SQNS

Paris, France--(Newsfile Corp. - October 20, 2026) - Sequans Communications S.A. (NYSE: SQNS), a leading provider of 5G/4G cellular IoT and software-defined radio (SDR) semiconductor solutions, will release its financial results for the third quarter of 2026 on Tuesday, November 3, 2026, during pre-market hours. Following the announcement, Sequans' management will host a conference call at 8:00 a.m. ET. Conference Call Details Date: Tuesday, November 3, 2026 Time: 8:00 a.m. ET / 14:00 CET Dial in: Link Upon registration, participants will receive a confirmation email detailing how to join the conference call, including the dial-in number and a unique registrant ID. Those who wish to join the live webcast can access it here. The company suggests participants for both the conference call and those listening via the web dial in or sign on at least 15 minutes in advance of the call. For those unable to participate in the live event, a replay will be available on the company's website after 9:00 a.m. ET. About Sequans Sequans Communications S.A. (NYSE: SQNS) is a leading fabless semiconductor company specializing in wireless 4G/5G cellular technology for the Internet of Things (IoT) and RF transceiver solutions for software-defined applications. Sequans' engineers design and develop innovative, secure, and scalable technologies that power the next generation of AI-connected applications — including secured payment, smart mobility and logistics, smart cities, industrial, e-health, and smart homes, as well as mission-critical deployments in space and defense. Sequans offers a comprehensive portfolio of 4G/5G solutions, including LTE-M/NB-IoT, 4G LTE Cat 1bis, and 5G NR RedCap and eRedCap platforms, all purpose-built for IoT and delivering breakthroughs in wireless connectivity, power efficiency, security, and performance. Sequans RF transceiver solutions enable highly flexible, programmable wireless systems optimized for performance and resilience in demanding environments. The company also provides advanced design services and technology licensing. Founded in 2003, Sequans is headquartered in France and operates globally, with offices in the United States, United Kingdom, Switzerland, Israel, Finland, Taiwan, and China. Visit Sequans at sequans.com and follow us on LinkedIn and X. Contacts Sequans investor relations: David Hanover/ Rob Kelly, KCSA Strategic Communications (USA), +1 212.682.6300, [email protected] Sequans media relations: Linda Bouvet (France), +33 170721600, [email protected] To view the source version of this press release, please visit https://www.newsfilecorp.com/release/319947

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 8:00 a.m. ET Investor Relations - David Hanover Chief Executive Officer and Chairman - Georges Karam Chief Financial Officer - Norman Brodt Operator: Welcome to the Second Quarter 2026 Sequans Earnings Conference Call. My name is Jonathan, and I will be your operator for today's call. [Operator Instructions]. Please note that this conference is being recorded. I would now like to turn the call over to David Hanover, Investor Relations. David, you may begin. David Hanover: Thank you, operator, and thank you to everyone participating in today's call. Joining me on the call from Sequans Communications are Georges Karam, CEO and Chairman; and Norman Brodt, CFO. Before turning the call over to Georges, I would like to remind our participants of the following important information on behalf of Sequans. First, Sequans issued an earnings press release this morning, and you'll find a copy of the release on the company's website at www.sequans.com under the Newsroom section. Second, this conference call contains projections and other forward-looking statements regarding future events or our future financial performance and potential financing sources. All statements other than present and historical facts and conditions contained in this release, including any statements regarding our business strategy, cost optimization plans, strategic options, the ability to enter into new strategic agreements, expectations for sales, our ability to convert our pipeline to revenue and our objectives for future operations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities and Exchange Act of 1934 as amended. These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risks and uncertainty and subject to change at any time. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you should not rely on or place undue reliance on these forward-looking statements. Actual events or results may differ materially from those contained in the projections or forward-looking statements. More information on factors that could affect our business and financial results are included in our public filings made with the Securities and Exchange Commission. And now I'd like to hand the call over to Georges Karam. Please go ahead, Georges. Georges Karam: Thank you, David, and good morning, everyone. Before discussing our core business, I'd like to begin with an update on our capital structure as we have now substantially concluded our Bitcoin treasury strategy. As we have announced on May 28, we completed the full redemption of our remaining convertible debt, funded through the sale of a portion of our Bitcoin holdings. Since then, we have continued to systematically reduce our Bitcoin position in a disciplined and opportunistic manner. The Bitcoin market has been volatile over the past several months. And throughout that period, we have remained patient, strategic and deliberate in managing our digital assets. During June, despite a challenging price environment, we made the decision to sell a portion of our holdings to further strengthen our cash position. As a result, we ended the second quarter with approximately $21 million in cash and 314 Bitcoin remaining on our balance sheet. At current market prices, those remaining Bitcoin represent approximately $20 million of additional value. With our IoT business continuing to perform well and our balance sheet in a strong position, we have the flexibility to monetize these remaining holdings opportunistically and when it's the best interest of the company to do so. Our priority going forward is squarely on executing our IoT semiconductor strategy, scaling our product business, expanding our presence in the defense and drone markets and advancing our 5G eRedCap roadmap to create long-term shareholder value. As we enter the second half of 2026, we do so with a strong debt-free balance sheet and the required financial flexibility to support our operations and invest in future growth. Now turning to our IoT semiconductor business. We continued to build momentum in the second quarter. Revenue for the quarter was approximately $7.5 million, exceeding the guidance we provided last quarter and representing a 23% increase from the first quarter. The vast majority of that revenue came from product sales, which increased by more than 80% year-over-year, demonstrating the continued acceleration of our core business. We also saw strong order momentum across our customer base with several key accounts scaling meaningfully into the second half of the year and beyond. To date, we have more than 40 design win projects that have reached mass production. several of which we expect will each generate more than $4 million in annualized revenue beginning in 2027. These programs are contributing to a strong and growing backlog that now extends into 2027, providing us with increasing visibility and confidence in our product growth trajectory for both this year and next. More importantly, this reflects the continued conversion of our design win pipeline into projects in production with committed orders to come. Our design win pipeline measured by potential three-year product revenue also continues to expand beyond the more than $300 million reported at the end of 2027. We'll provide an updated figure at year-end. But today, 55% of that figure is in mass production and generating revenue, representing approximately $165 million of design wins in production at quarter's end, a more than 3x increase year-over-year. We expect that percentage to continue increasing as additional customer programs move into production. Across our product portfolio, we continue to see encouraging momentum across each of our key technology families. CAT M remains a core growth driver for the business, led by asset tracking and smart metering applications. Multiple design win projects are now in production and continue to perform ahead of plan, supporting the strong product revenue growth we delivered during the quarter. CAT 1bis this is also gaining traction with customer ramps across telematics, security and industrial applications expected to continue building through the second half of the year. We remain encouraged by the level of customer engagement and the new IoT opportunities we see as existing design win projects move towards production. During the second quarter, we secured 10 new project wins, leveraging our CAT M and CAT 1bis technologies, while transitioning a similar number of projects into mass production. Design activity across our pipeline remains healthy, and we expect to add additional wins throughout the remainder of the year. Our RF transceiver business is also gaining momentum. We continue to see strong demand from existing customers, while interest from new prospects in the defense and drone markets continue to grow. During the quarter, we began shipping our SQN9506 development kit platform to several prospective customers evaluating our RF technology for these applications. I'm also pleased to report that we secured our first drone program with product shipments expected to begin early next year. While still at an early stage, we believe this represents an important milestone as we continue to expand into this new market. Development of our 5G eRedCap solution also remains on track. Our test ship is now in-house, and we continue to target customer sampling during the second half of 2027. As the IoT market transitions from 4G to 5G, we continue to believe eRedCap will become a key industry standard and an important pillar of our long-term strategy. Beyond the product opportunity itself, we believe our investment in eRedCap further strengthens our technology leadership, enhances the value of our intellectual property portfolio and creates additional opportunities for future licensing and services revenue. Although product revenue from our eRedCap platform is expected to begin in 2028, we believe meaningful services and licensing revenue can be generated well in advance of commercial product launches. That brings me to our broader licensing and services business. Our licensing and services business continues to represent an important source of high-margin revenue, although the timing of individual engagements can vary from quarter-to-quarter. While it represented a modest contribution to revenue in the second quarter, we expect a meaningful increase in the second half of the year as one or more of the significant license opportunities currently under discussion converts into signed agreements. Today, we have several active licensing and strategic engagements under discussion with global customers and partners across a range of end markets and geographies. The potential revenue contribution from these opportunities ranges from several hundred thousand dollars to well over $10 million, underscoring the significance of this part of our business. Beyond their potential financial contribution, these engagements continue to expand our strategic reach into new markets and applications while providing meaningful upside to revenue and supporting our path towards breakeven. Because many of these discussions involve confidential commercial relationships and sensitive end markets, we are not in a position to provide customer-specific details at this time. However, we remain encouraged by the level of activity across our licensing pipeline and we'll provide updates as we reach definitive agreements. As our product business continues to scale, maintaining a reliable supply chain remains equally important. We continue to operate in a challenging supply environment. While memory remains the primary constraint, we are increasingly seeing pressure across the broader semiconductor supply chain, including silicon and packaging. Based on what we are seeing today, we expect these supply constraints to persist beyond 2026. To address these challenges, we have continued to strengthen our supply chain strategy. Apart from wafer fabrication at TSMC, we are implementing multiple sourcing options across key components and manufacturing materials. This reduces our dependence on individual suppliers, improves supply security and better positions us to support our expected growth in the years ahead. We also remain focused on managing cost pressures. Where appropriate, we continue to pass through higher component costs to our customers while working closely with our supplier to adapt to changing market conditions. This remains particularly important with memory chips, where pricing continues to be volatile and can change significantly even from month to month. Based on our current planning assumptions, we believe supply is secured for our baseline demand through the remainder of 2026. Our focus is now shifting towards securing the capacity we will need to support continued growth in 2027. As our financial priority remains focused on disciplined cost management and reducing cash burn with the continued objective