Sequans Communications S.A. Stock Price: Quote, Forecast, Splits & News (SQNS)

SQNS

Sequans Communications S.A.

SQNS

Overview

Financials

Historical Data

$1.91

-$0.06

3.05%

At close: Jun 18, 4:00:02 PM EDT

$1.91

$0.00

After hours: 4:00:02 PM EDT

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice.

Market Cap: $48M
IPO Date: 4/19/11
CEO: Dr. Georges Karam
Fulltime Employees: 155
Sector: Technology
Industry: Semiconductors
Country: FR
Exchange: New York Stock Exchange

Peers

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Watchlist

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Sequans Communications S.A. Stock Price: Quote, Forecast, Splits & News (SQNS)

Change

-$0.06

3.05%

Financial Profile

Prev Close

$1.97

Market Cap

$48.49M

Day Range

$1.90 - $1.94

Open

$1.94

P/E Ratio

0.9

52W Range

$0.95 - $4.28

24H Volume

$101.22K

Dividend Yield

0.00%

EPS

2.19

Key Issues

Latest Price Movement

Jun 20

Earnings

Report Date

May 6, 2025

Reported Revenue

8.1M

Miss -5.25%

Avg 1d Change

10.2%

Report Period

Q1 2025

Reported EPS

-0.24

Beat +17.24%

Implied Move 1d

21.29%

Transcript

14m 3s

Joining me on the call from Sequans Communications are George Carham, and Chairman and Deborah Choate, CFO. Before turning the call over to George, 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 wwwsequans.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 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 risk and uncertainties and subject to change at any time.

15m 33s

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 in included in our public filings made with the Securities and Exchange Commission. And now I'd like to hand the call over to George Carum. Please go ahead, George.

16m 8s

Thank you, Kim. Good morning to everyone. We are pleased to report that we delivered first quarter revenue of $8,100,000 slightly above the high end of our guidance range. Reflecting steady execution of our plan. Drilling into the details, product revenue was $3,500,000 line with our target. This represents an increase of 42% compared to first quarter twenty twenty four mainly driven by the continued rollout of our Monarch two projects. Also license and services revenue grew 28% year over year largely due to the timing of revenue recognition from the five gs Taurus license to Qualcomm. As explained on our previous earning call, the sequential decline was due to the timing of various deliveries under the Qualcomm license and variability of product shipments with some design win projects still moving through pre launch phases. On the product and technology front, we are making substantial progress. Monarch two remains the key driver of our revenue growth with many design win projects in the pipeline. In the first quarter, we saw new momentum with several metering projects entering the pilot rollout phase. Also the Monarch two pipeline continues to expand with new projects and tracking, metering [indiscernible] and other industrial segments.

17m 52s

We began shipping CALiP2 to our first design win customers preparing for product launches in the second half of twenty twenty five. We expect Calli P2 shipments to ramp through the second half of this year and accelerate in twenty twenty six particularly in telematic and security markets. Our next generation Morag III and CALiP III chips which we announced at Mobile World Congress are planned for launch by the end of twenty twenty six. These chips will further improve cost structure power consumption, and radio performance while supporting five gs eRAD cap modem category. To help customers future proof the network's transition from four gs to five gs IoT. The market response has been extremely positive and we are engaged in advanced discussions with several customers and partners interested in collaborating with us more closely on this technology. The ACP acquisition accelerated our five gs ERADCA roadmap by approximately eighteen months giving us a first to market advantage. We expect this next generation of chips to contribute to our revenue in late twenty twenty seven. We're also excited about our five RedCap platform, called Taurus LT, as it's derived from our high end five gs broadband Taurus IP. Five gs Redcap is targeting high bandwidth [indiscernible] with speeds exceeding 100 megabits per second like cameras edge routers and high end industrial devices.

