Slides
Page 1
Investor Presentation – Q2 2026 August 4 , 2026 OneSpan
Page 2
2PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Forward Looking Statements This presentation contains forward-looking statements within the meaning of applicable U.S. securities laws, including statements regarding our 2026 financial guidance; our expectations regarding our DigipassONE platform and its anticipated use as a foundation for further product enhancements, including supporting consumer agentic use cases; and our general goals and expectations regarding our operational or financial performance in the future. Forward-looking statements may be identified by words such as "seek", "believe", "plan", "estimate", "anticipate", “expect", "intend", "continue", "outlook", "may", "will", "should", "could", or "might", and other similar expressions. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could materially affect our business and financial results include, but are not limited to: our ability to attract new customers and retain and expand sales to existing customers; our ability to successfully develop and market new product offerings and product enhancements; changes in customer requirements; the potential effects of technological changes; the loss of one or more large customers; difficulties enhancing and maintaining our brand recognition; competition; lengthy sales cycles; unintended costs and consequences of our cost reduction and restructuring actions, including higher than anticipated restructuring charges, disruption to our operations, litigation or regulatory actions, or employee turnover; challenges retaining key employees and successfully hiring and training qualified new employees; security breaches or cyber-attacks; real or perceived malfunctions or errors in our products; interruptions or delays in the performance of our products and solutions; reliance on third parties for certain products and data center services; our ability to effectively manage third party partnerships, acquisitions, divestitures, alliances, or joint ventures; economic recession, inflation, tariffs or trade disputes, and political instability; claims that we have infringed the intellectual property rights of others; changing laws, government regulations or policies; pressures on price levels; component shortages; delays and disruption in global transportation and supply chains; impairment of goodwill or amortizable intangible assets causing a significant charge to earnings; actions of activist stockholders; and exposure to increased economic and operational uncertainties from operating a global business, as well as other factors described in the “Risk Factors” section of our most recent Annual Report on Form 10-K, as updated by the “Risk Factors” section of our subsequent Quarterly Reports on Form 10-Q (if any). Our filings with the Securities and Exchange Commission and other important information can be found in the Investor Relations section of our website at investors.onespan.com. Statements in this presentation are made as of August 4, 2026, and the continued availability of this presentation after that date shall under no circumstances create an implication that the information contained herein is correct as of any date after August 4, 2026. We do not have any intent, and disclaim any obligation, to update the forward-looking information to reflect events that occur, circumstances that exist or changes in our expectations after the date of this press release, except as required by law.
Page 3
Company Overview
Page 4
4PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED FCF2 $40M 1 Revenue, AEBITDA, FCF (free cash flow) and subscription (% of total revenue) are for the trailing 12 -month period ending June 30, 2026. ARR and cash & cash equivalents are as of June 30, 2026. Includes the acquisitions of Nok Nok Labs, which closed in Q2 2025, and Build38, which closed in Q1 2026. 2 See Appendix for definitions and information regarding non-GAAP financial measures. 3 OneSpan’s annualized dividend increased to $0.52 per share in Q1 2026, up from $0.48 in 2025. The Company repurchased approximately 1 million shares in 2H 2025 and 0.7M shares in 1H 2026. Revenue $246M AEBITDA2 $75M Cash & Eq. $43M ARR2 $190M Subscription 77% OneSpan At a Glance1 Revenue Split Shareholder Returns3 FY 2025 1H 2026 Dividends $18.5M $9.8M Share Repurchases $13.1M $8.3M Total $31.6M $18.1M 71% 29% Two Divisions Cybersecurity Digital Agreements
Page 5
5PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Cybersecurity Division Industry Leader in Securing Digital Banking Transactions Authentication & Digital Credentials Digital Transaction Security Mobile Application Protection • FIDO and OTP Authentication Protocols • Cloud and On-prem Deployment Models • Software, Hardware & Hybrid Solutions • Trusted by the who’s who of global banks to protect identities, safeguard mobile apps, and secure high value digital transactions from sophisticated attacks • Investing for growth (organic and targeted M&A); Recently launched DigipassONE, a unified authentication platform • Total Division Revenue1,2: $175 million, -2% growth • Subscription Revenue1: $118 million, 9% growth • ARR3: $123 million, 7% growth • Operating margin1: 40% 1 Trailing twelve-months as of 6/30/26. Includes the acquisitions of Nok Nok Labs, which closed in Q2 2025, and Build38, which closed in Q1, 2026. 2 The decline in total revenue growth is primarily attributed to a secular decline in hardware driven by adoption of mobile first policies, and the transition of legacy perpetual contracts to term-based arrangements. 3 As of 6/30/26. Includes the acquisition of Build38. Fraud Prevention Threat Intelligence
Page 6
6PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Cybersecurity – DigipassONE Authentication Platform DigipassONE is a unified, integrated platform that enhances our ability to innovate, deepen customer relationships, address new market opportunities, and support long-term growth.
