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Segment Information | 3 Months Ended
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Mar. 31, 2025
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. The Company's reportable segments are businesses units that offer different products and services and are as follows: •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 on-premises and, to a lesser extent, cloud software products, and include multi-factor authentication and transaction signing solutions, such as mobile application security and mobile software tokens. •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. Segment operating income (loss) consists of the revenues generated by a segment, less the direct costs of revenue, sales and marketing, research and development expenses, general and administrative expenses, restructuring and other related charges, and amortization of intangible assets expense that are incurred directly by a segment. Sales and marketing and research and development expenses were determined to be significant segment expenses. 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 operating segments for the three months ended March 31, 2025 and 2024, 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, 2025
(In thousands, except percentages) | Security Solutions |  | Digital Agreements |  | Corporate and Other |  | Total
Revenue | $ | 47,713 |  |  | $ | 15,653 |  |  | $ | — |  |  | $ | 63,366 |
Cost of goods sold | 11,628 |  |  | 4,647 |  |  | — |  |  | 16,275 |
Gross profit | 36,085 |  |  | 11,006 |  |  | — |  |  | 47,091 |
Gross margin | 76 | % |  | 70 | % |  | * |  | 74 | %
Sales and marketing | 6,872 |  |  | 3,402 |  |  | 1,183 |  |  | 11,457 |
Research and development | 4,919 |  |  | 3,006 |  |  | 3 |  |  | 7,928 |
Other segment items (1)(3) | 134 |  |  | 1,231 |  |  | 9,159 |  |  | 10,524 |
Operating income (loss) (2)(4) | 24,160 |  |  | 3,367 |  |  | (10,345) |  |  | 17,182 |
Interest income, net |  |  |  |  |  |  | 692 |
Other income (expense), net |  |  |  |  |  |  | (9) |
Income before income taxes |  |  |  |  |  |  | $ | 17,865 |
| Three Months Ended March 31, 2024
(In thousands, except percentages) | Security Solutions |  | Digital Agreements |  | Corporate and Other |  | Total
Revenue | $ | 50,429 |  |  | $ | 14,414 |  |  | $ | — |  |  | $ | 64,843 |
Cost of goods sold | 12,926 |  |  | 4,522 |  |  | — |  |  | 17,448 |
Gross profit | 37,503 |  |  | 9,892 |  |  | — |  |  | 47,395 |
Gross margin | 74 | % |  | 69 | % |  | * |  | 73 | %
Sales and marketing | 6,544 |  |  | 5,230 |  |  | 1,153 |  |  | 12,927 |
Research and development | 4,000 |  |  | 4,231 |  |  | 28 |  |  | 8,259 |
Other segment items (1)(3) | 1,081 |  |  | 696 |  |  | 10,322 |  |  | 12,099 |
Operating income (loss) (2)(4) | 25,878 |  |  | (265) |  |  | (11,503) |  |  | 14,110 |
Interest income, net |  |  |  |  |  |  | 101 |
Other income (expense), net |  |  |  |  |  |  | 291 |
Income before income taxes |  |  |  |  |  |  | $ | 14,502 |
*Percentage not meaningful. (1) Security Solutions other segment items includes general and administrative expense and restructuring and other related charges for the three months ended March 31, 2025 and 2024. (2) Security Solutions operating income includes $0.2 million of total amortization and depreciation expense for both the three months ended March 31, 2025 and 2024. Security Solutions operating income includes $0.2 million and $1.1 million of restructuring and other related charges for the three months ended March 31, 2025 and 2024, respectively. (3) Digital Agreements other segment items includes general and administrative expense, restructuring and other related charges, and amortization of intangibles for the three months ended March 31, 2025 and 2024. (4) Digital Agreements operating income (loss) includes $1.7 million and $1.6 million of total amortization and depreciation expense for the three months ended March 31, 2025 and 2024, respectively. Digital Agreements operating income (loss) includes $0.2 million and $0.1 million of restructuring and other related charges for the three months ended March 31, 2025 and 2024, 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 reportable operating segments for the three months ended March 31, 2025 and 2024:
| Three Months Ended March 31,
| 2025 |  | 2024
(In thousands) | Security Solutions |  | Digital Agreements |  | Security Solutions |  | Digital Agreements
Subscription | $ | 28,072 |  |  | $ | 15,545 |  |  | $ | 26,182 |  |  | $ | 13,812 |
Maintenance and support | 7,984 |  |  | 24 |  |  | 10,066 |  |  | 505 |
Professional services and other (1) | 594 |  |  | 84 |  |  | 1,605 |  |  | 97 |
Hardware products | 11,063 |  |  | — |  |  | 12,576 |  |  | — |
Total Revenue | $ | 47,713 |  |  | $ | 15,653 |  |  | $ | 50,429 |  |  | $ | 14,414 |
(1) Professional services and other includes perpetual software licenses revenue, which was immaterial for the three months ended March 31, 2025 and approximately 1% of total revenue for the three months ended March 31, 2024. 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.

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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/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards 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