OneSpan helps organizations build secure seamless and trusted digital experiences through two solution portfolios: Cybersecurity and Digital Agreements. Its cybersecurity solutions protect identities, secure mobile apps, and safeguard access using advanced authentication, threat intelligence, fraud prevention, and mobile app protection. Its digital agreement solutions streamline agreement workflows with secure e signatures, identity verification, and smart digital…
OneSpan helps organizations build secure seamless and trusted digital experiences through two solution portfolios: Cybersecurity and Digital Agreements. Its cybersecurity solutions protect identities, secure mobile apps, and safeguard access using advanced authentication, threat intelligence, fraud prevention, and mobile app protection. Its digital agreement solutions streamline agreement workflows with secure e signatures, identity verification, and smart digital forms.
OneSpan generates revenue primarily through a subscription licensing model offering cloud based and on premise deployments of its cybersecurity and digital agreement products. Its products include authentication software, software development kits, hardware authenticators, e signature platforms, identity verification tools, and digital workflow solutions sold to financial institutions, enterprises, government, healthcare, and insurance customers worldwide via direct sales and channel partners such as distributors, resellers, systems integrators, and original equipment manufacturers.
The company operates through the following segments: Cybersecurity and Digital Agreements.
• Cybersecurity: This segment provides a broad portfolio of software products, software development kits, and Digipass authenticator devices used to build applications that defend against attacks on digital transactions across online environments, devices, and applications. It offers standards based authentication technologies such as FIDO authentication and passkeys, multi factor authentication, transaction signing solutions, and mobile application security delivered through on premises and cloud based deployment models.
• Digital Agreements: This segment provides solutions that enable clients to secure and automate business processes associated with digital agreement and customer transaction lifecycles requiring consent, non repudiation, and compliance. Its cloud based offerings include OneSpan Sign e signature, OneSpan Notary, and OneSpan Identity Verification.
OneSpan competes in a highly competitive market for security authentication identity electronic signature and digital workflow solutions. Its main competitors in authentication include Gemalto (a subsidiary of Thales Group), RSA Security, and Yubico while its primary competitors for e signature solutions are DocuSign, and Adobe Systems. The company differentiates itself through a broad product portfolio, global reach in over 120 countries, and a focus on high margin software solutions driven by the shift away from hardware authenticators.
The majority of OneSpan's revenue comes from financial institutions such as traditional banks, credit unions, and online only banks. It also serves enterprise, government, healthcare, and insurance customers in select regions around the globe. The top ten customers accounted for 18% of total worldwide revenue in 2025.
Sector:TechnologySector rationaleOneSpan designs and sells software-based products, including cybersecurity authentication tools, e-signature platforms, and identity verification software, delivered via cloud and on-premise subscription models. These products fall directly under the Technology sector's industries for Cybersecurity Software, AI Platforms, and Business Process Automation.Industries:Identity and Access ManagementTechnologyPrimaryOneSpan's core business centers on managing digital identity and access, specifically through multi-factor authentication, FIDO authentication, passkeys, and identity verification tools. These products are sold to financial institutions and enterprises to safeguard access and prevent fraud.Cybersecurity SoftwareTechnologySecondaryThe company provides a Cybersecurity segment that includes mobile app protection, threat intelligence, and transaction signing solutions designed to defend against attacks on digital transactions.Compliance SoftwareTechnologySecondaryThe Digital Agreements segment provides e-signature and digital notary solutions (OneSpan Sign, OneSpan Notary) specifically to ensure non-repudiation and regulatory compliance for business processes.Classified using BQ-MICSCIK: 0001044777
Investment Thesis
▲ Bull case
OneSpan Inc. is positioned to capture significant growth from the secular shift toward passwordless authentication, a trend the company reinforced through its strategic acquisition of Nok Labs, which has already delivered approximately 20% ARR growth in less than ten months post-acquisition and is expanding the company's TAM beyond traditional hardware tokens into high-growth cloud and software-based solutions; despite short-term ARR headwinds from two non-renewing contracts tied to legacy token deployments, management explicitly noted these decisions were made prior to the Nok acquisition, meaning OneSpan now has the competitive offering to win back similar customers and prevent future churn, turning what the market views as a near-term drag into a long-term catalyst for higher retention and expansion, particularly as financial institutions accelerate adoption of device-bound FIDO keys to mitigate cloud-synchronized key risks—a feature where Nok’s technology provides a differentiated advantage over generic passkey implementations.
