Sequans Communications (SQNS) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $8.1 million, up 34% year-over-year and above guidance, driven by strong execution and product rollouts, especially Monarch 2 and Calliope 2 projects.

• Product revenue was $3.5 million, up 42% year-over-year, while license and services revenue grew 28% year-over-year, mainly from 5G Taurus license to Qualcomm.

• Nine new projects were awarded in Q1, expected to generate over $10 million in annual revenue at full production, with a pipeline of $480 million in potential revenue over three years, over half from design-wins.

• Strategic focus remains on ramping design win projects, expanding customer base, and executing on 5G RedCap and eRedCap product roadmap.

Financial highlights

• Q1 2025 revenue was $8.1 million, up from $6.1 million in Q1 2024, but down 27% sequentially from Q4 2024.

• Product revenue accounted for 44% of total revenue, with a 26% sequential decline due to a large Q4 shipment not repeating.

• Licensing and other revenue was $4.5 million, up from $3.6 million year-over-year, but down 28% sequentially, impacted by timing of 5G broadband platform license to Qualcomm.

• Gross margin was 64.5%, compared to 67.4% in Q4 2024 and 63.9% in Q1 2024; product gross margin was 31% due to higher module sales and initial Calliope 2 costs.

• IFRS operating loss was $6.8 million, improved from $8.5 million in Q1 2024 but higher than $5.6 million in Q4 2024.

• Net loss was $7.3 million ($0.29 per diluted ADS), compared to $2.4 million in Q4 2024 and $11.8 million in Q1 2024.

• Cash and cash equivalents were $45.9 million at quarter-end, with non-recurring items causing a $9 million drag on cash burn.

Outlook and guidance

• Q2 2025 revenue expected between $8 million and $9 million, including final Qualcomm license revenue.

• Targeting operating income break-even in 2026 and cash operating expenses below $10 million per quarter.

• No equity raise anticipated in 2025 or 2026; year-end 2025 cash targeted above $25 million.

• Many new design win projects expected to enter production in H2 2025, with significant revenue ramp in 2026.