OneSpan Inc. (OSPN) experienced a significant 24-hour plunge of 14.25% following the release of its third-quarter earnings report, which fell short of analyst expectations and prompted a reduction in full-year guidance. The authentication software provider's disappointing results and outlook have sparked investor concerns about the company's growth trajectory.
For the third quarter, OneSpan reported revenue of $57.1 million, representing a modest 1% year-over-year increase but missing the analyst consensus estimate of $58.2 million. Despite the revenue shortfall, the company's adjusted earnings per share of $0.33 surpassed expectations of $0.29. Subscription revenue, a key growth driver for OneSpan, increased by 12% to $37.8 million. However, operating income saw a substantial decrease of 27% compared to the same period last year, attributed to higher operating costs.
Adding to investor worries, 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, likely contributed to the sharp decline in OneSpan's stock price during trading. The market's reaction reflects growing concerns about the company's ability to meet growth expectations in an increasingly competitive authentication software market.
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