We use cookies to improve your experience, analyze site usage, and show relevant ads. Go to our Privacy Policy for details.
Overall the call presents constructive operational progress: a growing backlog, multiple design wins moving into production, tangible product momentum across Cat-M/Cat-1bis/RF, progress on 5G eRedCap, and a decisive balance sheet move to eliminate convertible debt and simplify capital structure. Near-term challenges include Q1 revenue and margin pressure, increased cash burn, realized losses from monetizing Bitcoin, supply-chain driven cost inflation and an outstanding audit/filing timing issue. Management has clear targets to reduce OpEx and drive breakeven by year-end and has provided specific guidance/visibility (backlog, Q2 revenue range, BTC redemption timetable) that supports their optimistic outlook.
Sequans guided Q2 revenue of $6.8–$7.4M (Q1 was $6.1M) and said product revenue (≈90%+ of Q1) should build sequentially through 2026, supported by a ~ $22M product backlog and a >$300M design‑win pipeline (44% in production at the start of the year; 3 additional projects moved to production in Q1; management expects >50% of the pipeline — ~ $150M of 3‑year potential revenue — to be in production by end‑June). They reiterated a path to cash‑flow breakeven by year‑end while driving cash operating expenses below $10M (target ≈$9M) — normalized cash burn was just under $10M in Q1 (vs ~$7.7M in Q4). Q1 gross margin was 37.7% (Q4 41.4%); Q1 IFRS net loss was $54.3M (non‑IFRS loss $20.7M, $1.42/ADS) vs Q4 IFRS loss $76.4M (non‑IFRS $16.2M, $1.04/ADS). On the balance sheet they are redeeming $94.5M of convertible debt (≈62% redeemed as of Apr 30, ~$35.9M remaining, expected fully redeemed by June 1), funded via Bitcoin sales (Q1 mark‑to‑market BTC loss $29.3M and realized BTC sale loss $11.7M); cash was $10.6M at 3/31, BTC holdings were 1,514 at quarter‑end and 1,114 as of 4/30 with at least ~600 BTC expected post‑redemption. 5G eRedCap test chips arrived and customer sampling is targeted H2 2027; management also cited ~$4–5M of near‑term RF transceiver revenue visibility and a larger RF opportunity (> $100M) with very high margins.
Design-win pipeline exceeds $300M of potential 3-year product revenue entering 2026; 44% already in production at the start of the year. Q1 added 3 projects that transitioned to production and management expects >50% of the pipeline (≈$150M of 3-year potential) to be in production by end of June. Product order backlog of ≈$22M secured for 2026 with early indications into Q1 2027.
Q1 revenue was $6.1M and company guides Q2 revenue to $6.8M–$7.4M, with management expecting sequential growth throughout 2026 driven mainly by product revenue and production ramps.
Negotiated early redemption of $94.5M convertible debt: approximately 62% redeemed by April 30 (≈$58.6M of face value referenced between disclosures), $35.9M expected to be redeemed by June 1, 2026. Post-redemption the company expects a near debt-free balance sheet and at least 600 unencumbered Bitcoin; cash and cash equivalents were $10.6M at quarter end.
IFRS net loss improved to $54.3M in Q1 from $76.4M in Q4 (improvement of $22.1M, ~28.9%). Mark-to-market valuation charge on Bitcoin fell to $29.3M from $56.3M in Q4 (~48% improvement), lowering one major source of non-operating volatility quarter-over-quarter.
Cat-M is a meaningful growth driver with strong visibility from asset tracking and smart metering; Cat-1bis is positioned for a breakout with multiple customer ramps. RF transceiver business shows early traction with management citing roughly $4M–$5M of potential revenue this year outside core IoT and a larger high-margin market opportunity (company-estimated market potential of $100M+ annually).
Received first engineering test chips for 5G eRedCap during the quarter; customer sampling targeted for H2 2027. Management expects eRedCap to consolidate multiple 4G IoT categories and drive higher ASPs (management-cited premium of ~10–15% vs 4G).
Operating expenses fell to $11.8M in Q1 from $12.3M in Q4 (~4.1% reduction). Company targets cash operating expenses below $10M and specifically ~$9M by year-end, and continues to target approaching cash flow breakeven by the end of 2026 as revenue scales and cost program benefits are realized.
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.
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 ...