Sequans Communications (NYSE:SQNS) Releases Quarterly Earnings Results, Beats Estimates By $0.20 EPS

Sequans Communications (NYSE:SQNS) posted its quarterly earnings results on Tuesday, August 4th. The semiconductor company reported ($0.27) earnings per share (EPS) for the quarter, beating the consensus estimate of ($0.47) by $0.20, reports. Sequans Communications had a negative net margin of 637.49% and a negative return on equity of 54.51%. The company had revenue of $7.50 million for the quarter, compared to analyst estimates of $7.12 million.

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 Trading Up 1.6%

Shares of Sequans Communications stock traded up $0.04 during trading on Friday, reaching $2.90. 8,454 shares of the stock were exchanged, compared to its average volume of 144,834. The company has a quick ratio of 1.27, a current ratio of 1.39 and a debt-to-equity ratio of 0.03. The firm has a market cap of $43.37 million, a price-to-earnings ratio of -0.28 and a beta of 0.86. Sequans Communications has a 1 year low of $2.38 and a 1 year high of $10.42. The stock’s fifty day moving average is $2.83 and its 200 day moving average is $3.11.

Wall Street Analysts Forecast Growth

A number of equities analysts recently commented on the stock. Weiss Ratings cut shares of Sequans Communications from a “sell (d)” rating to a “sell (e+)” rating in a research report on Tuesday, August 11th. Zacks Research raised Sequans Communications from a “strong sell” rating to a “hold” rating in a research note on Tuesday, July 7th. Wall Street Zen upgraded Sequans Communications from a “sell” rating to a “hold” rating in a report on Saturday, August 8th. Finally, B. Riley Financial dropped their target price on Sequans Communications from $8.00 to $5.00 and set a “buy” rating for the company in a report on Monday, August 24th. Two investment analysts have rated the stock with a Buy rating, one has given a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat, Sequans Communications currently has an average rating of “Hold” and a consensus price target of $11.50.

About Sequans Communications

Sequans Communications SA (NYSE: SQNS) is a fabless semiconductor company that develops cellular connectivity solutions for the Internet of Things (IoT). Its technologies are designed to connect devices and equipment to mobile networks while supporting requirements such as low power consumption, wide-area coverage, and long operating life.

The company offers chipset platforms and modules for a range of cellular standards, including LTE-M, NB-IoT, LTE Cat 1, and 5G. Its product portfolio is used in applications such as smart metering, asset tracking, connected infrastructure, security systems, industrial equipment, and other machine-to-machine communications.