Page 7
7PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Digital Agreements Division Enterprise-Class Solutions with Strong Presence in BFSI Industries eSignatures Remote Notary • Robust security, white-labeling and pricing model differentiate OneSpan Sign from peers • Focus on new logos, customer expansion and profitable growth • Division Revenue1: $71 million, 14% growth • ARR2: $67 million, 5% growth • Operating margin1: 31% Identity Verification Smart Forms 1 Trailing twelve-months as of 6/30/26. Revenue is 100% subscription-based and includes overage fees. 2 As of 6/30/26. ARR does not include overage fees. • Land and Expand SaaS model • World-class Customer Support • Bank-grade Security eSignature Integrations
Page 8
8PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Trusted Technology Partner to Global Blue-Chip Enterprises – Including more than 60% of the World’s 100 Largest Banks Banking Other Financial Services Insurance Government Healthcare, Telecom & Other
Page 9
9PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED GTM Focused on Enterprise Sales and Growing Partner Network CUSTOMER SEGMENTATION BASED ON EMPLOYEE COUNT OSPN SALES FOCUS1 PARTNER COVERAGE Tiers (Employee Count) Efficient Resource Allocation with Sellers Global System Integrators Resellers & Distributors Platform Partners Large Enterprise 100,000+ SAM Enterprise 10,000 – 100,000 NAM Medium Business 5,000 – 10,000 NAM Mid-Market 2,000 – 5,000 TAM Small Business < 2,000 ISR 1 SAM, NAM, TAM, ISR defined as strategic account manager, named account manager, territory account manager, and inside sales r epresentative, respectively.
Page 10
10PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Targeting Long-Term, Sustainable Rule-of-40 Performance 2023-2024: Significant cost reductions and renewed focus on operational excellence 2024-2025: Initial pieces put in place to drive long-term revenue growth • Two Divisions – separate R&D and S&M teams • New CTO and CRO • Targeted M&A and Strategic Investments • $100M Credit facility 2026+: Committed to driving efficient revenue growth while maintaining strong profitability and cash generation, and returning capital to shareholders • Continue to innovate and expand product portfolio; recently launched DigipassONE • Expand existing and drive new customer relationships • Leverage and expand partner network Transforming to Drive Profitable, Long-Term Growth
Page 11
11PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED FY 2023 FY 2024 FY 2025 1H 2026 Adjusted EBITDA & Cash Flow: Strong Cash Generation, Disciplined Investment Approach $73M $78M FY 2023 FY 2024 FY 2025 1H 2026 23% $56M $59M 1 The increase in FY 2024 adjusted EBITDA, operating cash flow, and free cash flow was largely driven by cost reductions. Includes the acquisitions of Nok Nok Labs and Build38, which closed in Q2 2025 and Q1 2026, respectively, and incremental internal investments in 2026 to help drive higher future revenue growth as discussed during the Company’s Q4 2025 earnings call. Percentages on the bar charts denote percent of revenue in each corresponding period. 2 See Appendix for definitions and information regarding non-GAAP financial measures. Adjusted EBITDA1,2 Operating Cash Flow1 Free Cash Flow1,2 32% 30% 5% $(11M) -5% 24% FY 2023 FY 2024 FY 2025 1H 2026 19% $46M $50M $(23M) -10% 21% $13M $38M 32% $28M 22% $22M 17%
Page 12
Financial Highlights & Outlook
Page 13
13PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Q2 2026 Financial Highlights1 $60M Revenue1 (1% growth) $17M Adjusted EBITDA2 (28% margin) $0.30 Non-GAAP EPS2 $43M Cash and Equiv. $47M Subscription Revenue (11% growth) $190M ARR2 (7% growth) 103% NRR2 $0.13 Dividend3 1 Includes the acquisitions of Nok Nok Labs, which closed in Q2 2025, and Build38, which closed in Q1 2026. 2 See Appendix for definitions and information regarding non-GAAP financial measures. 3 OneSpan’s annualized dividend is $0.52 per share.
