Company Overview - Sequans Communications S.A. is a fabless semiconductor company specializing in the development of 4G and 5G chips and modules [1] Analyst Background - The analyst has a background in petroleum and gas engineering and has transitioned into finance, focusing on how businesses grow and market reactions [1] - The analyst holds FMVA® and BIDA® certifications and emphasizes the importance of strong fundamentals paired with real potential in companies [1] Investment Philosophy - The analyst aims to share investment ideas and connect with long-term investors, focusing on thoughtful analysis rather than short-term market noise [1]

We believe our combination of a strategic Bitcoin reserve and deep focus on semiconductor innovation positions Sequans for long-term value creation. Founded in 2003, Sequans is headquartered in France and operates globally, with offices in the United States, United Kingdom, Switzerland, Israel, Hong Kong, Singapore, Finland, Taiwan, and China. Visit Sequans at sequans.com and follow us on LinkedIn and X. Sequans Acquires 683 Additional BTC and Now Holds 1053 BTC July 14, 2025 6:00 AM EDT | Source: Sequans C ...

Core Viewpoint - Sequans Communications is set to participate in a fireside chat to discuss its bitcoin treasury initiative and its semiconductor cellular IoT business on July 16, 2025 [1][2]. Company Overview - Sequans Communications S.A. is a publicly listed company that adopted Bitcoin as a primary treasury reserve asset in June 2025, aiming to strategically accumulate Bitcoin through equity and debt financing along with operational cash flows [3]. - The company specializes in wireless cellular technology for the Internet of Things (IoT), offering a comprehensive portfolio that includes integrated circuits, modules, software, and protocol stacks [4]. - Sequans focuses on delivering advanced solutions such as LTE-M/NB-IoT, 4G LTE Cat 1bis, and 5G NR RedCap/eRedCap platforms, which are designed for IoT applications, emphasizing wireless connectivity, power efficiency, security, and performance [4]. Strategic Positioning - The combination of a strategic Bitcoin reserve and a strong emphasis on semiconductor innovation is believed to position Sequans for long-term value creation [5]. - Founded in 2003 and headquartered in France, Sequans operates globally with offices in multiple countries including the United States, United Kingdom, Switzerland, Israel, Hong Kong, Singapore, Finland, Taiwan, and China [5].

Core Viewpoint - Sequans Communications has initiated a Bitcoin treasury strategy, acquiring 370 BTC, with plans to accumulate over 3,000 BTC in the near future, reflecting confidence in Bitcoin as a long-term store of value for shareholders [1][2]. Group 1: Company Strategy - The acquisition of Bitcoin was funded through net proceeds from a recent offering of ordinary shares and convertible debentures, which closed on July 7, 2025 [1]. - Sequans has selected Coinbase as the custodian for its Bitcoin treasury, utilizing Coinbase Prime for secure and compliant management of digital assets [2][3]. - The company aims to strategically accumulate Bitcoin as part of its long-term financial strategy, having adopted Bitcoin as a primary treasury reserve asset in June 2025 [4]. Group 2: Company Overview - Sequans Communications specializes in cellular IoT semiconductors, focusing on wireless technology for various applications, including secured payments and smart cities [5]. - The company was founded in 2003 and is headquartered in France, with a global presence in multiple countries [6]. - Sequans believes that combining a strategic Bitcoin reserve with a focus on semiconductor innovation will position the company for long-term value creation [6].

BREAKING:NASDAQ-LISTED SEQUANS HAS RAISED $384 MILLION TO BUY BITCOIN.SEND BITCOIN TO A NEW ATH 🚀 https://t.co/WJPziStBxu ...

Core Insights - Sequans Communications has successfully closed a $384 million strategic investment to launch a Bitcoin treasury initiative, reflecting strong conviction in Bitcoin as a premier asset and long-term investment [1][2][5] Investment Details - The investment consists of $195 million from a PIPE (Private Investment in Public Equity) and $189 million in secured convertible debentures [1][3] - The offering included the sale of 139,444,614 American Depositary Shares (ADSs) at a price of $1.40 per ADS, contributing $195 million to the gross proceeds [3] - The secured convertible debentures amount to $189 million, due July 7, 2028, with a conversion price of $2.10 per ADS [3][4] Use of Proceeds - All net proceeds from the offering will be utilized to purchase Bitcoin and for general corporate purposes related to the Bitcoin treasury strategy [2][5] - If all common warrants are exercised, the company could receive an additional $57.6 million, which will also be used primarily for Bitcoin purchases [4] Strategic Partnerships - Sequans plans to partner with Swan Bitcoin, a leading Bitcoin financial services platform, to ensure secure execution and robust governance of its Bitcoin treasury strategy [5][11] Company Overview - Sequans Communications specializes in 5G/4G IoT semiconductors and modules, focusing on innovative and scalable technologies for connected devices [9]

