OneSpan (OSPN) Q3 2026 earnings summary

Executive summary

• Q3 revenue rose 12% YoY to $63.9M; subscription revenue increased 16% to $51.5M, and operating income grew 12% to $9.2M.

• ARR increased 9% to $195.5M; NRR was 105%.

• Q3 performance reached Rule of 42, compared with Rule of 12 in 2023, alongside improved retention and investment in products for longer-term growth.

Financial highlights

• Gross profit was $48.7M and gross margin was 76.3%, versus 73.6% a year earlier.

• GAAP net income was $7.8M versus $6.5M; diluted EPS was $0.20 versus $0.17. Non-GAAP net income was $13.6M versus $12.9M; diluted EPS was $0.35 versus $0.33.

• Adjusted EBITDA was $19.3M at a 30.1% margin, versus $17.5M and 30.7% in Q3 2025; nine-month Adjusted EBITDA was $57.2M versus $58.2M.

• Subscription revenue was 81% of total revenue versus 78% a year earlier; hardware and perpetual maintenance combined were 19% versus 22%.

• Q3 free cash flow was $13.3M versus $8.8M YoY; nine-month free cash flow was $35.0M versus $40.9M.

Outlook and guidance

• FY 2026 revenue guidance increased to $254M–$258M from $248M–$252M; Software & Services guidance rose to $208M–$210M from $202M–$204M.

• FY 2026 hardware revenue guidance remained $46M–$48M; ARR guidance increased to $197M–$201M from $194M–$198M.

• FY 2026 Adjusted EBITDA guidance increased to $72M–$76M from $67M–$71M; FY gross margin is expected to be slightly above 74%.

• Q4 Software & Services revenue is expected above prior forecasts, partly offset by lower hardware revenue after token shipments arrived earlier than expected; FY hardware guidance was unchanged.

• No FY 2027 guidance was set; new products may take time to affect revenue given lengthy sales cycles at large banks.