19m 46s

We plan to sample this platform to early customers by year end completing our portfolio to address the full range of IoT connectivity needs. Additionally, with the technology and resources gained from the ACP acquisition, we now offer RF transceiver chips that serve vertical markets such as defense, public safety, and proprietary radio devices. Particularly, we have a very advanced 22 nanometer RF transceiver shipping to one customer and under evaluation with a few others. We are preparing for a broader commercial launch supported by an enhanced marketing campaign to expand our market reach. This represents a significant new opportunity with meaningful revenue contributions expected to begin in late twenty twenty six. With our comprehensive and rich portfolio, Sequans is one of the few comprehensive cellular IoT providers outside of China. This has become a meaningful differentiator in today's geopolitical environment and has already contributed to new opportunities and design wins. Turning to customer interest. We are seeing strong momentum across the board. Our total pipeline representing advanced customer engagements or design ins on one side and secure design wins on the other side is reaching approximately $480,000,000 of potential revenue counting the first three years of sales for each project.

21m 32s

More than half of this pipeline dollars $250,000,000 is already in the design win phase. And the balance $230,000,000 covers the design in projects. I'm pleased to report that we were awarded 90 new projects in the first quarter. From six customers including four new ones. They cover applications in Telematics, metering, and e health represent much more than $10,000,000 in expected annual revenue at full production. Some of them are part of our high velocity targets, and expected to contribute to revenue in 2026. These projects will be classified as full design wins in our pipeline as soon as our customers have initial hardware designs sampling with our chip or module. Also, we have made progress on many other design in opportunities where we are shortlisted for final evaluation and selection. So how does the design win pipeline translate revenue growth? About 18 design win projects are currently in production. Contributing to revenue representing around 20% of our design win revenue pipeline. We expect this number to grow to over 30 projects by the end of twenty twenty five where around 50% of our design win pipeline will generate revenue. And most of the remaining design win projects should reach the production phase by the end of twenty twenty six.

23m 18s

On the licensing side, we are also seeing progress. Our Chinese partner who licensed our five gs Taurus broadband platform is advancing swiftly with its product development and we expect to begin receiving a royalty revenue from this partner in 2026. Separately, we are engaged in discussions on three new strategic deals all leveraging our five gs RedCap and e RedCap IP. We anticipate closing one or more of these deals by year end 2025. Looking ahead, our strategic priorities for the rest of 2025 are clear. We'll continue moving design win projects into production converting Monarch two and ramping CALIP2 projects. We remain focused on winning new customers expanding our design win pipeline, and capturing share in high growth markets like security fleet management and asset track. We are also aggressively executing our REDCap and eREDCap product roadmap to further solidify our leadership position in next generation five IoT and secure new strategic and licensing deals. Finally, we are expanding our vertical market sales by leveraging the RF chip opportunities we acquired with ACP. Financially, we remain disciplined and focused on execution. While macroeconomic conditions are uncertain, we are managing what we can control. We remain focused on our target to achieve operating income breakeven in 2026.

25m 14s

We are managing our cash operating expenses with a target of below $10,000,000 per quarter, We have two important levers to help with this. First, the maturity of our MARAC2 and CALIP2 product lines, which require limited additional investment And second, the flexibility to adjust spending on next generation chips if needed. As revenue increases, we expect to reduce our cash burn rate to below $5,000,000 per quarter by the end of twenty twenty five, and continue growing to achieve our breakeven target from the Many new design win projects are expected to begin production in the second half of the year While there is some market uncertainty around potential new US tariffs, it's too early to draw firm conclusions We are monitoring the situation closely and will respond as needed. For now, we are not seeing a direct impact on our business. On the corporate governance side, the board governance committee recommended refreshing our Board of Directors to strengthen our strategic execution and refine our long term vision. More information will be provided in our May proxy filing.

26m 40s

In closing, I want to thank our employees, customers, partners and shareholders for their continued support. We are proud of the progress we've made in the first quarter of twenty twenty five and are excited about the opportunities ahead. With the strength of our product portfolio the accelerating pace of projects into production, and the strategic initiatives we are executing on we believe we are well positioned to drive significant value for all our stakeholders. I will now turn the call over to Deborah to review the first quarter twenty twenty five preliminary financial results in details.

