OneSpan Inc. (NASDAQ: OSPN) reported first‑quarter 2026 results that surpassed analyst expectations, with total revenue of $65.95 million and a Non‑GAAP earnings per share of $0.39, beating the consensus estimate of $0.35–$0.36 by $0.03–$0.04. The company’s revenue grew 4% year‑over‑year, driven by an 11% increase in Digital Agreements revenue and a modest 2% rise in Cybersecurity revenue, while hardware sales continued to decline as the business shifts toward higher‑margin subscription services.
The earnings beat was largely attributable to disciplined cost management and a favorable product mix. Subscription revenue grew 8% year‑over‑year, reflecting strong demand for OneSpan’s digital agreements platform and the continued adoption of its cybersecurity solutions. Gross margin held steady at approximately 74%, a slight improvement over the 73% margin reported in Q1 2025, indicating that the company is successfully leveraging its high‑margin software offerings to offset the lower‑margin hardware segment.
OneSpan also confirmed the completion of its Build38 acquisition on March 2, 2026. The deal adds mobile app protection and telemetry capabilities to OneSpan’s portfolio, enabling customers to embed threat protection directly into their mobile applications. Management highlighted that Build38’s SDK‑based security will create a new revenue stream and strengthen OneSpan’s position in the growing mobile security market, a strategic move that aligns with the company’s hardware‑to‑software transformation.
Guidance for the full year was raised, with revenue projected at $244 million to $249 million and annual recurring revenue (ARR) expected to reach $194 million to $198 million, up from the previous $192 million to $196 million range. The higher ARR outlook reflects confidence in continued subscription momentum and the anticipated impact of the Build38 acquisition. CFO Jorge Martell noted a $3 million headwind in second‑quarter ARR from two non‑renewing contracts, but the overall outlook remains positive.
Investor sentiment was supportive, driven by the earnings beat, margin stability, and the raised guidance. The company’s focus on high‑margin subscription growth, coupled with the strategic expansion into mobile security, positions OneSpan for sustained long‑term growth as it continues to transition away from legacy hardware sales.
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