Page 14
14PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Q2 2026 YoY Revenue Growth Q2 20262 $46.7M $60.5M Revenue grew 1%, driven by 11% growth in subscription revenue, which accounted for 77% of total revenue. Total Software & Services revenue grew 7% and accounted for 81% of total revenue. 1 Division and total revenue amounts may not sum due to rounding. 2 Includes the acquisitions of Nok Nok Labs, which closed in Q2 2025, and Build38, which closed in Q1 2026. $11.4M $42.1M $59.8M $14.0 Q2 2025 Total Company1 $27.2M $40.9M Revenue declined 7%, primarily attributed to the secular shift away from consumer banking tokens and the transition of legacy software licenses to term from perpetual, partially offset by growth in subscription revenue, net of lower multi-year term license revenue. $11.4M $26.5M $44.2M $14.0M Cybersecurity Division1 $19.5M Revenue grew 25% driven by expansion of renewal contracts, new customer additions, and overages, which were markedly higher. Nearly all revenue is subscription-based and delivered through a SaaS model. $15.6M Digital Agreements Division1 Q2 20262Q2 2025 Q2 2026Q2 2025 $3.7M $2.3M$3.7M $2.3M
Page 15
15PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Q2 2025 Q2 2026 Q2 2026 ARR Growth $114.5M $123.0M Q2 2025 Q2 2026 $63.3M $66.7M 1 Includes the acquisition of Build38, which closed in Q1 2026. Cybersecurity1 (7% growth) Digital Agreements (5% growth) Q2 2025 Q2 2026 $177.8M $189.7M Total Company1 (7% growth)
Page 16
16PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED 2026 Guidance Metrics Metric FY 2026 Previous Guidance FY 2026 Current Guidance Total Revenue $244M – $249M $248M – $252M Software & Services Revenue* $201M - $204M $202M - $204M Hardware Revenue $43M - $45M $46M - $48M Adjusted EBITDA1 $64M – $68M $67M – $71M ARR1 $194M – $198M $194M – $198M * Software & Services Revenue includes subscription and perpetual maintenance and services revenue. 1 Please refer to the Appendix for more information regarding non-GAAP financial measures, including ARR and Adjusted EBITDA. The Company is not providing a reconciliation of Adjusted EBITDA guidance to GAAP net income, the most directly comparable GAAP measure, because we are unable to predict certain items includ ed in GAAP net income without unreasonable efforts.
Page 17
17PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED FY 2026 Guidance Metrics and Prior Year Results1 Revenue2 ARR3 FY23 FY24 FY25 FY26E Software & Services Hardware $248M – $252M$243M$235M FY23 FY24 FY25 FY26E $187M $194M – $198M $168M $155M 1 Includes the acquisitions of Nok Nok Labs, which closed in Q2 2025, and Build38, which closed in Q1 2026. 2 Software & Services includes subscription revenue and perpetual maintenance and services revenue. 3 See appendix for definitions and information regarding non-GAAP financial measures. Adjusted EBITDA3 FY23 FY24 FY25 FY26E $67M – $71M $73M $13M $243M $78M
Page 18
Appendix
Page 19
19PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Revised Presentation of Revenue by Business Division1 (in millions, unaudited) 1 Effective January 1, 2026, we have revised our presentation of revenue by major products and services to better align with how we manage the business and our strategic focus on growing recurring revenues. Accordingly, term maintenance revenue is now included within subscription revenue. As a result, subscription revenue now consists primarily of subscription licenses sold for on-premises software, the related maintenance and support revenue, and SaaS revenue. Additionally, maintenance revenue associated with perpetual licenses and professional services is now presented together, which reflects the steady decline in perpetual license arrangements. These changes are presentation-only and have no impact on total revenue, operating income, or cash flows, and prior-period results have been updated for comparability March 31 June 30 Sept. 30 Dec. 31 March 31 June 30 Sept. 30 Dec. 31 March 31 June 30 2024 2024 2024 2024 2025 2025 2025 2025 2026 2026 Cybersecurity Revenue Subscription 30.6$ 19.5$ 23.2$ 25.9$ 33.1$ 26.5$ 27.7$ 28.1$ 35.3$ 27.2$ Perpetual maintenance and services 7.2 6.3 5.6 5.1 3.5 3.7 2.9 3.0 2.6 2.3 Hardware products 12.6 19.7 12.1 14.4 11.1 14.0 9.7 14.3 10.6 11.4 Total Cybersecurity 50.4$ 45.5$ 40.8$ 45.5$ 47.7$ 44.2$ 40.3$ 45.4$ 48.5$ 40.9$ Digital Agreements Revenue Subscription 14.2$ 15.3$ 15.4$ 15.6$ 15.6$ 15.6$ 16.7$ 17.4$ 17.4$ 19.5$ Perpetual maintenance and services 0.2 0.2 0.1 0.1 0.1 0.0 0.0 0.1 0.0 0.0 Total Digital Agreements 14.4$ 15.5$ 15.4$ 15.7$ 15.7$ 15.6$ 16.7$ 17.5$ 17.4$ 19.5$ Total Company Revenue Subscription 44.8$ 34.7$ 38.5$ 41.5$ 48.7$ 42.1$ 44.4$ 45.6$ 52.7$ 46.7$ Perpetual maintenance and services 7.4 6.5 5.6 5.2 3.6 3.7 2.9 3.1 2.7 2.3 Hardware products 12.6 19.7 12.1 14.4 11.1 14.0 9.7 14.3 10.6 11.4 Total Company Revenue 64.8$ 60.9$ 56.2$ 61.2$ 63.4$ 59.8$ 57.1$ 62.9$ 65.9$ 60.5$ Three months ended,