27m 25s

Thank you, George, and good morning to everyone. Before we get started, please note that the financial results released today are preliminary subject to the finalization of the ACP purchase price allocation. Revenues for the first quarter of twenty twenty five increased 34% to $8,100,000 up from $6,100,000 in the first quarter of twenty twenty four and as projected declined sequentially by 27%. Product revenue reached $3,500,000 in the quarter and accounted for 44% of total revenues. Product revenue increased 42% from the year ago period and declined 26% sequentially as we had a large customer shipment in Q4 that did not repeat in Q1. Licensing and other revenue was $4,500,000 an increase compared to $3,600,000 in the prior year quarter, and a 28% decline compared to $6,300,000 in the fourth quarter of twenty twenty four, due to the distribution Hello. Can you hear me? Revenue recognition. [indiscernible] Can you can you hear us?

28m 37s

Go ahead, Beth. Okay.

28m 40s

Where was I? So, revenue variation is due to the distribution of revenue recognition from the five gs Taurus license to Qualcomm. This quarter, we recognized $3,900,000 in revenue versus $5,500,000 in Q4 twenty twenty four, from partial delivery under this license was part of the overall Qualcomm transaction. Gross margin in the first quarter of twenty twenty five was 64.5%, compared to 67.4% in the prior quarter and 63.9% in the first quarter of twenty twenty four. Reflecting the mix of revenues we had between CHIP, model, and licensing and services. Product gross margin was 31% in Q1, versus 35.5% in Q4 twenty twenty four. Reflecting a higher portion of module sales as well as initial sales of KALIA B2 with higher costs incurred during the product introduction phase. IFRS operating loss was $6,800,000 in the quarter compared to an operating loss of $5,600,000 in Q4 twenty twenty four, and a loss of $8,500,000 in the first quarter of twenty twenty four. Please note that our non IFRS operating expenses $11,000,000 declined from $12,500,000 in Q4 even with ACP operating expenses now included in Q1. Operating expenses also declined from the prior year period of $11,300,000 The Q1 twenty twenty four number included the benefit of capitalizing $9,100,000 of R and D costs.

30m 20s

Whereas no R and D costs were capitalized in Q1 twenty twenty five or in Q4 twenty twenty four. The reductions in our operating expenses show that we are making progress toward our goal to bring cash operating expenses down below $11,000,000 on a quarterly basis.

30m 39s

We recorded net interest income in Q1 and in Q4 twenty twenty four, compared to net interest expense in the first quarter of twenty twenty four due to our investment of excess cash from the Qualcomm deal after repayment of all matured debt in October 2024. Net loss in Q1 twenty twenty five was $7,300,000 or $0.29 per diluted ADS. This compares to a net loss of $2,400,000 or $0.10 per diluted ADS in Q4 twenty twenty four and to a net loss in the first quarter of last year of $11,800,000 or $0.48 per diluted ADS. The net loss of Q4 twenty twenty four benefited from the reduction of the estimated tax expense recorded in the third quarter related to the gain on the Qualcomm transaction. Therefore showing a tax benefit in Q4. On a non IFRS basis, our net loss for Q1 twenty twenty five was $6,100,000 or $0.24 per diluted ADS compared to a $1,800,000 loss or $07 per diluted ADS in the prior quarter and a non IFRS net loss of 8,800,000.0 or 36¢ per diluted ADS in the first quarter of twenty twenty four. Cash and short term deposits totaled $45,900,000 at the end of Q1, compared to $62,100,000 at the end of twenty twenty four.

32m 7s

We had several non operating or unusual items that had an approximate $9,000,000 drag on cash burn in the first quarter including the payment of bonus and severance packages expensed in 2024, the impact of the termination of our factoring agreement, and the ACP acquisition payments.

32m 28s

Excluding these items, the normalized operating cash burn for the first quarter have been around $7,200,000 We anticipate certain nonrecurring items again in Q2, including final payments to ACP shareholders.

32m 43s

However, maintain a disciplined spending approach and target to finish 2025 with over $25,000,000 in cash. Based on our capital allocation plan, we do not foresee the need for an equity raise in 2025 or 2026.

33m 2s

Turning to the outlook for the second quarter of twenty twenty five. We expect total revenue in the range of 8,000,000 to $9,000,000 including final revenue recognition related to the five gs license to Qualcomm.

