OneSpan Inc.

Good afternoon, ladies and gentlemen. I'm just here to make a patient's announcement. I ask that you guys hold on just for a moment while we begin very soon. Thank you. We'll be right back. Good afternoon and thank you for attending today's OneSpan fourth quarter 2021 conference call. My name is Jason and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to Joe Maxa, Vice President of Investor Relations. Joe, please proceed.

Thank you, operator. Hello, everyone, and thank you for joining the OneSpan fourth quarter and full year 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 is Matt Moynihan, OneSpan's chief executive officer, and Jan Kays van Gaalen, our interim chief financial officer. This afternoon, after market closed, OneSpan issued a press release announcing results for our fourth quarter and full year 2021. To access a copy of the press release and other investor information, 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 2022, 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 and the company's Form 10-K filing with the U.S. Securities and Exchange Commission for a discussion of such risks 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 conference call is February 22nd, 2022. 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 Matt.

Thank you, Joe, and good afternoon, everyone. Thank you for joining the call today. Today's call, I will cover a handful of topics, including our Q4 results, our value proposition and relevant growth drivers, a few key customer wins equally important i'll provide an update on the progress with our long-range strategic planning efforts after that john keys will walk you through our financials before opening the call to questions first i would like to begin by sharing my perspective on the company i joined one span at the end of november and i'm excited by the strength of our solution portfolio and market position as well as the potential to enhance our operations and overall customer value proposition two months into my tenure I have to say that I'm encouraged by the progress we've made on the development of our long-term strategic plan, and I've been impressed by the talented people in our company who will execute on the opportunities that lie ahead of us. I am also confident in our ability to drive revenue growth while increasing profitability as we transition to the next generation of One Span. I joined the company because One Span has an exciting and relevant value proposition, and I truly believe we can unlock significant shareholder value by increasing our focus, leveraging our competitive advantages to improve our growth profile, all the while enhancing our operational performance and capital efficiency. We operate in two important markets, in cybersecurity and digital agreements, both of which will only become more important to enterprises in the years to come. We also have a tremendous asset in our top tier customer base that includes many of the largest and most security conscious companies in the world. companies that trust us to mitigate their risk of fraud and help them comply with regulations while delivering compelling user experiences across such technologies as e-signature, identity verification, video signing, mobile authentication, mobile app shielding, transaction signing, and more. During the other quarter, Q4 revenue of $59 million was the highest level achieved in eight quarters, and revenue, ARR, and adjusted EBITDA exceeded expectations in December we announced the cost savings plan that is expected to result in pre-tax savings of approximately 10 to 12 million for fiscal year 22 primarily from headcount related actions and reduction in leased office spaces now turning to our strategic action plan we've made significant progress in the evaluation of our markets prioritizing our product portfolio and aligning our investments and operations to execute against our most compelling opportunities. We are on track to update you on the details of our go-forward strategy at our investor day in mid-May. Stay tuned for more information. But today, I would like to share with you my initial observations. And sure, I believe we have a strong suite of e-signature and security solutions that provide us with a solid platform to both enhance our go-to-market and also introduce new, innovative solutions that will deepen our customer relationships. We also believe we can establish a clear and disruptive leadership position in the markets we serve by leveraging our identity, security, and compliance DNA to deliver trusted agreements and transactions as a core differentiator. We're fortunate to have a strong market position as we progress in our transformational journey. Our selling efforts will continue to focus on providing new and existing customers with our core security and e-signature solutions. We will strengthen our go-to-market strategy with an increased focus on account expansion, cross-selling, new customer targeting, and creating sales leverage through strategic alliances, such as our recently announced partnership with Smart Communications. This partnership combines our smart digital forms with One Span Sign to improve the customer experience, increased application completion rates, and reduce document errors while maintaining the strictest security and compliance standards. We expect to form additional partnerships, including OEM relationships, in the coming months. We also have a significant opportunity to drive increased demand for our security and e-signature solutions. Recent customer wins demonstrate our value as a strategic provider of essential solutions that enable our customers to execute trusted and user-friendly digital agreements and transactions. Improving the end-user experience is as important for our customers as is mitigating the risk of fraud, as a rising trend of identity and credential theft increases regulations and accounts for billions of dollars in losses each year. The need to comply with government regulations is a key driver of innovation in our markets. A recent study found 85% of global banks need technology vendors to be trusted advisors to help navigate the changing regulatory environment. Top challenges for financial institutions are fraud, safeguarding sensitive data, and keeping pace with changes in consumer privacy laws. To help them comply with regulations, banks are partnering with trusted companies like OneSpan to put innovative solutions such as digital remote identity verification in place. We had a number of six-figure digital security contracts closed during the fourth quarter as customers continued to roll out our mobile and other security solutions. We also closed a number of six-figure e-signature contracts driven by increased transaction volumes, expansions to additional business units, and competitive displacements, including from DocuSign. Let me provide you with a few examples. First, a major digital security customer in the United Kingdom increased its annual commitment ninefold to approximately 900,000 ACB. Similarly, a major e-signature customer in the United States expanded its e-signature deployment across multiple lines of increasing its ACB with us from $50,000 to $1 million. A major leading global HR and temporary staffing firm selected OneSpan Sign over their previous well-known e-signature provider in a mid-six-figure ACB deal. And lastly, a major North American and long-time digital security banking customer selected OneSpan Sign with identity verification over their incumbent provider for use in their insurance arm. One span's trusted provider status in this 300,000 ACV deal was a key reason for the win. Beyond a strong product portfolio, we have a significant opportunity to become more capital efficient across our organization by better aligning our costs with our growth opportunities. I look forward to addressing more detail of these topics at our upcoming investor day. With that, Jan Kies will now take you through our financial. Jan Kies?