Sequans Communications S.A. Q4 FY2025 earnings call

Capital Allocation

• Balancing IoT execution with digital asset treasury management. Repurchased ~9.7% of ADS in Q4, board approved new repurchase program for up to 10% more ADS.

IoT Business

• Continues to build momentum with Q4 revenue in line with expectations. Revenue predominantly product-based. Strong design win pipeline with over $550M potential three-year revenue, 44% in production. Key drivers include 4G Cat M, Cat 1 Bis, RF transceivers, and 5G eRedcap. IP licensing and services integrated for high-margin upside.

Supply Chain

• Addressing substrate constraints by adding suppliers. Dealing with memory pricing/capacity pressures, working with customers on ordering/delivery schedules.

The IoT semiconductor business was the key segment. In Q4 2025, IoT semiconductor revenue was $7,000,000, with over 94% from product sales and ~6% from services. Full year 2025 total revenue was approximately $27,200,000, with an adjusted underlying business closer to $20,000,000. For 2026, internal plans target $40,000,000 to $45,000,000 in total global revenue. The product pipeline has potential three-year revenue exceeding $550,000,000, with 44% of design wins in production, and aiming for over 50% in production by June 2026.

Q1 2026

• Revenue expected around $6,500,000, with risk of ~$1,000,000 shifting to Q2. Target cash flow breakeven in Q4 2026.

2026 Plan

• Internal plan targets $40,000,000 to $45,000,000 total global revenue. Aiming for over 50% of design win projects in production by June 2026. Licensing opportunities range from $2,000,000 to $10,000,000+, expanding market reach.

• Competitive and rapidly changing environment with emerging risks.
• Supply chain challenges including substrate constraints and memory pricing/capacity pressures.
• Market conditions impacting Bitcoin and share price, affecting capital allocation and valuation.

Q: Scott Searle asks about guidance, breakeven, transceiver momentum, memory side, competitive landscape for Cat 1 Bis and eRedcap.

A: Georges Karam responds on guidance conservatism, breakeven mix, transceiver potential, supply chain memory impact, Cat 1 Bis being a duopoly market, and eRedcap timeline with carriers eager for transition.

Q: Mike Grondahl asks about design wins breadth and average order size.

A: Georges Karam talks about design wins contributing over $130,000,000 three-year revenue, diversified customers with various order sizes.

Q: Fedor Shabalin asks about midterm 2027 revenue cadence, buybacks.

A: Georges Karam discusses pipeline conversion, buyback pace based on market dynamics and Bitcoin price.

Q: Jacob Stephan asks about Q1 guidance shift, customer receptiveness to price increases, Bitcoin treasury strategy.

A: Georges Karam addresses Q1 guidance risk, customer receptiveness to price hikes, and evaluation of debt redemption based on Bitcoin price