33m 15s

And now for a few housekeeping items. After the call, we will post a written version of our formal remarks in the Investor Relations section of our website. On the Webcasts and Presentations page. The same location where you will find the audio replay. And we filed our annual report on Form 20 F last week on April 30. And now I'll turn the call back to George.

33m 39s

Thank you, Deborah. Thank you again for joining the call today. As we wrap up, I want to reiterate our confidence and the direction of our business, the strength of our revenue pipeline, the ramp up of key design win projects into production, and the progress on our five gs REDCap and eRADCap roadmap all position Sequans for long term value creation. We are staying focused on execution scaling our product portfolio, deepening and broadening customer engagements, and managing expenses with discipline. With a strong demand for our solutions, we are confident not only in reaching breakeven in 2026, but in unlocking meaningful growth beyond that goal. Thank you again for your continued support. Operator, we can turn now the call for Q and A please.

34m 39s

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Followed by the number one on your touch tone phone, and you will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. If you use the speakerphone, please lift the handset before pressing any keys. Your first question comes from Scott Scharley with ROTH Capital. Please go ahead.

35m 15s

Hey, good morning, good afternoon. Thanks for taking the questions and nice job on the first quarter.

35m 20s

Thanks, Scott. [indiscernible] George, maybe to dive in, in terms of the pipeline I think you said now the design in opportunity is around $230,000,000 Last quarter, I guess about sixty or so days ago, was about hundred million dollars It sounds like you've had $10 plus million worth of wins. So in that sixty day period, we've added about another $40,000,000 of opportunities just wanted to confirm that. And then in terms of the velocity of what's in that pipeline, you've been skewing more towards quick design opportunities that translate into revenue a lot sooner. I wonder if you could provide a little bit more color I think you gave some of the end market categories, but how quick quickly some of those revenue or those design in opportunities should be able to translate into revenue? Is it nine months, twelve months, eighteen months? And then I had a couple of follow Yes. Hi, Scott. So for the the first question regarding the pipeline, as I said, we secured nine projects this quarter and the only problem of our KPI, I mean, we want we have a lot of discipline on measuring design win And we don't measure it as award as design win before really being sure that the customer has achieved a key milestone on his hardware, which is the availability of the hardware in hand that we can see it Because you never know, sometimes customers, they can delay the ramp or it takes them some time.

36m 46s

So So we don't want to change the pipeline by adding number, then deduct them the following quarter. So we are prudent on this. But when you look to the $230,000,000 there, this means some of this is awarded but not yet moved to the design win. And this will be done in the coming quarter or the following quarter, depending on the speed of the execution on each project. But in the same time, it shows as well more opportunity in this new deals and with many of them, by the way, advanced because we are in a few of them in a short list. We have been notified that we are shortlisted and we are finalizing the negotiation with the customer. To close it. So yes, all this is progressing well and your understanding is right in the sixty days progress we have done. In terms now on the velocity of the market, and in reality, we spoke a lot about it in the past, and this was a level of frustration we all had that we have a lot of design win projects in the metering space. And unfortunately, the metering is taking longer time to converge to revenue.

38m 1s

Because the design is complex and the design cycle in general is much more complicated than regular other business. When you go to other IoT devices like fleet management, like security, we expect time to revenue to be faster But what happened specifically, and I mentioned this, that some of the new deals will generate revenue, we're sure about it in 2026. And very likely beginning of twenty twenty six. They are on one side related to the nature of the business, As I mentioned, they are not in metering, they are in high velocity segment. But also some of those deals they were like customers changing the modem if you want. Not redesigning the full product, and just only changing the modem for some related to the geopolitical situation, for some related to some people exiting the market, where Sequans won those cues and the refresh of this product was much faster. So we're expecting revenue from, let's say, a couple of those projects to happen in less than twelve months. As we are speak.

39m 10s

Very helpful. Thank you. And George, it sounds like we're looking for a little bit of a product inflection as we get into the second half of this year. Think some of those have been some long standing metering projects, but what's your comfort and visibility to that product revenue starting to accelerate in the second half of this year?

