months Ended
June 30,
(In thousands, except percentages)2024202320242023
Digital Agreements
Revenue$15,463 $11,862 $29,876 $23,414 
Gross profit (1)$9,741 $8,583 $19,632 $17,031 
Gross margin63 %72 %66 %73 %
Operating loss (2)$(155)$(7,121)$(420)$(13,154)
Security Solutions
Revenue$45,461 $43,871 $95,891 $89,926 
Gross profit (3)$30,600 $25,711 $68,104 $56,549 
Gross margin67 %59 %71 %63 %
Operating income (4)$20,693 $8,523 $46,571 $24,154 
Total Company:
Revenue$60,924 $55,733 $125,767 $113,340 
Gross profit$40,341 $34,294 $87,736 $73,580 
Gross margin66 %62 %70 %65 %
Statements of Operations reconciliation:
Segment operating income$20,538 $1,402 $46,151 $11,000 
Corporate operating expenses not allocated at the segment level12,901 19,166 24,404 36,894 
Operating income (loss)$7,637 $(17,764)$21,747 $(25,894)
Interest income, net521 585 622 1,088 
Other income (expense), net331 29 622 (11)
Income (loss) before income taxes$8,489 $(17,150)$22,991 $(24,817)
(1) Digital Agreements gross profit includes intangible asset write-off of $0.8 million and internal capitalized software write-off of $0.7 million (see Note 7, Intangible Assets and Note 8, Property and Equipment, net ) for the three and six months ended June 30, 2024.
(2) Digital Agreements operating loss includes $0.6 million and $1.1 million of amortization of intangible assets expense for the three and six months ended June 30, 2024, respectively, and $0.6 million and $1.1 million of amortization of intangible assets expense for the three and six months ended June 30, 2023, respectively.
(3) Security Solutions gross profit includes $1.6 million of inventory impairments related to discontinuation of investments in our Digipass CX product for the three and six months ended June 30, 2023 (see Note 5, Inventories, net).
(4) Security Solutions operating income includes $1.6 million of inventory impairments and $1.4 million of capitalized software write-offs related to discontinuation of investments in our Digipass CX product for the three and six months ended June 30, 2023 (see Note 5, Inventories, net and Note 8, Property and Equipment, net).
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 and six months ended June 30, 2024 and 2023:
Three Months Ended June 30,
20242023
(In thousands)Digital AgreementsSecurity SolutionsDigital AgreementsSecurity Solutions
Subscription$14,785 $14,857 $10,486 $12,499 
Maintenance and support490 9,742 1,130 10,473 
Professional services and other (1)188 1,123 246 1,253 
Hardware products— 19,739 — 19,646 
Total Revenue$15,463 $45,461 $11,862 $43,871 
Six Months Ended June 30,
20242023
(In thousands)Digital AgreementsSecurity SolutionsDigital AgreementsSecurity Solutions
Subscription$28,597 $41,039 $20,834 $32,107 
Maintenance and support994 19,808 2,126 20,638 
Professional services and other (1)285 2,728 454 2,669 
Hardware products— 32,316 — 34,512 
Total Revenue$29,876 $95,891 $23,414 $89,926 
(1) Professional services and other includes perpetual software licenses revenue, which was approximately 1% of total revenue for both the three and six months ended June 30, 2024 and approximately 1% of total revenue for both the three and six months ended June 30, 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.