Sequans Communications (SQNS) investor relations material

Executive summary

• IoT semiconductor business generated $7M in Q4 revenue, up 72.6% sequentially but down 37% year-over-year due to prior-year license revenue from Qualcomm; full year 2025 revenue was $27.2M, with adjusted core business revenue at ~$20M excluding Qualcomm-related non-recurring items.

• Fourth quarter saw strong product shipment growth, disciplined capital allocation, and a focus on long-term shareholder value through IoT execution and Bitcoin treasury management.

• Board authorized a new ADS repurchase program for up to an additional 10% of outstanding ADSs after repurchasing 9.7% in Q4.

• Strategic alternatives are being evaluated to unlock further value across both IoT and treasury strategies.

• Strong order backlog and a $300M design-win pipeline, with over 44% in mass production.

Financial highlights

• Q4 revenue increased 72.6% sequentially to $7M, driven by product revenue; gross margin was 37.7%, or 43% excluding inventory provisions, down from 67.4% in Q4 2024.

• R&D and SG&A expenses declined to $11.5M in Q4 from $13.6M in Q3; target for H2 2026 is ~$10.5M per quarter.

• IFRS net loss of $87.1M in Q4, driven by a $56.9M unrealized Bitcoin impairment and $8.4M realized Bitcoin loss; non-IFRS net loss was $18.5M ($1.19/ADS).

• Normalized operating cash burn in Q4 was ~$7.7M; cash and cash equivalents at year-end 2025 totaled $13.4M.

• Year-end 2025 Bitcoin holdings: 2,139 BTC valued at $187.1M; 1,617 BTC pledged as collateral for $94.5M convertible debt.

Outlook and guidance

• 2026 revenue targeted at $40M–$45M, with Q1 2026 guidance of ~$6.5M, reflecting seasonality and potential $1M shipment shift to Q2.

• Revenue expected to ramp through 2026, aiming for cash flow breakeven by Q4; management projects cash-flow break-even by end of 2026, supported by growing production and demand in LTE-M, Cat 1bis, RF transceivers, and early 5G eRedCap.

• By mid-2026, over 50% of design win projects expected in production; by year-end, potentially 75%.

• 2027 growth expected to exceed 60% as pipeline converts to production; 5G eRedCap revenue anticipated mid-2028.

• Additional projects expected to enter mass production throughout 2026.