39m 30s

Yeah. I mean, honestly, Scott, all is progressing very well in terms of design. Unfortunately, you have always sometimes customer you're not sure about the level of ramp. In other words, the execution, I believe it's moving. We're seeing, I mentioned a couple of metering by the way, projects that they moved to [indiscernible] [indiscernible] the phase from pilot to full mass production we are a little bit in the don't have full visibility on it because it depends on the end customer validation and so on. So this can take more six months maybe maybe less, maybe a little bit more. But this is the order of magnitude on those projects. So we have there on the others that they are in the space of fleet and other application related, by the way, to the automotive segment, We're seeing some progress and we have confidence that get order and we'll be shipping in the second half. So So definitely all is positive. It's more the order of magnitude where we are a little bit we have uncertainty around it if you want, like quarter to quarter because it depends if the guys will move the ramp very quickly in the first quarter or takes them to quarter to ramp.

40m 51s

And we need to make some estimate for the time being, but all positive and progressing.

40m 57s

Gotcha. Thank you. And George, I think for the first time we've heard you talk a little bit about additional RF or transceiver opportunities going into some other markets, be it defense, public safety. I'm wondering if you could quantify the size of that and the timeline of that opportunity?

41m 15s

Indeed, mean, you know, we didn't by the way, more will come from us towards the end of the quarter because we'll be making lunch of this product We decided to take a little bit of time and after the acquisition of ECP, although we knew about it, but we want really to assess the market, understand and so on. But as I mentioned, we have strong expertise in radio where they sell [indiscernible] in hundreds of millions of those IP to many, many product in the past. And we have an existing product, very, very advanced in mass production shipping to one customer, by the way, in China. Initial shipment, not big shipment for this customer. But assessing all those application of defense and public safety, we realize there is a real demand for this chip, which is very advanced in comparison to what you can find in the market. So we'll be moving there. We engaged already two customer. All the feedback was extremely positive. So that's why we are excited to launch the product and put it on our portfolio and start selling and marketing this. Opportunity could be I mean, we should be able to do $10,000,000 per year easily, just to give a number.

42m 33s

The market is very I'll say diverse, so it's very, very hard to look to the study. You can attack because you can go to base station, you can go to a point to point radio, you can go to defense, you can go to drones, application. So many application while talking with the customer and everyone, those customers like this product. I will give it like twelve to eighteen months to ramp to revenue, but we should I I have, you know, I'm quite positive that even in 2026, we could generate maybe $5,000,000 to give a number like this from this product line.

43m 10s

Great. Very helpful. And lastly, if I could, just on the licensing front. It's encouraging to hear the Chinese customer converting to royalties. It also sounds like you remain pretty actively engaged on REDCap and eREDCap. I'm wondering if you could just provide a little bit more color on that front. And Deborah, just on the cash, I just wanted to clarify, I think that there were some final escrow payments coming from Qualcomm of $10,000,000 some in the second half of this year and then with some additional grant money. I'm wondering if you could just clarify Thanks.

43m 40s

Yep. I mean, I'll let the thing indeed, know, with our Chinese partner, are reaching the MP version of the chip. I mean, it's still not MP tip out, I should say. It should go to production for sure towards the end of the year and we should start getting revenue from them next year. It's good with the geopolitical environment, you could imagine those guys selling in China, they should be able to make some good number. China is full speed on five gs SA, so Redcap will be a quite strong market there. And this could generate a few million dollars for us per year in terms of royalty, depending on the volume what they can do. Today, we are not putting this yet in our forecast. So this will be like an upside for us next year as part of the servicing. Part of the service and licensing. But also we're engaged with as we mentioned, a few others opportunity all interested in [indiscernible] for other application or for different regions. As well. We're quite advanced. I cannot say more on this. But there are serious opportunity, well identified, engagement and negotiation is there. And we feel comfortable that we should close something this year.

44m 52s

It's not something to drag for next year. You will hear from us, I will say, hopefully in the second half of the year closing at least one, maybe two opportunity there.

45m 4s

Yeah. And Scott, on the cash, yes, we have $10,000,000 in escrow from the Qualcomm deal that we're expecting to have released [indiscernible] And in terms of government grants in the second half of the year, we're expecting about $5,500,000 to come in.

45m 22s

Great. Thanks so much.

