Shares of OneSpan (NASDAQ:OSPN) have soared today, up by 17% as of 1 p.m. EST, after the company reported fourth-quarter earnings results. The cybersecurity specialist posted a surprise profit and issued upbeat guidance for 2019.
Revenue in the fourth quarter jumped 19% to $64.8 million, easily beating the market's expectations of $59.9 million in sales. That all led to non-GAAP net income of $6.8 million, or $0.17 per share, a surprise profit compared to the adjusted loss of $0.02 per share that analysts were modeling for. Adjusted EBITDA was $9.1 million for the quarter.
"We had a very strong fourth quarter with revenue up 19% on solid contributions across our portfolio of software, services and hardware," CEO Scott Clements said in a statement.
For the year, we exceeded the high-end of our revenue and adjusted EBITDA guidance. Subscription revenue grew 50% and our mobile security software license revenue grew more than 50%. We booked initial orders for Intelligent Adaptive Authentication in 2018, and we expect this and other new Trusted Identity solutions, including Risk Analytics and our upcoming digital account opening offering to contribute to revenue as 2019 progresses.
On the earnings call, Clements also noted that 2018 marked the first time that software and services revenue exceeded hardware revenue.
In terms of guidance, OneSpan expects 2019 revenue to be in the range of $229 million to $237 million; the midpoint of that sales outlook is comfortably above the $231.5 million in sales that the Street is currently expecting. Adjusted EBITDA for the year should be $22 million to $27 million, compared to full-year 2018 adjusted EBITDA of $21.6 million.
"We expect 2019's quarterly revenue trend to be similar to 2018's, with new products contributing more significantly as the year progresses," Clements said. "In 2019, we will be making significant investments in our global cloud infrastructure, which is necessary to support the growth in recurring revenue that we anticipate."