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

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

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 Down 2.0%

Shares of Sequans Communications stock traded down $0.06 during trading hours on Friday, hitting $2.88. 28,137 shares of the company’s stock traded hands, compared to its average volume of 150,376. The company has a quick ratio of 1.27, a current ratio of 1.39 and a debt-to-equity ratio of 0.03. Sequans Communications has a twelve month low of $2.38 and a twelve month high of $10.93. The stock has a 50 day simple moving average of $2.88 and a 200-day simple moving average of $3.11. The company has a market cap of $43.14 million, a PE ratio of -0.27 and a beta of 0.86.

Wall Street Analyst Weigh In

SQNS has been the subject of several research analyst reports. Wall Street Zen upgraded shares of Sequans Communications from a “sell” rating to a “hold” rating in a research note on Saturday, August 8th. B. Riley Financial lowered their target price on Sequans Communications from $8.00 to $5.00 and set a “buy” rating on the stock in a research note on Monday, August 24th. Weiss Ratings cut shares of Sequans Communications from a “sell (d)” rating to a “sell (e+)” rating in a report on Tuesday, August 11th. Finally, Zacks Research raised Sequans Communications from a “strong sell” rating to a “hold” rating in a report on Tuesday, July 7th. Two equities research analysts have rated the stock with a Buy rating, one has issued a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, the company has a consensus rating of “Hold” and a consensus price target of $11.50.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently modified their holdings of SQNS. Bank of America Corp DE bought a new stake in shares of Sequans Communications during the third quarter valued at about $26,000. XTX Topco Ltd acquired a new position in Sequans Communications in the 4th quarter worth approximately $73,000. Virtu Financial LLC purchased a new position in shares of Sequans Communications during the fourth quarter valued at $75,000. Quadrature Capital Ltd acquired a new position in shares of Sequans Communications in the 4th quarter valued at about $101,000. Finally, Moore Capital Management LP acquired a new stake in shares of Sequans Communications during the 3rd quarter valued at $581,000. 63.33% of the stock is owned by institutional investors and hedge funds.

Sequans Communications Company Profile

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.