Sequans Communications Preliminary First Quarter 2025 Financial Results May 06, 2025 6:00 AM EDT | Source: Sequans Communications Paris, France--(Newsfile Corp. - May 6, 2025) - Sequans Communications S.A. (NYSE: SQNS) ("Sequans" or the "Company"), a leading developer and provider of 5G/4G semiconductors and IoT modules, today announced preliminary financial results for the first quarter ended March 31, 2025. First Quarter 2025 Summary Preliminary Results Table: | (in US$ millions, except share and per shar ...

Core Insights - Sequans Communications S.A. has filed its Annual Report on Form 20-F for the year ended December 31, 2024, with the SEC, and it is available on the company's website [1][2] Company Overview - Sequans Communications S.A. is a leading semiconductor company specializing in wireless cellular technology for the Internet of Things (IoT) [2] - The company designs and develops innovative, secure, and scalable technologies that power the next generation of connected devices [2] - Sequans offers a wide range of solutions, including chips, modules, IP, and services, with platforms optimized for IoT such as LTE-M/NB-IoT, 4G LTE Cat 1bis, and 5G NR RedCap/eRedCap [2] - Established in 2003, Sequans is headquartered in France and has a global presence with offices in multiple countries including the United States, United Kingdom, Israel, Hong Kong, Singapore, Finland, Taiwan, and China [2]

Financial Performance - The company recorded a net profit of $57.6 million in 2024, including a significant gain of $153.1 million from the sale of 4G assets, following a net loss of $41.0 million in 2023[36]. - The accumulated deficit at December 31, 2024, was $35.8 million, indicating ongoing financial challenges despite the recent profit[36]. - The company has a history of annual losses since inception, except for 2024, highlighting the need for sustained revenue growth to achieve profitability[36]. - Total revenue for 2024 was $36.8 million, an increase from $33.6 million in 2023 and a decrease from $60.6 million in 2022[209]. - A net gain of $153.1 million was recognized on the sale of 4G assets, included in operating income for the year ended December 31, 2024[215]. Customer Dependency and Revenue Risks - The company relies on a small number of customers for a significant portion of its revenue, which poses a risk if those customers change their purchasing behavior[29]. - The top ten customers accounted for 95%, 92%, and 97% of total revenue in 2022, 2023, and 2024 respectively, indicating a high dependency on a small number of customers[50]. - Customer A represented 53% of total revenue in 2024, while Customer B accounted for 15% of total revenue in the same year[50]. - The company anticipates that some customers could each represent at least 10% of revenue in 2025, highlighting the risk of losing significant customers[50]. - The company derives a significant portion of its revenue from a small number of end customers, with customer A accounting for 53% of total revenue in 2024, while customer C contributed 12%[210]. Market and Competitive Landscape - The semiconductor solutions market is characterized by rapid technological changes, which could negatively impact revenue and margins if the company fails to adapt[37]. - The company faces competition from established semiconductor companies, including Qualcomm, which acquired certain intellectual property in 2024[56][57]. - The semiconductor industry is cyclical, with significant downturns in customer demand potentially harming operating results and cash flows[67]. - The company faces intense competition for qualified marketing, sales, technical, and engineering personnel, which could impair its ability to grow if not addressed[140]. Supply Chain and Manufacturing Risks - The company is dependent on a single foundry for semiconductor wafer manufacturing, which poses risks related to production quality and capacity[29]. - The company relies on a single independent foundry, TSMC, for semiconductor wafer manufacturing, which poses significant risks if capacity is not available or if prices increase due to inflationary pressures[85]. - The lack of long-term agreements with suppliers may lead to increased costs and reduced gross margins, particularly in light of recent supply chain disruptions[92]. - Recent supply chain challenges have led to production constraints, impacting the ability to meet increased demand for semiconductor solutions[68]. - Supply chain disruptions and shortages of critical components have previously impacted the ability to fulfill customer orders, particularly in 2021 and 2022[82]. Research and Development - The company plans to continue investing in the development of new technologies and products, including 5G solutions, although at a lower level than in 2024[37]. - Significant capital investment is required for research and development to remain competitive, with potential cash flow issues if operations do not generate sufficient cash[63]. - The company suspended the development of its 5G broadband product for Fixed Wireless Access applications in June 2024, shifting focus to low-power 5G variants for IoT, specifically RedCap and eRedCap[155]. - The company anticipates its capital expenditures in 2025 to be primarily for 5G narrowband development for the massive IoT markets, financed from cash on hand and potential new strategic alliances[150]. Legal and Regulatory Challenges - The company identified material weaknesses in its internal control over financial reporting during 2024, which may result in material misstatements[108]. - The New York Stock Exchange notified the company on April 9, 2024, that it was no longer in compliance with minimum market capitalization and share price requirements, with an average global market capitalization below $50 million[113]. - The company may face significant costs and operational disruptions due to potential intellectual property litigation, which could also affect customer relationships and sales[105]. - The company is subject to legal actions that could distract management and increase costs, potentially impacting its financial condition and reputation[128]. Strategic Partnerships and Alliances - The company relies on strategic alliances and partnerships for revenue and financing, with potential risks if unable to attract favorable terms[65]. - The company has established long-term relationships with wireless carriers globally, facilitating quicker product certification and deployment[163]. - The company is actively partnering with leading technology firms and mobile virtual network operators to expand market reach and enhance technology offerings[164]. Product Development and Innovation - The company has developed a comprehensive portfolio of 4G/5G semiconductor solutions, including highly integrated SoC solutions that reduce size and power consumption[165]. - The Monarch 2 platform is the first Common Criteria EAL5+ certified cellular platform, enhancing security for IoT devices[162]. - The company anticipates significant growth in demand for 4G LTE-only and 5G devices, driven by the transition from 2G and 3G networks[163]. - The Monarch 3 and Calliope 3 semiconductors are set to enhance performance and ensure a seamless transition from 4G LTE to 5G NR, expected to launch in February 2025[163]. Corporate Governance and Compliance - The corporate governance practices of the company may differ significantly from NYSE standards, potentially affording less protection to shareholders[125]. - The company intends to comply with NYSE corporate governance standards to the extent possible under French law, but future changes may reduce shareholder protections[126]. - The company is exempt from certain U.S. securities laws, which may limit the information available to holders of ADSs[124]. Financial Outlook and Shareholder Impact - The company has no present intention to pay dividends on its ordinary shares in the foreseeable future, relying on stock price appreciation for returns[119]. - The exercise of outstanding stock options and warrants may adversely affect the market price of the ADSs due to dilution[136]. - As of April 18, 2025, there were outstanding stock options, warrants, and unvested restricted shares representing an aggregate of 44.1 million ordinary shares, which could dilute the ownership percentage of existing shareholders[138].