45m 23s

Nice quarter. Thank you, Scott.

45m 26s

Thanks, Scott.

45m 28s

Thank you. The next question comes from Nick Doyle with Needham. Please go ahead, sir.

45m 37s

Hey, guys. Thanks for taking my questions.

45m 40s

For the non GAAP gross margin that came in a little below and you some drivers. But my question is what is the Calliope two gross margin improvement roadmap? How long until that drag grows away on product gross margin? Thanks.

45m 58s

Hi, Nick. Is essentially first of all, you know, in more generic Nick, all our chip business stand around the 50% gross margin. Yeah, it can vary. You have depending on the phase of the life cycle or depending on the size of the deal, it could be a little bit below 50 it could be above 50, up to fifty five. With the volume we are talking about today. We're not talking improvement over time, which definitely will happen when the volume will grow. We'll solidify it and make it above 50 and hopefully closer to 55. Module business, as we said in the past, this vary as well around the 30% number. Could be 35%, it could be 25 again, depending on the deal and so on. So the mix of the two give you the product gross margin which is above 40 today if we where we should be around 40%. Now for this quarter, again, you have two elements when you look to the margin currently. We have a fixed cost of our manufacturing costs, is included. In other words, if we have a revenue of a few million dollars, this fixed cost is going to impact by by more than maybe close to five points.

47m 13s

Our margin. So our variable gross margin today is not what you see. You need to add like 5% as we grow just only by growing volume, discussed will be like negligible to our variable gross margin. And we had specifically this quarter, the mix of module and chip plus some launch of initial production of CALiP2 you know, the initial production will come a little bit at high cost of the module just serving the customer with the first thousands, 10 thousands unit here and there. So the cost is not really optimal. But there is nothing unique to CaliPit two I will say, which is different from the Morak two recipe. And terms of gross margin, whether Morac two or Cali P2 or even in the future eRED cap, they will play with the number I explained to you more generically. 50% of the chip 35% for the module, and obviously licensing and services above 70%.

48m 16s

Yeah, that makes sense. It sounds a lot more like a volume leverage issue. So I know we'll find out soon, but maybe you can give us a hint at what kind of board changes are being discussed. Thank you.

48m 31s

Yeah. I mean, obviously, don't want to I gave you the guideline. Obviously, the Board we have great, great people on our board, but they serve many mandates and I believe for the interest of the company, is to refresh, bring new blood. So this is one trend if you want. Also, we believe the size of the board could be a little bit lower. At some time, we increase the size We have the complexity of when we added some strategic, when we get Renaissance on board, and then we had to we had to increase the size of the board to compensate for the US versus non US as we are foreign follow issuer So this adds another constraint when we build our board. But now we believe we can reduce the size of the board to be in any case maybe six in any case below seven people in total. And have at least a couple of new guys. In the same time, obviously, some people will be reaching their term now and they will be leaving immediately. But also others very likely as soon as we hire other board member that will be resigning and leaving afterwards.

49m 51s

So this is a process that we will engage now starting obviously with the with the next shareholder meeting. And in the coming, I'll say two or three quarters, we should be able to achieve this target, reduce the sizes of the board, to six, or maybe in any case below seven or six, And have almost more half of the board new blood and new people that they are serving for their first mandate on our Thank you very much. Thank you, Nick.

50m 28s

Thank you. There are no further questions at this time. I would now like to turn the call over to doctor George Karam, president and CEO. Please go ahead, sir.

50m 40s

Thank you, operator, and thank you all again, and looking forward to speak whether on next earnings calls or before if we have the opportunity to have this. Thank you very much. Operator, we can close the connection.

