Sequans Communications S.A. Q3 FY2025 earnings call

• Bitcoin Strategy: Proactively reduced debt by 50% via selling Bitcoin, aiming to lower debt-to-NAV ratio to ~35%, enable ADS buyback, and generate yield from remaining Bitcoin. Committed to Bitcoin treasury strategy for long-term shareholder value.
• IoT Business: Design win pipeline healthy with $550M potential in 3 years. Q3 won 6 new projects, 3 design wins to production. Q4 expected product revenue >$6M, services/IP licensing ~$1M, total >$7M. Launched 4G Cat1 bis module, taped out 5G eRedCap test chip. OpEx to be below $10M per quarter in 2026 with cost reduction measures.
• Q3 Financials: Revenue $4.3M, gross margin 40.9%, operating loss $20.4M, net loss $6.7M. Cash and cash equivalents $13.4M, pro forma $23.4M after Qualcomm payment release.

In Q3 2025, total revenues were $4.3 million, a 47.3% decrease from Q2 2025. Revenue was approximately 2/3 product and 1/3 licensing and services. Product revenue was impacted by delays and substrate issues. The company held 3,234 Bitcoin with a market value of $365.6 million, with 1,617 Bitcoin released from pledge and 970 sold to reduce debt, leaving 647 unpledged Bitcoin available for ADS repurchase if needed.

• Q4: Product revenue expected >$6M, services/IP licensing ~$1M, total >$7M.
• IoT: Design wins to continue ramping, 45% in production by end 2025, 50%+ growth in 2027.
• OpEx: To be below $10M per quarter in 2026.

• Digital asset treasury market conditions limiting ability to advance strategy.
• Substrate availability issues impacting product revenue in Q3, though mitigated for Q4.
• Uncertainties in converting IoT pipeline to revenue, market competition.

Q: In the third quarter, were there any licensing or service revenues a part of the $4.3 million, and on OpEx reduction?

A: Deborah stated about 2/3 product, 1/3 licensing and services in Q3. OpEx reduction expected to be mostly realized in Q1, fully in place by Q2, below $10M per quarter in 2026.

Q: George, talk a little about your confidence in $7 million of revenue in 4Q and the $45 million annual run rate?

A: Georges mentioned Q4 revenue confidence as backlog is secure, and the $45M annual run rate is based on 45% of $300M design wins in production divided by 3, with ramp-up considered.

Q: Could you provide more details on additional initiatives beyond ATM program and share buybacks?

A: Georges mentioned focus on buyback program first, then preferred shares and yield on Bitcoin, with no specific timeline as it depends on negotiation.