Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 03, 2023 | |
Entity Addresses [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-24389 | |
Entity Registrant Name | OneSpan Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-4169320 | |
Entity Address, Address Line One | 1 Marina Park Drive | |
Entity Address, Address Line Two | Unit 1410 | |
Entity Address, City or Town | Boston | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02210 | |
City Area Code | 312 | |
Local Phone Number | 766-4001 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | OSPN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 39,887,336 | |
Entity Central Index Key | 0001044777 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Former Address | ||
Entity Addresses [Line Items] | ||
Entity Address, Address Line One | 121 West Wacker Drive | |
Entity Address, Address Line Two | Suite 2050 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60601 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 68,496 | $ 96,167 |
Restricted cash | 788 | 1,208 |
Short-term investments | 0 | 2,328 |
Accounts receivable, net of allowances of $1,663 in 2023 and $1,600 in 2022 | 38,667 | 65,132 |
Inventories, net | 15,456 | 12,054 |
Prepaid expenses | 7,319 | 6,222 |
Contract assets | 4,960 | 4,520 |
Other current assets | 10,377 | 10,757 |
Total current assets | 146,063 | 198,387 |
Property and equipment, net | 16,518 | 12,681 |
Operating lease right-of-use assets | 4,377 | 8,022 |
Goodwill | 91,369 | 90,514 |
Intangible assets, net of accumulated amortization | 11,912 | 12,482 |
Deferred income taxes | 1,843 | 1,901 |
Other assets | 10,611 | 11,095 |
Total assets | 282,693 | 335,082 |
Current liabilities | ||
Accounts payable | 16,538 | 17,357 |
Deferred revenue | 50,760 | 64,637 |
Accrued wages and payroll taxes | 13,420 | 18,345 |
Short-term income taxes payable | 2,184 | 2,438 |
Other accrued expenses | 8,123 | 7,664 |
Deferred compensation | 306 | 373 |
Total current liabilities | 91,331 | 110,814 |
Long-term deferred revenue | 4,569 | 6,269 |
Long-term lease liabilities | 5,294 | 8,442 |
Long-term income taxes payable | 0 | 2,565 |
Deferred income taxes | 1,218 | 1,197 |
Other long-term liabilities | 2,963 | 2,484 |
Total liabilities | 105,375 | 131,771 |
Stockholders' equity | ||
Preferred stock: 500 shares authorized, none issued and outstanding at September 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock: $0.001 par value per share, 75,000 shares authorized; 41,159 and 40,764 shares issued; 39,816 and 39,726 shares outstanding at September 30, 2023 and December 31, 2022, respectively | 40 | 40 |
Additional paid-in capital | 115,162 | 107,305 |
Treasury stock, at cost, 1,343 and 1,038 shares outstanding at September 30, 2023 and December 31, 2022, respectively | (21,749) | (18,222) |
Retained earnings | 98,498 | 128,738 |
Accumulated other comprehensive loss | (14,633) | (14,550) |
Total stockholders' equity | 177,318 | 203,311 |
Total liabilities and stockholders' equity | $ 282,693 | $ 335,082 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Accounts receivable, allowance for doubtful accounts | $ 1,663 | $ 1,600 |
Stockholders' equity | ||
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 41,159,000 | 40,764,000 |
Common stock, shares outstanding (in shares) | 39,816,000 | 39,726,000 |
Treasury Stock, Common, Shares | 1,343,000 | 1,038,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue | ||||
Total revenue | $ 58,838 | $ 57,147 | $ 172,178 | $ 162,384 |
Cost of goods sold | ||||
Total cost of goods sold | 18,169 | 18,716 | 57,929 | 51,769 |
Gross profit | 40,669 | 38,431 | 114,249 | 110,615 |
Operating costs | ||||
Sales and marketing | 16,664 | 15,265 | 56,388 | 45,193 |
Research and development | 10,133 | 9,541 | 29,686 | 33,596 |
General and administrative | 11,559 | 11,813 | 44,038 | 39,549 |
Restructuring and other related charges | 6,524 | 6,481 | 13,076 | 11,828 |
Amortization of intangible assets | 583 | 956 | 1,749 | 3,555 |
Total operating costs | 45,463 | 44,056 | 144,937 | 133,721 |
Operating loss | (4,794) | (5,625) | (30,688) | (23,106) |
Interest income, net | 587 | 179 | 1,675 | 197 |
Other income (expense), net | 353 | (1,155) | 342 | 13,817 |
Loss before income taxes | (3,854) | (6,601) | (28,671) | (9,092) |
Provision for income taxes | 279 | 600 | 1,569 | 2,245 |
Net loss | $ (4,133) | $ (7,201) | $ (30,240) | $ (11,337) |
Net loss per share | ||||
Basic (in dollars per share) | $ (0.10) | $ (0.18) | $ (0.75) | $ (0.28) |
Diluted (in dollars per share) | $ (0.10) | $ (0.18) | $ (0.75) | $ (0.28) |
Weighted average common shares outstanding | ||||
Basic (in shares) | 40,454 | 39,723 | 40,529 | 39,801 |
Diluted (in shares) | 40,454 | 39,723 | 40,529 | 39,801 |
Product and license | ||||
Revenue | ||||
Total revenue | $ 31,732 | $ 31,280 | $ 95,461 | $ 89,496 |
Cost of goods sold | ||||
Total cost of goods sold | 11,004 | 12,646 | 36,330 | 32,672 |
Services and other | ||||
Revenue | ||||
Total revenue | 27,106 | 25,867 | 76,717 | 72,888 |
Cost of goods sold | ||||
Total cost of goods sold | $ 7,165 | $ 6,070 | $ 21,599 | $ 19,097 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (4,133) | $ (7,201) | $ (30,240) | $ (11,337) |
Other comprehensive loss | ||||
Cumulative translation adjustment, net of tax | (2,647) | (4,786) | 93 | (12,121) |
Pension adjustment, net of tax | (61) | (21) | (182) | (68) |
Unrealized gains (loss) on available-for-sale securities | (2) | 59 | 6 | (30) |
Comprehensive loss | $ (6,843) | $ (11,949) | $ (30,323) | $ (23,556) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury - Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2021 | 40,001 | |||||
Beginning balance at Dec. 31, 2021 | $ 219,780 | $ 40 | $ (12,501) | $ 100,250 | $ 143,173 | $ (11,182) |
Beginning balance, treasury stock, at cost (in shares) at Dec. 31, 2021 | 592 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 5,214 | 5,214 | ||||
Foreign currency translation adjustment, net of tax | (2,020) | (2,020) | ||||
Share-based compensation | 1,360 | 1,360 | ||||
Vesting of restricted stock awards (in shares) | 34 | |||||
Tax payments for stock issuances (in shares) | (14) | |||||
Tax payments for stock issuances | (635) | (635) | ||||
Unrealized gain (loss) on available-for-sale securities | (79) | (79) | ||||
Pension adjustment, net of tax | (25) | (25) | ||||
Ending balance (in shares) at Mar. 31, 2022 | 40,021 | |||||
Ending balance at Mar. 31, 2022 | 223,595 | $ 40 | $ (12,501) | 100,975 | 148,387 | (13,306) |
Ending balance, treasury stock, at cost (in shares) at Mar. 31, 2022 | 592 | |||||
Beginning balance (in shares) at Dec. 31, 2021 | 40,001 | |||||
Beginning balance at Dec. 31, 2021 | 219,780 | $ 40 | $ (12,501) | 100,250 | 143,173 | (11,182) |
Beginning balance, treasury stock, at cost (in shares) at Dec. 31, 2021 | 592 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (11,337) | |||||
Unrealized gain (loss) on available-for-sale securities | (30) | |||||
Ending balance (in shares) at Sep. 30, 2022 | 39,662 | |||||
Ending balance at Sep. 30, 2022 | 194,922 | $ 40 | $ (18,222) | 104,669 | 131,836 | (23,401) |
Ending balance, treasury stock, at cost (in shares) at Sep. 30, 2022 | 1,038 | |||||
Beginning balance (in shares) at Mar. 31, 2022 | 40,021 | |||||
Beginning balance at Mar. 31, 2022 | 223,595 | $ 40 | $ (12,501) | 100,975 | 148,387 | (13,306) |
Beginning balance, treasury stock, at cost (in shares) at Mar. 31, 2022 | 592 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (9,350) | (9,350) | ||||
Foreign currency translation adjustment, net of tax | (5,315) | (5,315) | ||||
Share-based compensation (in shares) | 28 | |||||
Share-based compensation | 1,253 | 1,253 | ||||
Vesting of restricted stock awards (in shares) | (6) | |||||
Vesting of restricted stock awards | (88) | (88) | ||||
Tax payments for stock issuances (in shares) | (446) | (446) | ||||
Tax payments for stock issuances | (5,721) | $ (5,721) | ||||
Unrealized gain (loss) on available-for-sale securities | (10) | (10) | ||||
Pension adjustment, net of tax | (22) | (22) | ||||
Ending balance (in shares) at Jun. 30, 2022 | 39,597 | |||||
Ending balance at Jun. 30, 2022 | 204,342 | $ 40 | $ (18,222) | 102,140 | 139,037 | (18,653) |
Ending balance, treasury stock, at cost (in shares) at Jun. 30, 2022 | 1,038 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (7,201) | (7,201) | ||||
Foreign currency translation adjustment, net of tax | (4,786) | (4,786) | ||||
Vesting of restricted stock awards (in shares) | 101 | |||||
Vesting of restricted stock awards | 2,884 | 2,884 | ||||
Tax payments for stock issuances (in shares) | (36) | |||||
Tax payments for stock issuances | (355) | (355) | ||||
Unrealized gain (loss) on available-for-sale securities | 59 | 59 | ||||
Pension adjustment, net of tax | (21) | (21) | ||||
Ending balance (in shares) at Sep. 30, 2022 | 39,662 | |||||
Ending balance at Sep. 30, 2022 | $ 194,922 | $ 40 | $ (18,222) | 104,669 | 131,836 | (23,401) |
Ending balance, treasury stock, at cost (in shares) at Sep. 30, 2022 | 1,038 | |||||
Beginning balance (in shares) at Dec. 31, 2022 | 39,726 | 39,726 | ||||
Beginning balance at Dec. 31, 2022 | $ 203,311 | $ 40 | $ (18,222) | 107,305 | 128,738 | (14,550) |
Beginning balance, treasury stock, at cost (in shares) at Dec. 31, 2022 | 1,038 | 1,038 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ (8,356) | (8,356) | ||||
Foreign currency translation adjustment, net of tax | 1,715 | 1,715 | ||||
Share-based compensation | 3,812 | 3,812 | ||||
Vesting of restricted stock awards (in shares) | 329 | |||||
Tax payments for stock issuances (in shares) | (105) | |||||
Tax payments for stock issuances | (1,098) | (1,098) | ||||
Unrealized gain (loss) on available-for-sale securities | 7 | 7 | ||||
Pension adjustment, net of tax | (60) | (60) | ||||
Ending balance (in shares) at Mar. 31, 2023 | 39,950 | |||||
Ending balance at Mar. 31, 2023 | $ 199,331 | $ 40 | $ (18,222) | 110,019 | 120,382 | (12,888) |
Ending balance, treasury stock, at cost (in shares) at Mar. 31, 2023 | 1,038 | |||||
Beginning balance (in shares) at Dec. 31, 2022 | 39,726 | 39,726 | ||||
Beginning balance at Dec. 31, 2022 | $ 203,311 | $ 40 | $ (18,222) | 107,305 | 128,738 | (14,550) |
Beginning balance, treasury stock, at cost (in shares) at Dec. 31, 2022 | 1,038 | 1,038 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ (30,240) | |||||
Unrealized gain (loss) on available-for-sale securities | $ 6 | |||||
Ending balance (in shares) at Sep. 30, 2023 | 39,816 | 39,816 | ||||
Ending balance at Sep. 30, 2023 | $ 177,318 | $ 40 | $ (21,749) | 115,162 | 98,498 | (14,633) |
Ending balance, treasury stock, at cost (in shares) at Sep. 30, 2023 | 1,343 | 1,343 | ||||
Beginning balance (in shares) at Mar. 31, 2023 | 39,950 | |||||
Beginning balance at Mar. 31, 2023 | $ 199,331 | $ 40 | $ (18,222) | 110,019 | 120,382 | (12,888) |
Beginning balance, treasury stock, at cost (in shares) at Mar. 31, 2023 | 1,038 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (17,751) | (17,751) | ||||
Foreign currency translation adjustment, net of tax | 1,025 | 1,025 | ||||
Share-based compensation | 4,503 | 4,503 | ||||
Vesting of restricted stock awards (in shares) | 44 | |||||
Tax payments for stock issuances (in shares) | (15) | |||||
Tax payments for stock issuances | (449) | (449) | ||||
Unrealized gain (loss) on available-for-sale securities | 1 | 1 | ||||
Pension adjustment, net of tax | (61) | (61) | ||||
Ending balance (in shares) at Jun. 30, 2023 | 39,979 | |||||
Ending balance at Jun. 30, 2023 | 186,599 | $ 40 | $ (18,222) | 114,073 | 102,631 | (11,923) |
Ending balance, treasury stock, at cost (in shares) at Jun. 30, 2023 | 1,038 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (4,133) | (4,133) | ||||
Foreign currency translation adjustment, net of tax | (2,647) | (2,647) | ||||
Share-based compensation | 1,878 | 1,878 | ||||
Vesting of restricted stock awards (in shares) | 226 | |||||
Tax payments for stock issuances (in shares) | (84) | |||||