Core Viewpoint - Sequans Communications is launching a bitcoin treasury initiative with a strategic investment of approximately $384 million, expanding its core semiconductor cellular IoT business [1][3]. Group 1: Investment Details - The company plans to raise approximately $384 million through the issuance of about $195 million in equity securities and $189 million in convertible secured debentures [2][6]. - The offering is expected to close around July 1, 2025, pending shareholder approval on June 30, 2025 [6]. Group 2: Strategic Rationale - The CEO of Sequans expressed strong conviction in bitcoin as a premier asset, believing it will enhance financial resilience and deliver significant value to shareholders [3]. - The company intends to partner with Swan Bitcoin for bitcoin treasury management solutions [3]. Group 3: Commitment to Core Business - Despite the new initiative, Sequans remains focused on advancing its cellular IoT mission, continuing to support customers with a robust 4G and 5G product roadmap [4]. - The company aims to deliver innovative solutions to meet evolving IoT application needs [4]. Group 4: Offering Structure - The offering includes the sale of 1,392,857,140 ordinary shares and common warrants to purchase up to 208,928,460 ordinary shares, with a combined purchase price of $1.40 per ADS and common warrant [5]. - The secured convertible debentures will total $189 million, along with common warrants for an additional 202,499,980 ordinary shares [5]. Group 5: Legal and Advisory - Northland Capital Markets and B. Riley Securities are serving as joint lead placement agents for the offering, with legal counsel provided by Lowenstein Sandler LLP and ARCHERS (AARPI) [7].

Core Viewpoint - Sequans Communications has received a notice of non-compliance from the NYSE due to its market capitalization and stockholders' equity falling below the required thresholds [1][2]. Group 1: Compliance Issues - The company was notified that its average global market capitalization over a consecutive 30 trading-day period was below $50 million, and its stockholders' equity was also less than $50 million [2]. - The notice does not lead to immediate delisting of the company's American Depositary Shares (ADSs) from the NYSE [2][4]. Group 2: Remedial Actions - Sequans has 90 days from the receipt of the notice to submit a business plan to the NYSE detailing actions to regain compliance within a 9-month period [3]. - If the NYSE accepts the plan, the company's ADSs will continue to be listed and traded during the 9-month period, contingent on compliance with other NYSE standards [3][4]. Group 3: Company Overview - Sequans Communications S.A. specializes in wireless cellular technology for the Internet of Things (IoT) and offers a range of solutions including chips, modules, and services [6][7]. - The company is headquartered in France and has a global presence with offices in multiple countries [7].

Financial Data and Key Metrics Changes - The company reported first quarter revenue of $8.1 million, a 34% increase from $6.1 million in the same quarter of 2024, but a sequential decline of 27% [22] - Product revenue was $3.5 million, accounting for 44% of total revenues, representing a 42% year-over-year increase but a 26% sequential decline [22] - Licensing and other revenue was $4.5 million, up from $3.6 million year-over-year but down 28% from $6.3 million in the previous quarter [22] - Gross margin for the first quarter was 64.5%, down from 67.4% in the previous quarter and up from 63.9% year-over-year [24] - The net loss for Q1 2025 was $7.3 million, or $0.29 per diluted ADS, compared to a net loss of $2.4 million in Q4 2024 and $11.8 million in Q1 2024 [26] Business Line Data and Key Metrics Changes - Product revenue increased by 42% year-over-year, driven by the rollout of Monarch two projects [6] - Licensing and services revenue grew by 28% year-over-year, primarily due to revenue recognition timing from the five gs Taurus license to Qualcomm [7] - The company expects CalliP2 shipments to ramp in the second half of 2025, particularly in telematics and security markets [9] Market Data and Key Metrics Changes - The total pipeline of advanced customer engagements and design wins reached approximately $480 million, with over half ($250 million) already in the design win phase [12] - The company secured nine new projects in Q1 from six customers, including four new ones, representing over $10 million in expected annual revenue at full production [13] Company Strategy and Development Direction - The company aims to continue moving design win projects into production and expand its design win pipeline in high-growth markets like security and fleet management [16] - The strategic priorities for 2025 include executing the REDCap and eREDCap product roadmap and leveraging RF chip opportunities acquired from the ACP acquisition [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in reaching operating income breakeven in 2026 while managing cash operating expenses below $10 million per quarter [18] - The company is closely monitoring potential new US tariffs but has not seen a direct impact on its business so far [19] - Management highlighted the positive market response to new technologies and ongoing discussions with customers for collaboration [10] Other Important Information - Cash and short-term deposits totaled $45.9 million at the end of Q1, down from $62.1 million at the end of 2024 [27] - The company anticipates total revenue in Q2 2025 to be in the range of $8 million to $9 million [28] Q&A Session Summary Question: Pipeline composition and revenue translation timeline - Management confirmed the design opportunity is around $230 million, with nine projects secured this quarter, and noted that revenue from some new deals is expected to begin in 2026 [34][38] Question: Product revenue acceleration visibility - Management indicated that while there is positive progress, the timeline for ramping to full production varies by customer, with some projects expected to generate revenue in the second half of the year [40][42] Question: RF transceiver opportunities in new markets - Management discussed the potential for $10 million per year in revenue from new RF transceiver opportunities, with a ramp to revenue expected in 12 to 18 months [46][47] Question: Licensing front and cash clarification - Management confirmed that they expect to start receiving royalty revenue from a Chinese partner in 2026 and clarified that $10 million in escrow from Qualcomm is expected to be released in September [50][53]

