OneSpan Inc.

Good afternoon. Thank you for standing by and welcome to the OneSpan third quarter 2021 earnings conference call. At this time, all participants are in a listen only mode. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. Thank you. Please note today's call is being recorded. I would now like to hand the conference over to your first speaker today, Joe Maxa, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Hello, everyone, and thank you for joining the OneSpan Third Quarter 2021 Earnings Conference Call. This call is being webcast and can be accessed on the investor relations section of OneSpan's website at investors.onespan.com. Joining me on the call today are Stephen Wirth, OneSpan's interim chief executive officer, and Jan Kays van Gaalen, our interim chief financial officer. This afternoon, after market close, OneSpan issued a press release announcing results for our third quarter 2021. To access a copy of the press release and other investor information, including a presentation reflecting our third quarter financial results, please visit our website. Following our prepared comments today, we will open the call for questions. Please note that statements made during this conference call that relate to future plans, events, or performance, including the outlook for full year 2021, are forward-looking statements. These statements use words such as believes. anticipates, plans, expects, projects, and similar words. And these statements involve risks and uncertainties and are based on current assumptions. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements. I direct your attention to today's press release in the company's Form 10-K and Form 10-Q filings with the U.S. Securities and Exchange Commission for a discussion of such risk and uncertainties. Also note that certain financial measures that may be discussed on this call are expressed on a non-GAAP basis and have been adjusted from a related GAAP financial measure. We have provided an explanation for and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures in the earnings press release. In addition, Please note that the date of this call is November 2, 2021. Any forward-looking statements and related assumptions are made as of this date. Except as required by law, we undertake no obligation to update these statements as a result of new information or future events or for any other reason. With that, I will turn the call over to Stephen.

Thanks very much, Joe, and good afternoon, everyone. Thank you for joining us on today's call. Before we get into our third quarter results, I'd like to welcome Jan Kies van Gaalen to OneSpan. Jan Kies joined the company as interim CFO and treasurer last month. He brings a wealth of accounting, finance, and consulting experience, including 15 years in chief financial officer roles, where he was instrumental in implementing significant cost savings. We believe Yankee's skill set matches our needs well as we look to streamline and optimize our operations in the coming months. Our board would also like to share an update on the CEO search, which began after the departure of our former CEO in August. The search has emphasized relevant skill sets, including demonstrated leadership in growth strategies, operational efficiencies, and transformational activities. That process continues to advance, and the board will share more information as the process unfolds. Now I'd like to provide you with an update on our strategic action plan progress. Over the last three months, we have been hard at work evaluating our product portfolio, the markets we serve, our investments, and our operations in order to identify ways to best leverage our strengths, enhance our growth profile, reduce costs, and drive improved performance. We have made significant progress in formulating our action plan by leveraging a combination of internal experts, board members, industry analysts, and FDI, a leading global business transformation consulting firm. We are working diligently to identify and take action on initial cost reduction opportunities and will provide a range of expected savings before year-end. We are also making progress on forming an action plan to accelerate our recurring revenue growth. We will give you more details on this strategic action plan in the coming months, and we expect to host an investor day in early Q2. We have great confidence in the markets we serve where our products are uniquely growth our core offerings are performing well and we believe we have significant opportunity to increase long-term recurring revenue growth we will focus on our fastest growing product categories where we can capitalize on our competitive position and expand our market served for example we've had extremely attractive growth in e-signature subscription revenue this year as we are well positioned in that market with that I'll turn to our third quarter results, which demonstrated our ability to execute through a management transition, our internal review, and hardware supply chain issues, which John Keyes will discuss in a few minutes. We had a strong quarter of recurring revenue growth driven by both our e-signature and mobile security solutions. For the quarter, recurring revenue grew 38% year over year. with e-signature subscription revenue growing 45% and mobile security term license revenue growing even faster. We believe demand for these solutions will continue well into the future based on our internal forecasts, our customer feedback, and industry analysts. Demand for our mobile security solutions is driven by the increasing need to improve the user experience and mitigate the risk of fraud. Mobile banking and other remote financial services applications have been widely adopted around the globe. Yet a recent study found 70% of the top 400 mobile finance related apps had security vulnerabilities. Our market leading mobile security solutions are having success in part because they are designed to improve the user experience and mitigate that risk of fraud. Demand for e-signatures accelerated during the pandemic. It has moderated recently yet remains strong. Our volumes continue to increase and indications suggest that this will continue in the coming years based on growing opportunities in our current use cases, in new use cases, and in new geographies. For example, our investments in e-signature add-on offerings such as virtual room and identity verification are gaining traction. Virtual room provides businesses with the ability to conduct remote mediated transactions that combine digital and human interaction to improve the customer experience. Two recent examples include a customer serving the legal community that launched a product providing a complete digital process for verifying the identity of individuals. They are using our virtual room because it provides a secure encrypted online video conference service where the lawyers and business professionals are able to meet virtually and electronically sign documents with verified participants. A second example is a banking customer of ours that is launching a closing room product supported by our technology to drive their commercial real estate business. This will allow lenders and borrowers to meet virtually to complete a mortgage transaction using e-signatures and virtual room, replacing the more costly and time-consuming in-person meetings that utilize paper-based processors. The bank intends to expand this offering to other high-value lending use cases. We also won several contracts that utilize our recently integrated identity verification and e-signature capabilities. Some of the use cases include remote bank account openings, title insurance agreements, and automobile financing. I'll now pass the call over to Jan Kies to take you through our financial results, and then I'll come back to provide additional comments along with an update on our outlook before opening the call to questions. Jan Kies?