Tax payments for stock issuances | (789) | (789) | ||||
Unrealized gain (loss) on available-for-sale securities | (2) | (2) | ||||
Share repurchases (in shares) | (305) | 305 | ||||
Share repurchases | (3,527) | $ (3,527) | ||||
Pension adjustment, net of tax | $ (61) | (61) | ||||
Ending balance (in shares) at Sep. 30, 2023 | 39,816 | 39,816 | ||||
Ending balance at Sep. 30, 2023 | $ 177,318 | $ 40 | $ (21,749) | $ 115,162 | $ 98,498 | $ (14,633) |
Ending balance, treasury stock, at cost (in shares) at Sep. 30, 2023 | 1,343 | 1,343 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (30,240) | $ (11,337) |
Adjustments to reconcile net loss from operations to net cash used in operations: | ||
Depreciation and amortization of intangible assets | 4,524 | 5,691 |
Loss on disposal of asset | 72 | 0 |
Impairment of intangible assets | 0 | 3,828 |
Impairments of property and equipment, net | 2,640 | 0 |
Impairments of inventories, net | 1,568 | 0 |
Gain on sale of equity-method investment | 0 | (14,810) |
Deferred tax benefit | 44 | 683 |
Stock-based compensation | 10,192 | 5,497 |
Changes in operating assets and liabilities: | ||
Accounts receivable and allowance for doubtful accounts | 26,396 | 10,437 |
Inventories, net | (5,277) | (540) |
Contract assets | (542) | (232) |
Accounts payable | (834) | 2,236 |
Income taxes payable | (2,826) | (1,450) |
Accrued expenses | (4,620) | (1,342) |
Deferred compensation | (67) | (532) |
Deferred revenue | (15,425) | (10,838) |
Other assets and liabilities | 557 | (970) |
Net cash used in operating activities | (13,838) | (13,679) |
Cash flows from investing activities: | ||
Purchase of short-term investments | 0 | (15,812) |
Maturities of short-term investments | 2,330 | 39,050 |
Additions to property and equipment | (9,035) | (2,547) |
Additions to intangible assets | (31) | (17) |
Cash paid for acquisition of business | (1,800) | 0 |
Sale of equity-method investment | 0 | 18,874 |
Net cash (used in) provided by investing activities | (8,536) | 39,548 |
Cash flows from financing activities: | ||
Tax payments for restricted stock issuances | (2,335) | (1,078) |
Repurchase of common stock | (3,527) | (5,721) |
Net cash used in financing activities | (5,862) | (6,799) |
Effect of exchange rate changes on cash | 145 | (616) |
Net (decrease) increase in cash | (28,091) | 18,454 |
Cash, cash equivalents, and restricted cash, beginning of period | 97,375 | 64,228 |
Cash, cash equivalents, and restricted cash, end of period | $ 69,284 | $ 82,682 |
Description of the Company and
Description of the Company and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Company and Basis of Presentation | Description of the Company and Basis of Presentation Description of the Company OneSpan helps organizations accelerate digital transformations by enabling secure, compliant, and easy customer agreements and transaction experiences. The Company is a global leader in providing high-assurance identity and authentication security as well as enterprise-grade electronic signature (e-signature) solutions for use cases ranging from simple transactions to workflows that are complex or require higher levels of security. The Company’s solutions help its clients ensure the integrity of the people and records associated with digital agreements, transactions, and interactions in industries including banking, financial services, healthcare, and professional services. The Company offers a portfolio of products and services across identity verification, authentication, virtual interactions and transactions, and secure digital storage. OneSpan has operations in Austria, Australia, Belgium, Canada, China, France, Japan, The Netherlands, Singapore, Switzerland, the United Arab Emirates, the United Kingdom (U.K.), and the United States (U.S.) Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of OneSpan and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the results of the interim periods presented. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In May 2022, the Company announced a three-year strategic transformation plan that began on January 1, 2023. In conjunction with the strategic transformation plan and to enable a more efficient capital deployment model, effective with the quarter ended June 30, 2022, the Company began reporting under the following two lines of business, which are its reportable operating segments: Digital Agreements and Security Solutions. During the three months ended March 31, 2023, and as a result of the ongoing strategic transformation, the Company refined its allocation methodology to better align internal and external costs more directly to where the employee efforts and company resources are being spent on each segment. While the Company's consolidated results will not be impacted, the Company has recast its segment information for the three and nine months ended September 30, 2022 for comparable presentation. For further information regarding the Company’s reportable segments, see Note 3, Segment Information . Estimates and Assumptions The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Foreign Currency Translation and Transactions The financial position and results of operations of the majority of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. Accordingly, assets and liabilities are translated into U.S. Dollars using current exchange rates as of the balance sheet date. Revenue and expenses are translated at average exchange rates prevailing during the year. Translation adjustments arising from differences in exchange rates are charged or credited to other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are included in the condensed consolidated statements of operations in other (expense) income, net. Foreign exchange transaction losses aggregated $0.1 million and $0.5 million for the three and nine months ended September 30, 2023, respectively. Foreign exchange transaction losses aggregated $1.3 million and $2.6 million for the three and nine months ended September 30, 2022, respectively. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies There have been no changes to the significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023 that have had a material impact on the Company’s condensed consolidated financial statements and related notes. Restricted Cash The Company is party to lease agreements that require letters of credit to secure the obligations which totaled $0.7 million and $1.1 million at September 30, 2023 and December 31, 2022, respectively. Additionally, the Company maintained a cash guarantee with a payroll vendor in the amount of $0.1 million at both September 30, 2023 and December 31, 2022. The restricted cash related to the letters of credit and the payroll vendor cash guarantee is recorded in "Restricted cash" on the condensed consolidated balance sheets. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, the Company believes that the issued standards that are not yet effective will not have a material impact on its condensed consolidated financial statements and disclosures upon adoption. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Segments are defined as components of a company that engage in business activities from which they may earn revenues and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker (CODM), in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. • Digital Agreements. Digital Agreements consists of solutions that enable our clients to secure and automate business processes associated with their digital agreement and customer transaction lifecycles that require consent, non-repudiation and compliance. These solutions, which are largely cloud-based, include OneSpan Sign e-signature and OneSpan Notary. This segment also includes costs attributable to our transaction cloud platform. • Security Solutions . Security Solutions consists of our broad portfolio of software products, software development kits (SDKs) and Digipass authenticator devices that are used to build applications designed to defend against attacks on digital transactions across online environments, devices, and applications. The software products and SDKs included in the Security Solutions segment are largely on-premises software products and include identity verification, multi-factor authentication and transaction signing solutions, such as mobile application security and mobile software tokens. Segment operating income consists of the revenues generated by a segment, less the direct costs of revenue, sales and marketing, research and development expenses, amortization expense, and restructuring and other related charges that are incurred directly by a segment. Unallocated corporate costs include costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. Prior to 2023, the Company allocated certain cost of goods sold and operating expenses to its two reportable operating segments using a direct cost allocation and an allocation based on revenue split between the segments. During the three months ended March 31, 2023, and as a result of the ongoing strategic transformation, the Company refined its allocation methodology to better align internal and external costs more directly to where the employee efforts are being spent on each segment moving forward. As a result of this change, there was an increase in cost of goods sold and operating expenses being allocated to the Digital Agreements segment, which better aligns with the investments the Company is making to grow that segment as compared to its Security Solutions segment. Effective with the three months ended September 30, 2022, the Company began allocating amortization of intangible assets expense to operating income (loss) for each of its reportable operating segments in order to better align the expense with the operations of each segment. The Company has updated segment operating income (loss) for the three and nine months ended September 30, 2022 to reflect the change in presentation. The allocation change had no impact on the Company's condensed consolidated financial statements. The tables below set forth information about the Company’s reportable operating segments for the three and nine months ended September 30, 2023 and 2022, along with the items necessary to reconcile the segment information to the totals reported in the accompanying condensed consolidated financial statements. Three Months Ended Nine Months Ended (In thousands, except percentages) 2023 2022 2023 2022 Digital Agreements Revenue $ 13,012 $ 12,200 $ 36,426 $ 35,955 Gross profit $ 9,808 $ 9,736 $ 26,839 $ 27,669 Gross margin 75 % 80 % 74 % 77 % Operating income (loss) (1) $ (4,666) $ 2,160 $ (17,820) $ 2,823 Security Solutions Revenue $ 45,826 $ 44,947 $ 135,752 $ 126,429 Gross profit $ 30,861 $ 28,695 $ 87,410 $ 82,946 Gross margin 67 % 64 % 64 % 66 % Operating income (2) $ 15,673 $ 5,711 $ 39,827 $ 21,399 Total Company: Revenue $ 58,838 $ 57,147 $ 172,178 $ 162,384 Gross profit $ 40,669 $ 38,431 $ 114,249 $ 110,615 Gross margin 69 % 67 % 66 % 68 % Statements of Operations reconciliation: Segment operating income $ 11,007 $ 7,871 $ 22,007 $ 24,222 Corporate operating expenses not allocated at the segment level 15,801 13,496 52,695 47,328 Operating loss $ (4,794) $ (5,625) $ (30,688) $ (23,106) Interest income, net 587 179 1,675 197 Other income (expense), net 353 (1,155) 342 13,817 Loss before income taxes $ (3,854) $ (6,601) $ (28,671) $ (9,092) (1) Digital Agreements operating income includ es $0.6 million of amortization of intangible assets expense for the three months ended both September 30, 2023 and 2022 and $1.7 million of amortization of intangible assets expense for the nine months ended both September 30, 2023 and 2022. (2) Security Solutions operating income includes $0 and $0.4 million of amortization of intangible assets expense for the three months ended September 30, 2023 and 2022, respectively, and $0 and $1.8 million of amortization of intangible assets expense for the nine months ended September 30, 2023 and 2022, respectively. The following tables illustrate the disaggregation of revenues by category and services, including a reconciliation of the disaggregated revenues to revenues from the Company’s two reportable operating segments for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, 2023 2022 Digital Agreements Security Solutions Digital Agreements Security Solutions (In thousands) Subscription $ 11,807 $ 14,378 $ 10,321 $ 11,941 Maintenance and support 995 11,276 1,693 11,158 Professional services and other (1) 210 1,333 186 2,034 Hardware products — 18,839 — 19,814 Total Revenue $ 13,012 $ 45,826 $ 12,200 $ 44,947 Nine Months Ended September 30, 2023 2022 Digital Agreements Security Solutions Digital Agreements Security Solutions (In thousands) Subscription $ 32,641 $ 46,485 $ 30,728 $ 34,632 Maintenance and support 3,121 31,914 4,453 32,522 Professional services and other (1) 664 4,002 774 5,327 Hardware products — 53,351 — 53,948 Total Revenue $ 36,426 $ 135,752 $ 35,955 $ 126,429 (1) Professional services and other includes perpetual software licenses revenue, which was less than 2% of total revenue for the three and nine months ended September 30, 2023, respectively, and less than 3% of total revenue for the three and nine months ended September 30, 2022, respectively. The Company allocates goodwill by reporting unit, in accordance with Accounting Standards Codification (ASC) 350 – Goodwill and Other . Asset information by segment is not reported to or reviewed by the CODM to allocate resources, and therefore, the Company has not disclosed asset information for the segments. