OneSpan Inc. (NASDAQ: OSPN), a provider of authentication software, saw its shares plummet 14.25% in after-hours trading following the release of its third-quarter earnings report and revised full-year guidance. The significant drop comes as the company missed revenue expectations and substantially lowered its outlook for the year, raising concerns among investors.
For the third quarter, OneSpan reported revenue of $57.06 million, a modest 1.4% increase year-over-year but falling short of the analyst consensus estimate of $58.18 million. Despite the revenue miss, the company's adjusted earnings per share of $0.33 beat expectations of $0.29. Notably, subscription revenue, a key growth driver for OneSpan, increased by 12% to $37.8 million. However, operating income decreased by 27% compared to the same period last year, dropping to $8.2 million due to higher operating costs.
Adding to investor concerns, OneSpan significantly reduced its full-year 2025 guidance. The company now expects revenue between $239 million and $241 million, down from the previous forecast of $245 million to $251 million. Annual Recurring Revenue (ARR) guidance was also cut to between $183 million and $187 million, from the earlier projection of $186 million to $192 million. This lowered outlook, combined with the Q3 revenue miss and decreased operating income, likely contributed to the sharp decline in OneSpan's stock price during after-hours trading. The market's reaction reflects growing uncertainty about the company's growth trajectory and profitability in the face of rising costs and potential market challenges.
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