Sequans Announces Conference Call to Review First Quarter 2025 ResultsTuesday, May 6, 2025 at 8:00 a.m. ETApril 22, 2025 6:00 AM EDT | Source: Sequans CommunicationsParis, France--(Newsfile Corp. - April 22, 2025) - Sequans Communications S.A. (NYSE: SQNS), a leading provider of 4G and 5G semiconductors and modules for the Internet of Things, will release its financial results for the first quarter of 2025 on Tuesday, May 6, 2025, during pre-market hours. Following the announcement, Sequans' m ...

Core Points - Sequans Communications has regained compliance with NYSE listing standards after addressing previous deficiencies [1][4] - The company faced non-compliance due to its average global market capitalization falling below $50 million and stockholders' equity also being below $50 million [2][3] - Corrective actions included a reverse stock split and a $200 million strategic transaction that improved stockholders' equity and market capitalization [3] Company Overview - Sequans Communications S.A. specializes in 4G and 5G semiconductors and modules for the Internet of Things (IoT) [1][8] - The company focuses on innovation in the cellular IoT space and aims to strengthen its position as a technology leader [2][8] - Established in 2003, Sequans is headquartered in France and has a global presence with offices in multiple countries [8]

Core Insights - Sequans Communications has partnered with Coyote to integrate its Monarch technology into the new Coyote Nano 2.0 vehicle tracker, enhancing vehicle recovery capabilities through cellular LPWA networks [1][3] - The Coyote Nano 2.0 tracker boasts a 91% recovery rate for stolen vehicles within 48 hours, showcasing the effectiveness of the technology [1] - The tracker is designed for longevity with a target battery life of up to 5 years and operates efficiently in challenging RF environments [2][3] Company Overview - Sequans Communications S.A. specializes in wireless cellular technology for IoT, offering a range of solutions including chips, modules, and services optimized for IoT applications [4] - Coyote, founded in 2005, is a leader in connected driver assistance services in Europe, processing 25 billion data items monthly from 5 million connected users [7]

Core Insights - Sequans Communications has introduced its third-generation low-power semiconductor solution at Mobile World Congress 2025, featuring two new advanced chips that enhance the transition from 4G to 5G eRedCap for IoT applications [1][5] - The new chips significantly improve power consumption, integration, and cost efficiency, addressing longevity challenges in IoT applications [1][5] - The development of these chips is supported by a French government grant awarded in 2024 [1] Calliope 3 - Calliope 3 builds on the success of Calliope 2 by adding 5G NR eRedCap to LTE Cat 1bis, providing improved data rates and robust connectivity for IoT applications [2] - This product line is particularly suitable for applications such as fleet management, wearables, and security devices [2] Monarch 3 - Monarch 3 enhances the Monarch 2 solution by integrating 5G NR eRedCap with LTE-M, offering ultra-low power efficiency for various cellular LPWA applications [3] - It is designed to meet the increasing demand in sectors like smart metering, healthcare, and asset tracking [3] Transition Roadmap - Users of Calliope 2 and Monarch 2 have a clear roadmap for transitioning to 5G NR eRedCap, with Calliope 3 and Monarch 3 being footprint and software compatible with their predecessors [4] - Sequans plans to provide samples of these new modules to customers in 2026 [4] Industry Context - The introduction of 5G eRedCap semiconductors is critical for network operators transitioning from 4G to 5G, ensuring cost and power efficiency for IoT applications [5] - The seamless transition capability allows IoT application designers to create future-proof products [5] Company Overview - Sequans Communications specializes in wireless cellular technology for IoT, offering a range of solutions including chips, modules, and services [6] - The company is headquartered in France and has a global presence with offices in multiple countries [7]