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Revenue by major products and services The following tables present the Company’s revenues disaggregated by major products and services, geographical region and timing of revenue recognition: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (In thousands) Subscription $ 26,185 $ 22,262 $ 79,126 $ 65,360 Maintenance and support 12,271 12,851 35,035 36,975 Professional services and other (1) 1,543 2,220 4,666 6,101 Hardware products 18,839 19,814 53,351 53,948 Total Revenue $ 58,838 $ 57,147 $ 172,178 $ 162,384 (1) Professional services and other includes perpetual software licenses revenue, which was less than 2% of total revenue for the three and nine months ended September 30, 2023, respectively, and less than 3% of total revenue for the three and nine months ended September 30, 2022, respectively. Revenue by location of customer for the Three and Nine Months Ended September 30, 2023 and 2022 We classify our sales by customer location in three geographic regions: 1) EMEA, which includes Europe, Middle East and Africa; 2) the Americas, which includes North, Central, and South America; and 3) Asia Pacific (APAC), which includes Australia, New Zealand, and India. The breakdown of revenue in each of our major geographic areas was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (In thousands, except percentages) Revenue EMEA $ 26,233 $ 25,999 $ 80,592 $ 74,396 Americas 19,999 20,394 58,828 56,972 APAC 12,606 10,754 32,758 31,016 Total revenue $ 58,838 $ 57,147 $ 172,178 $ 162,384 % of Total Revenue EMEA 45 % 45 % 47 % 46 % Americas 34 % 36 % 34 % 35 % APAC 21 % 19 % 19 % 19 % Timing of revenue recognition Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Products and Licenses transferred at a point in time $ 31,732 $ 31,280 $ 95,461 $ 89,496 Services transferred over time 27,106 25,867 76,717 72,888 Total Revenue $ 58,838 $ 57,147 $ 172,178 $ 162,384 Contract balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers as of September 30, 2023 and December 31, 2022: September 30, December 31, (In thousands) 2023 2022 Receivables, inclusive of trade and unbilled $ 38,667 $ 65,132 Contract Assets (current and non-current) $ 5,096 $ 4,642 Contract Liabilities (Deferred Revenue current and non-current) $ 55,329 $ 70,906 Contract assets relate primarily to multi-year term license arrangements and the remaining contractual billings. These contract assets are transferred to receivables when the right to bill occurs over a 2- to 5-year period. The contract liabilities primarily relate to the advance consideration received from customers for subscription and maintenance services. Revenue is recognized for these services over time. As a practical expedient, the Company does not adjust the promised amount of consideration for the effects of a significant financing component when it is expected, at contract inception, that the period between the Company's transfer of a promised product or service to a customer and when the customer pays for that product or service will be one year or less. Extended payment terms are not typically included in contracts with customers. Revenue recognized during the nine months ended September 30, 2023 included $52.6 million that was included on the December 31, 2022 consolidated balance sheet in contract liabilities. Deferred revenue decreased in the same period due to timing of annual renewals. Transaction price allocated to the remaining performance obligations Remaining performance obligations represent the revenue that is expected to be recognized in future periods related to performance obligations that are unsatisfied, or partially unsatisfied, as of the end of the period. The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2023: (In thousands) 2023 2024 2025 Beyond 2025 Total Future revenue related to current unsatisfied performance obligations $ 12,040 $ 30,733 $ 16,271 $ 10,340 $ 69,384 The Company applies practical expedients and does not disclose information about remaining performance obligations (a) that have original expected durations of one year or less, or (b) where revenue is recognized as invoiced. Costs of obtaining a contract The Company incurs incremental costs related to commissions, which can be directly tied to obtaining a contract. The Company capitalizes commissions associated with certain new contracts and amortizes the costs over a period of up to seven years, which is the determined benefit period based on the transfer of goods or services. The Company determined the period of benefit by taking into consideration the customer contracts, its technology and other factors, including customer attrition. Commissions are earned upon invoicing to the customer. For contracts with multiple year payment terms, because the commissions that are payable after year 1 are payable based on continued employment, they are expensed when incurred . Commissions and amortization expense are included in “Sales and Marketing” expense in the condensed consolidated statements of operations. Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period for the assets that the Company otherwise would have recognized is one year or less. These costs are included in “Sales and Marketing” expense in the condensed consolidated statements of operations. The following tables provide information related to the capitalized costs and amortization recognized in the current and prior period: (In thousands) September 30, 2023 December 31, 2022 Capitalized costs to obtain contracts, current $ 3,284 $ 2,929 Capitalized costs to obtain contracts, non-current $ 10,322 $ 10,571 Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Amortization of capitalized costs to obtain contracts $ 801 $ 641 $ 2,286 $ 1,731 Impairments of capitalized costs to obtain contracts $ — $ — $ — $ — |
Inventories, net
Inventories, net | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Inventories, net Inventories, net, consisting principally of hardware and component parts, are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Inventories, net consist of the following: September 30, December 31, (In thousands) Component parts (1) $ 8,890 $ 6,762 Work-in-process and finished goods 6,566 5,292 Total $ 15,456 $ 12,054 (1) In conjunction with the Company's decision to discontinue investments in its Digipass CX product (see Note 16, Restructuring and Other Related Charges) , non-cash impairment charges of $1.6 million for component parts, net, were recorded in "Cost of goods sold, Product and license" on the condensed consolidated statements of operations during the quarter ended June 30, 2023. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table presents the changes in goodwill during the nine months ended September 30, 2023: Digital Agreements Security Solutions Total (In thousands) Net balance at December 31, 2022 $ 19,732 $ 70,782 $ 90,514 Foreign currency exchange rate effect 56 199 255 Acquisition during the period (1) $ 600 $ — $ 600 Net balance at September 30, 2023 $ 20,388 $ 70,981 $ 91,369 (1) Represents goodwill recorded in conjunction with the acquisition of substantially all the assets of the ProvenDB business of Southbank Software Pty Ltd. during the three months ended March 31, 2023. See Note 17, Business Acquisitions, for additional information. No impairment of goodwill was recorded during the nine months ended September 30, 2023 and 2022. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets as of September 30, 2023 and December 31, 2022 consist of the following: As of September 30, 2023 As of December 31, 2022 (In thousands) Useful Life (in years) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Acquired technology 3 to 7 $ 43,293 $ 42,024 $ 42,022 $ 41,894 Customer relationships 5 to 12 34,451 25,076 34,386 23,323 Patents, trademarks, and other 10 to 20 13,543 12,275 13,518 12,227 Total $ 91,287 $ 79,375 $ 89,926 $ 77,444 Total amortization expense was $0.7 million and $2.0 million for the three and nine months ended September 30, 2023, respectively, compared to $1.0 million and $3.6 million for the three and nine months ended September 30, 2022, respectively. Amortization expense includes cost of sales amortization expense directly related to delivering cloud subscription revenue of $0.1 million and $0.3 million for the three and nine months ended September 30, 2023, respectively, and $0 for the three and nine months ended September 30, 2022. Costs are recorded in "Services and other cost of goods sold" on the condensed consolidated statements of operations. Certain intangible assets are denominated in functional currencies besides the U.S. dollar and are subject to currency fluctuations. During the nine months ended September 30, 2022, the Company performed an impairment review of the customer relationships intangible assets obtained in its 2018 acquisition of Dealflo Limited (“Dealflo”). The impairment review was triggered by the Company’s July 2022 notification to customers regarding its intent to gradually sunset its Dealflo solution in the months leading up to December 31, 2023. As a result, substantially all Dealflo solution customer contracts will terminate on or before December 31, 2023. The results of the impairment review indicated that the carrying value of the Dealflo customer relationships exceeded the fair value, and the Company recorded a $3.8 million impairment charge on the entire remaining value of the asset during the three months ended September 30, 2022. The charge is included in “Impairment of intangible assets” on the condensed consolidated statements of operations. There was no additional impairment of intangible assets recorded during the nine months ended September 30, 2023 and 2022. |
Property and Equipment, net