The integration of Build 38’s mobile application shielding and telemetry capabilities creates a unique, end-to-end cybersecurity moat that goes beyond basic app wrapping by enabling real-time threat visibility and device-level intelligence on consumer banking apps—a critical attack surface given that over 80% of banking traffic now flows through mobile channels; this technology not only strengthens OneSpan’s existing authentication offerings but opens new upsell and cross-sell pathways, particularly as clients seek consolidated vendors for mobile threat defense, fraud prevention, and secure authentication, yet the company has not heavily promoted this synergistic potential in its guidance, leaving the market to underestimate the incremental revenue and stickiness gains from bundling app shielding with Nok’s passwordless and OneSpan’s legacy authentication suites into a unified platform for financial services and enterprise clients.
OneSpan’s digital agreements business is exhibiting stronger-than-reported fundamentals, with 11.2% revenue growth and improving gross margins (up to 72.5% from 70.3%) driven by cloud efficiency and expansion within renewal contracts, yet the market overlooks the structural shift in how the company now prices 97% of this business on transaction volume—not user or seat counts—meaning revenue scales directly with clients’ digital transformation initiatives in financial services, healthcare, and government sectors, where e-signature adoption remains in early-to-mid stages globally; combined with a 94% gross revenue retention rate in this segment and a pipeline weighted toward Q4 seasonality, the business is poised for accelerated ARR expansion in the second half of 2026, especially as AI-driven workflow insights—explicitly called out by management as a planned investment—begin to enhance product value and reduce sales friction in complex, regulated industries.
OneSpan Inc. is positioned to capture significant growth from the secular shift toward passwordless authentication, a trend the company reinforced through its strategic acquisition of Nok Labs, which has already delivered approximately 20% ARR growth in less than ten months post-acquisition and is expanding the company's TAM beyond traditional hardware tokens into high-growth cloud and software-based solutions; despite short-term ARR headwinds from two non-renewing contracts tied to legacy token deployments, management explicitly noted these decisions were made prior to the Nok acquisition, meaning OneSpan now has the competitive offering to win back similar customers and prevent future churn, turning what the market views as a near-term drag into a long-term catalyst for higher retention and expansion, particularly as financial institutions accelerate adoption of device-bound FIDO keys to mitigate cloud-synchronized key risks—a feature where Nok’s technology provides a differentiated advantage over generic passkey implementations.
The integration of Build 38’s mobile application shielding and telemetry capabilities creates a unique, end-to-end cybersecurity moat that goes beyond basic app wrapping by enabling real-time threat visibility and device-level intelligence on consumer banking apps—a critical attack surface given that over 80% of banking traffic now flows through mobile channels; this technology not only strengthens OneSpan’s existing authentication offerings but opens new upsell and cross-sell pathways, particularly as clients seek consolidated vendors for mobile threat defense, fraud prevention, and secure authentication, yet the company has not heavily promoted this synergistic potential in its guidance, leaving the market to underestimate the incremental revenue and stickiness gains from bundling app shielding with Nok’s passwordless and OneSpan’s legacy authentication suites into a unified platform for financial services and enterprise clients.
OneSpan’s digital agreements business is exhibiting stronger-than-reported fundamentals, with 11.2% revenue growth and improving gross margins (up to 72.5% from 70.3%) driven by cloud efficiency and expansion within renewal contracts, yet the market overlooks the structural shift in how the company now prices 97% of this business on transaction volume—not user or seat counts—meaning revenue scales directly with clients’ digital transformation initiatives in financial services, healthcare, and government sectors, where e-signature adoption remains in early-to-mid stages globally; combined with a 94% gross revenue retention rate in this segment and a pipeline weighted toward Q4 seasonality, the business is poised for accelerated ARR expansion in the second half of 2026, especially as AI-driven workflow insights—explicitly called out by management as a planned investment—begin to enhance product value and reduce sales friction in complex, regulated industries.
