OneSpan Inc. (Nasdaq: OSPN) (“OneSpan” or the “Company”) today
announced a leadership change designed to strengthen its strategic
plan and accelerate the pace of execution of the Company’s ongoing
transformation.
Victor Limongelli, a seasoned software CEO, has been named
Interim Chief Executive Officer. Mr. Limongelli replaces Matthew
Moynahan, with the change effective immediately.
“OneSpan recently implemented significant changes to its
operating model and we believe this is the right time for a
leadership transition,” said Al Nietzel, Chair of OneSpan’s Board
of Directors. “Victor has a strong track record of improved
operational performance at each of the four software companies he
has led, and this will be an important asset as we seek to
accelerate the pace of our ongoing transformation efforts during
this interim period. I look forward to working closely with
him.”
Mr. Nietzel added, “On behalf of the Board, I would like to
thank Mr. Moynahan for his contributions to OneSpan’s
transformation and wish him all the best in his future
endeavors.”
Mr. Limongelli added: “OneSpan has a clear opportunity to
further optimize across the organization and deliver better value
for our customers, improved opportunities for our employees, and
enhanced value creation for our shareholders.”
About Victor Limongelli
Mr. Limongelli, age 57, is a seasoned software executive who
most recently served as Chief Executive Officer at BQE Software, a
private SaaS company providing billing, accounting, and similar
functionality to professional services firms, from September 2021
to April 2023. From April 2018 to August 2021, he served as Chief
Executive Officer of MobileCause, Inc., a private equity-backed
SaaS company focused on fundraising and donor engagement for
nonprofits, and from November 2015 to April 2018, he was initially
Chairman of the Board and then Chief Executive Officer of
AccessData Group, a privately held security software company. From
May 2003 through November 2014, Mr. Limongelli held a number of
executive positions with Guidance Software, Inc., a publicly traded
security software company, including over 9 years as President and
7 years as its Chief Executive Officer. Mr. Limongelli received an
A.B. from Dartmouth College and a J.D. from Columbia
University.
Financial Outlook Update
OneSpan is providing an update to our financial guidance and
targets. We now expect that fiscal year 2023 revenue will be at the
high end of the previously disclosed range of $228 million to $232
million, and that fiscal year 2023 adjusted EBITDA will achieve or
exceed the high end of the previously disclosed range of $2 million
to $4 million. In addition, we are reiterating our fiscal year 2023
ARR guidance of $148 million to $152 million, fiscal year 2024
revenue target of low- to mid-single digits growth over 2023
revenue and fiscal year 2024 adjusted EBITDA margin target of 20%
to 23%. During 2024, we plan to continue to focus on improving our
operating model, driving toward the aspirational goal of attaining
a level of 30% under the “Rule of 40” framework by the time we exit
2024.
We expect a cash, cash equivalents, and short-term investments
balance of $41 million to $43 million at year-end 2023. Changes in
cash during the quarter ended December 31, 2023 include payments to
repurchase our common stock related to the $25 million modified
Dutch auction tender offer we completed on December 14, 2023,
restructuring payments, capitalized expenditures and changes in net
working capital items.
Non-GAAP Financial Measures
Adjusted EBITDA, adjusted EBITDA margin and the Rule of 40
framework are non-GAAP metrics. We are not providing a
reconciliation of guidance or targets for adjusted EBITDA, adjusted
EBITDA margin or Rule of 40 to GAAP net income, the most directly
comparable GAAP measure, because we are unable to predict certain
items included in GAAP net income without unreasonable efforts.
We report financial results in accordance with GAAP. We also
evaluate our performance using certain non-GAAP financial metrics,
including adjusted EBITDA, adjusted EBITDA margin and the Rule of
40 framework. Our management believes that these non-GAAP measures,
when taken together with the corresponding GAAP financial metrics,
provide useful supplemental information regarding the performance
of our business.
These non-GAAP financial measures are not measures of
performance under GAAP and should not be considered in isolation or
as alternatives or substitutes for the most directly comparable
financial measures calculated in accordance with GAAP. While we
believe that these non-GAAP financial measures are useful for the
purposes described below, they have limitations associated with
their use, since they exclude items that may have a material impact
on our reported results and may be different from similar measures
used by other companies.
Definitions
We define adjusted EBITDA as net income (loss) before interest,
taxes, depreciation, amortization, long-term incentive
compensation, restructuring and other related charges, and certain
non-recurring items, including acquisition related costs, lease
exit costs, rebranding costs, and non-routine shareholder matters.