Property and Equipment, net | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net The following table presents the major classes of property and equipment, net, as of September 30, 2023 and December 31, 2022: (In thousands) September 30, 2023 December 31, 2022 Office equipment and software $ 7,981 $ 14,451 Leasehold improvements 6,827 9,927 Furniture and fixtures 3,295 4,260 Capitalized software 10,565 4,007 Total 28,668 32,645 Accumulated depreciation (12,150) (19,964) Property and equipment, net $ 16,518 $ 12,681 Total depreciation expense was $1.0 million and $2.5 million for the three and nine months ended September 30, 2023, respectively, compared to $0.7 million and $2.1 million for the three and nine months ended September 30, 2022, respectively. Depreciation expense includes cost of sales depreciation expense directly related to delivering cloud subscription revenue of $0.4 million for the three and nine months ended September 30, 2023, respectively, and $0 for the three and nine months ended September 30, 2022. Costs are recorded in "Services and other cost of goods sold" on the condensed consolidated statements of operations. As part of the Company's decision to discontinue investments in its Digipass CX product (see Note 16, Restructuring and Other Related Charges) , non-cash impairment charges of $1.4 million for capitalized software were recorded in "Restructuring and other related charges" on the condensed consolidated statements of operations during the three months ended June 30, 2023. In conjunction with the Company's Chicago office lease abandonment (see Note 16, Restructuring and Other Related Charges) , non-cash impairment charges of $0.6 million for leasehold improvements and $0.1 million for office equipment and software were recorded in "Restructuring and other related charges" on the condensed consolidated statements of operations during the three months ended June 30, 2023 Due to the Company's Brussels office lease termination (see Note 16, Restructuring and Other Related Charges) |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables summarize the Company’s financial assets by level in the fair value hierarchy, which are measured at fair value on a recurring basis, as of September 30, 2023 and December 31, 2022: Fair Value Measurement at Reporting Date Using (In thousands) September 30, 2023 Quoted Prices in Active Markets for Significant Other Observable Inputs Significant Unobservable Inputs (Level 3) Assets: U.S. Treasury Bills $ 8,980 — $ 8,980 — Money Market Funds $ 18,245 18,245 $ — — Fair Value Measurement at Reporting Date Using (In thousands) December 31, 2022 Quoted Prices in Active Markets for Significant Other Observable Inputs Significant Unobservable Inputs (Level 3) Assets: Money Market Funds $ 28,388 28,388 $ — — Commercial Paper $ 6,743 — $ 6,743 — Corporate Notes / Bonds $ 2,328 — $ 2,328 — The Company classifies its investments in debt securities as available-for-sale. The Company reviews available-for-sale debt securities for impairments related to losses and other factors each quarter. The unrealized gains and losses on the available-for-sale debt securities were not material as of September 30, 2023 and December 31, 2022. Also, the Company did not have any financial liabilities that are measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022. |
Allowance for Credit Losses
Allowance for Credit Losses | 9 Months Ended |
Sep. 30, 2023 | |
Credit Loss [Abstract] | |
Allowance for Credit Losses | Allowance for Credit Losses The changes in the allowance for credit losses during the nine months ended September 30, 2023 were as follows: (In thousands) Balance at December 31, 2022 $ 1,600 Provision 418 Write-offs (355) Balance at September 30, 2023 $ 1,663 During the nine months ended September 30, 2023, the Company wrote off $0.4 million of accounts receivable that were fully reserved for and no longer deemed collectible. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases Operating lease cost details for the three and nine months ended September 30, 2023 and 2022 are as follows: Three Months Ended Nine months ended 2023 2022 2023 2022 (In thousands) Building rent $ 369 $ 509 $ 1,370 $ 1,605 Automobile rentals 270 295 836 876 Total net operating lease costs $ 639 $ 804 $ 2,206 $ 2,481 At September 30, 2023, the Company’s weighted average remaining lease term for its operating leases is 4.5 years, and the weighted average discount rate for its operating leases is 5%. During the nine months ended September 30, 2023, there were $2.2 million of operating cash payments for lease liabilities, and $0.6 million of right-of use assets obtained in exchange for new lease liabilities. As part of its multiyear restructuring plan (see Note 16, Restructuring and Other Related Charges ), the Company vacated its Chicago office space and abandoned the underlying leases during June 2023. The Company accrued a $1.4 million early lease termination fee, which is reflected on the condensed consolidated statements of operations for the nine months ended September 30, 2023 in "Restructuring and other related charges". The underlying lease right-of-use asset and lease liability for the Chicago leased office space were written off, and a $0.3 million gain related to rent concessions and tenant improvement allowances was recorded on the condensed consolidated statements of operations for the nine months ended September 30, 2023 in "Restructuring and other related charges". In September 2023, the Company vacated its Brussels office and terminated the lease as of September 30, 2023. The Company accrued a $0.3 million early lease termination fee, which is reflected on the condensed consolidated statements of operations for the three and nine months ended September 30, 2023 in "Restructuring and other related charges". The underlying lease right-of-use asset and lease liability for the Brussels leased office space were written off, and a $0.6 million loss related to rent concessions and tenant improvement allowances was recorded on the condensed consolidated statements of operations for the three and nine months ended September 30, 2023 in "Restructuring and other related charges". Maturities of the Company’s operating leases as of September 30, 2023 are as follows: As of (In thousands) 2023 $ 608 2024 2,099 2025 1,227 2026 1,136 2027 956 Later years 1,266 Less imputed interest (742) Total lease liabilities $ 6,550 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s estimated annual effective tax rate for 2023 before discrete items and excluding entities with a valuation allowance is expected to be approximately 25%. The Company’s global effective tax rate is higher than the U.S. statutory tax rate of 21% primarily due to foreign tax rate differences and nondeductible expenses. The ultimate tax expense will depend on the mix of earnings in various jurisdictions. Income taxes, net of refunds, of $4.4 million were paid during the nine months ended September 30, 2023. Income taxes, net of refunds, of $1.7 million were paid during the nine months ended September 30, 2022. Management assesses the need for a valuation allowance on a regular basis, weighing all positive and negative evidence to determine whether a deferred tax asset will be fully or partially realized. In evaluating the realizability of deferred tax assets, significant pieces of negative evidence such as 3-year cumulative losses are considered. Management also reviews reversal patterns of temporary differences to determine if the Company would have sufficient taxable income due to the reversal of temporary differences to support the realization of deferred tax assets. Certain operations have incurred net operating losses (NOLs), which are currently subject to a valuation allowance. These NOLs may become deductible to the extent these operations become profitable. For each of its operations, the Company evaluates whether it is more likely than not that the tax benefits related to NOLs will be realized. As part of this evaluation, the Company considers evidence such as tax planning strategies, historical operating results, forecasted taxable income, and recent financial performance. In the year that certain operations record a loss, the Company does not recognize a corresponding tax benefit, thus increasing its effective tax rate, or decreasing its effective tax rate when reporting income in a jurisdiction that has a valuation allowance. Upon determining that it is more likely than not that the NOLs will be realized, the Company will reduce the tax valuation allowances related to these NOLs, which will result in a reduction of its income tax expense and its effective tax rate in the period. |
Long-Term Compensation Plan and
Long-Term Compensation Plan and Stock Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Long-Term Compensation Plan and Stock Based Compensation | Long-Term Compensation Plan and Stock Based Compensation (share counts in thousands) Under the OneSpan Inc. 2019 Omnibus Incentive Plan, the Company awards restricted stock units subject to time-based vesting, restricted stock units which are subject to the achievement of future performance criteria and restricted stock units that are subject to the achievement of market conditions. Other long-term incentive plan compensation expense includes cash incentives. The Company awarded 0.9 million restricted stock units during the nine months ended September 30, 2023, subject to time-based vesting. The fair value of the unissued time-based restricted stock unit grants was $11.9 million at the dates of grant and the grants are being amortized over the vesting periods of one The Company awarded restricted stock units subject to the achievement of service and future performance criteria during the nine months ended September 30, 2023, which allow for up to 0.8 million shares to be earned if the performance criteria are achieved at the target level. The fair value of these awards was $11.9 million at the dates of grant and the awards are being amortized over the requisite service period of one During the nine months ended September 30, 2023 and 2022, stock-based compensation and other long-term incentive plan compensation accruals were reversed for employees who were terminated. The reversal of the accrued long-term incentive plan compensation for the terminated employees largely offset the expense for the period. The following table presents stock-based compensation expense and other long-term incentive plan compensation expense for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (In thousands) Stock-based compensation $ 1,878 $ 2,884 $ 10,192 $ 5,497 Other long-term incentive plan compensation (1) 55 230 234 118 Total compensation $ 1,933 $ 3,114 $ 10,426 $ 5,615 (1) Long-term incentive compensation includes immaterial expense for 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 expense associated with these cash incentive grants was $0.1 million and $0.2 million for the three months ended September 30, 2023 and 2022, respectively, and $0.2 million and $0.1 million for the nine months ended September 30, 2023 and 2022, respectively. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic earnings per share is based on the weighted average number of shares outstanding and excludes the dilutive effect of common stock equivalents. Diluted earnings per share is based on the weighted average number of shares outstanding and includes the dilutive effect of common stock equivalents to the extent they are not anti-dilutive. Because the Company was in a net loss position for the three and nine months ended September 30, 2023 and 2022, diluted net loss per share for the period excludes the effects of common stock equivalents, which are anti-dilutive. The details of the earnings per share calculations for the three and nine months ended September 30, 2023 and 2022 are as follows: Three Months Ended Nine Months Ended (In thousands, except per share data) 2023 2022 2023 2022 Net loss $ (4,133) $ (7,201) $ (30,240) $ (11,337) Weighted average common shares outstanding: Basic 40,454 39,723 40,529 39,801 Incremental shares with dilutive effect: Restricted stock awards — — — — Diluted 40,454 39,723 40,529 39,801 Net loss per share: Basic $ (0.10) $ (0.18) $ (0.75) $ (0.28) Diluted $ (0.10) $ (0.18) $ (0.75) $ (0.28) |
Legal Proceedings and Contingen