OneSpan Inc. faces a persistent and underappreciated structural decline in its legacy hardware token business, which now constitutes only 16% of total revenue but continues to weigh on overall growth despite management’s optimism about FIDO2 offsets; the company admitted that corporate banking and certain regional segments (notably parts of Europe and Asia where web banking persists) will maintain demand for tokens, yet it offered no concrete timeline or volume expectations for when FIDO2 security key adoption might meaningfully counterbalance this erosion, leaving investors to assume a stable hardware business when in reality, the secular shift away from tokens—driven by mobile-first banking and regulatory pressure for modern authentication—may continue to outpace any gains from niche hardware use cases, especially if enterprise clients opt for software-only FIDO implementations from competitors like Yubico or Hid Global rather than OneSpan’s branded tokens.
The company’s reliance on acquisitions to drive ARR growth masks weakening organic momentum, as evidenced by the CFO’s admission that organic ARR growth is only 7% to 8% after stripping out the contributions from Nok Labs and Build 38, a figure that falls short of the long-term algorithmic growth rates typically expected of software companies trading at premium multiples; furthermore, the integration costs from these deals—including headcount expansion, nonrecurring consulting fees, and increased R&D spend—are pressuring GAAP profitability, with operating income down year-over-year despite solid non-GAAP results, suggesting that the market may be overestimating the sustainability of margin expansion if acquisition synergies fail to materialize or if organic product innovation lags behind competitors in fast-evolving domains like AI-driven fraud detection and cloud-native identity orchestration.
OneSpan’s geographic exposure reveals a growing vulnerability to regional instability, particularly in EMEA, which still accounts for 43% of revenue despite a strategic pivot toward North America; while management downplayed the Middle East conflict as impacting only 4% of revenue, the broader EMEA mix—including Western Europe—is showing signs of weakness, with lower cybersecurity software and hardware revenue attributed to macroeconomic headwinds and delayed procurement cycles, yet the company provided no hedging strategy or commentary on how currency fluctuations, reduced IT spending in banks, or elongated sales cycles in regulated European markets might impair its recovery trajectory, especially as its digital agreements business—though stronger in North America—remains susceptible to global economic slowdowns that could delay large-scale e-signature deployments in multinational enterprises.
OneSpan Inc. faces a persistent and underappreciated structural decline in its legacy hardware token business, which now constitutes only 16% of total revenue but continues to weigh on overall growth despite management’s optimism about FIDO2 offsets; the company admitted that corporate banking and certain regional segments (notably parts of Europe and Asia where web banking persists) will maintain demand for tokens, yet it offered no concrete timeline or volume expectations for when FIDO2 security key adoption might meaningfully counterbalance this erosion, leaving investors to assume a stable hardware business when in reality, the secular shift away from tokens—driven by mobile-first banking and regulatory pressure for modern authentication—may continue to outpace any gains from niche hardware use cases, especially if enterprise clients opt for software-only FIDO implementations from competitors like Yubico or Hid Global rather than OneSpan’s branded tokens.
The company’s reliance on acquisitions to drive ARR growth masks weakening organic momentum, as evidenced by the CFO’s admission that organic ARR growth is only 7% to 8% after stripping out the contributions from Nok Labs and Build 38, a figure that falls short of the long-term algorithmic growth rates typically expected of software companies trading at premium multiples; furthermore, the integration costs from these deals—including headcount expansion, nonrecurring consulting fees, and increased R&D spend—are pressuring GAAP profitability, with operating income down year-over-year despite solid non-GAAP results, suggesting that the market may be overestimating the sustainability of margin expansion if acquisition synergies fail to materialize or if organic product innovation lags behind competitors in fast-evolving domains like AI-driven fraud detection and cloud-native identity orchestration.
OneSpan’s geographic exposure reveals a growing vulnerability to regional instability, particularly in EMEA, which still accounts for 43% of revenue despite a strategic pivot toward North America; while management downplayed the Middle East conflict as impacting only 4% of revenue, the broader EMEA mix—including Western Europe—is showing signs of weakness, with lower cybersecurity software and hardware revenue attributed to macroeconomic headwinds and delayed procurement cycles, yet the company provided no hedging strategy or commentary on how currency fluctuations, reduced IT spending in banks, or elongated sales cycles in regulated European markets might impair its recovery trajectory, especially as its digital agreements business—though stronger in North America—remains susceptible to global economic slowdowns that could delay large-scale e-signature deployments in multinational enterprises.