Financial Data and Key Metrics Changes - The company reported first quarter revenue of $8.1 million, a 34% increase from $6.1 million in Q1 2024, but a sequential decline of 27% from Q4 2024 [21] - Product revenue was $3.5 million, representing a 42% year-over-year increase, but a 26% sequential decline [21] - Licensing and services revenue grew to $4.5 million, up from $3.6 million year-over-year, but down 28% sequentially [21][23] - Gross margin for Q1 2025 was 64.5%, compared to 67.4% in the previous quarter and 63.9% in Q1 2024 [23] - The net loss for Q1 2025 was $7.3 million, or $0.29 per diluted ADS, compared to a net loss of $2.4 million in Q4 2024 and $11.8 million in Q1 2024 [26] Business Line Data and Key Metrics Changes - Product revenue accounted for 44% of total revenues in Q1 2025, with a significant increase driven by Monarch two projects [21][6] - The company is seeing substantial progress in its Monarch two pipeline, with new projects in various sectors including metering and eHealth [7][12] - The design win pipeline reached approximately $480 million, with $250 million already in the design win phase [12][13] Market Data and Key Metrics Changes - The company is expanding its market reach with new projects in tracking, metering, eHealth, and other industrial segments [8] - The ACP acquisition is expected to accelerate the five gs ERADCA roadmap by approximately 18 months, providing a first-to-market advantage [10] - The geopolitical environment has created new opportunities for the company, differentiating it as a comprehensive cellular IoT provider outside of China [12] Company Strategy and Development Direction - The strategic priorities for 2025 include moving design win projects into production, expanding the design win pipeline, and capturing market share in high-growth areas like security and fleet management [16] - The company aims to achieve operating income breakeven in 2026 while managing cash operating expenses below $10 million per quarter [17] - The company is focused on executing its REDCap and eREDCap product roadmap to solidify its leadership in next-generation five gs IoT [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the direction of the business, citing a strong revenue pipeline and progress on key projects [29] - The company is monitoring potential new US tariffs but has not seen a direct impact on its business as of now [18] - Management anticipates that many new design win projects will begin production in the second half of the year [18] Other Important Information - Cash and short-term deposits totaled $45.9 million at the end of Q1 2025, down from $62.1 million at the end of Q4 2024 [27] - The company does not foresee the need for an equity raise in 2025 or 2026 based on its capital allocation plan [27] Q&A Session Summary Question: Can you confirm the pipeline composition and velocity of design opportunities? - Management confirmed that the design opportunity is around $230 million, with nine projects secured in the quarter, and emphasized a disciplined approach to measuring design wins [34][36] Question: What is the expected timeline for revenue from design opportunities? - Management indicated that revenue from some new deals is expected to begin in less than twelve months, particularly in high-velocity segments [39] Question: What is the comfort level regarding product revenue acceleration in the second half of the year? - Management expressed confidence in the progress of design projects but noted uncertainty around the timing of customer ramp-up [40][42] Question: Can you quantify the size and timeline of RF transceiver opportunities? - Management estimated that the RF transceiver market could generate around $10 million per year, with a ramp to revenue expected in 12 to 18 months [45][46] Question: What is the status of licensing agreements, particularly with the Chinese partner? - Management confirmed that the Chinese partner is advancing towards production, with expected royalty revenue beginning in 2026 [49][50] Question: Can you clarify the cash situation regarding escrow payments from Qualcomm? - Management confirmed a $10 million escrow payment expected to be released on September 30, along with additional government grant money [53]