Legal Proceedings and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings and Contingencies | Legal Proceedings and Contingencies The Company is subject to certain legal proceedings and claims incidental to the operations of its business. The Company is also subject to certain other legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully adjudicated. The Company currently does not anticipate that these matters, if resolved against the Company, will have a material adverse impact on its financial results or financial condition. The Company accrues loss contingencies when losses become probable and are reasonably estimable. As of September 30, 2023, the Company has recorded an accrual of $1.0 million for loss contingencies. The Company does not accrue for contingent losses that, in the judgment of the Company, are considered to be reasonably possible, but not probable. As of September 30, 2023, the Company does not have any reasonably possible losses for which an estimate can be made. Although the Company intends to defend its legal matters vigorously, the ultimate outcome of these matters is uncertain. However, the Company does not expect the potential losses, if any, to have a material adverse impact on its operating results, cash flows, or financial condition. |
Restructuring and Other Related
Restructuring and Other Related Charges | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Related Charges | Restructuring and Other Related Charges In December 2021, the Company's Board of Directors (the "Board") approved a restructuring plan (“Plan”) designed to advance the Company’s operating model, streamline its business, improve efficiency, and enhance its capital resources. As part of the first phase of the Plan, the Company reduced headcount by eliminating positions in certain areas of its organization. The first phase of the Plan began and was substantially completed during the three months ended March 31, 2022. In May 2022, the Board approved additional actions related to the Plan through the year ending December 31, 2025. This second phase of the Plan is designed to continue to advance the same objectives as the first phase of the Plan. In connection with the Plan, the Company recorded $6.5 million and $13.1 million in “Restructuring and other related charges” in the condensed consolidated statements of operations for the three and nine months ended September 30, 2023, respectively, and $6.5 million and $11.8 million for the three and nine months ended September 30, 2022, respectively. The main categories of charges are in the following areas: • Employee costs – include severance, related benefits, and retention pay costs incurred as a result of eliminating positions in certain areas of the Company. For the three and nine months ended September 30, 2023, severance-related costs were $5.1 million and $8.2 million, respectively. In total, there were approximately 240 employees, across multiple functions, whose positions were made redundant. The $2.3 million current portion of the restructuring liability at September 30, 2023 is included in "Accrued wages and payroll taxes" in the condensed consolidated balance sheet and is expected to be paid within the next 12 months. The $0.5 million non-current portion is included in "Other long-term liabilities" in the condensed consolidated balance sheet and is expected to be paid within the next 24 months. • Real estate rationalization costs – include costs to align the real estate footprint with the Company’s needs. The Company vacated its Chicago office space and abandoned the underlying leases during the three months ended June 30, 2023. During September 2023, the Company vacated its Brussels office and terminated the lease as of September 30, 2023. The Company accrued contract termination fees of $1.4 million and $0.3 million for the Chicago office and Brussels office, respectively. The $1.0 million current portion of the restructuring liability at September 30, 2023 is included in "Other accrued expenses" in the condensed consolidated balance sheet and is expected to be paid within the next 12 months. The $0.7 million non-current portion is included in "Long-term lease liabilities" in the condensed consolidated balance sheet and is expected to be paid within the next 18 months. In conjunction with the abandonment of the Chicago lease and termination of the Brussels lease, the underlying right-of-use assets and liabilities were written off and a $0.3 million gain and $0.6 million loss, respectively, were recorded related to rent concessions and tenant improvement allowances for restructuring. The Company also incurred $0.7 million and $0.6 million of non-cash impairment charges for fixed assets in its Chicago and Brussels leased office space, respectively (See Note 8, Property and Equipment, net ). • Product and services optimization costs – include costs to discontinue products and services that are no longer advancing the Company's operating model. In June 2023, the Company made the decision to discontinue investments in its Digipass CX product and incurred $1.4 million of non-cash impairment charges for capitalized software. The charges are recorded in "Restructuring and other related charges" on the condensed consolidated statements of operations for the nine months ended September 30, 2023 (See Note 8, Property and Equipment, net ). • Vendor rationalization costs – include costs for contractually committed services the Company is no longer utilizing. For the three and nine months ended September 30, 2023, these costs totaled $0.5 million and $0.7 million, respectively, and are included in "Restructuring and other related charges" on the condensed consolidated statements of operations for the nine months ended September 30, 2023. The table below sets forth the changes in the carrying amount of our restructuring charge liability by restructuring type for the nine months ended September 30, 2023. Employee Costs Real Estate Rationalization Total (In thousands) Balance as of December 31, 2022 $ 3,596 $ — $ 3,596 Additions 8,077 1,690 9,767 Payments (8,853) — (8,853) Balance as of September 30, 2023 $ 2,820 $ 1,690 $ 4,510 |
Business Acquisitions
Business Acquisitions | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisitions | Business Acquisitions On February 22, 2023, the Company acquired substantially all of the assets of the ProvenDB business of Southbank Software Pty Ltd. ("ProvenDB") under the terms of an asset purchase agreement. Pursuant to the terms of the asset purchase agreement, the total consideration for the acquisition was $2.0 million, of which $1.8 million was paid in cash at closing. The remaining $0.2 million was held back as security for any indemnity claims made by the Company, and to the extent not used to satisfy such claims, will be paid to the seller 12 months after the acquisition date. ProvenDB is a developer of secure storage that leverages blockchain technology in order to prevent data tampering or alteration of documents. The technology acquired in the acquisition is expected to provide a foundational architecture for future blockhain-based digital solutions, including secure storage. As of September 30, 2023, the Company is still determining the purchase price allocation. A preliminary purchase price allocation of the fair value of the assets acquired and liabilities assumed is included in the table below. These estimates are subject to change and may result in an increase in goodwill with regard to our estimates of the acquired assets and assumed liabilities during the measurement period, which may extend up to one year from the acquisition date. ProvenDB is allocated entirely to our Digital Agreements reportable operating segment. (In thousands) As of Date of Opening Balance Sheet Net assets acquired: Acquired technology $ 1,447 Accrued wages and payroll taxes (47) Goodwill 600 Total net assets acquired $ 2,000 Consideration $ 2,000 The financial impact of this acquisition was not material to our condensed consolidated financial statements, and therefore, we have not presented pro forma results of operations for the acquisition. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Description of the Company | Description of the CompanyOneSpan helps organizations accelerate digital transformations by enabling secure, compliant, and easy customer agreements and transaction experiences. The Company is a global leader in providing high-assurance identity and authentication security as well as enterprise-grade electronic signature (e-signature) solutions for use cases ranging from simple transactions to workflows that are complex or require higher levels of security. The Company’s solutions help its clients ensure the integrity of the people and records associated with digital agreements, transactions, and interactions in industries including banking, financial services, healthcare, and professional services. The Company offers a portfolio of products and services across identity verification, authentication, virtual interactions and transactions, and secure digital storage. OneSpan has operations in Austria, Australia, Belgium, Canada, China, France, Japan, The Netherlands, Singapore, Switzerland, the United Arab Emirates, the United Kingdom (U.K.), and the United States (U.S.) |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of OneSpan and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the results of the interim periods presented. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In May 2022, the Company announced a three-year strategic transformation plan that began on January 1, 2023. In conjunction with the strategic transformation plan and to enable a more efficient capital deployment model, effective with the quarter ended June 30, 2022, the Company began reporting under the following two lines of business, which are its reportable operating segments: Digital Agreements and Security Solutions. During the three months ended March 31, 2023, and as a result of the ongoing strategic transformation, the Company refined its allocation methodology to better align internal and external costs more directly to where the employee efforts and company resources are being spent on each segment. While the Company's consolidated results will not be impacted, the Company has recast its segment information for the three and nine months ended September 30, 2022 for comparable presentation. For further information regarding the Company’s reportable segments, see Note 3, Segment Information . |
Estimates and Assumptions | Estimates and Assumptions The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of |
Foreign Currency Translation and Transactions | Foreign Currency Translation and TransactionsThe financial position and results of operations of the majority of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. Accordingly, assets and liabilities are translated into U.S. Dollars using current exchange rates as of the balance sheet date. Revenue and expenses are translated at average exchange rates prevailing during the year. Translation adjustments arising from differences in exchange rates are charged or credited to other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are included in the condensed consolidated statements of operations in other (expense) income, net. |
