Why VASCO Data Security International Shares Plunged Today

What happened

Shares of VASCO Data Security International (NASDAQ: VDSI) have plunged today, down by 13% as of 12:45 p.m. EST, after the company reported fourth-quarter earnings.

So what

Revenue in the fourth quarter came in at $47.6 million, down 6.5% from a year ago. Full-year 2016 revenue was $192.3 million. VASCO posted adjusted earnings per share of $0.13, up from an adjusted profit of $0.09 per share a year ago. Gross margin was 64.8% in the fourth quarter, and the company exited the quarter with $144.2 million in cash on the balance sheet.

Image source: Getty Images.

EVP and Chief Strategy Officer Scott Clements was promoted to COO during the quarter, and BankMobile implemented VASCO's DIGITPASS for Apps mobile app security suite. Switzerland's largest retail bank, Raiffeisen, also implemented the company's CRONTO technology for online banking.

Now what

In a statement, Chairmand and CEO T. Kendall Hunt said that the company's transition to a software-based business continues make progress, and management is happy with the "sustained high rate of growth" in the software business. This has helped offset the decline in hardware products.

In terms of guidance, VASCO expects full-year 2017 revenue to be in the range of $180 million to $190 million, with an adjusted operating margin of 1% to 5%.

10 stocks we like better than VASCO Data Security InternationalWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and VASCO Data Security International wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of February 6, 2017

Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.