Page 20
20PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Definitions ARR, or Annual Recurring Revenue, is calculated as the approximate annualized value of our customer recurring contracts as of the measurement date. These include subscription, term- based license, and maintenance and support contracts and exclude one-time fees. To the extent that we are negotiating a renewal with a customer within 90 days after the expiration of a recurring contract, we continue to include that revenue in ARR if we are actively in discussion with the customer for a new recurring contract or renewal and the customer has not notified us of an intention to not renew. See our Form 10-K for the year ended December 31, 2025 for additional information describing how we define ARR, including how ARR differs from GAAP revenue. NRR, or Net Recurring Revenue, is defined as the approximate year-over-year growth in ARR from the same set of customers at the end of the prior year period.
Page 21
21PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Non-GAAP Financial Measures We report financial results in accordance with GAAP. We also evaluate our performance using certain non-GAAP financial metrics, namely Adjusted EBITDA, Non-GAAP Net Income, Non- GAAP Net Income Per Diluted Share, and Free Cash Flow. Our management believes that these measures, when taken together with the corresponding GAAP financial metrics, provide useful supplemental information regarding the performance of our business, as further discussed in the descriptions of each of these non-GAAP metrics below. These non-GAAP financial measures are not measures of performance under GAAP and should not be considered in isolation or as alternatives or substitutes for the most directly comparable financial measures calculated in accordance with GAAP. While we believe that these non-GAAP financial measures are useful for the purposes described below, they have limitations associated with their use, since they exclude items that may have a material impact on our reported results and may be different from similar measures used by other companies. Additional information about the non-GAAP financial measures appear below. ARR, or Annual Recurring Revenue, is calculated as the approximate annualized value of our customer recurring contracts as of the measurement date. These include subscription, term- based license, and maintenance and support contracts and exclude one-time fees. To the extent that we are negotiating a renewal with a customer within 90 days after the expiration of a recurring contract, we continue to include that revenue in ARR if we are actively in discussion with the customer for a new recurring contract or renewal and the customer has not notified us of an intention to not renew. See our Form 10-Q for the quarter ended March 31, 2026 for additional information describing how we define ARR, including how ARR differs from GAAP revenue. NRR, or Net Recurring Revenue, is defined as the approximate year-over-year growth in ARR from the same set of customers at the end of the prior year period. Adjusted EBITDA is defined as net income before interest, taxes, depreciation, amortization, long-term incentive compensation and related payroll tax expense, restructuring and other related charges, and certain non-recurring items, including acquisition related costs, rebranding costs, and non-routine shareholder matters. Adjusted EBITDA is a non-GAAP financial metric. We use Adjusted EBITDA as a simplified measure of performance for use in communicating our performance to investors and analysts and for comparisons to other companies within our industry. As a performance measure, we believe that Adjusted EBITDA presents a view of our operating results that is most closely related to serving our customers. By excluding interest, taxes, depreciation, amortization, long-term incentive compensation and related payroll tax expense, restructuring costs and other related costs, and certain other non-recurring items, we are able to evaluate performance without considering decisions that, in most cases, are not directly related to meeting our customers’ requirements and were either made in prior periods (e.g., depreciation, amortization, long-term incentive compensation and related payroll tax expense, non-routine shareholder matters), deal with the structure or financing of the business (e.g., interest, one-time strategic action costs, restructuring costs, impairment charges) or reflect the application of regulations that are outside of the control of our management team (e.g., taxes). In addition, removing the impact of these items helps us compare our core business performance with that of our competitors.