of moving towards a breakeven operating run rate as revenue continues to scale. We made some progress this quarter and expect to make more in the second half of the year. Overall, the second quarter reflected continued progress across the business. We strengthened our balance sheet, continued to grow our semiconductor business, advanced our product roadmap and further simplified our capital structure, positioning Sequans for continued growth. Regarding our outlook for the third quarter, we currently expect revenue to be in the range of $8.5 million to $10 million, reflecting continued momentum in our core product business with the upper end of the range, further supported by the potential contribution from closing one of the significant licensing opportunities currently under discussion. Based on our growing backlog, continued production ramps and the strength of our design win pipeline, we continue to expect the business to build through the second half of the year. While the timing of licensing revenue can vary from quarter-to-quarter, we remain encouraged by the level of activity across our sales pipeline and continue to believe we are well positioned to deliver sequential growth as we execute our strategy. Looking ahead, we believe the fundamental building blocks of the business continue to strengthen. We have a simplified near debt-free balance sheet with meaningful liquidity and the financial flexibility to support our long-term strategy. Our IoT semiconductor business continues to demonstrate a strong underlying momentum, supported by a growing backlog and a design win pipeline that continues to grow and convert into production revenue. Finally, our differentiated portfolio of 5G and RF technologies remains one of Sequans' most important long-term strategic assets, creating opportunities across both products and licensing revenue. Our priorities remain clear. We continue scaling our IoT semiconductor business, advancing our 5G eRedCap roadmap, expanding our licensing opportunities and executing against the initiatives we believe will unlock the full long-term value of Sequans. Before handing the call over to Norman, I'd like to take a moment to recognize an important leadership transition that took place at the end of June. After 19 years with Sequans, Deborah Choate retired as our Chief Financial Officer. Deborah has been part of Sequans through many of the company's most important milestones. She played a significant role in strengthening our financial foundation and supporting the strategic initiatives that have positioned the company for where it is today. On behalf of our Board of Directors and everyone at Sequans, I would like to sincerely thank Deborah for her many contributions over the years and wish her all the best in her retirement. I'm also pleased to welcome Norman Brodt as our new Chief Financial Officer. Norman joined Sequans as Vice President of Finance in January 2025 and has been deeply involved in our financial planning, capital allocation strategy, and operational initiatives over the past 1.5 years. Many of the decisions and initiatives we have discussed on today's call, have benefited from his leadership and involvement, making this a natural transition for the company. I'm confident that Norman's experience, financial discipline and knowledge of our business will serve Sequans well as we continue executing our strategy. With that, I will now turn the call over to Norman to review our second quarter financial results in greater detail. Norman? Norman Brodt: Thank you, Georges, and good morning, everyone. Before reviewing our financial results, I'd like to say a few words. I assumed the role of Chief Financial Officer at the beginning of July following Deborah's retirement after 19 years with Sequans. I want to thank Deborah for the strong foundation she built and for ensuring a smooth transition. I'm pleased to have the opportunity to speak with you today for the first time as CFO. Now let me turn to our second quarter financial results. Total revenue for the second quarter was $7.5 million, an increase of 23.2% compared to the first quarter of 2026. Compared to the second quarter of 2025, revenue declined 8.4%, primarily because the prior year quarter included a significant contribution from license and services revenue associated with the 2024 Qualcomm transaction. Excluding this impact, our revenue grew 84.2% year-over-year. Revenue in the quarter was primarily product related with product sales up 39% sequentially and almost doubling year-over-year, reflecting the continued growth of our IoT business. That reflects sustained conversion of our design win pipeline into production revenue and with more than 40 projects now in mass production and the backlog extending far into 2027, we have strong visibility into continued growth. Gross margin was 32.9% compared to 37.7% in the first quarter and 64.4% in the second quarter of 2025. The sequential and year-over-year decline primarily reflects the higher mix of product revenue relative to license and services revenue, which naturally carries a different margin profile. As a reminder, the second quarter of last year includes meaningful license and services revenue associated with the Qualcomm transaction, making the year-over-year comparison less meaningful. Operating expenses, consisting of research and development, selling, general and administrative expenses were approximately $11.9 million compared with $11.8 million in the first quarter. We continue to execute on our cost reduction initiatives and remain on track to achieve lower operating expense levels in the second half of the year. During the quarter, we recorded a noncash impairment on our Bitcoin holdings of $3 million, now down significantly from $29.3 million in the first quarter, along with a realized net gain of $5.3 million on Bitcoin sales compared to a realized net loss of $11.7 million in the prior quarter. Operating loss was $7.2 million compared to losses of $50.5 million in the first quarter of 2026 and $8.5 million in the second quarter of 2025. Net loss for the quarter was $9.6 million or $0.65 per diluted ADS compared to net losses of $76.2 million or $5.23 per diluted ADS in the first quarter and $9 million or $3.53 per diluted ADS in the second quarter of 2025. Please note that we adjusted Q1 2026 financial income and expenses to the reevaluation of the convertible debt upon the amendment in February to permit the full redemption of the debt, which resulted in an increase of the financial expenses of $21.9 million. During the past quarter, debt-related net interest expense was $2.4 million, down from $4.9 million in the first quarter, reflecting the wind down of our convertible debt. On a non-IFRS basis, excluding noncash impairments, stock-based compensation and noncash items associated with the convertible debt and its embedded derivative, non-IFRS net loss was $4 million or $0.27 per diluted ADS. This compares to a non-IFRS net loss of $20.6 million or $1.41 per diluted ADS in the first quarter and a non-IFRS net loss of $8 million or $3.14 per diluted ADS in the second quarter of 2025. Turning to the balance sheet. Cash and cash equivalents at June 30 totaled $21 million, up from $10.6 million at March 31. For the first 6 months of the year, cash used in operating activities was $23 million. Investing activities provided $127.7 million, driven primarily by the proceeds from Bitcoin sales, while financing activities used $97 million, reflecting the full repayment of the convertible debt associated with our Bitcoin treasury strategy. As of June 30, we held 314 Bitcoin valued at approximately $18.4 million, all of which is unrestricted and available for sale. This compares to 1,514 Bitcoin at March 31 valued at $103.2 million at the end of March, of which 1,217 Bitcoin was pledged as collateral for the convertible debt. With the redemption of our convertible debt completed and the repayment of our COVID-related loan during the quarter, Sequans now has a clean unencumbered balance sheet. Together with our $21 million cash position and 314 unrestricted Bitcoin, we believe the company is well positioned to support its operating and strategic priorities going forward. Before I hand the call back to Georges, I want to briefly echo his comments on our licensing pipeline. We have several discussions that are well advanced, and we believe a number of these have the potential to contribute meaningfully to revenue in the second half of the year. As Georges noted, the timing of licensing revenue recognition can be difficult to predict, and that variability is reflected in our Q3 guidance range. With that, I'll turn the call back to Georges. Georges Karam: Thank you, Norman. So as we close, our priorities remain clear. We are focused on executing and scaling our IoT semiconductor business while expanding our presence in software-defined radio applications, including drones and defense. We continue to see encouraging momentum across the business, supported by a growing backlog, a growing design win pipeline, an increasing number of design win projects transitioning into production and a maturing pipeline of licensing and services opportunities. Together with continued strength across our CAT M, CAT 1bis and RF product families and the progress we are making with 5G eRedCap, we believe Sequans is well positioned to deliver continued growth while moving steadily towards cash flow breakeven. At the same time, we have taken important steps to strengthen our financial foundation. With the redemption of our convertible debt and the successful transition away from our Bitcoin treasury strategy, we have significantly improved our financial flexibility and sharpened our focus on our core semiconductor business. Going forward, we'll continue to manage our remaining Bitcoin holdings in a disciplined and opportunistic manner while maintaining the liquidity needed to support operations, invest in innovation and execute our long-term growth strategy. Overall, we believe Sequans is entering an important new chapter. We have a stronger balance sheet, improving visibility into future product revenue, a differentiated technology portfolio and multiple avenues for growth. We remain focused on disciplined execution and believe we are well positioned to create long-term value for our shareholders. Thank you for listening, and we can now open the call for questions. Operator: And our first question for today comes from the line of Scott Searle from ROTH. Scott Searle: Georges, congrats on the product momentum kind of going in the right direction. And Norm, congrats on the new role. Maybe to start, Georges, in terms of 55% of the design win pipeline now ramping into production and it continues to grow beyond that $300 million mark implies $13 million, $14 million plus at full production. I think you've been targeting the first half of next year is when you'll be getting to operating breakeven. Is that still the plan? And given how things are rolling into production, are you on track for that mark? Georges Karam: Yes. Scott, indeed, your remarks, I mean, honestly, when you compare to last year, as we said, we have like 3x improvement in projects in production. So they are solid, and we have visibility, as we mentioned many times, even towards the first half of next year 2027 from all those projects in production. So this is really becoming much more, I would say, predictable, if you want, like when the projects are moving and ordering, so we can predict much easier. So we expect definitely sequential growth, the growth to continue on our product. And to support our breakeven is essentially, it takes two other elements, obviously, continue controlling our cost structure, which is something definitely we are committed to, and we will continue doing this as we move forward in the second half. But also, obviously, there is a second component which can a little bit play on the margin, which is the services revenue. So yes, with these 3 points, that's the target to be next year in a position very close to breakeven, if not breakeven on a yearly basis globally. Scott Searle: And if I could follow up then, Georges, on the licensing front, it sounds like there are more opportunities or irons in the fire at this point in time. I think previously, we've been talking about two or three. It sounds like it may have expanded beyond that. Wide range of opportunities. Is that the correct interpretation? And I think you've hinted at it in the past as well, given where the balance sheet is today that some of these licensing opportunities, given how they tend to be front-end cash loaded, that would finance operations until the anticipated breakeven. Is that still the expectation? Georges Karam: Yes, absolutely. I mean the opportunity we have in hand, they are maturing. Definitely, they are closer, I would say, as predicted, we already, from the beginning of the year, we estimated that this will happen in the second half. So we are on track on this. Now obviously, what's important is really signing the deal. Revenue itself, depending on the timing, you could take some revenue in any quarter or the other based on the revenue recognition rules. But we definitely have a handful of projects very, very advanced in discussion. And hopefully, we can conclude one or more in the second half to meet our target. This is really the only point we see it for the year, if you want, and we'll be completely on our plan that we set at the beginning of the year. In addition to this, we should mention as well when we are