Sequans Communications (SQNS) investor relations material

Executive summary

• Focus remains on scaling the IoT semiconductor business and advancing the 5G roadmap, with disciplined capital allocation and a shift away from digital asset strategies.

• Q1 2026 revenue was $6.1 million, down 12.5% sequentially and 24.8% year-over-year, with 84% from product sales, which rose 45% year-over-year but fell 15% sequentially.

• Significant progress made in eliminating convertible debt, resulting in a near debt-free balance sheet by June 1, 2026, and at least 600 Bitcoin held as unencumbered assets.

• Strong momentum in IoT product revenue, supported by a robust backlog and increasing number of design wins transitioning to production.

• Continued cost discipline and operational improvements aimed at achieving cash flow breakeven by year-end.

Financial highlights

• Q1 2026 revenue was $6.1 million, down from $6.9 million in Q4 2025, primarily driven by product sales.

• Gross margin for Q1 was 37.7%, compared to 41.4% in Q4 and 64.5% in Q1 2025, reflecting supply chain impacts and product mix.

• Operating expenses were $11.8 million, down from $12.3 million in Q4.

• IFRS net loss was $54.3 million, improved from $76.4 million in Q4; non-IFRS net loss was $20.7 million, compared to $16.2 million in Q4.

• Non-cash charges of $29.3 million related to Bitcoin mark-to-market and $11.7 million realized losses on Bitcoin sales.

• Cash and equivalents at quarter-end were $10.6 million; Bitcoin holdings reduced to 1,514 from 2,139 at year-end.

Outlook and guidance

• Q2 2026 revenue expected between $6.8 million and $7.4 million, with upside potential from licensing deals.

• Revenue anticipated to build sequentially through the year, with a path to cash flow breakeven by year-end.

• More than half of the $300 million three-year design win pipeline expected to be in production by end of June.

• Focus remains on executing IoT strategy and advancing the 5G roadmap as the market transitions from 4G to 5G.