Page 22
22PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Non-GAAP Financial Measures, Continued Non-GAAP Net Income and Non-GAAP Net Income Per Share are defined as net income or net income per diluted share, as applicable, before the consideration of long-term incentive compensation expenses, the amortization of intangible assets, restructuring costs, and certain other non-recurring items. We use these measures to assess the impact of our performance excluding items that can significantly impact the comparison of our results between periods and the comparison to competitor results. We exclude long-term incentive compensation and related payroll tax expense because our long-term incentives generally reflect the use of restricted stock unit grants or cash incentive grants, including incentives directly tied to the performance of the business, while other companies may use different forms of incentives that have different cost impacts, which makes comparison difficult. We exclude amortization of intangible assets as we believe the amount of such expense in any given period may not be correlated directly to the performance of the business operations and that such expenses can vary significantly between periods as a result of new acquisitions, the full amortization of previously acquired intangible assets, or the write down of such assets due to an impairment event. However, intangible assets contribute to current and future revenue, and related amortization expense will recur in future periods until expired or written down. We also exclude certain non-recurring items including one-time strategic action costs and non-recurring shareholder matters, as these items are unrelated to the operations of our core business. By excluding these items, we are better able to compare the operating results of our underlying core business from one reporting period to the next. We use a long-term projected non-GAAP tax rate of 20% for the purpose of determining our Non-GAAP Net Income and Non-GAAP Net Income Per Diluted Share to provide better consistency across interim reporting periods. We will assess the appropriate non-GAAP tax rate on a regular basis, which could be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or other changes to our strategy or business operations. Free Cash Flow is defined as net cash provided by operating activities, less additions of property and equipment, including capitalized software. Reconciliations of Adjusted EBITDA and Non-GAAP Net Income to their most directly comparable GAAP financial measure, net income, appear below. Reconciliation of Free Cash Flow to its most directly comparable GAAP financial measure, cash flow from operations, also appears below.
Page 23
23PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED 2025 2026 2025 2026 Net income (loss) 8,342$ 6,781$ 22,847$ 18,346$ Interest income, net (732) 154 (1,424) 173 Provision for income taxes 2,227 1,853 5,587 4,700 Depreciation and amortization of intangible assets1 2,456 3,434 4,585 6,566 Long-term incentive compensation2 3,678 3,525 6,926 5,603 Restructuring and other related charges3 88 - 534 - Other non-recurring items4 1,579 1,148 1,618 2,516 Adjusted EBITDA 17,638$ 16,895$ 40,673$ 37,904$ Three months ended Six months ended June 30, June 30, Reconciliation of Net Income to Adjusted EBITDA5 (in thousands, unaudited) 1 Includes cost of sales depreciation and amortization expense directly related to delivering cloud subscription revenue of $2.2 million and $4.1 million for the three and six months ended June 30, 2026, respectively, and $1.3 million and $2.3 million for the three and six months ended June 30, 2025, respectively. Costs are recorded in "Services and other cost of goods sold" on the condensed consolidated statements of operations. 2 Long-term incentive compensation and related payroll tax expense includes stock-based compensation and related payroll tax expense, and cash incentive grants awarded to employees located in jurisdictions where we do not issue stock- based compensation due to tax, regulatory or similar reasons. The immaterial expense associated with these cash incentive grants was less than $0.1 million for the three and six months ended June 30, 2026 and 2025. 3 Costs are recorded in "Services and other cost of goods sold" and "Restructuring and other related charges," respectively, on the condensed consolidated statements of operations. Includes restructuring and other related charges of less than $0.1 million and $0.1 million for the three and six months ended June 30, 2025, respectively, that are recorded in "Services and other cost of goods sold" on the condensed consolidated statements of operations. 4 For the three months ended June 30, 2026 and 2025, other non-recurring items consist of $1.1 million and $1.6 million, respectively, of fees related to non-recurring acquisition projects. For the six months ended June 30, 2026 and 2025, other non-recurring items consist of $2.5 million and $1.6 million, respectively, of fees related to non-recurring acquisition projects. 5 Adjusted EBITDA is a non-GAAP financial measure. The Company is not providing a reconciliation of Adjusted EBITDA guidance to GAAP net income, the most directly comparable GAAP measure, because we are unable to predict certain items included in GAAP net income without unreasonable efforts. Please refer to slide 23 for definitions and additional information about Adjusted EBITDA.