Restricted Cash | Restricted Cash The Company is party to lease agreements that require letters of credit to secure the obligations which totaled $0.7 million and $1.1 million at September 30, 2023 and December 31, 2022, respectively. Additionally, the Company maintained a cash guarantee with a payroll vendor in the amount of $0.1 million at both September 30, 2023 and December 31, 2022. The restricted cash related to the letters of credit and the payroll vendor cash guarantee is recorded in "Restricted cash" on the condensed consolidated balance sheets. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, the Company believes that the issued standards that are not yet effective will not have a material impact on its condensed consolidated financial statements and disclosures upon adoption. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Reconciliation of segment information to the totals reported in the accompanying consolidated financial statements | The tables below set forth information about the Company’s reportable operating segments for the three and nine months ended September 30, 2023 and 2022, along with the items necessary to reconcile the segment information to the totals reported in the accompanying condensed consolidated financial statements. Three Months Ended Nine Months Ended (In thousands, except percentages) 2023 2022 2023 2022 Digital Agreements Revenue $ 13,012 $ 12,200 $ 36,426 $ 35,955 Gross profit $ 9,808 $ 9,736 $ 26,839 $ 27,669 Gross margin 75 % 80 % 74 % 77 % Operating income (loss) (1) $ (4,666) $ 2,160 $ (17,820) $ 2,823 Security Solutions Revenue $ 45,826 $ 44,947 $ 135,752 $ 126,429 Gross profit $ 30,861 $ 28,695 $ 87,410 $ 82,946 Gross margin 67 % 64 % 64 % 66 % Operating income (2) $ 15,673 $ 5,711 $ 39,827 $ 21,399 Total Company: Revenue $ 58,838 $ 57,147 $ 172,178 $ 162,384 Gross profit $ 40,669 $ 38,431 $ 114,249 $ 110,615 Gross margin 69 % 67 % 66 % 68 % Statements of Operations reconciliation: Segment operating income $ 11,007 $ 7,871 $ 22,007 $ 24,222 Corporate operating expenses not allocated at the segment level 15,801 13,496 52,695 47,328 Operating loss $ (4,794) $ (5,625) $ (30,688) $ (23,106) Interest income, net 587 179 1,675 197 Other income (expense), net 353 (1,155) 342 13,817 Loss before income taxes $ (3,854) $ (6,601) $ (28,671) $ (9,092) (1) Digital Agreements operating income includ es $0.6 million of amortization of intangible assets expense for the three months ended both September 30, 2023 and 2022 and $1.7 million of amortization of intangible assets expense for the nine months ended both September 30, 2023 and 2022. (2) Security Solutions operating income includes $0 and $0.4 million of amortization of intangible assets expense for the three months ended September 30, 2023 and 2022, respectively, and $0 and $1.8 million of amortization of intangible assets expense for the nine months ended September 30, 2023 and 2022, respectively. |
Reconciliation of the disaggregated revenues to revenues from our two operating segments | The following tables illustrate the disaggregation of revenues by category and services, including a reconciliation of the disaggregated revenues to revenues from the Company’s two reportable operating segments for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, 2023 2022 Digital Agreements Security Solutions Digital Agreements Security Solutions (In thousands) Subscription $ 11,807 $ 14,378 $ 10,321 $ 11,941 Maintenance and support 995 11,276 1,693 11,158 Professional services and other (1) 210 1,333 186 2,034 Hardware products — 18,839 — 19,814 Total Revenue $ 13,012 $ 45,826 $ 12,200 $ 44,947 Nine Months Ended September 30, 2023 2022 Digital Agreements Security Solutions Digital Agreements Security Solutions (In thousands) Subscription $ 32,641 $ 46,485 $ 30,728 $ 34,632 Maintenance and support 3,121 31,914 4,453 32,522 Professional services and other (1) 664 4,002 774 5,327 Hardware products — 53,351 — 53,948 Total Revenue $ 36,426 $ 135,752 $ 35,955 $ 126,429 (1) Professional services and other includes perpetual software licenses revenue, which was less than 2% of total revenue for the three and nine months ended September 30, 2023, respectively, and less than 3% of total revenue for the three and nine months ended September 30, 2022, respectively. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues disaggregated by geography, major product line and timing of revenue recognition | The following tables present the Company’s revenues disaggregated by major products and services, geographical region and timing of revenue recognition: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (In thousands) Subscription $ 26,185 $ 22,262 $ 79,126 $ 65,360 Maintenance and support 12,271 12,851 35,035 36,975 Professional services and other (1) 1,543 2,220 4,666 6,101 Hardware products 18,839 19,814 53,351 53,948 Total Revenue $ 58,838 $ 57,147 $ 172,178 $ 162,384 (1) Professional services and other includes perpetual software licenses revenue, which was less than 2% of total revenue for the three and nine months ended September 30, 2023, respectively, and less than 3% of total revenue for the three and nine months ended September 30, 2022, respectively. Revenue by location of customer for the Three and Nine Months Ended September 30, 2023 and 2022 We classify our sales by customer location in three geographic regions: 1) EMEA, which includes Europe, Middle East and Africa; 2) the Americas, which includes North, Central, and South America; and 3) Asia Pacific (APAC), which includes Australia, New Zealand, and India. The breakdown of revenue in each of our major geographic areas was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (In thousands, except percentages) Revenue EMEA $ 26,233 $ 25,999 $ 80,592 $ 74,396 Americas 19,999 20,394 58,828 56,972 APAC 12,606 10,754 32,758 31,016 Total revenue $ 58,838 $ 57,147 $ 172,178 $ 162,384 % of Total Revenue EMEA 45 % 45 % 47 % 46 % Americas 34 % 36 % 34 % 35 % APAC 21 % 19 % 19 % 19 % Timing of revenue recognition Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Products and Licenses transferred at a point in time $ 31,732 $ 31,280 $ 95,461 $ 89,496 Services transferred over time 27,106 25,867 76,717 72,888 Total Revenue $ 58,838 $ 57,147 $ 172,178 $ 162,384 |
Schedule of changes in contract assets and contract liabilities | The following table provides information about receivables, contract assets and contract liabilities from contracts with customers as of September 30, 2023 and December 31, 2022: September 30, December 31, (In thousands) 2023 2022 Receivables, inclusive of trade and unbilled $ 38,667 $ 65,132 Contract Assets (current and non-current) $ 5,096 $ 4,642 Contract Liabilities (Deferred Revenue current and non-current) $ 55,329 $ 70,906 |
Schedule of estimated revenue expected to be recognized in the future | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2023: (In thousands) 2023 2024 2025 Beyond 2025 Total Future revenue related to current unsatisfied performance obligations $ 12,040 $ 30,733 $ 16,271 $ 10,340 $ 69,384 |
Schedule of information related to the capitalized costs and amortization recognized in the current and prior period | The following tables provide information related to the capitalized costs and amortization recognized in the current and prior period: (In thousands) September 30, 2023 December 31, 2022 Capitalized costs to obtain contracts, current $ 3,284 $ 2,929 Capitalized costs to obtain contracts, non-current $ 10,322 $ 10,571 Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Amortization of capitalized costs to obtain contracts $ 801 $ 641 $ 2,286 $ 1,731 Impairments of capitalized costs to obtain contracts $ — $ — $ — $ — |
Inventories, net (Tables)
Inventories, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Summary of inventories, net | Inventories, net consist of the following: September 30, December 31, (In thousands) Component parts (1) $ 8,890 $ 6,762 Work-in-process and finished goods 6,566 5,292 Total $ 15,456 $ 12,054 (1) In conjunction with the Company's decision to discontinue investments in its Digipass CX product (see Note 16, Restructuring and Other Related Charges) , non-cash impairment charges of $1.6 million for component parts, net, were recorded in "Cost of goods sold, Product and license" on the condensed consolidated statements of operations during the quarter ended June 30, 2023. |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill activity | The following table presents the changes in goodwill during the nine months ended September 30, 2023: Digital Agreements Security Solutions Total (In thousands) Net balance at December 31, 2022 $ 19,732 $ 70,782 $ 90,514 Foreign currency exchange rate effect 56 199 255 Acquisition during the period (1) $ 600 $ — $ 600 Net balance at September 30, 2023 $ 20,388 $ 70,981 $ 91,369 (1) Represents goodwill recorded in conjunction with the acquisition of substantially all the assets of the ProvenDB business of Southbank Software Pty Ltd. during the three months ended March 31, 2023. See Note 17, Business Acquisitions, for additional information. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of intangible asset activity | Intangible assets as of September 30, 2023 and December 31, 2022 consist of the following: As of September 30, 2023 As of December 31, 2022 (In thousands) Useful Life (in years) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Acquired technology 3 to 7 $ 43,293 $ 42,024 $ 42,022 $ 41,894 Customer relationships 5 to 12 34,451 25,076 34,386 23,323 Patents, trademarks, and other 10 to 20 13,543 12,275 13,518 12,227 Total $ 91,287 $ 79,375 $ 89,926 $ 77,444 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of major classes of property and equipment | The following table presents the major classes of property and equipment, net, as of September 30, 2023 and December 31, 2022: (In thousands) September 30, 2023 December 31, 2022 Office equipment and software $ 7,981 $ 14,451 Leasehold improvements 6,827 9,927 Furniture and fixtures 3,295 4,260 Capitalized software 10,565 4,007 Total 28,668 32,645 Accumulated depreciation (12,150) (19,964) Property and equipment, net $ 16,518 $ 12,681 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets that are measured at fair value on a recurring basis | The following tables summarize the Company’s financial assets by level in the fair value hierarchy, which are measured at fair value on a recurring basis, as of September 30, 2023 and December 31, 2022: Fair Value Measurement at Reporting Date Using (In thousands) September 30, 2023 Quoted Prices in Active Markets for Significant Other Observable Inputs Significant Unobservable Inputs (Level 3) Assets: U.S. Treasury Bills $ 8,980 — $ 8,980 — Money Market Funds $ 18,245 18,245 $ — — Fair Value Measurement at Reporting Date Using (In thousands) December 31, 2022 Quoted Prices in Active Markets for Significant Other Observable Inputs Significant Unobservable Inputs (Level 3) Assets: Money Market Funds $ 28,388 28,388 $ — — Commercial Paper $ 6,743 — $ 6,743 — Corporate Notes / Bonds $ 2,328 — $ 2,328 — |
Allowance for Credit Losses (Ta
Allowance for Credit Losses (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Credit Loss [Abstract] | |
Schedule change in the allowance for credit losses | The changes in the allowance for credit losses during the nine months ended September 30, 2023 were as follows: (In thousands) Balance at December 31, 2022 $ 1,600 Provision 418 Write-offs (355) Balance at September 30, 2023 $ 1,663 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of supplemental consolidated balance sheet information related to our operating leases | Operating lease cost details for the three and nine months ended September 30, 2023 and 2022 are as follows: Three Months Ended Nine months ended 2023 2022 2023 2022 (In thousands) Building rent $ 369 $ 509 $ 1,370 $ 1,605 Automobile rentals 270 295 836 876 Total net operating lease costs $ 639 $ 804 $ 2,206 $ 2,481 |
Schedule of maturities of operating leases | Maturities of the Company’s operating leases as of September 30, 2023 are as follows: As of (In thousands) 2023 $ 608 2024 2,099 2025 1,227 2026 1,136 2027 956 Later years 1,266 Less imputed interest (742) Total lease liabilities $ 6,550 |
Long-Term Compensation Plan a_2