We use adjusted EBITDA as a simplified measure of performance for
use in communicating our performance to investors and analysts and
for comparisons to other companies within our industry. As a
performance measure, we believe that adjusted EBITDA presents a
view of our operating results that is most closely related to
serving our customers. By excluding interest, taxes, depreciation,
amortization, long-term incentive compensation, impairment of
intangible assets, restructuring costs, and certain other
non-recurring items, we are able to evaluate performance without
considering decisions that, in most cases, are not directly related
to meeting our customers’ requirements and were either made in
prior periods (e.g., depreciation, amortization, long-term
incentive compensation, non-routine shareholder matters), deal with
the structure or financing of the business (e.g., interest,
one-time strategic action costs, restructuring costs, impairment
charges) or reflect the application of regulations that are outside
of the control of our management team (e.g., taxes). In addition,
removing the impact of these items helps us compare our core
business performance with that of our competitors.
We define adjusted EBITDA margin as adjusted EBITDA as a
percentage of revenue for a specified period.
We define the Rule of 40 as the sum of (i) our adjusted EBITDA
margin for a specified period plus (ii) our year-over-year revenue
growth rate, expressed as a percentage, for the same period. For
example, a Rule of 40 attainment level of 30% would mean that the
sum of our adjusted EBITDA margin for a specified period plus the
year-over-year revenue growth rate for that period would equal 30%.
We use the Rule of 40 as a financial framework because it is a
well-known framework in our industry, and therefore helpful to our
investors; it allows us to measure our progress in achieving a
balance between adjusted EBITDA margins and revenue growth; and it
enables us to measure our financial performance against those of
our peers.
About OneSpan
OneSpan helps organizations accelerate digital transformations
by enabling secure, compliant, and refreshingly easy customer
agreements and transaction experiences. Organizations requiring
high assurance security, including the integrity of end-users and
the fidelity of transaction records behind every agreement, choose
OneSpan to simplify and secure business processes with their
partners and customers. Trusted by global blue-chip enterprises,
including more than 60% of the world’s largest 100 banks, OneSpan
processes millions of digital agreements and billions of
transactions in 100+ countries annually.
For more information, go to www.onespan.com. You can also follow
@OneSpan on Twitter or visit us on LinkedIn and Facebook.
Forward-Looking Statements
This press release contains forward-looking statements. Any
statements about our expectations, beliefs, plans, predictions,
forecasts, objectives, assumptions or future events or performance
are not historical facts and may be forward-looking, including
statements about: our intentions to strengthen our strategic plan,
accelerate the pace of our transformation efforts, and deliver
enhanced value creation for our shareholders; our financial
guidance and targets for fiscal year 2023 and 2024; our
aspirational goal of attaining a level of 30% under the “Rule of
40” framework by the time we exit 2024; and our expectations for
our cash, cash equivalents, and short-term investments balance at
year-end 2023. You can identify forward-looking statements by the
use of forward-looking terminology such as “believes,” “expects,”
“could,” “may,” “will,” “should,” “seeks,” “likely,” “intends,”
“plans,” “pro forma,” “projects,” “estimates” or “anticipates” or
the negative of these words and phrases or similar words or phrases
that are predictions of or indicate future events or trends and
that do not relate solely to historical matters. You can also
identify forward-looking statements by discussions of strategy,
plans or intentions. Forward-looking statements involve numerous
risks and uncertainties and you should not rely on them as
predictions of future events. Forward-looking statements depend on
assumptions, data or methods that may be incorrect or imprecise and
we may not be able to realize them. Investors are cautioned that
such statements are predictions and that actual events or results
may differ materially. Factors that could materially affect our
business and financial results include, but are not limited to, the
factors described in the forward-looking statement disclosure and
“Risk Factors” section of our most recent Annual Report on Form
10-K, as updated by the “Risk Factors” section of our Quarterly
Report on Form 10-Q for the quarter ended September 30, 2023. We do
not have any intent, and disclaim any obligation, to update the
forward-looking information to reflect events that occur,
circumstances that exist or changes in our expectations after the
date of this press release, except as required by law.
Copyright© 2024 OneSpan North America Inc., all rights reserved.
OneSpan™ is a registered or unregistered trademark of OneSpan North
America Inc. or its affiliates in the U.S. and other countries.
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version on businesswire.com: https://www.businesswire.com/news/home/20240105759208/en/
Investor Contact: Joe Maxa Vice President of Investor
Relations +1-312-766-4009 joe.maxa@onespan.com
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