Page 24
24PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED 2025 2026 2025 2026 Net income 8,342$ 6,781$ 22,847$ 18,346$ Benefit from income taxes 2,227 1,853 5,587 4,700 Income loss before income taxes 10,569 8,634 28,434 23,046 Long-term incentive compensation and related payroll tax expense1 3,678 3,525 6,926 5,603 Amortization of intangible assets2 685 1,179 1,241 2,108 Restructuring and other related charges3 88 - 534 - Other non-recurring items4 1,579 1,148 1,618 2,516 Non-GAAP net income before income taxes 16,599 14,486 38,753 33,273 Non-GAAP provision for income taxes5 (3,320) (2,897) (7,751) (6,655) Non-GAAP Net income 13,279$ 11,589$ 31,002$ 26,618$ Non-GAAP net income per share, diluted 0.34$ 0.30$ 0.79$ 0.70$ 39,012 38,142 39,026 38,098 Three months ended Six months ended June 30, June 30, Weighted-average shares used to compute non-GAAP net income per share, diluted Reconciliation of Net Income to Non-GAAP Net Income (in thousands, except per share data; unaudited) 1 Long-term incentive compensation and related payroll tax expense includes stock-based compensation and related employer payroll tax expense, and cash incentive grants awarded to employees located in jurisdictions where we do not issue stock-based compensation due to tax, regulatory or similar reasons. The immaterial expense associated with these cash incentive grants was less than $0.1 million for the three and six months ended June 30, 2026 and 2025. 2 Includes cost of sales amortization expense directly related to delivering cloud subscription revenue of $0.4 million and $0.6 million for the three and six months ended June 30, 2026, respectively. There was no amortization expense included in cost of sales for the three and six months ended June 30, 2025. Costs are recorded in "Services and other cost of goods sold" on the condensed consolidated statements of operations. 3 Costs are recorded in "Services and other cost of goods sold" and "Restructuring and other related charges," respectively, on the condensed consolidated statements of operations. Includes restructuring and other related charges of less than $0.1 million and $0.1 million for the three and six months ended June 30, 2025, respectively. These charges are recorded in "Services and other cost of goods sold" on the condensed consolidated statements of operations. 4 For the three months ended June 30, 2026 and 2025, other non-recurring items consist of $1.1 million and $1.6 million, respectively, of fees related to non-recurring acquisition projects. For the six months ended June 30, 2026 and 2025, other non-recurring items consist of $2.5 million and $1.6 million, respectively, of fees related to non-recurring acquisition projects. 5 We use a long-term projected non-GAAP tax rate of 20% for the purpose of determining our Non-GAAP Net Income and Non-GAAP Net Income Per Diluted Share to provide better consistency across interim reporting periods .
Page 25
25PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED 2025 2026 2025 2026 Net cash provide by operating activities 6,217$ (103)$ 35,583$ 28,069$ Purchases of property and equipment1 (1,857) (3,177) (3,483) (6,297) Free Cash Flow 4,360$ (3,280)$ 32,100$ 21,772$ Three months ended Six months ended June 30, June 30, Free Cash Flow Reconciliation (in thousands, unaudited) 1 Includes capitalized software.
Page 26
26PROPRIETARY AND CONFIDENTIAL. ALL RIGHTS RESERVED Copyright and Trademarks Copyright© 2026 OneSpan North America Inc., all rights reserved. OneSpan and related names, logos, products and service names are registered trademarks or trademarks of OneSpan Inc. or its subsidiaries in the U.S. and other countries. All other trademarks or trade names are the property of their respective owners.