OneSpan Inc. reported its financial results for the fourth quarter and full year ended December 31, 2024, on February 27, 2025, showcasing a significant turnaround in profitability. The company achieved a record high Adjusted EBITDA of $20 million in Q4, representing 32% of revenue, and $73 million for the full year, or 30% of revenue. This marks a substantial improvement from an operating loss of $28.9 million and a net loss of $29.8 million in 2023.
Annual Recurring Revenue (ARR) grew 8.5% to $168 million for the full year, with Digital Agreements growing 12% and Security growing 6%. Subscription revenue, a key strategic focus, grew over 30% for both the quarter and the full year, accounting for 57% of total revenue in 2024, an increase of 12 percentage points year-over-year. Software and services revenue, excluding hardware, grew 16% in 2024 and comprised nearly three-quarters of total revenue.
Total revenue for the full year 2024 grew 3% to $243.2 million, despite a 3% decline in the fourth quarter, primarily due to the anticipated reduction in hardware revenue. Gross margin expanded to 74% in Q4 and 71.8% for the full year, driven by a favorable product mix emphasizing higher-margin software. The company generated $56 million in cash from operations for the full year, a significant improvement from a cash usage of $11 million in 2023, ending the year with $83 million in cash on hand.
For the full year 2025, OneSpan provided guidance with revenue expected in the range of $245 million to $251 million, ARR between $180 million and $186 million, and Adjusted EBITDA projected at $72 million to $76 million. While the guidance for overall revenue and EBITDA suggests a flattish outlook, the company's focus remains on accelerating top-line growth in 2026. The company also confirmed the payment of its first quarterly cash dividend in Q1 2025, reflecting its strong financial position and commitment to shareholder returns.
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