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

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

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 Price Performance

SQNS opened at $2.47 on Tuesday. Sequans Communications has a 12-month low of $2.38 and a 12-month high of $13.90. The company has a current ratio of 0.47, a quick ratio of 0.42 and a debt-to-equity ratio of 0.02. The business’s fifty day simple moving average is $3.22 and its 200-day simple moving average is $3.38. The company has a market capitalization of $37.04 million, a price-to-earnings ratio of -0.18 and a beta of 0.79.

Institutional Trading of Sequans Communications

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

Analyst Upgrades and Downgrades

Several analysts have issued reports on SQNS shares. Wall Street Zen downgraded shares of Sequans Communications from a “hold” rating to a “sell” rating in a research note on Saturday, June 27th. Zacks Research upgraded Sequans Communications from a “strong sell” rating to a “hold” rating in a report on Tuesday, July 7th. One analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating, one has issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, Sequans Communications has an average 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.