talking about breakeven as well, is like there is always the cash from the government, which is the grant from the government, which as you know, it's a little bit -- we have technically around $4 million plus on a yearly basis. But this amount is not smooth every quarter, and we have a chunk of $3 million plus that should happen in the second half as well when you complete the cash. Scott Searle: And lastly, if I could, just on the RF front, very exciting opportunity now that's starting to ramp up. I'm wondering if you could frame the size of the opportunity, maybe in terms of revenue expectations in '26 and '27. And a quick one for you, Norm. Just in terms of the OpEx running over $11 million this quarter. I'm wondering if you could remind us where the target is. I think it was below $10 million, but just are you comfortable to get to that bogey in the second half of this year? Georges Karam: I mean on the RF, definitely, we have very solid RF portfolio. And this is somehow related to the acquisition we did boosted, I would say, the position of the company. We always had this technology in the company. The acquisition of ACP that we did a year ago boosted us, put us in a very strong position where we have a couple of customers with whom we do a couple of million dollars, $3 million in a predicted way, I will say, every year. But we took this product really to address larger space of software-defined and more focused on drone and defense. Today, the pipeline of this, we're talking about more than 20 opportunities that we are dealing with. I mean, not to give exact number, but really, we have a large number and many people interested in our technology. All the feedback we are getting is extremely positive. And we already signed one deal and to whom we will start shipping beginning of next year. I believe their product is quite advanced. We have many others in the evaluation process to whom we start shipping to them the development kit, the technology that they need for them to conclude their design win and move on. So I'm expecting in the second half of the year to get more and more from those designs secured. Now the potential of this, honestly, it's big if we are able to reach to all those customers. And we're still in our early phase to really estimate exactly where we can go there. But thinking like this is a business that can scale to $10 million, $20 million per year with a margin closer to 90% plus. We're talking about very high-margin sales. So this is really very important for us, and we are focusing on it every day, and we have the full team committed to this. Now where we will be next year, definitely, hopefully, maybe we should be approaching on the RF more than $5 million for sure and scale this to $10 million and plus the following year. That's what I hope at minimum. Norman Brodt: Scott, so on the OpEx, as you certainly have seen, we've made some progress on the OpEx already. We had last year at the same time, about $13 million, but more than that, we are down to $11.9 million this quarter. So there is progress on the reduction of that. Now we are still targeting on a $10 million per quarter OpEx on a recurrent level. So we're having plans on our page and working on that towards that target. Operator: And our next question comes from the line of Owen Rickert from Northland Capital Markets. Unknown Analyst: Just quickly on the Bitcoin holdings. What's the intended end state for that? Is this full liquidation the goal? And how are you thinking about timing given the current market conditions? Georges Karam: Yes. I mean thanks for the question. Honestly, as you know, obviously, we are out of the strategy. So the intention of the company is not really, I would say, to build any strategy around this. So it's an asset in hand. The most logical way is to turn this to cash as soon as possible. On the same time, we don't need really the cash immediately, and we were talking about licensing deal that we could have as well with more money. We have money from the government coming in. So we don't really see, feel the pressure where we are today to go and liquidate at the price we are today. Now obviously, you can say where this is going to go and is it going to go lower or higher. I mean we remain opportunistic there. And definitely, you will hear at some time that the idea is really to clean it and get the balance sheet where we don't have dependence on Bitcoin. So timing for this, nothing definitive, if you want. We are more opportunistic looking to the best we can do for the interest of the company. Unknown Analyst: Got it. Got it. Super helpful. And then secondly for me, can you just give us a quick sense of how much of the organic growth was volume-driven versus pricing driven? And how sustainable that growth rate is into the second half of the year? Georges Karam: Yes. I mean it's a good question because, obviously, there is an impact of cost, which means we have some price increase. To be honest, our price increase was not too big in Q2 because the impact for us was it's a little bit more complicated to implement this rapidly, I would say, overnight, I would say, with all those memory issues. So, we have a little bit to deal with every customer to impact this in the second half. So we'll see it more in the second half. But still, we didn't have an increase similar to what you see in memory where the people are doubling and tripling. So we're talking about, I believe, we don't have an exact number, but it's really below 5%. That's so far what we impacted our product pricing. But there is more maybe to come in the near future because it continues to increase. It's very painful because you cannot set a policy once forever with your customer. You need to deal with this almost on a quarterly basis. But the majority of the growth is really coming from new projects turning to production. And obviously, this is where it's coming. And the growth, we are positioned to continue growing. Back to the simple rule. I know that many shareholders in the past when we were talking about our pipeline, me and all the shareholders were extremely nervous and we would like, I would say, we wanted to be not too much patient, I would say, to convert those design wins to revenue. And unfortunately, in the IoT business, it takes time because customers take a lot of time to move from design win to get their product ready, certified and shipping. But what's good about it is once it's there, it's there and it's sticky and stays for many years, 5, 6, 7 years. So we have many projects in this situation, and this is what the 55%, $165 million three years revenue. So in average, we are talking about $55 million as a product revenue on a yearly basis. And this will continue to grow because in the second half of the year, more projects convert and this 55% will go higher. And if you put this into perspective where we are in product revenue and next year, so the growth trend should continue next year at least at similar level. Unknown Analyst: Great , Thank you. Operator: And our next question comes from the line of Fedor Shabalin from B. Riley. Fedor Shabalin: Norman, congratulations on the appointment. My question is kind of follow-up questions for previous ones. Georges, you cited many design win projects now in mass production, and I have a question about this 55% of $300 million three year product pipeline. What would be the expected cadence for the remaining 45% to convert? And does that pipeline figure get revised upward with the new drone defense win? Or was that already embedded in this guidance? Georges Karam: Yes. I mean, just if I take it like at the beginning of the year, we were like at 44% of $300 million. And in 6 months, we turned the 44% it becomes 55. So added like 10 points. Obviously, it's not a rule, but I'm giving it here if you want. But just to give you, I don't know if the future will be like the past because it all depends on the project, right? I mean, we have some customers, surprisingly, they move fast. Some others could be slow and take longer. I should say today, our CAT M technology in general, people are moving very, very fast on the CAT M. CAT 1bis, which is really ramping, still has more room there to convert to design win. So, technically, I don't know if I should say towards the end of the year, we should add another 10 points. This will be my own target, if you like, if I look to the past. But obviously, we're pushing to converge much more than this. Fedor Shabalin: And my follow-up is about Bitcoin remaining holdings. I know you want to monetize it opportunistically, but if you can confirm the year-end target for this? And also, what are the immediate needs for financing your core semiconductor business? And if is it kind of urgent or not urgent? So just trying to figure out when you are dependent on monetizing these Bitcoin holdings near term or not? Georges Karam: Yes. I mean, honestly, there is no urgency if we take it like this, from the end of the year, we're not in a rush on this. So we'll be opportunistic. I would like here to highlight one point. Obviously, we are a small company. We're dealing with suppliers, and suppliers would like to look to us and wash the balance sheet. And unfortunately, for many of those suppliers, Bitcoin doesn't count. So to some extent, saying that you have $20 million in Bitcoin, even if the Bitcoin could be at $25, it could be at $100 and you say I have $31 million equivalent, they don't give the same weight in the front of your supplier as when you say I have them in cash. So for this reason, we have really a lot of interest of converting this as soon as possible. Other as well, like as well, I heard many shareholders, they don't like to have this dependence on volatility on the stock, so they get it to cash. For us, the fact that you don't need this money for S&P, and based on the history of Bitcoin and whatever you could predict, we believe it's not maybe the best timing and better to wait. But we will not keep this on board forever. At some time when the price will be decent, much better than where it is today, we'll convert and take it all to cash. Unfortunately, we missed the window because when we redeemed the debt, my idea was to sell all, to be honest. But the Bitcoin was not available because they were in the collateral. So we had to conclude the transaction. And at the time to conclude the transaction, Bitcoin went down, and we lost immediately like $15,000 per Bitcoin due to the volatility. Then we waited on this, and we didn't convert. So that's a story. But the strategy for the company is really to take it all to cash as soon as possible, even if we don't need this money now, but factor in a little bit, be patient in a couple of few months to see where we have the best price, and sell. Operator: [Operator Instructions] Our next question comes from the line of Jacob Stephan from Lake Street Capital Markets. Jacob Stephan: I'd like to extend the congratulations to Norman as well. Maybe just first on the margin front, maybe you could kind of quantify for us or give a little bit more color on product mix versus kind of the memory input cost pressure and kind of what impact they had on margins? And maybe looking forward, how can we expect the gross margin line to trend? Georges Karam: Jacob, I mean, a few things, I would say. As you know, we have the licensing business when it's there; this has a very high margin. And obviously, depending on this contribution, it pushes sometimes our gross margin to be higher than 50% globally because, obviously, it helps on the product. If we focus only on the product, the rule for us is like, let's say, what we are trying to achieve is like to be on the chip gross margin above 50% on the module gross margin to be above 30%. This is more or less the rule of the industry. And then it depends on the mix of the two because we sell our product, the two, it can give us some gross margin on the product that can vary around 35% to 40%, if you want, if we project. This is in normal days. Now, if you add to this, you need to factor there is another component, which should improve over time. Which is the fixed cost. In our gross margin today, we have like three, four points related to fixed cost. Obviously, when you are making $7 million product revenue, the fixed cost is high for this number. If we go next year to the 15 plus and going to 20, we can gain just only on the pro forma basis because this fixed cost doesn't scale. It's really the number of people we use to run our operation and amortization of the masks and so on. So there are like three, four points impacted there. So this is how we should think about it going forward. Now if we factor into the cost increase, definitely with the supply pressure that we have, sometimes even to get access to the technology, right? I mean, we didn't anticipate many things at the beginning of the year. So, and we are trying to catch up; sometimes we are not able to impact the price of our customer immediately while the supplier is impacted immediately. So we could have those variations impacting us from quarter to quarter. But hopefully, all this will stabilize over time when we start planning. Jacob Stephan: Okay. Got it. Very helpful. And then maybe just touching on guidance, $8.5 million to $10 million. You said the high end is kind of more gated on potential licensing agreements. But maybe if you could help us think through, like I guess, when would the licensing agreement need to be signed? Georges Karam: In licensing agreements, we have many, as I mentioned. We have several, I would say; they tend to be a few hundred thousand dollars to a couple of million dollars, and we have other four or maybe more that tend to be more than $10 million, just to give you the spectrum where we have. Obviously, the smaller deals are much easier to convert faster because they are less negotiation, and you can get them faster. The larger deals take a little bit more time because there is more strategic discussion around it. So that's where we are. Definitely, if we put something in the guidance is that we believe that something could happen this quarter somehow. The challenge about it, like when you sign something, let's say, if you sign something at the end of September, you may sign it, and you will not take too much revenue of it. Even if you sign a deal of $20 million in license, it will be hard to take any revenue. If you sign it earlier, you can take much more than the guidance that we have. So we can have an upside. But factoring if you want the small deal that we have and potentially a larger, medium-sized deal, we could be, that's why we said that the high end assumes some services revenue, not only product. But if we do only product, it will be hard to reach the $10 million this quarter. But there's still significant growth of our product revenue quarter-to-quarter because the low end is almost pure product, if you want. Operator: This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Georges for any further remarks. Georges Karam: Yes. Many thanks, operator, for handling this call, and thanks to all of you. Looking forward to meeting you in person on another opportunity. Thank you very much. Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. Before you buy stock in Sequans Communications, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sequans Communications wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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Paris, France--(Newsfile Corp. - July 21, 2026) - Sequans Communications S.A. (NYSE: SQNS), a leading provider of 5G/4G cellular IoT semiconductor solutions, will release its financial results for the second quarter of 2026 on Tuesday, August 4, 2026, during pre-market hours. Following the announcement, Sequans' management will host a conference call at 8:00 a.m. ET. Conference Call Details Date: Tuesday, August 4, 2026Time: 8:00 a.m. ET / 14:00 CETDial in: Link Upon registration, participants will receive a confirmation email detailing how to join the conference call, including the dial-in number and a unique registrant ID. Those who wish to join the live webcast can access it here. The company suggests participants for both the conference call and those listening via the web dial in or sign on at least 15 minutes in advance of the call. For those unable to participate in the live event, a replay will be available on the company's website after 9:00 a.m. ET. About Sequans Sequans Communications S.A. (NYSE: SQNS) is a leading fabless semiconductor company specializing in wireless 4G/5G cellular technology for the Internet of Things (IoT) and RF transceiver solutions for software-defined applications. Sequans' engineers design and develop innovative, secure, and scalable technologies that power the next generation of AI-connected applications - including secured payment, smart mobility and logistics, smart cities, industrial, e-health, and smart homes, as well as mission-critical deployments in space and defense. Sequans offers a comprehensive portfolio of 4G/5G solutions, including LTE-M/NB-IoT, 4G LTE Cat 1bis, and 5G NR RedCap and eRedCap platforms, all purpose-built for IoT and delivering breakthroughs in wireless connectivity, power efficiency, security, and performance. Sequans RF transceiver solutions enable highly flexible, programmable wireless systems optimized for performance and resilience in demanding environments. The company also provides advanced design services and technology licensing. Founded in 2003, Sequans is headquartered in France and operates globally, with offices in the United States, United Kingdom, Switzerland, Israel, Finland, Taiwan, and China. Visit Sequans at sequans.com and follow us on LinkedIn and X. Contacts Sequans investor relations: David Hanover/Rob Kelly, KCSA Strategic Communications (USA), +1 212.682.6300, [email protected] Sequans media relations: Linda Bouvet (France), +33 170721600, [email protected] To view the source version of this press release, please visit https://www.newsfilecorp.com/release/305926

Image source: The Motley Fool. Tuesday, May 5, 2026 at 8 a.m. ET Chairman and Chief Executive Officer — Georges Karam Chief Financial Officer — Deborah Choate Investor Relations — David Hanover Operator: Good day, ladies and gentlemen, and welcome to the First Quarter 2026 Sequans Earnings Conference Call. My name is Howard, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference over to Mr. David Hanover, Investor Relations. David, you may begin. David Hanover: Thank you, operator, and thank you to everyone participating in today's call. Joining me on the call from Sequans Communications are Georges Karam, CEO and Chairman; and Deborah Choate, CFO. Before turning the call over to Georges, I would like to remind our participants of the following important information on behalf of Sequans. First, Sequans issued an earnings press release this morning, and you'll find a copy of the release on the company's website at www.sequans.com under the Newsroom section. Second, this conference call contains projections and other forward-looking statements regarding future events or future financial performance and potential financing sources. All statements other than present and historical facts and conditions contained in this release, including any statements regarding our business strategy, cost optimization plans, strategic options, the ability to enter into new strategic agreements, expectations for sales, our ability to convert our pipeline to revenue and our objectives for future operations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended. These statements are only predictions and reflect current beliefs and expectations with respect to future events and are based on assumptions and subject to risks and uncertainties and subject to change at any time. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you should not rely on or place undue reliance on these forward-looking statements. Actual events or results may differ materially from those contained in the projections or forward-looking statements. More information on factors that could affect our business and financial results are included in our public filings made with the Securities and Exchange Commission. And now I'd like to hand the call over to Georges Karam. Please go ahead, Georges. Georges Karam: Thank you, David, and good morning, everyone. I'd like to begin with a brief update on our capital allocation strategy, including how we are approaching the management of our digital asset holdings alongside the continued execution of our IoT semiconductor business. Our priority remains clear. We are focused first and foremost on executing our IoT strategy, scaling our product business and advancing our 5G road map in a disciplined way to create long-term shareholder value. In parallel, we have continued to manage our Bitcoin holdings with a pragmatic and opportunistic approach. In light of current market conditions, we made the decision earlier this year to eliminate all debt-related risk by negotiating an early redemption agreement with our debt holders. This allows us to fully redeem the $94.5 million of convertible debt by June 1, 2026, funded through the sale of Bitcoin that had been held as collateral. As of today, we have already redeemed approximately 62% of this debt, and the remaining balance will be redeemed in the coming weeks. By June 1, we expect to have a near debt-free balance sheet with at least 600 Bitcoin held as unencumbered asset. Looking ahead, we do not intend to further pursue our treasury strategy. Instead, our objective will be to monetize these holdings over time in a disciplined manner, balancing market conditions with our broader capital needs. Importantly, we remain focused on maintaining a strong cash position to support operations, invest in our 5G IoT road map and provide stability as we scale the business. Turning now to the operational side of the business. Our IoT semiconductor business continues to demonstrate solid underlying momentum. For the first quarter, we generated $6.1 million revenue. This performance is broadly in line with our expectations and reflects continued strength in product revenue despite supply challenges, partially offset by variability in the timing of services revenue. Looking ahead, we continue to benefit from a strong backlog, which provides good near-term visibility. Our order backlog continues to build with approximately $22 million in revenue, primarily product-related, already secured for the year, along with early indications of orders extending into the first quarter of next year. This provides us with increasing confidence in the trajectory of the business as we move through 2026 and confirms the healthy nature of our design-win pipeline and related KPI we track. Our full year outlook continues to be supported by an increasing number of design-win projects transitioning to production. We entered the year with more than $300 million in potential 3-year product revenue from design-win projects. Of these, 44% had already reached the production phase and are generating revenue. During the first quarter, 3 additional design-win projects transitioned into production, and we expect additional projects to follow in the second quarter. As a result, we continue to anticipate that more than half of our current design-win pipeline will be in production by the end of June, representing approximately $150 million in potential 3-year revenue. We are also seeing strong momentum with the new customer engagements. In the first quarter, we engaged more than a dozen new customer projects with 6 already confirmed as design wins. These programs are expected to contribute to growth, beginning in 2027 and beyond. Our product pipeline remains primarily driven by our 4G, CAT-M and CAT-1bis technologies. It also includes our RF transceiver product, which supports a wide range of software-defined radio applications, including defense and drone use cases. In addition, we have initiated early engagements around 5G eRedCap, which will be the future successor to 4G and cellular IoT deployments. Smart metering, telematics and asset tracking continue to represent our strongest verticals, followed by security, e-health and medical and other industrial applications. Turning now to product ramps and key drivers. Cat-M continues to be a meaningful growth driver in 2026, led primarily by asset tracking and smart metering deployments. This business is scaling in line with expectation, supported by strong visibility and steady ordering patterns as many Cat-M design-win projects are now in production with key customers deployment underway. CAT-1bis is positioned for a breakout year, supported by multiple customer ramps across telematics, security and some metering use cases. We are already seeing revenue contribution from several design wins with additional projects expected to enter production in the second half of the year. We're also seeing incremental opportunities driven by current market dynamics, which are creating opening for Sequans to gain share. In our RF transceiver business, we continue to see stable demand from existing customers, supported by committed backlog, and we expect additional contribution in the second half of the year. At the same time, we are engaging with a number of new prospective customers, particularly in defense and drone applications, and we expect to begin securing some of these opportunities in the near term. We are also advancing discussions around licensing and collaboration opportunities, which could further expand the reach of our RF portfolio. More broadly, our product pipeline continues to mature with several design-win programs progressing towards production. We are also seeing new generation product opportunities with existing customers, which provide incremental upside with our installed base. At the same time, we are actively preparing for the next major transition in IoT connectivity, which is the migration from 4G to 5G. Market demand for our 5G eRedCap solution continues to strengthen, particularly as mobile network operators look to refarm 4G spectrum and accelerate broader 5G deployment. Importantly, IoT applications represent the final phase of this 4G to 5G transition. And these applications require long device life cycle, often 10 years or more, making a seamless and future-proof migration path essential. Unlike the 4G era, where the market became fragmented across multiple cellular technology categories, we expect the 5G IoT landscape to be more streamlined, centered around eRedCap as the primary standard. This creates a more efficient and scalable ecosystem for both customers and suppliers. Sequans is well positioned in this transition. We already have an established customer base across our 4G portfolio, and we expect to leverage these relationships as we introduce our 5G solutions. In many cases, customers will be able to transition using solutions designed to be compatible with existing deployments, enabling a smoother upgrade path. We continue to make strong progress on our 5G eRedCap program. During the quarter, we