Toronto-based cybersecurity software company 1Password has revealed that it surpassed $400 million USD in annual recurring revenue (ARR) this year, up from $250 million in 2023. The company claims that it has managed to do this while remaining free cash flow-positive.
The 1,400-person Canadian tech firm now serves over 180,000 businesses—including nearly a third of the Fortune 100—secures more than 1.3 billion human and machine credentials, and supports more than one million developers.
“We’re at the scale and profitability that we could be public today.”
David Faugno, 1Password
In an interview with BetaKit, 1Password CEO David Faugno said the company’s current size and market position is “a great launching point” for it to “bring that trust layer” to the artificial intelligence (AI) era—something he said 1Password still has some work to do on before entertaining the idea of an initial public offering.
“We’re at the scale and profitability that we could be public today—we know that,” Faugno said. “What we’re focused on is making sure that we’re delivering for our customers with these transitions at play. We’ve got a very ambitious roadmap around the AI product set, and we’ve got a brand-new team that’s pulled together to go take advantage of it.”
Faugno argued that public market investors want “a level of predictability” from businesses that is hard to deliver given how dynamic the AI market is at the moment. The CEO said 1Password wants to see that predictability, as well as evidence of repeatability, before it explores becoming a public company.
“I can’t tell you when that’s going to happen,” Faugno said, but noted that 1Password has been taking the steps to ensure it has the right team, processes, and vision in place to make that leap when the time comes.
This includes the addition of what Faugno described as some “stage-appropriate folks” to 1Password’s executive team, including new president Michael Hughes, who previously held leadership positions at ChargePoint and Barracuda Networks, and chief business officer John Torrey, who formerly held C-suite roles at Qualtrics and SAP.
RELATED: C-suite execs Pedro Canahuati and Julian Teixeira leave 1Password
Hughes will oversee sales, customer experience, and revenue operations, while Torrey will lead strategic expansion through mergers and acquisitions, partnerships, and ecosystem development.
They mark the latest in a series of executive changes that 1Password has made over the past year. Since Faugno became co-CEO late last year, the company has seen longtime CEO Jeff Shiner transition to executive chair and CTO Pedro Canahuati and CRO Julian Teixeira leave the business.
During this time, 1Password has appointed Greg Henry as CFO, shifted Jeannie De Guzman to COO, hired Abe Ankumah as chief product officer, brought on Nancy Wang as senior vice-president of engineering, and promoted Jacob DePriest to chief information security officer and CIO.
“We feel like … we’ve got a team that we know that we can go for the foreseeable future with,” inclusive of public markets, Faugno said.
Founded in 2005 and formally known as AgileBits, 1Password is one of Canada’s most valuable tech companies. It sells identity security and access management software that helps individuals and corporate clients like the Associated Press, Canva, Harvard University, Hugging Face, IBM, Midjourney, Salesforce, Slack, and Stripe secure sign-ins to apps and websites.
In recent years, 1Password has evolved from a consumer-facing password manager to a broader digital security platform for businesses, which now account for more than 75 percent of its overall revenue. Faugno anticipates that this share will continue to grow.
RELATED: 1Password expands Extended Access Management platform with agentic AI security
Faugno said 1Password sees “a huge opportunity” in helping businesses navigate the security considerations associated with AI, and has been leaning into doing so “aggressively.”
This work has included adding agentic AI security to its Extended Access Management platform to help companies and developers manage AI agents more securely, and partnering with AI web browser developers like Perplexity and Browserbase.
As 1Password keeps executing on its AI strategy, Faugno claimed that the firm currently has a lot of cash in the bank and an investor base that is interested in “playing the long game.”
“They’re in no rush for liquidity—they want to see us build a massive business, and so that’s a very, very luxurious position to be in,” he said. “Not many companies of our scale can say that.”
1Password co-founders and long-tenured employees recently sold some shares as part of a $100-million USD secondary deal, which may have helped alleviate any internal pressure the company felt to go public sooner rather than later.
Faugno expects 1Password to eclipse $500 million in ARR in the “not too distant future” as it scales toward $1 billion in ARR “and beyond.”
Feature image courtesy 1Password.