Long-Term Compensation Plan and Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of compensation expense | The following table presents stock-based compensation expense and other long-term incentive plan compensation expense for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (In thousands) Stock-based compensation $ 1,878 $ 2,884 $ 10,192 $ 5,497 Other long-term incentive plan compensation (1) 55 230 234 118 Total compensation $ 1,933 $ 3,114 $ 10,426 $ 5,615 (1) Long-term incentive compensation includes immaterial expense for 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 expense associated with these cash incentive grants was $0.1 million and $0.2 million for the three months ended September 30, 2023 and 2022, respectively, and $0.2 million and $0.1 million for the nine months ended September 30, 2023 and 2022, respectively. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Details of earnings per share calculations | The details of the earnings per share calculations for the three and nine months ended September 30, 2023 and 2022 are as follows: Three Months Ended Nine Months Ended (In thousands, except per share data) 2023 2022 2023 2022 Net loss $ (4,133) $ (7,201) $ (30,240) $ (11,337) Weighted average common shares outstanding: Basic 40,454 39,723 40,529 39,801 Incremental shares with dilutive effect: Restricted stock awards — — — — Diluted 40,454 39,723 40,529 39,801 Net loss per share: Basic $ (0.10) $ (0.18) $ (0.75) $ (0.28) Diluted $ (0.10) $ (0.18) $ (0.75) $ (0.28) |
Restructuring and Other Relat_2
Restructuring and Other Related Charges (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of changes in the carrying amount of the restructuring charge liability | The table below sets forth the changes in the carrying amount of our restructuring charge liability by restructuring type for the nine months ended September 30, 2023. Employee Costs Real Estate Rationalization Total (In thousands) Balance as of December 31, 2022 $ 3,596 $ — $ 3,596 Additions 8,077 1,690 9,767 Payments (8,853) — (8,853) Balance as of September 30, 2023 $ 2,820 $ 1,690 $ 4,510 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of business acquisition | ProvenDB is allocated entirely to our Digital Agreements reportable operating segment. (In thousands) As of Date of Opening Balance Sheet Net assets acquired: Acquired technology $ 1,447 Accrued wages and payroll taxes (47) Goodwill 600 Total net assets acquired $ 2,000 Consideration $ 2,000 |
Description of the Company an_2
Description of the Company and Basis of Presentation (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) segment | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Number of reportable segments | 2 | |||
Number of operating segments | 2 | 2 | 2 | 2 |
Loss from foreign currency transactions | $ | $ 0.1 | $ 1.3 | $ 0.5 | $ 2.6 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accounting Policies [Line Items] | ||
Restricted cash | $ 788 | $ 1,208 |
Letter of Credit | ||
Accounting Policies [Line Items] | ||
Restricted cash | 700 | 1,100 |
Guarantees | ||
Accounting Policies [Line Items] | ||
Restricted cash | $ 100 | $ 100 |
Segment Information - Narrative
Segment Information - Narrative (Details) - segment | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting [Abstract] | ||||
Number of operating segments | 2 | 2 | 2 | 2 |
Segment Information - Reconcili
Segment Information - Reconciliation of segment information to the totals reported in the accompanying consolidated financial statements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Information | ||||
Revenue | $ 58,838 | $ 57,147 | $ 172,178 | $ 162,384 |
Gross profit | $ 40,669 | $ 38,431 | $ 114,249 | $ 110,615 |
Gross margin | 69% | 67% | 66% | 68% |
Operating income (loss) | $ (4,794) | $ (5,625) | $ (30,688) | $ (23,106) |
Corporate operating expenses not allocated at the segment level | (45,463) | (44,056) | (144,937) | (133,721) |
Operating loss | (4,794) | (5,625) | (30,688) | (23,106) |
Interest income, net | 587 | 179 | 1,675 | 197 |
Other income (expense), net | 353 | (1,155) | 342 | 13,817 |
Loss before income taxes | (3,854) | (6,601) | (28,671) | (9,092) |
Amortization of intangible assets | 583 | 956 | 1,749 | 3,555 |
Digital Agreements | ||||
Segment Information | ||||
Revenue | 13,012 | 12,200 | 36,426 | 35,955 |
Gross profit | $ 9,808 | $ 9,736 | $ 26,839 | $ 27,669 |
Gross margin | 75% | 80% | 74% | 77% |
Operating income (loss) | $ (4,666) | $ 2,160 | $ (17,820) | $ 2,823 |
Operating loss | (4,666) | 2,160 | (17,820) | 2,823 |
Security Solutions | ||||
Segment Information | ||||
Revenue | 45,826 | 44,947 | 135,752 | 126,429 |
Gross profit | $ 30,861 | $ 28,695 | $ 87,410 | $ 82,946 |
Gross margin | 67% | 64% | 64% | 66% |
Operating income (loss) | $ 15,673 | $ 5,711 | $ 39,827 | $ 21,399 |
Operating loss | 15,673 | 5,711 | 39,827 | 21,399 |
Operating Segments | ||||
Segment Information | ||||
Operating income (loss) | 11,007 | 7,871 | 22,007 | 24,222 |
Corporate operating expenses not allocated at the segment level | 15,801 | 13,496 | 52,695 | 47,328 |
Operating loss | 11,007 | 7,871 | 22,007 | 24,222 |
Operating Segments | Digital Agreements | ||||
Segment Information | ||||
Amortization of intangible assets | 600 | 600 | 1,700 | 1,700 |
Operating Segments | Security Solutions | ||||
Segment Information | ||||
Amortization of intangible assets | $ 0 | $ 400 | $ 0 | $ 1,800 |
Segment Information - Reconci_2
Segment Information - Reconciliation of the disaggregated revenues to revenues from our two operating segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) segment | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) segment | |
Segment Information | ||||
Number of operating segments | segment | 2 | 2 | 2 | 2 |
Revenue | $ 58,838 | $ 57,147 | $ 172,178 | $ 162,384 |
Subscription | ||||
Segment Information | ||||
Revenue | 26,185 | 22,262 | 79,126 | 65,360 |
Professional services and other | ||||
Segment Information | ||||
Revenue | $ 1,543 | $ 2,220 | $ 4,666 | $ 6,101 |
Percent of total | 2% | 3% | 2% | 3% |
Digital Agreements | ||||
Segment Information | ||||
Revenue | $ 13,012 | $ 12,200 | $ 36,426 | $ 35,955 |
Digital Agreements | Subscription | ||||
Segment Information | ||||
Revenue | 11,807 | 10,321 | 32,641 | 30,728 |
Digital Agreements | Maintenance and support | ||||
Segment Information | ||||
Revenue | 995 | 1,693 | 3,121 | 4,453 |
Digital Agreements | Professional services and other | ||||
Segment Information | ||||
Revenue | 210 | 186 | 664 | 774 |
Digital Agreements | Hardware products | ||||
Segment Information | ||||
Revenue | 0 | 0 | 0 | 0 |
Security Solutions | ||||
Segment Information | ||||
Revenue | 45,826 | 44,947 | 135,752 | 126,429 |
Security Solutions | Subscription | ||||
Segment Information | ||||
Revenue | 14,378 | 11,941 | 46,485 | 34,632 |
Security Solutions | Maintenance and support | ||||
Segment Information | ||||
Revenue | 11,276 | 11,158 | 31,914 | 32,522 |
Security Solutions | Professional services and other | ||||
Segment Information | ||||
Revenue | 1,333 | 2,034 | 4,002 | 5,327 |
Security Solutions | Hardware products | ||||
Segment Information | ||||
Revenue | $ 18,839 | $ 19,814 | $ 53,351 | $ 53,948 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue | ||||
Revenue | $ 58,838 | $ 57,147 | $ 172,178 | $ 162,384 |
Products and Licenses transferred at a point in time | ||||
Revenue | ||||
Revenue | 31,732 | 31,280 | 95,461 | 89,496 |
Services transferred over time | ||||
Revenue | ||||
Revenue | 27,106 | 25,867 | 76,717 | 72,888 |
EMEA | ||||
Revenue | ||||
Revenue | $ 26,233 | $ 25,999 | $ 80,592 | $ 74,396 |
Percent of total | 45% | 45% | 47% | 46% |
Americas | ||||
Revenue | ||||
Revenue | $ 19,999 | $ 20,394 | $ 58,828 | $ 56,972 |
Percent of total | 34% | 36% | 34% | 35% |
APAC | ||||
Revenue | ||||
Revenue | $ 12,606 | $ 10,754 | $ 32,758 | $ 31,016 |
Percent of total | 21% | 19% | 19% | 19% |
Subscription | ||||
Revenue | ||||
Revenue | $ 26,185 | $ 22,262 | $ 79,126 | $ 65,360 |
Maintenance and support | ||||
Revenue | ||||
Revenue | 12,271 | 12,851 | 35,035 | 36,975 |
Professional services and other | ||||
Revenue | ||||
Revenue | $ 1,543 | $ 2,220 | $ 4,666 | $ 6,101 |
Percent of total | 2% | 3% | 2% | 3% |
Hardware products | ||||
Revenue | ||||
Revenue | $ 18,839 | $ 19,814 | $ 53,351 | $ 53,948 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Contract balances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Contract balances | ||
Receivables, inclusive of trade and unbilled | $ 38,667 | $ 65,132 |
Contract Assets (current and non-current) | 5,096 | 4,642 |
Contract Liabilities (Deferred Revenue current and non-current) | 55,329 | $ 70,906 |
Revenue recognized that was included in the balance sheet | $ 52,600 | |
Minimum | ||
Contract balances | ||
The amount of time contract assets are transferred to receivables | 2 years | |
Maximum | ||
Contract balances | ||
The amount of time contract assets are transferred to receivables | 5 years |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Performance Obligations (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Revenue | |
Future revenue related to current unsatisfied performance obligations | $ 69,384 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue | |
Future revenue related to current unsatisfied performance obligations | $ 12,040 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue | |
Future revenue related to current unsatisfied performance obligations | $ 30,733 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue | |
Future revenue related to current unsatisfied performance obligations | $ 16,271 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue | |
Future revenue related to current unsatisfied performance obligations | $ 10,340 |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Capitalized Costs and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |||||
Amortization period | 7 years | 7 years | |||
Capitalized costs to obtain contracts, current | $ 3,284 | $ 3,284 | $ 2,929 | ||
Capitalized costs to obtain contracts, non-current | 10,322 | 10,322 | $ 10,571 | ||
Amortization of capitalized costs to obtain contracts | 801 | $ 641 | 2,286 | $ 1,731 | |
Impairments of capitalized costs to obtain contracts | $ 0 | $ 0 | $ 0 | $ 0 |
Inventories, net - Summary of I
Inventories, net - Summary of Inventories, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | ||||
Component parts | $ 8,890 | $ 6,762 | ||
Work-in-process and finished goods | 6,566 | 5,292 | ||
Total | 15,456 | $ 12,054 | ||
Impairments of inventories, net | $ 1,600 | $ 1,568 | $ 0 |
Goodwill - Goodwill Activity (D
Goodwill - Goodwill Activity (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill [Roll Forward] | ||
Net balance at beginning of period | $ 90,514,000 | |
Foreign currency exchange rate effect | 255,000 | |
Additions during the period | 600,000 | |
Net balance at end of period | 91,369,000 | |
Goodwill impairment | 0 | $ 0 |
Digital Agreements | ||
Goodwill [Roll Forward] | ||
Net balance at beginning of period | 19,732,000 | |
Foreign currency exchange rate effect | 56,000 | |
Additions during the period | 600,000 | |
Net balance at end of period | 20,388,000 | |
Security Solutions | ||
Goodwill [Roll Forward] | ||
Net balance at beginning of period | 70,782,000 | |
Foreign currency exchange rate effect | 199,000 | |
Additions during the period | 0 | |
Net balance at end of period | $ 70,981,000 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Intangible assets, net | |||||
Gross Carrying Amount | $ 91,287 | $ 91,287 | $ 89,926 | ||
Accumulated Amortization | 79,375 | 79,375 | 77,444 | ||
Amortization | 700 | $ 1,000 | 2,000 | $ 3,600 | |
Acquired technology | |||||
Intangible assets, net | |||||
Gross Carrying Amount | 43,293 | 43,293 | 42,022 | ||
Accumulated Amortization | $ 42,024 | $ 42,024 | $ 41,894 | ||
Acquired technology | Minimum | |||||
Intangible assets, net | |||||
Useful Life (in years) | 3 years | 3 years | 3 years | ||
Acquired technology | Maximum | |||||
Intangible assets, net | |||||
Useful Life (in years) | 7 years | 7 years | 7 years | ||
Customer relationships | |||||
Intangible assets, net | |||||
Gross Carrying Amount | $ 34,451 | $ 34,451 | $ 34,386 | ||
Accumulated Amortization | $ 25,076 | $ 25,076 | $ 23,323 | ||
Customer relationships | Dealflo Limited | |||||
Intangible assets, net | |||||
Impairment of intangible assets | 3,800 | ||||
Customer relationships | Minimum | |||||
Intangible assets, net | |||||
Useful Life (in years) | 5 years | 5 years | 5 years | ||
Customer relationships | Maximum | |||||
Intangible assets, net | |||||
Useful Life (in years) | 12 years | 12 years | 12 years | ||