received our first engineering test chips, which are now in-house and under evaluation. This represents an important milestone as we advance toward customer sampling, which we continue to target for the second half of 2027. Looking ahead, we believe 5G IoT will represent a significant long-term growth opportunity, both in terms of market size and value per device, supporting improved pricing dynamics relative to 4G. Now turning to services and licensing. Our services and licensing business continues to represent an important source of high-margin revenue, although timing of revenue recognition can vary from quarter-to-quarter. On this front, we have several ongoing discussions that could contribute to revenue over the course of 2026. These include engagements with large global partners, licensing and collaboration opportunities, leveraging our RF and 5G IP portfolio as well as a range of smaller service agreements. These opportunities provide potential upside to our product-driven revenue base while also expanding our reach into new markets and applications. We remain focused on converting these discussions into revenue while managing expectation around time. On the supply chain side, we continue to operate in a dynamic cost and supply environment. We are seeing significant increases in memory pricing, which are impacting the cost of both our chips and modules. We are actively working to address these cost pressures while ensuring we can meet customer demand. At the same time, we have taken proactive steps to secure supply, including multi-sourcing across key components such as memory and packaging. Based on our current plan, we believe supply for our 2027 baseline demand is secure, although we continue to monitor potential upside scenarios. Overall, while cost pressures and supply challenges are real, they are manageable and consistent with the broader industry trends. As we move through 2026, we remain focused on disciplined cost management and reducing cash burn. Our objective continues to be reaching a breakeven run rate by the end of the year as revenue scales. We implemented the cost reduction plan at the end of last year. And while the full benefits will not be realized until midyear, we are confident in achieving our expense targets in the second half. Working capital dynamics will continue to evolve alongside growth, particularly as we support production ramps and manage supply chain requirements. These dynamics may create short-term variability, but they are aligned with long-term revenue growth. Overall, our performance underscores the progress we are making in strengthening our core IoT business, improving financial discipline and maintaining flexibility in our capital strategy. Regarding our outlook for the second quarter, we currently expect revenue to be in the range of $6.8 million to $7.4 million, driven predominantly by product revenue, with potential upside if new licensing deals are closed. Based on our backlog and continued momentum across our design-win pipeline, we expect revenue to build sequentially throughout the remainder of the year. We also remain focused on reducing cash burn and continue to believe we can approach cash flow breakeven by the end of the year as the business scales. Looking ahead, we continue to evaluate strategic alternatives that could accelerate profitability and unlock additional value for shareholders. What's clear to us is that we are operating from a position of strength. We have a solid balance sheet, a growing and increasingly productive IoT business and a differentiated 5G and RF IP portfolio that we believe will be a key driver of long-term value. As we discussed earlier, the transition from 4G to 5G in IoT represents a fundamental shift in the market. With eRedCap expected to become the primary standard, we believe this will create a larger, more unified and more scalable market than what we saw in the 4G cycle. Sequans is uniquely positioned to benefit from this evolution. We expect to leverage our existing 4G customer base as a natural entry point into 5G, enabling a more efficient transition for our customers while accelerating our own time to market. Combined with the expected premium pricing and expanded market opportunity, we believe this positions us to drive meaningful long-term growth and improved profitability. In parallel, we will complete the redemption of our debt by June 1 and continue to manage our capital allocation with discipline, maintaining a strong cash position while preserving flexibility to act opportunistically as conditions evolve. Overall, we remain focused on scaling our IoT business, advancing our 5G road map, developing our new RF transceiver business and executing against the key drivers that we believe will unlock the full value of Sequans over time. With that, I will now turn the call over to Deborah to review our financial results in greater detail. Deborah? Deborah Choate: Thank you, Georges. Hello, everyone. I'll begin by reviewing our first quarter financial results and then provide an update on our balance sheet and digital asset holdings. During the first quarter, our financial results continued to reflect the underlying momentum in the IoT business, along with the impact of actions taken earlier this year to strengthen our balance sheet and simplify our capital structure. For Q1 2026, total revenue was $6.1 million compared to $6.9 million in the fourth quarter. As Georges mentioned, revenue in the quarter was primarily driven by product sales with ongoing variability and licensing and service revenue timing. Gross margin for the quarter was 37.7% compared to 41.4% in the fourth quarter and reflects the ongoing impact of supply chain dynamics and especially revenue and product mix. Operating expenses in the quarter, including R&D and SG&A expenses, were $11.8 million compared to $12.3 million in the fourth quarter. We continue to make progress on our cost reduction plan and remain on track to achieve lower operating expense levels in the second half of the year. During the quarter, we recorded $29.3 million of noncash charges related to the mark-to-market valuation of our Bitcoin holdings compared to a loss of $56.3 million in the fourth quarter. As a reminder, these charges are driven by market price movements and do not reflect underlying operating performance. We also recorded $11.7 million of realized losses on the sale of Bitcoin during the quarter compared to $6.1 million of losses in the fourth quarter, primarily associated with the ongoing redemption of our convertible debt. As discussed previously, the convertible debt and associated embedded derivatives continue to be remeasured each reporting period, resulting in noncash impacts to the P&L. In addition, IFRS accounting requires us to recognize noncash interest expense associated with the 0% coupon instrument. Reflecting these factors, we reported an IFRS net loss of $54.3 million for the quarter compared to an IFRS net loss of $76.4 million in the fourth quarter. On a non-IFRS basis, excluding significant noncash items, we reported a net loss of $20.7 million or $1.42 per ADS compared with a non-IFRS net loss of $16.2 million or $1.04 per ADS in Q4. The comparative numbers for Q4 and Q1 2025 have been adjusted from the unaudited figures published in February 2026 and May 2025. In finalizing the 2025 audit, we made adjustments related to the timing and amount of revenue recognized, the accounting for the compound financial instruments issued in July 2025 and related embedded derivatives, finalization of the ACP purchase accounting and other adjustments attributable to normal year-end closing procedures, audit adjustments and the completion of management review. We are currently still finalizing with our auditors the documentation and disclosure of the impairment test for ACP, goodwill and other acquired intangibles on the balance sheet. The ongoing discussions regarding determination of the cash-generating units to be evaluated and the most appropriate valuation models resulted in delays in issuance of the audit report, and therefore, we filed a statement indicating we would need to extend our filing deadline. We expect to file our Form 20-F this week. Turning to cash flow. Normalized cash burn for the quarter was just under $10 million compared to approximately $7.7 million in the fourth quarter, including working capital movements. As Georges mentioned, working capital can fluctuate as we support production ramp and secure supply. During the quarter, we continued to execute on our balance sheet strategy. As of March 31, 2026, we had redeemed $28.3 million of the $94.5 million face value debt that was outstanding on December 31, 2025. As of April 30, we had redeemed approximately 62% of this convertible debt, funded through the sale of 800 Bitcoin, leaving a balance of approximately $35.9 million due, which we expect to redeem in full by June 1, 2026. At the end of Q1, we held cash and cash equivalents of approximately $10.6 million compared to $13.4 million at the end of 2025. As of the end of Q1, we held 1,514 Bitcoin compared to 2,139 Bitcoin at year-end 2025. And as of April 30, we held 1,114 Bitcoin and expect that we will hold at least 600 Bitcoin after full redemption of the debt, all of which will be fully available for sale. Following completion of the debt redemption, we expect to have a near debt-free balance sheet with a simplified capital structure and increased financial flexibility. Overall, our financial results for the quarter reflect continued progress in scaling the IoT business, improving cost discipline and strengthening the balance sheet. Before turning the call back to Georges to conclude, I'd like to cover a few housekeeping matters. We expect to conclude the final audit procedures with our auditors this week and be in a position to file our annual report on Form 20-F. Since we filed an extension notification last week, as long as we file by May 15, we will still be considered a timely filer. We are currently preparing for our Annual Shareholders Meeting on June 30, 2026. You should expect to see voting materials by early June. Most of the resolutions will be our normal recurring resolutions that you see each year. One of these resolutions is to ask for authorization for a capital increase. This year, we will ask for authorization to issue up to 7.5 million ADS, including up to $15 million in the form of convertible debt. We would like to clarify that we are asking for this authorization only to provide flexibility in the event that we have a strategic opportunity that would require issuance of convertible debt or equity. We currently have no plans to do any equity raise to finance operations. In fact, the shelf registration statement and ATM program that we filed in August 2025 were filed when we had the market cap to be an accelerated filer and were automatically effective. Upon the filing of the 2025 annual report on Form 20-F, we will no longer satisfy the requirements for using an automatic shelf, and therefore, we can no longer issue equity under that August shelf registration or the ATM program. With that, I'll turn the call back to Georges. Georges Karam: As we close, I want to reiterate that our primary focus remains on executing and scaling our IoT business and expanding to software-defined markets such as drones and defense. We are seeing solid momentum across the portfolio, supported by a growing backlog, a maturing design-win pipeline, an increasing number of projects transitioning into production and several advanced licensing and services deals. With continued strength across Cat-M, Cat-1bis and RF transceivers, and with early engagement around 5G eRedCap, we believe the business is well positioned to drive sequential growth while maintaining a clear path towards cash flow breakeven. At the same time, we have taken decisive steps to simplify and strengthen our balance sheet. By eliminating our convertible debt and transitioning away from the treasury strategy, we are increasing financial flexibility and sharpening our focus on the core business. Going forward, our priority is to monetize our remaining Bitcoin holding in a disciplined way while ensuring we maintain the liquidity needed to support operations and invest in our 5G road map. Overall, we believe we are entering an important phase for the company with a stronger financial foundation, improving operational visibility and a clear path to long-term value creation. Thank you for listening. We can move now, operator, to the questions, if you don't mind. Operator: [Operator Instructions] Our first question or comment comes from the line of Luke Horton from Northland. Lucas John Horton: This is Luke on for Mike Grondahl. Just wanted to touch kind of on the 5G road map and pipeline you have there. And I guess, specifically with RedCap, I guess, how large do you expect this opportunity to be relative to the existing kind of Cat-M, Cat-1 business? Georges Karam: Yes. Luke, I mean, just not to be confused, you said RedCap, I'm talking about eRedCap. eRedCap is really the standard that's going to replace literally CAT-M and CAT-1bis. When you look to the 4G -- the 4G IoT, we had like 4 technology used in 4G: NB-IoT, mainly in China, but you have some in Europe and even in Australia and other place; Cat-M, mainly U.S., Japan and half of Europe, I would say; CAT-1bis is -- and CAT-1, which is the fourth one. And as you see, this is really because IoT -- cellular was for the first time entering IoT and for the good and the bad, they ended by having almost competing