What: Shares of hardware and software security system vendor VASCO Data Security (OSPN 0.52%) tanked by as much as 23% Wednesday after the company reported earnings and provided full-year guidance below consensus estimates.

So what: Revenue in the second quarter increased 37% to $65.4 million, while net income more than doubled to $13.9 million, or $0.35 per share. Gross margin contracted slightly to 59%. VASCO reaffirmed full-year revenue guidance of $230 million to $240 million, and expects its adjusted operating income margin to be between 19% to 22%. The company will have to hit the high end of guidance in order to match analyst estimates of $239 million for the full year.

Now what: VASCO continues to grow its presence in the banking security market, with revenue in this segment increasing 43% last quarter. The company also said the growth this quarter was driven by card reader sales using its new Cronto technology to Rabobank. Earlier this month, VASCO disclosed that it learned that one of its third-party distributors resold some of its products to customers in Iran, and VASCO will conduct an internal investigation.