Patents, trademarks, and other | |||||
Intangible assets, net | |||||
Gross Carrying Amount | $ 13,543 | $ 13,543 | $ 13,518 | ||
Accumulated Amortization | $ 12,275 | $ 12,275 | $ 12,227 | ||
Patents, trademarks, and other | Minimum | |||||
Intangible assets, net | |||||
Useful Life (in years) | 10 years | 10 years | 10 years | ||
Patents, trademarks, and other | Maximum | |||||
Intangible assets, net | |||||
Useful Life (in years) | 20 years | 20 years | 20 years | ||
Cloud Subscription Agreements | |||||
Intangible assets, net | |||||
Amortization expense directly related to generating revenue | $ 100 | $ 0 | $ 300 | $ 0 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||||||
Total | $ 28,668 | $ 28,668 | $ 32,645 | |||
Accumulated depreciation | (12,150) | (12,150) | (19,964) | |||
Property and equipment, net | 16,518 | 16,518 | 12,681 | |||
Depreciation expense | 1,000 | $ 700 | 2,500 | $ 2,100 | ||
Impairments of property and equipment, net | 2,640 | 0 | ||||
Brussels Office | Real Estate Rationalization | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Impairments of property and equipment, net | 600 | |||||
Office equipment and software | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total | 7,981 | 7,981 | 14,451 | |||
Impairments of property and equipment, net | $ 100 | |||||
Leasehold improvements | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total | 6,827 | 6,827 | 9,927 | |||
Impairments of property and equipment, net | 600 | |||||
Furniture and fixtures | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total | 3,295 | 3,295 | 4,260 | |||
Capitalized software | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total | 10,565 | 10,565 | $ 4,007 | |||
Impairments of property and equipment, net | $ 1,400 | |||||
Cloud Subscription Agreements | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Depreciation expense directly related to generating revenue | $ 400 | $ 0 | $ 400 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
U.S. Treasury Bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 8,980 | |
U.S. Treasury Bills | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
U.S. Treasury Bills | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 8,980 | |
U.S. Treasury Bills | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 18,245 | $ 28,388 |
Money Market Funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 18,245 | 28,388 |
Money Market Funds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Money Market Funds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 0 | 0 |
Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 6,743 | |
Commercial Paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Commercial Paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 6,743 | |
Commercial Paper | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Corporate Notes / Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,328 | |
Corporate Notes / Bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Corporate Notes / Bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,328 | |
Corporate Notes / Bonds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 0 |
Allowance for Credit Losses (De
Allowance for Credit Losses (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Changes in the allowance for credit losses | |
Beginning Balance | $ 1,600 |
Provision | 418 |
Write-offs | (355) |
Ending Balance | $ 1,663 |
Allowance for Credit Losses - N
Allowance for Credit Losses - Narrative (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Credit Loss [Abstract] | |
Accounts receivable, write offs that were fully reserved for and no longer deemed collectible | $ 355 |
Leases - Schedule of supplement
Leases - Schedule of supplemental consolidated balance sheet information related to our operating leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lessee, Lease, Description [Line Items] | ||||
Total net operating lease costs | $ 639 | $ 804 | $ 2,206 | $ 2,481 |
Building rent | ||||
Lessee, Lease, Description [Line Items] | ||||
Total net operating lease costs | 369 | 509 | 1,370 | 1,605 |
Automobile rentals | ||||
Lessee, Lease, Description [Line Items] | ||||
Total net operating lease costs | $ 270 | $ 295 | $ 836 | $ 876 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Lessee, Lease, Description [Line Items] | |||
Weighted average remaining lease term | 4 years 6 months | 4 years 6 months | |
Weighted-average discount rate | 5% | 5% | |
Cash payments to settle a lease liability reported in cash flows | $ 2,200 | ||
Right-of-use assets obtained in exchange for new lease liabilities | 600 | ||
Contract termination fees | $ 4,510 | 4,510 | $ 3,596 |
Real Estate Rationalization | |||
Lessee, Lease, Description [Line Items] | |||
Contract termination fees | 1,690 | 1,690 | $ 0 |
Chicago Office | Real Estate Rationalization | |||
Lessee, Lease, Description [Line Items] | |||
Contract termination fees | 1,400 | 1,400 | |
Gain (loss) on rent concession and tenant improvement allowances | 300 | ||
Brussels Office | Real Estate Rationalization | |||
Lessee, Lease, Description [Line Items] | |||
Contract termination fees | 300 | 300 | |
Gain (loss) on rent concession and tenant improvement allowances | $ (600) | $ (600) |
Leases - Maturities of our oper
Leases - Maturities of our operating leases (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Maturities of operating leases | |
2023 | $ 608 |
2024 | 2,099 |
2025 | 1,227 |
2026 | 1,136 |
2027 | 956 |
Later years | 1,266 |
Less imputed interest | (742) |
Total lease liabilities | $ 6,550 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 25% | ||
Statutory tax rate | 21% | ||
Income taxes paid | $ 4.4 | $ 1.7 | |
Deferred tax assets, foreign and state NOL carryforwards | $ 46.8 | ||
Foreign and state, net operating loss (NOL) carryforwards | 125.7 | ||
Other foreign deductible carryforwards | 124.2 | ||
Deferred tax assets, valuation allowance | $ 37.7 |
Long-Term Compensation Plan a_3
Long-Term Compensation Plan and Stock Based Compensation (Details) - 2019 Omnibus Incentive Plan $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) shares | |
Restricted Stock, subject to time-based criteria | |
Plan information | |
Stock based compensation awards issued shares (in shares) | shares | 900,000 |
Restricted stock awards | $ | $ 11.9 |
Restricted Stock, subject to time-based criteria | Minimum | |
Plan information | |
Vesting period (in years) | 1 year |
Restricted Stock, subject to time-based criteria | Maximum | |
Plan information | |
Vesting period (in years) | 3 years |
Restricted Stock, subject to future performance criteria | |
Plan information | |
Stock based compensation awards issued shares (in shares) | shares | 800,000 |
Restricted stock awards | $ | $ 11.9 |
Vesting period (in years) | 3 years |
Restricted stock expected to be earned, percent | 12% |
Long-Term Compensation Plan a_4
Long-Term Compensation Plan and Stock Based Compensation - Allocation of Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Stock-based compensation | $ 1,878 | $ 2,884 | $ 10,192 | $ 5,497 |
Other long-term incentive plan compensation | 55 | 230 | 234 | 118 |
Total compensation | 1,933 | 3,114 | 10,426 | 5,615 |
Deferred Compensation, Cash Incentive Grants | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Other long-term incentive plan compensation | $ 100 | $ 200 | $ 200 | $ 100 |
Earnings per Share - Details of
Earnings per Share - Details of Earnings Per Share Calculations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||||||
Net loss | $ (4,133) | $ (17,751) | $ (8,356) | $ (7,201) | $ (9,350) | $ 5,214 | $ (30,240) | $ (11,337) |
Weighted average common shares outstanding: | ||||||||
Basic (in shares) | 40,454 | 39,723 | 40,529 | 39,801 | ||||
Incremental shares with dilutive effect: | ||||||||
Restricted stock awards | 0 | 0 | 0 | 0 | ||||
Diluted (in shares) | 40,454 | 39,723 | 40,529 | 39,801 | ||||
Basic (in dollars per share) | $ (0.10) | $ (0.18) | $ (0.75) | $ (0.28) | ||||
Diluted (in dollars per share) | $ (0.10) | $ (0.18) | $ (0.75) | $ (0.28) |
Legal Proceedings and Conting_2
Legal Proceedings and Contingencies - Rent expense and purchase obligations (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Liabilities accrued | $ 1 |
Restructuring and Other Relat_3
Restructuring and Other Related Charges - Narrative (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) employee | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Restructuring Plan | ||||||
Restructuring and other related charges | $ 6,524 | $ 6,481 | $ 13,076 | $ 11,828 | ||
Contract termination fees | 4,510 | 4,510 | $ 3,596 | |||
Impairments of property and equipment, net | 2,640 | 0 | ||||
Payments | 8,853 | |||||
Capitalized software | ||||||
Restructuring Plan | ||||||
Impairments of property and equipment, net | $ 1,400 | |||||
Employee Costs | ||||||
Restructuring Plan | ||||||
Severance-related costs | 5,100 | $ 8,200 | ||||
Number of employees eliminated | employee | 240 | |||||
Restructuring liability, current | 2,300 | $ 2,300 | ||||
Restructuring liability, noncurrent | 500 | 500 | ||||
Contract termination fees | 2,820 | 2,820 | 3,596 | |||
Payments | 8,853 | |||||
Real Estate Rationalization | ||||||
Restructuring Plan | ||||||
Restructuring liability, current | 1,000 | 1,000 | ||||
Restructuring liability, noncurrent | 700 | 700 | ||||
Contract termination fees | 1,690 | 1,690 | $ 0 | |||
Payments | 0 | |||||
Real Estate Rationalization | Chicago Office | ||||||
Restructuring Plan | ||||||
Contract termination fees | 1,400 | 1,400 | ||||
Gain (loss) on rent concession and tenant improvement allowances | 300 | |||||
Impairments of property and equipment, net | 700 | |||||
Real Estate Rationalization | Brussels Office | ||||||
Restructuring Plan | ||||||
Contract termination fees | 300 | 300 | ||||
Gain (loss) on rent concession and tenant improvement allowances | (600) | (600) | ||||
Impairments of property and equipment, net | 600 | |||||
Vendor Rationalization | ||||||
Restructuring Plan | ||||||
Payments | 500 | 700 | ||||
Plan | ||||||
Restructuring Plan | ||||||
Restructuring and other related charges | $ 6,500 | $ 6,500 | $ 13,100 | $ 11,800 |
Restructuring and Other Relat_4
Restructuring and Other Related Charges - Operating costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 3,596 | |
Additions | 9,767 | |
Payments | (8,853) | |
Ending balance | $ 4,510 | 4,510 |
Employee Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 3,596 | |
Additions | 8,077 | |
Payments | (8,853) | |
Ending balance | 2,820 | 2,820 |
Real Estate Rationalization | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 0 | |
Additions | 1,690 | |
Payments | 0 | |
Ending balance | 1,690 | 1,690 |
Vendor Rationalization | ||
Restructuring Reserve [Roll Forward] | ||
Payments | $ (500) | $ (700) |
Business Acquisitions - Narrati
Business Acquisitions - Narrative (Details) - USD ($) $ in Thousands | Feb. 22, 2023 | Sep. 30, 2023 |
Asset Acquisition [Line Items] | ||
Weighted average remaining lease term | 4 years 6 months | |
ProvenDB | ||
Asset Acquisition [Line Items] | ||
Total consideration | $ 2,000 | |
Cash payments for acquisition | 1,800 | |
Aggregate amount held for net working capital adjustments | 200 | |
ProvenDB | Digital Agreements | ||
Asset Acquisition [Line Items] | ||
Total consideration | $ 2,000 |
Business Acquisitions - Allocat
Business Acquisitions - Allocation (Details) - USD ($) $ in Thousands | Feb. 22, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Asset Acquisition [Line Items] | |||
Goodwill | $ 91,369 | $ 90,514 | |
Digital Agreements | |||
Asset Acquisition [Line Items] | |||
Goodwill | $ 20,388 | $ 19,732 | |
ProvenDB | |||
Asset Acquisition [Line Items] | |||
Consideration | $ 2,000 | ||
ProvenDB | Digital Agreements | |||
Asset Acquisition [Line Items] | |||
Acquired technology | 1,447 | ||
Accrued wages and payroll taxes | (47) | ||
Goodwill | 600 | ||
Total net assets acquired | 2,000 | ||
Consideration | $ 2,000 |