technology, not 100% competing, covering some application, but there is also a piece of it competing. And this fragmented the market. Obviously, now the carriers, starting in the U.S., and obviously, this will be followed by other region of the world, the carriers, they would like to finish their deployment of 5G. And in other words, they need to refarm the 4G spectrum to use it on 5G and one day switch off the 4G. To do this, you can do it today for all applications on the phone, but you cannot do it for IoT because all the IoT runs on 4G. That's why there is a push to come with the IoT -- 5G IoT, and this is the eRedCap. So eRedCap, by definition, will come and replace [indiscernible] all those Cat-M, NB, CAT-1 and CAT-1bis. You will have like kind of supporting low speed and medium speed. The same technology is able to do this. And because it supports 5G, it will have a little bit higher ASP. And because it supports the low speed and the high speed, so it will be really benefiting from the continuation of the IoT business in cellular and it will be expanding over time as well increasing in the price and increasing the size. So definitely, the opportunity will be, let's say, at least the sum of the 4 opportunity of Cat-1, Cat-1bis, Cat-M and NB-IoT today, plus some premium, let's say, 10%, 15% related to ASP increase because of the 5G. Lucas John Horton: Okay. Got it. I appreciate the color there. And then I guess on the kind of $300 million pipeline that you called out with about 50% of that expected in the next 3 years. And then also just kind of given the sequential growth acceleration, kind of quarterly cadence throughout this year, I guess, where does that confidence come from? And could you provide any other color around those? Georges Karam: Yes. Sure. Luke, I mean, the $300 million, this is what we had, let's say, on January this year as design win in hand, and we said like first 4% of them were in production, which means generating revenue. And we expect to be, by June, 50% of them in production, which will be $150 million. In other words, if you take $150 million in average over 3 years, this is $50 million yearly revenue in average. Obviously, there will be a ramp depending on the project, year 1, year 2, year 3. And the confidence there continues to build. And literally, when you look to our backlog, if you compare this to beginning of the year, this year in Q1, as I'm speaking, we have backlog securing close to $22 million for the year, this year, in product revenue. And we have even portioned, like $2 million, $3 million already in hand for Q1 next year. This backlog is coming from existing design win in production. And this means all our analysis on the fact of our design-win pipeline is really true and accurate, if you want, reflected in the ramp of our customers. So that's why we have really strong confidence on this. Now obviously, we need to continue the conversions from design win to full mass production. That will happen in the second half of the year, I would say, in June and beyond June, let's say, for the second half of the year. And to some extent, if you look to Cat-M business, Cat-M business today is really -- versus our target, we feel almost secured. I don't want to say 100%, but maybe 90% of our plan is already in hand. Why? Because on the Cat-M is really -- a big portion of the Cat-M is design win in production. The Cat-1bis, we have design win, not all of them in production, and this is the piece where we're still working on to ensure the ramp is going to continue in the second half of the year in terms of product revenue. Lucas John Horton: Okay. Great. And then just lastly for me on the digital asset strategy after the June 1 redemption, how do you think about Bitcoin holdings on the balance sheet and kind of capital allocation strategy, I guess, kind of specifically in different crypto market situations, like if there were to be another bull run in crypto versus kind of digital asset pricing pulling back again? Georges Karam: Yes. I mean, Luke, I mean, we went through digital asset thinking seriously that we can develop this business and we can trade above NAV. And then after this, maybe separate the 2 business, which is the core business, IoT from the digital assets because they cannot live together forever. I mean it was really -- my plan was if the 2 -- if digital asset is working in addition to the IoT, knowing that IoT will be working, we'll have, at some time, to separate them and do something there. Unfortunately, for many, many reasons, the digital assets didn't work in a sense like we were not able really to create -- to benefit from the leverage of the debt and be able to get our NAV higher than [ 1 ] , allowing us to keep scaling. So any digital asset strategy needs to have the ability to scale in number of Bitcoin and so on. And unfortunately, because we realized on top of this, the pressure on the Bitcoin, put us almost at risk. And I believe many people were nervous at the beginning of the year if this can hurt the IoT business as well. For all those reasons, we decided really to take out the risk by redeeming the debt. And obviously, from there, have a balance sheet which is clean, no debt. We'll have there, obviously, Bitcoin after -- in June 1. From there, the question becomes, are we going to go and buy Bitcoin? I don't believe so today. This is what I'm clear on it. Now we will have a holding, more than 600 Bitcoin. Are we going to sell them on June 2? I don't believe we'll be doing this on June 2, but we will be taking our time to monetize those Bitcoin in the coming, I would say, couple of quarters, knowing that the purchase price of this Bitcoin, I mean, is higher. And obviously, the trend we are seeing today that the Bitcoin is going into the right direction. So we would like to benefit from this if we can. But in any case, we'll not sacrifice IoT. And in other words, we secure enough cash on the balance sheet to be sure that the company can operate independent of the variability that you could see on the Bitcoin. Operator: Our next question or comment comes from the line of Scott Searle from ROTH Capital Partners. Scott Searle: Maybe just to dive in, Georges, on the RF business, it sounds like there's a lot of momentum building. Could you calibrate us in terms of where that is from a current revenue standpoint, what the backlog and opportunity looks like as you think about '26 and '27? And then as it relates to the RedCap -- eRedCap licensing opportunity, it sounds like there are a number of opportunities in the pipeline. I wonder if you could provide a little bit more color in terms of the magnitude and time line that you could see some of these deals materializing maybe a little bit in terms of how you're thinking about different vertical markets on that licensing front? Georges Karam: Yes. Scott, thanks for the questions. Indeed, as you know, one of the nice surprise we saw this year, which is we acquired the ACP and by acquiring ACP, the original goal was there to get the IP of the RF and accelerate our 5G eRedCap road map. And this is really executed on. As I said, we have already a chip in-house, and this has all the RF and all the analog and everything is working well as we are speaking. So this is -- we did it. But at the same time, we have, let's say, as a bonus on top of this, a product -- RF product that can be sold on stand-alone to existing customer. And when we dig in, we realized that this product is really a great product to go to drone market and defense market where you have very high ASP, very high margin and the market is booming. From this, we obviously secure the existing customer we have. And I could say today, around those customers, we could be doing close to, maybe this year, $5 million or $4 million, $5 million. They are not -- they are -- I'm putting inside this as well the royalty we collect with our Chinese RedCap. But let's call it, outside of this regular IoT business, we have around $5 million almost secured for the year and maybe we can do a couple more, depending, in the second half, if the backlog will confirm versus forecast. But the good news as well there is like we expanded to go to this defense market and drone market. And here, since we announced the Iris family, this product, we had like a dozen of leads across the world, really from many, many countries. And we realized that we have really great product, very competitive in terms of feature set, and people are really happy to use it and test it and engage projects. And as I'm speaking, I have at least several -- a few of them very advanced to consider it a design win. I don't qualify it yet a design win, but a few of them are there. So the potential of this RF business, honestly, could be -- when we're talking about the market, it's very hard to size this market around defense and drones, if you take only the transceiver business, but we are talking about maybe $100 million plus per year potential market. And as you know, this is really very high margin. We're talking about 99% gross margin. So we believe like it makes sense for us to capture a nice market share from there, whether 20%, 30%, we'll see how good we are. but this is really a very nice potential for the company, coming almost with very minimum investment. The only investment we are doing is really in support, marketing because the R&D is already done. So this is on the RF. And then if I look to the licensing and in general, those opportunities, licensing remains very important for us, specifically if we want really to achieve our cash flow breakeven in Q4. Even if the product revenue is really growing nicely, and if you look to our number in Q1, 90% plus is product and my guidance for the Q2, same. So we are really moving to almost product revenue, but we still have several deals under discussion, maybe more than 5 of advanced discussion covering RF covering the eRedCap or let's say, the modem portion as well as the protocol for satellite communication. So on those, we are advanced with many of them. We hope we'll close something in Q2. We're not -- timing sometimes, it's not obvious how much revenue you can take it if you close at end of June. But we are looking to close at least 1 deal this quarter and maybe another 1 or 2 in the second half. And those deals, they vary. I mean there is -- obviously, we have some smaller ones. I'm not mentioning this. It could be a few hundred thousand dollars, but those are really associated with the product revenue in general. But pure service revenue, we're talking about deals here, they could be from a couple of million dollars up to $15 million, 1-5, that we are contemplating there. So potential is big. But obviously, they are binary. I mean, if you get them, you get the $15 million, if you don't get them, you get 0. But we have, as I said, several of them quite advanced. So that's why we are optimistic that we can secure something this year that can help us support -- that add to the product growth in the second half of the year. Scott Searle: And then, George, looking to the second half of this year, you're talking about getting cash flow breakeven. That obviously implies that the product revenue ramps considerably in the second half of this year. Could you expand a little bit on your confidence level on that front? Certainly, that $300 million pipeline is helping, but it sounds like new wins are starting to ramp as well. And could you give us an idea about where you expect product to ramp to by the end of this year? The backlog supports some of that current visibility. But just kind of maybe help us out a little bit with some end markets and the competitive landscape as well. Cat-1bis is very, very hot right now. Kind of where you guys stand from a win rate on that front? Georges Karam: It's really -- the confidence is coming with the maturity of the design win, means those design wins are already in production. Everything which is in production today, and we start to have a sizable number of projects, and as I mentioned, mainly in metering and tracking. These are the 2 markets where we are very good at in a matured way. All those are coming, scaling. Last year, we did some number. This year, we plan to do something that's already secured. So the confidence level is really coming very strong from everything in production. So if I look to my ramp for everything in production, I'm more than 90% sure about it. Everything really shipping. It's really good. We have backlog and we have forecast from customers, and we should have no big surprise in the second half on this. The other piece, which is really where really the risk is or, let's say, where we have a little bit of challenge of timing, not to lose the customer. But if we are planning, obviously, and mainly in the Cat-1bis space because the Cat-M is much more mature today, more than 90% of the Cat-M -- of our Cat-M plan this year is already done, as I said, while maybe in terms of Cat-1bis, we are at 30%, let's say, if I give it a number. Why? Because the Cat-1bis is a product that we introduced after the Cat-M, which means the design wins we have there came later and those guys are not yet all in full production. Some are in full production, and we continue to win in security and telematics and they start moving and we start getting order. But obviously, we're expecting to have more in the second half. So this is the risk really or, let's say, the point to observe if those Cat-1bis projects come on time in terms of moving to production in the second half of the year. But we are optimistic