Sequans munications S.A.(SQNS) - 2025 Q1 - Quarterly Report

Financial Performance Overview Sequans reported Q1 2025 revenue of $8.1 million and a net loss of $7.3 million, with product revenue growing 42% year-over-year, and anticipates Q2 2025 revenue between $8 million and $9 million1 Q1 2025 Preliminary Financial Highlights In Q1 2025, Sequans reported revenue of $8.1 million, a 33.6% increase year-over-year but a 27.1% decrease quarter-over-quarter. The company recorded a net loss of $7.3 million. Product revenue showed strong year-over-year growth of 42%, driven by momentum in Monarch 2 and Calliope 2 projects. The company's total 3-year revenue pipeline has expanded to approximately $480 million Preliminary Financial Highlights | (in US$ millions, except per share data) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Revenue | $8.1 | $11.0 | $6.0 | | Gross profit | $5.2 | $7.4 | $3.9 | | Operating income (loss) | ($6.8) | ($5.6) | ($8.5) | | Net profit (loss) | ($7.3) | ($2.4) | ($11.8) | | Diluted income (loss) per ADS | ($0.29) | ($0.10) | ($0.48) | | Non-IFRS diluted income (loss) per ADS | ($0.24) | ($0.07) | ($0.36) | - Revenue of $8.1 million slightly exceeded the high end of the company's guidance range[4] - Product revenue grew 42% year-over-year, fueled by momentum in Monarch 2 projects and pre-production shipments of Calliope 2[5] - The total 3-year revenue pipeline expanded to approximately $480 million, with over half representing design-wins[5] Business Outlook For the second quarter of 2025, management anticipates total revenue to be between $8 million and $9 million, with acceleration expected in the second half of 2025 and into 2026 as more projects enter production - Management expects total revenue for the second quarter of 2025 to be in the range of $8 million to $9 million[7] - The company is on track to drive revenue acceleration in the second half of 2025 and into 2026, supported by a growing number of projects entering production[5] Detailed Financial Analysis This section provides a comprehensive review of Sequans' Q1 2025 financial performance, including revenue breakdown, gross margin, operating results, and an analysis of the company's financial position and cash flow1 Q1 2025 Financial Summary In Q1 2025, total revenue was $8.1 million, comprising $3.5 million from products and $4.5 million from licenses and services. The gross margin stood at 64.5%. The company reported an operating loss of $6.8 million and a net loss of $7.3 million. On a non-IFRS basis, the net loss was $6.1 million, with non-IFRS operating expenses declining to $11 million Revenue Breakdown | Revenue Category | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Product Revenue | $3.5M | $4.7M | $2.5M | | License & Services Revenue | $4.5M | $6.3M | $3.6M | | Total Revenue | $8.1M | $11.0M | $6.0M | - Gross margin was 64.5% in Q1 2025, compared to 67.4% in Q4 2024 and 63.9% in Q1 2024[9] - Operating loss for Q1 2025 was $6.8 million, compared to a loss of $5.6 million in Q4 2024 and a loss of $8.5 million in Q1 2024[10] - Non-IFRS net loss was $6.1 million, or ($0.24) per diluted ADS, compared to a non-IFRS net loss of $8.8 million, or ($0.36) per diluted ADS, in Q1 2024[11] Financial Position and Cash Flow As of March 31, 2025, cash and cash equivalents stood at $45.9 million, a decrease from $62.1 million at the end of 2024, influenced by approximately $9 million in non-operating or unusual cash uses - Cash and cash equivalents totaled $45.9 million at March 31, 2025, compared to $62.1 million at December 31, 2024[12] - The use of cash in Q1 2025 included about $9 million for non-operating or unusual items, such as bonus/severance payments, termination of a factoring facility, and ACP acquisition payments[12] Financial Statements This section presents the preliminary unaudited condensed consolidated statements of operations, financial position, and cash flow, along with a reconciliation of IFRS to non-IFRS financial measures6 Condensed Consolidated Statements of Operations For Q1 2025, Sequans reported total revenues of $8.05 million, a gross profit of $5.19 million, an operating loss of $6.82 million, and a net loss of $7.25 million, resulting in a loss of $0.29 per diluted ADS Condensed Consolidated Statements of Operations | (in thousands of US$) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Total revenue | 8,054 | 11,049 | 6,027 | | Gross profit | 5,191 | 7,444 | 3,854 | | Operating profit (loss) | (6,824) | (5,561) | (8,533) | | Profit (Loss) | (7,254) | (2,377) | (11,790) | | Diluted income (loss) per ADS | ($0.29) | ($0.10) | ($0.48) | Condensed Consolidated Statements of Financial Position As of March 31, 2025, total assets were $97.6 million, total equity was $49.3 million, and total liabilities stood at $48.3 million, reflecting changes from year-end 2024 Condensed Consolidated Statements of Financial Position | (in thousands of US$) | At March 31, 2025 | At Dec 31, 2024 | | :--- | :--- | :--- | | Total assets | 97,582 | 106,532 | | Total current assets | 75,798 | 92,984 | | Total equity and liabilities | 97,582 | 106,532 | | Total equity | 49,284 | 55,359 | | Total non-current liabilities | 9,246 | 9,000 | | Total current liabilities | 39,052 | 42,173 | Condensed Consolidated Statements of Cash Flow For the three months ended March 31, 2025, net cash used in operating activities was $9.4 million, net cash from investing activities was $18.0 million, and net cash used in financing activities was $5.7 million, leading to a net increase in cash and cash equivalents of $2.9 million Condensed Consolidated Statements of Cash Flow | (in thousands of US$) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash flow used in operating activities | (9,384) | (3,250) | | Net cash flow from (used in) investing activities | 17,971 | (10,621) | | Net cash flows used in (from) financing activities | (5,734) | 8,644 | | Net increase (decrease) in cash and cash equivalents | 2,853 | (5,227) | | Cash and cash equivalents at end of the period | 11,948 | 474 | Reconciliation of IFRS to Non-IFRS Financial Measures The company reconciled its IFRS net loss of $7.3 million for Q1 2025 to a non-IFRS net loss of $6.1 million, primarily adjusting for non-cash stock-based compensation and interest, resulting in a non-IFRS diluted loss per ADS of $0.24 Reconciliation of IFRS to Non-IFRS Financial Measures | (in thousands of US$, except per share data) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | IFRS profit (loss) as reported | (7,254) | (11,790) | | Non-cash stock-based compensation | 1,014 | 1,117 | | Non-cash interest on convertible debt | 111 | 1,833 | | Non-IFRS profit (loss) adjusted | (6,129) | (8,804) | | IFRS diluted profit (loss) per ADS | ($0.29) | ($0.48) | | Non-IFRS diluted profit (loss) per ADS | ($0.24) | ($0.36) | Other Information This section provides details on the conference call for financial results and an overview of Sequans Communications S.A., a leading semiconductor company specializing in IoT wireless cellular technology3 Conference Call Information A conference call was held on May 6, 2025, to discuss financial results, with a live webcast and archived replay available on the company's investor relations website - A conference call was held on Tuesday, May 6, 2025, at 8:00 a.m. ET / 14:00 CET[13] - A live and archived webcast is available on the Investor Relations section of the Sequans website, with an audio replay available until May 13, 2025[14] About Sequans Communications Sequans Communications S.A. is a leading semiconductor company founded in 2003, headquartered in France, specializing in wireless cellular technology for IoT, offering solutions like LTE-M/NB-IoT and 5G NR RedCap/eRedCap - Sequans is a leading semiconductor company specializing in wireless cellular technology for the Internet of Things (IoT)[19] - The company 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[19]