Key Highlights

  • OneSpan shares were up 11.17% in pre-market trading to $18.02, extending Tuesday's 2.14% close gain to $16.21 near 52-week highs.
  • Second-quarter revenue grew 1% year-over-year to $60.5 million, beating consensus estimates of $58.3 million by 3.80%.
  • Adjusted EPS of $0.30 beat estimates of $0.25 by 20%, while subscription revenue rose 11% to $47 million, or 77% of total revenue.
  • Management raised full-year 2026 guidance to $248 million to $252 million in revenue, up from $244 million to $249 million previously.
  • Annual recurring revenue reached $190 million, up 7% year-over-year, with net retention of 103%.

What's Driving the Rally

OneSpan (NASDAQ:OSPN) is a Boston-based provider of cybersecurity and digital agreement solutions, founded in 1991 and rebranded in 2018. The company helps banks, enterprises, and government entities secure digital transactions through products such as multifactor authentication, mobile app security, identity verification, and its OneSpan Sign e-signature platform, serving more than 60% of the world's top 100 banks.

Shares are extending Tuesday's close gain sharply higher after the company raised its full-year 2026 sales guidance to $248 million to $252 million from a prior range of $244 million to $249 million, topping analyst estimates of $246.4 million. The upgraded outlook adds momentum for the digital identity and security software provider as broader enterprise software and cybersecurity names caught a bid following Palantir's (NASDAQ:PLTR) blockbuster earnings, which reinforced investor confidence that AI-driven demand is translating into real monetization for software companies.

Segment Performance

OneSpan launched Digital Pass One during the quarter, a unified authentication platform combining its Knock Knock Labs and Build38 acquisitions across four components: Authenticate, Verify, Protect, and Insights, positioned to support both existing digital channels and future agentic banking interactions.

The Digital Agreements division grew revenue 25.2% year-over-year to $19.5 million, driven by strong overage revenue from customer transaction volume growth, with operating income improving to $7 million, or 35.7% margin, from $2.9 million, or 18.4% margin, a year earlier. The Cybersecurity division grew ARR 7.4% to $123 million and revenue 7.5% to $40.9 million, though operating income declined to $13.8 million, or 34% of revenue, from $19.8 million, or 45% of revenue, in the year-ago quarter due to acquisition-related costs and organic investments.

Raised Guidance and Capital Returns

Alongside the revenue increase, management raised full-year hardware revenue guidance to $46 million to $48 million from $43 million to $45 million previously, and adjusted EBITDA guidance to $67 million to $71 million from $64 million to $68 million. OneSpan returned nearly $8 million to shareholders during the second quarter through dividends and buybacks, with a quarterly dividend of $0.13 per share approved.

Conclusion

OneSpan's second consecutive guidance raise this year, paired with double-digit subscription revenue growth and expanding margins in its Digital Agreements segment, points to durable momentum heading into the second half of 2026. The sharp pre-market advance suggests investors are increasingly rewarding the company's shift toward higher-margin recurring revenue, even as acquisition costs continue to weigh on Cybersecurity segment profitability in the near term.

This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research before making financial decisions.