because they are happening and the customer is serious, the projects are moving. And if there is a shift, it will be really minor delay with the customers taking a month or 2 delay, but this will happen at the end of the day. And then if I look to the RF, I told you already, I mean, we are in good shape there because all what we have in hand, we secured maybe 60% power plant in RF already. Still the remaining needs to happen in the second half based on forecast, not yet an order, but based on forecast. So all this give us strong confidence, to be honest. And when you compare to the last year, it has nothing to do -- I mean the company really now -- we talk about many, many customers, many projects, repeating order, established customers to whom we ship -- we ship to them maybe in the last 2 years already, maybe a little bit and growing. And some we started shipping last year and now growing strongly this year. So that's why we are really very, very positive on the ramp of our product revenue in the coming quarters. Scott Searle: Very helpful. Georges, maybe just quickly, the competitive landscape right now for Cat-1bis and kind of what your win rate is. And Deborah, if you could remind us, I know that there -- you've got cost reduction efforts, but there are a lot of moving parts in the world today with currency fluctuations, et cetera. What should we be thinking about in terms of where that OpEx is in the second half of this year and therefore, the breakeven? Georges Karam: Yes. I mean on the competitive landscape, there is not a big change, to be honest, Scott. It's the same thing. Even if -- I saw in the Cat-1bis, Nordic announcing a product, I believe they got it through IP licensing from somewhere, without saying more on this. But you need to understand that Cat-1bis in the U.S. is closed. There is no more certification of new module in Cat-1bis. So any new Cat-1bis will be coming more to address Europe and not in the U.S., not North America. And there, if you go to North America, it's left between Qualcomm and us, to be straight on this. And the challenge of all this, again, you need to imagine that starting in 2029 and maybe not that far, maybe 2030, if this shifts a little bit, you're going to see all the market will be pushing to get eRedCap support, 5G support and you will not be able to deploy new product with 4G without having the 5G. So -- and here, obviously, the competitive landscape is who has 5G technology. And as you know, we benefit from all the investments we have done in the 5G, and we believe we'll be leading in the eRedCap in the market and take a strong position there. Deborah Choate: Yes. And on operating expenses, we expect those to keep coming down. We're targeting to have cash operating expenses below $10 million, targeting $9 million by the end of the year. Operator: Our next question or comment comes from the line of Jacob Stephan from Lake Street Capital Markets. Jacob Stephan: Maybe first, I want to touch on the balance sheet, kind of post June 1. Obviously, $10.6 million in cash. Just kind of help walk us through that a little bit. I know you're going to have roughly 600 Bitcoin, but the collateralized number of 817 that you guys cited in the press release, I guess when you kind of subtract the current holdings from that number, you get like 300. So can you kind of walk us through that a little bit? Georges Karam: Yes. I mean, Jacob, you're right. I mean it's a little bit tricky because we have some Bitcoin already free. We have around 300 Bitcoin in hand that they are free. They are not part of the 800 that Deborah was mentioning. When we talk about the 800, we're talking about the piece which is in the collateral. And obviously, the deal we have with our debt holders is we're keeping all the amount of Bitcoin in collateral until we redeem all the debt. So obviously, once we redeem all the debt, we get all what's left in there. So the more than 600 -- we'll be at least 600, I believe, we should have more. Mainly if the Bitcoin stays where it is today, maybe we'll have a nicer number. It's just only the fact that you pay what's left -- you sell the Bitcoin, you pay what's left. And then when you combine what's left from the collateral plus what we have already in hand, free Bitcoin, we'll end above 600 Bitcoin. So in a very simple way, don't matter the detail there. On June 1, we'll pay all the debt. We'll have more than 600 Bitcoin. And we'll have almost debt-free company, maybe we have $1 million or $2 million. Deborah Choate: The only remaining debt after that will be related to government, like R&D funding that's 0 or low interest. Georges Karam: More short-term debt. Jacob Stephan: Got it. So the actual collateral, the $62 million or so is really just security for the $36 million of debt. But once you pay the $36 million of principal off, that's the remaining. Deborah Choate: Yes. Jacob Stephan: Okay. I got you. Second, I just want to touch on the supply chain. I know you guys talked a lot about it with the memory costs increasing, but what's kind of your confidence level you can procure any additional supply, should any of the kind of upside opportunities that you mentioned to the full year present themselves? Georges Karam: Yes. I mean the -- you're absolutely -- you're mentioning a good point, Jacob. On one side, what I said, like for our, what I call it, baseline, we are good today. We were not -- last quarter, we were a little bit worry about Q4. Now we are fine. I mean maybe we'll not -- however, we are short in terms of covering upside, depending how big is the upside, right? I mean if we have a big deal and we need to serve it in Q4, we'll be short if I look to the number today. However, we have capacity to increase, we will be paying more in reality. So there is always some supply capacity that will cost you more, like you lose on margin and so on. So we are contemplating this. We are working on those angles. We believe there is a potential of upside that we can cover it, but maybe this will come with a reduced margin if we have to get it because we'll be paying more. And on the memory supply, as you know, this is an industry problem today and mainly driven by AI demand. But just to make it very simple, for me, even if there is -- even if AI is taking all the capacity of memory, if this is true at the end of the day, AI will not work neither, right? Because you cannot have all the electronic only running with the AI processor, right? I mean you need a lot of things around it, some communication and so on, and you need memory. So there is availability of memory, just only people benefiting off the cycle. And I can tell you, you have crazy price increases. We're not talking in percentage. You talk about multiple -- you can talk about 2x, 3x, some memory, sometimes more than this. So that's what we are seeing. And obviously, this is the industry trend. We cannot fight for it. But however, we have good relationship with the supplier, and we are securing our capacity. So we are not missing capacity. We also introduced some second sources on some of them. We have one memory, which was really key. We have already a second source already available and shipping to some customers, not to everybody. And obviously, over time, this gives us a chance as well to secure supply, but also keep pressure on the pricing not to pay -- at least to pay based on what the market is setting as a price for memory. Operator: Our next question or comment comes from the line of Fedor Shabalin from B. Riley. Fedor Shabalin: Georges, Once the convertible debt is fully redeemed, how should we think about the preferred use of the proceeds from the sale of remaining Bitcoin? How would you rate funding operational expenses versus maybe share buybacks? Georges Karam: Yes. Fedor, I mean, it's a good point to mention on this. Obviously, we still have the share buyback plan in hand, and we can execute on it. And in Q1, we did some share buyback already. Honestly, we don't need all this money on our balance sheet. And as I'm speaking, we'll be turning -- we don't need it in a sense for operation, for cash burn. Our cash burn should be reduced and be limited, and this will put the company in a very strong position in terms of balance sheet. The option of buying opportunistically, we could be looking to this. We're not giving up on this, making some buyback. Obviously, it depends on the business evolution in the second half, on the licensing deal we secured, let's assume we secure a big licensing deal and we add -- because maybe on revenue, we will not take all the deals now, but this can add a lot of cash because in the licensing deal, you have always some upfront payment that could be significant. There, maybe we feel like we have enough cash to -- and if the share is not performing, to come and support the share and make some buyback. So this is really on the agenda of the Board, and we can execute on it opportunistically, based on the market condition. Fedor Shabalin: That's helpful. And my follow-up is about -- you did a great job outlining revenue pipeline and timing and cadence for 2026, and the same for operating expenses. I would like to dig a little bit deeper into details on operating expenses side. You mentioned that you would expect decrease in OpEx for the year. And I remember you mentioned $9 million, something like that, the number by the end of 2026. Where most of the savings come from on the OpEx side? That's the question. Georges Karam: Yes. I mean, Fedor, last year -- to be honest, now the company is in, I would say, efficient mode. But as you remember, last year, with all the movement of the company with the deal we did with Qualcomm and we had the acquisition of ACP, and we have a lot of even exceptional items related to Bitcoin, digital strategy in general as well. So all this, let's say, got cleaned, we cleaned it in Q4. Some of it was not effective in Q1. So -- and some will be effective in Q2. And for sure, by end of Q2, we'll get the full benefit of what we have. And we continue watching this. But in general, the focus was really -- we have our -- if I take in terms of R&D, our 4G product is maturing. There is only need for support on the 4G product. So in other words, we moved all the spending in 5G -- sorry, in R&D to 5G and with very minimum 4G, just all what we need for the support. This was an angle of saving. The investment into the 5G was aligned with time to market. We could go much faster if we want. We can go slower. And this was the decision based -- we need to be just in time. We don't want to be, with our eRedCap, 1 year ahead of time because this will not benefit for the company. And we don't want to be late. So -- and this also give us a variation, if you want, that a level -- a variable that we can play with. And obviously, in general, I would say all the G&A spending... Deborah Choate: Yes. I don't think -- there's not one particular item, but across the board, we've had some planned headcount reductions, basically people leaving that we're not replacing. We have -- we work with a certain number of contractors that gives us leverage there when we are -- to reduce that number as different R&D projects finish. We've also looked at just the overall structure in terms of rent, basically, overall, all of the G&A expenses are being reduced across the board. Operator: I'm showing no additional questions or comments in the queue at this time. I'd like to turn the conference back over to Mr. Georges Karam for any closing remarks. Georges Karam: So thank you all for joining the call and for all your questions. Looking forward to see you in the near future. Bye-bye. Operator: Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Before you buy stock in Sequans Communications, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sequans Communications wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $473,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,204,650!