Core Insights - Sequans Communications S.A. will participate in the 37th Annual Roth Conference from March 16-18, 2025, in Laguna Beach, California, with CEO Georges Karam and CFO Deborah Choate attending [1][2]. Company Overview - Sequans Communications is a leading semiconductor company focused on wireless cellular technology for the Internet of Things (IoT), providing a range of solutions including chips, modules, IP, and services [3]. - The company specializes in LTE-M/NB-IoT, 4G LTE Cat 1bis, and 5G NR RedCap/eRedCap platforms, which are optimized for IoT applications, enhancing wireless connectivity, power efficiency, security, and performance [3]. - Established in 2003 and headquartered in France, Sequans has a global presence with offices in multiple countries including the United States, United Kingdom, Israel, Hong Kong, Singapore, Finland, Taiwan, and China [3].

Financial Data and Key Metrics Changes - Total revenue for 2024 increased by 9% to $36.8 million from $33.6 million in 2023 [30] - Gross margin for 2024 improved to 75.5% from 71.8% in 2023, primarily due to a shift towards chipset sales [30] - IFRS operating profit for 2024 was $69.5 million, a significant recovery from an operating loss of $29.8 million in 2023 [32] - Non-IFRS net profit for 2024 was $77.5 million, or $2.73 per diluted ADS, compared to a non-IFRS net loss of $30.6 million in 2023 [32] Business Line Data and Key Metrics Changes - Product revenue in Q4 2024 reached $4.7 million, doubling sequentially and increasing 19% year-over-year [33] - Licensing and other revenue was $6.2 million in Q4 2024, up from $802,000 in the prior year quarter but down 19% from Q3 2024 [34] - Product gross margin in Q4 2024 was 37.6%, reflecting a higher portion of chip sales [35] Market Data and Key Metrics Changes - The design win pipeline represents approximately $250 million, with over 50% coming from smart metering projects [13][14] - The company is seeing significant traction in various IoT segments, including telematics and security, with shorter time-to-revenue cycles compared to metering [55] Company Strategy and Development Direction - The company aims to achieve non-IFRS operating income breakeven by 2026, driven by the acceleration of Monarch 2 and Calliope 2 shipments [25] - Sequans is focusing on increasing market share in high-velocity IoT segments and expanding into new vertical markets [27][72] - The strategic acquisition of ACP is expected to enhance the company's capabilities in 5G and RF investment [66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to achieve operating income breakeven by 2026, supported by key design wins and new customer engagements [72] - The geopolitical environment, particularly regarding China, is influencing customer dynamics and creating opportunities for Sequans [59] - The company is optimistic about the future, particularly with the introduction of RedCap technology and its potential market impact [66] Other Important Information - The company expects to recognize nearly $8 million in licensing revenue related to the Qualcomm deal throughout 2025 [39] - Cash and short-term deposits totaled $62.1 million at the end of Q4 2024, down from $173.6 million at the end of Q3 2024 [37] Q&A Session Summary Question: Clarification on the $250 million design win pipeline - Management confirmed that the pipeline represents approximately $60 million in annualized revenue over four years, with a significant portion coming from metering projects [49][50] Question: Applications and design cycles in the ramping pipeline - Management highlighted traction in telematics and security applications, with Cat 1bis products attracting significant customer interest [55] Question: Impact of geopolitical dynamics on customer conversations - Management acknowledged that the geopolitical environment is influencing customer decisions, positioning Sequans favorably in the market [59] Question: Progress on licensing deals and RedCap technology - Management indicated that licensing discussions are progressing well, with RedCap technology expected to enhance product differentiation [64][66] Question: Cash flow perspective until breakeven in 2026 - Management expressed confidence in the cash position, anticipating adequate funds to reach breakeven by the second half of 2026 [68]

NEWS Sequans Communications Preliminary Fourth Quarter and full year 2024 Financial Results | (in US$ millions, except share and per share data) | Q4 2024 | (1) Q3 2024 | Q4 2023 | Full year 2024 | Full year 2023 | | --- | --- | --- | --- | --- | --- | | Revenue | $11.0 | $10.1 | $4.8 | $36.8 | $33.6 | | Gross profit | $7.5 | $8.3 | $0.6 | $27.8 | $24.1 | | Gross margin (%) | 68.1 % | 82.5 % | 12.2 % | 75.5 % | 71.7 % | | Operating income (loss) | ($5.3) | $87.1 | ($12.6) | $69.5 | ($29.8) | | Net profit (l ...