Sequans Communications (NYSE:SQNS) Announces Earnings Results, Beats Estimates By $0.17 EPS

Sequans Communications (NYSE:SQNS) posted its earnings results on Tuesday. The semiconductor company reported ($0.30) earnings per share for the quarter, topping analysts’ consensus estimates of ($0.47) by $0.17, Zacks reports. Sequans Communications had a negative return on equity of 58.42% and a negative net margin of 617.78%.

Here are the key takeaways from Sequans Communications’ conference call:

• IoT product momentum strengthened: Second-quarter revenue rose 23% sequentially to $7.5 million, while product sales increased nearly 80% year over year excluding the prior-year Qualcomm licensing contribution. More than 40 design-win projects are now in mass production, with backlog visibility extending into 2027.
• The company reported a debt-free, more liquid balance sheet after redeeming its convertible debt. Sequans ended the quarter with $21 million in cash and 314 unrestricted Bitcoin worth approximately $18 million to $20 million, which it plans to monetize opportunistically.
• Management expects third-quarter revenue of $8.5 million to $10 million, with the high end dependent on signing and recognizing revenue from one or more licensing agreements. Executives remain confident in sequential growth and believe the company can approach or reach operating breakeven in 2027.
• Sequans secured its first drone program, with shipments expected to begin early next year, and is pursuing more than 20 additional defense and drone opportunities. Management believes the RF business could exceed $5 million in revenue next year and eventually scale toward $10 million or more annually at margins above 90%.
• Supply-chain pressure remains a risk, particularly for memory, silicon, and packaging, and management expects constraints to persist beyond 2026. Product mix and higher input costs reduced gross margin to 32.9% from 37.7% in the prior quarter, although the company is pursuing price increases and multiple sourcing options.

Sequans Communications Stock Performance

SQNS opened at $2.47 on Tuesday. Sequans Communications has a 52-week low of $2.38 and a 52-week high of $13.90. The company has a quick ratio of 0.42, a current ratio of 0.47 and a debt-to-equity ratio of 0.02. The company has a market cap of $37.04 million, a P/E ratio of -0.18 and a beta of 0.79. The firm’s 50-day moving average price is $3.22 and its 200-day moving average price is $3.38.

Institutional Trading of Sequans Communications

A number of institutional investors have recently bought and sold shares of the stock. Boothbay Fund Management LLC raised its holdings in shares of Sequans Communications by 1.5% in the second quarter. Boothbay Fund Management LLC now owns 1,673,609 shares of the semiconductor company’s stock worth $2,460,000 after buying an additional 25,000 shares during the last quarter. Bank of America Corp DE acquired a new stake in shares of Sequans Communications during the third quarter worth $26,000. Moore Capital Management LP purchased a new stake in shares of Sequans Communications during the third quarter valued at $581,000. Alyeska Investment Group L.P. purchased a new stake in shares of Sequans Communications during the third quarter valued at $2,590,000. Finally, DRW Securities LLC acquired a new position in shares of Sequans Communications in the 4th quarter valued at $4,646,000. 63.33% of the stock is currently owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

A number of brokerages have recently issued reports on SQNS. Wall Street Zen downgraded Sequans Communications from a “hold” rating to a “sell” rating in a report on Saturday, June 27th. Zacks Research upgraded Sequans Communications from a “strong sell” rating to a “hold” rating in a research note on Tuesday, July 7th. One research analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating, one has issued a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, Sequans Communications presently has a consensus rating of “Moderate Buy” and an average price target of $20.33.

About Sequans Communications

Sequans Communications is a fabless semiconductor company specializing in cellular IoT and broadband connectivity solutions. The company designs and delivers a range of LTE and 5G chips, modules and connectivity platforms that enable low-power wide-area (LPWA) networking as well as high-speed broadband services. Sequans’s products are targeted at Internet of Things (IoT) applications, including smart metering, industrial automation, smart cities and consumer electronics, as well as more data-intensive use cases such as fixed wireless access and private networks.

The company’s portfolio includes single-mode LTE chipsets for narrowband IoT (NB-IoT) and LTE-M, multi-mode platforms that combine LTE and 5G New Radio (NR) support, and modules that integrate RF front-ends, power management and embedded software.