* Now, it’s worth noting Stock Advisor’s total average return is 950% — a market-crushing outperformance compared to 203% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 6, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy. Sequans (SQNS) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Sequans balanced execution of its IoT roadmap with active treasury management, repurchasing about 9.7% of ADSs in Q4 (board authorized an additional 10%), holding 2,139 BTC (valued at $187.1M) with 1,617 BTC pledged against $94.5M convertible debt and ending with net cash equivalents above $68M. Q4 revenue rose to $7M (up 72.6% sequentially), but the company reported an IFRS net loss of $87.1M driven by a $56.9M Bitcoin impairment and a $29.1M loss on early debt redemption; on a non‑IFRS basis the loss was $18.5M and normalized operating cash burn was about $7.7M. Management targets $40M–$45M revenue for 2026 backed by a > $550M three‑year product funnel and aims for a breakeven run rate by Q4 2026, with growth driven by 4G Cat M, Cat 1bis, RF transceivers and a multi‑year ramp toward 5G eRedCap (sampling mid‑2027, meaningful revenue around mid‑2028). Interested in Sequans Communications S.A.? Here are five stocks we like better. Sequans Communications (NYSE:SQNS) used its fourth-quarter and full-year 2025 earnings call to outline a “balanced and disciplined” capital allocation approach that blends execution of its IoT semiconductor roadmap with management of a Bitcoin digital asset treasury. Management emphasized that the top operational priority remains scaling the core IoT business, while capital actions in the quarter centered on repurchasing ADSs and partially redeeming convertible debt. CEO Georges Karam said Sequans has focused on repurchasing ADSs when the stock trades at what he described as a meaningful discount to net cash and net digital asset value, particularly in an environment where many digital asset treasury peers trade below an “MNAV of one.” During the fourth quarter, the company repurchased about 9.7% of outstanding ADSs, and the board approved a new program authorizing repurchases of up to an additional 10%. → Once Upon A Farm: Buy the $1B Growth Story? Karam provided balance sheet context based on quarter-end Bitcoin holdings and an assumed Bitcoin price of about $70,000, saying the company’s Bitcoin NAV was about $150 million. After adding end-of-Q4 cash and netting convertible debt, he said Sequans’ net cash equivalent position exceeded $68 million. CFO Deborah Choate added that the company ended 2025 with 2,139 Bitcoin valued at $187.1 million, with 1,617 Bitcoin pledged as collateral for the remaining $94.5 million of convertible debt due in July 2028 and 522 Bitcoin unencumbered. Choate said the company sold Bitcoin in Q4 to fund two “non-operating initiatives”: the early redemption of half of the convertible debt and the ADS buyback. The company recorded an $8.4 million net realized loss on the sale of Bitcoin. → Verizon: Your Total Return Leader for 2026 Might Be Hiding in Plain Sight Sequans reported fourth-quarter revenue of $7 million, in line with management’s expectations, with more than 94% from product sales and roughly 6% from services. Choate said Q4 revenue increased 72.6% sequentially, driven primarily by product revenue. Gross margin was 37.7%, impacted by provisions for slow-moving inventory. Excluding these provisions, Choate said gross margin would have been approximately 43%, compared with 42.4% in the prior quarter. → 3 ETFs Designed to Survive the Next Market Crash Operating expenses declined, with combined R&D and SG&A of $11.5 million in Q4, down from $13.6 million in Q3. Choate said the company intends to keep reducing operating expenses through 2026 to support goals around breakeven operating results and cash burn. Several items drove a large IFRS net loss for the quarter, including Bitcoin mark-to-market impacts and accounting associated with the company’s convertible financing. Sequans recorded a $56.9 million non-cash impairment charge related to the mark-to-market value of its Bitcoin holdings, compared with an $8.2 million charge in Q3. The company also recorded a $29.1 million loss on early redemption of debt that Choate said was primarily non-cash. As a result, Sequans reported an IFRS net loss of $87.1 million in Q4, compared with an IFRS net profit of $0.9 million in the prior quarter. On a non-IFRS basis, excluding significant non-cash items, Sequans reported a non-IFRS net loss of $18.5 million, or $1.19 per ADS, compared with a non-IFRS net loss of $11.3 million, or $0.81 per ADS, in Q3. Choate noted the $8.4 million realized loss on Bitcoin sales is included in non-IFRS results, and that absent that element the non-IFRS net loss would have been “just over $10 million.” Normalized operating cash burn in Q4, including primary working capital movements, was approximately $7.7 million, according to Choate. For full-year 2025, Sequans reported total revenue of approximately $27.2 million. Karam noted this included “meaningful” non-recurring Qualcomm-related revenue from a deal closed in 2024; on an adjusted basis, he said the underlying business was closer to $20 million. Looking ahead, management’s internal plan targets $40 million to $45 million in total global revenue for 2026, supported by what Karam called improving visibility and a significant order backlog. For Q1 2026, the company expects revenue of around $6.5 million, reflecting normal seasonality, with a risk that about $1 million could shift into Q2 due to manufacturing and shipment timing late in the quarter. In Q&A, Karam said the company is taking a conservative view on licensing within the annual outlook, citing a small amount of secured licensing in backlog and multiple potential deals. He suggested that, conservatively, licensing could add roughly $5 million to $6 million over the year, with the overall revenue mix assumed to be about 80% to 85% product and roughly 15% to 20% services. Sequans said it exited 2025 with a revenue funnel exceeding $550 million in potential three-year product revenue, including more than $300 million from design win projects. Of those design wins, 44% were in production and generating revenue at year-end, up from 38% at the end of Q3. Karam said that, assuming no changes to customer forecasts, production-stage projects represented about $132 million of potential three-year revenue. During Q4, the company added nine new customer projects to the design win pipeline, and three existing projects transitioned into production. Management’s target is to have over 50% of current design win projects in production by the end of June 2026; in Q&A, Karam said this estimate is “more than 50 for sure” by mid-year, and he suggested that a year-end figure could be higher, while noting it is not formal guidance. Management highlighted several core product areas and verticals: 4G Cat M: described as a meaningful growth driver in 2026, led by asset tracking and smart metering; Karam cited expanded programs entering production with customers such as Honeywell and Itron. Cat 1bis: positioned for a “breakout year” in 2026, supported by ramps in telematics and security. In Q&A, Karam characterized Cat 1bis as a duopoly between Sequans and Qualcomm. RF transceivers: management said it has committed backlog and expects additional demand in the second half; in Q&A, Karam said RF revenue could be around $7 million in 2026, “north of $5 million for sure,” with potential longer-term upside if additional customers in areas like defense, public safety, and drones move from sampling to production. 5G eRedCap: described as the successor to 4G in IoT deployments; the company expects its first test chips “this quarter,” with customer sampling beginning in mid-2027. In Q&A, management said it still expects meaningful eRedCap revenue to begin around mid-2028, depending on infrastructure readiness and customer product cycles. On profitability and cash flow, Karam said the company aims to reduce cash burn during 2026 with the objective of reaching a breakeven run rate by Q4. In Q&A, he discussed targeting combined operating expenses around $10.5 million in the second half of 2026, and walked through how services gross margin and product gross margin could support a cash breakeven model as revenue scales. Management said it continues to operate in a dynamic supply chain environment, including substrate constraints and memory pricing pressures. Karam said Sequans is adding suppliers to reduce single-source exposure and is working to pass cost increases through where appropriate, while maintaining customer relationships. The company expects little to no impact in the first half of 2026 and limited impact in the second half, though Karam noted pricing and availability pressures tied to broader industry demand and packaging constraints. On capital actions going forward, Karam said repurchase cadence will depend on multiple factors, including the share price relative to net cash and Bitcoin value, and that the company continues to evaluate strategic alternatives across both the IoT business and treasury strategy. Sequans Communications is a fabless semiconductor company specializing in cellular IoT and broadband connectivity solutions. The company designs and delivers a range of LTE and 5G chips, modules and connectivity platforms that enable low-power wide-area (LPWA) networking as well as high-speed broadband services. Sequans's products are targeted at Internet of Things (IoT) applications, including smart metering, industrial automation, smart cities and consumer electronics, as well as more data-intensive use cases such as fixed wireless access and private networks. The company's portfolio includes single-mode LTE chipsets for narrowband IoT (NB-IoT) and LTE-M, multi-mode platforms that combine LTE and 5G New Radio (NR) support, and modules that integrate RF front-ends, power management and embedded software. The article "Sequans Communications Q4 Earnings Call Highlights" was originally published by MarketBeat.

This article first appeared on GuruFocus. Q4 2025 Revenue: $7 million, predominantly from product sales (94%). Full Year 2025 Revenue: Approximately $27.2 million, including non-recurring Qualcomm-related revenue. Adjusted Full Year 2025 Revenue: Closer to $20 million, excluding non-recurring items. Q4 2025 Gross Margin: 37.7%, impacted by provisions for slow-moving inventory; approximately 43% excluding provisions. Q4 2025 R&D and SG&A Expenses: $11.5 million, down from $13.6 million in Q3. Q4 2025 IFRS Net Loss: $87.1 million, compared to a net profit of $900,000 in Q3. Q4 2025 Non-IFRS Net Loss: $18.5 million or $1.19 per ADS. Q4 2025 Operating Cash Burn: Approximately $7.7 million. Bitcoin Holdings at Year End 2025: 2,139 bitcoins valued at $187.1 million. Convertible Debt: $94.5 million due in July 2028, with 1,617 bitcoins pledged as collateral. Q1 2026 Revenue Expectation: Around $6.5 million, with potential $1 million shift to Q2. 2026 Revenue Target: Approximately $40 million to $45 million. Warning! GuruFocus has detected 2 Warning Sign with SQNS. Is SQNS fairly valued? Test your thesis with our free DCF calculator. Release Date: February 10, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Sequans Communications SA (NYSE:SQNS) reported a 72.6% sequential increase in revenues for Q4 2025, driven primarily by growth in product revenue. The company has a strong design win pipeline, with 44% of projects already in production, contributing to a potential $132 million in three-year revenue from production stage projects. Sequans Communications SA (NYSE:SQNS) has a significant order backlog and improving visibility, targeting approximately $40 million to $45 million in total global revenue for 2026. The company is making progress on its 5G e Redcap program, with first test chips expected this quarter and customer sampling beginning in mid-2027. Sequans Communications SA (NYSE:SQNS) has authorized a new ADS repurchase program, allowing for the buyback of up to an additional 10% of outstanding ADSs, reflecting a disciplined approach to capital management. The company reported an IFRS net loss of $87.1 million in Q4 2025, compared to an IFRS net profit of $900,000 in the prior quarter. Sequans Communications SA (NYSE:SQNS) recorded a non-cash impairment charge of $56.9 million related to the mark-to-market value of its Bitcoin holdings in Q4. The company faces supply chain challenges, including substrate constraints and memory pricing pressures, which could affect shipment timing and costs. Sequans Communications SA (NYSE:SQNS) experienced a net realized loss of $8.4 million on the sale of Bitcoin, which was used to fund debt redemption and share buybacks. The company is working to reduce cash burn and reach a break-even run rate by Q4 2026, but working capital dynamics may create short-term cash flow variability. Q: How does licensing factor into the $40 to $45 million revenue guidance, and what percentage of design wins are expected to be in production? A: Georges Karam, CEO, explained that the guidance primarily reflects product revenue, with licensing contributing a smaller portion. They have secured a couple of million dollars in licensing for the year, with potential for more. Approximately 80-85% of revenue is expected from products, with 15-20% from services. By mid-year, at least 50% of design wins should be in production, potentially reaching 75% by year-end. Q: What is the outlook for the RF transceiver business, and how significant could it become? A: Georges Karam noted that the RF transceiver business is expected to generate around $7 million in 2026, potentially more if demand increases. The business has existing customers in production and is sampling with new customers, which could lead to significant growth, potentially reaching $15 to $20 million annually if successful. Q: How are you managing supply chain challenges, particularly with memory pricing and capacity? A: Georges Karam stated that while supply chain constraints exist, particularly with memory and substrate, they have secured production for Q3 and are working on multiple sourcing strategies. They are passing cost increases to customers where possible and expect more impact in the second half of the year. Q: Can you provide more details on the competitive landscape for Cat 1 Bis and the upcoming 5G E Redcap? A: Georges Karam highlighted that Sequans and Qualcomm dominate the Cat 1 Bis market, providing a strong position. For 5G E Redcap, there is significant interest from carriers to transition from 4G to 5G, and Sequans is well-positioned to lead this transition with expected customer sampling in mid-2027. Q: What is the strategy for share buybacks given the current share price and authorization to repurchase up to 10% of ADS? A: Georges Karam indicated that the company is assessing share buybacks based on share price and Bitcoin value. The intention is to buy back shares if the share price does not reflect underlying asset value, but the pace will depend on market dynamics and Bitcoin price movements. For the complete transcript of the earnings call, please refer to the full earnings call transcript.