50m 57s

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Key Insights

Q1 2025 revenue was $8.1M, up 34% year-over-year and slightly above guidance; product revenue was $3.5M (up 42% YoY), driven by Monarch 2 projects, while license and services revenue grew 28% YoY due to Qualcomm 5G Taurus license timing.
Gross margin for Q1 2025 was 64.5% (vs. 63.9% in Q1 2024); product gross margin was 31%, impacted by higher module sales and initial CALiP2 launch costs; non-IFRS operating expenses declined to $11M, showing progress toward the target of sub-$11M quarterly cash OPEX.
The design win pipeline reached ~$480M in potential revenue (first three years of sales per project), with $250M in the design win phase and $230M in design-in; 90 new projects were awarded in Q1, expected to generate over $10M in annual revenue at full production, with many contributing to revenue in 2026.
Sequans expects to achieve operating income breakeven in 2026, targeting cash OPEX below $10M/quarter and reducing cash burn to under $5M/quarter by end of 2025; expects to finish 2025 with over $25M in cash and does not foresee the need for an equity raise in 2025 or 2026.
Q2 2025 revenue guidance is $8M–$9M; new product launches (CALiP2, Morag III, CALiP III) and RF transceiver chips are expected to ramp in late 2025–2026, with meaningful revenue from new verticals (defense, public safety) anticipated in late 2026; royalty revenue from a Chinese partner is expected to begin in 2026, and additional strategic licensing deals may close by year-end 2025.

Recent Transcripts

Q1 revenue grew 34% YoY, pipeline and design wins signal accelerating growth for Sequans.

$480M total, $250M design win

Sequans achieved strong revenue growth and financial turnaround driven by the $200M Qualcomm deal.

Earnings

Report Date

May 6, 2025

Reported Revenue

8.1M

Miss -5.25%

Avg 1d Change

10.2%

Report Period

Q1 2025

Reported EPS

-0.24

Beat +17.24%

Implied Move 1d

21.29%

Transcript

14m 3s

15m 33s

16m 8s

17m 52s

19m 46s

21m 32s

23m 18s

25m 14s

26m 40s

27m 25s

28m 37s

Go ahead, Beth. Okay.

28m 40s

30m 20s

30m 39s

32m 7s

32m 28s

32m 43s

33m 2s

33m 15s

33m 39s

34m 39s

35m 15s

Hey, good morning, good afternoon. Thanks for taking the questions and nice job on the first quarter.

35m 20s

36m 46s

38m 1s

39m 10s

39m 30s

40m 51s

And we need to make some estimate for the time being, but all positive and progressing.

40m 57s

41m 15s

42m 33s

43m 10s

43m 40s

44m 52s

It's not something to drag for next year. You will hear from us, I will say, hopefully in the second half of the year closing at least one, maybe two opportunity there.

45m 4s

45m 22s

Great. Thanks so much.

45m 23s

Nice quarter. Thank you, Scott.

45m 26s

Thanks, Scott.

45m 28s

Thank you. The next question comes from Nick Doyle with Needham. Please go ahead, sir.

45m 37s

Hey, guys. Thanks for taking my questions.

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Thank you. There are no further questions at this time. I would now like to turn the call over to doctor George Karam, president and CEO. Please go ahead, sir.

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Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Key Insights

Q1 2025 revenue was $8.1M, up 34% year-over-year and slightly above guidance; product revenue was $3.5M (up 42% YoY), driven by Monarch 2 projects, while license and services revenue grew 28% YoY due to Qualcomm 5G Taurus license timing.
Gross margin for Q1 2025 was 64.5% (vs. 63.9% in Q1 2024); product gross margin was 31%, impacted by higher module sales and initial CALiP2 launch costs; non-IFRS operating expenses declined to $11M, showing progress toward the target of sub-$11M quarterly cash OPEX.
The design win pipeline reached ~$480M in potential revenue (first three years of sales per project), with $250M in the design win phase and $230M in design-in; 90 new projects were awarded in Q1, expected to generate over $10M in annual revenue at full production, with many contributing to revenue in 2026.
Sequans expects to achieve operating income breakeven in 2026, targeting cash OPEX below $10M/quarter and reducing cash burn to under $5M/quarter by end of 2025; expects to finish 2025 with over $25M in cash and does not foresee the need for an equity raise in 2025 or 2026.
Q2 2025 revenue guidance is $8M–$9M; new product launches (CALiP2, Morag III, CALiP III) and RF transceiver chips are expected to ramp in late 2025–2026, with meaningful revenue from new verticals (defense, public safety) anticipated in late 2026; royalty revenue from a Chinese partner is expected to begin in 2026, and additional strategic licensing deals may close by year-end 2025.