Sequans Communications (NYSE:SQNS) used its fourth-quarter and full-year 2025 earnings call to outline a “balanced and disciplined” capital allocation approach that blends execution of its IoT semiconductor roadmap with management of a Bitcoin digital asset treasury. Management emphasized that the top operational priority remains scaling the core IoT business, while capital actions in the quarter centered on repurchasing ADSs and partially redeeming convertible debt.
Capital allocation and Bitcoin treasury
CEO Georges Karam said Sequans has focused on repurchasing ADSs when the stock trades at what he described as a meaningful discount to net cash and net digital asset value, particularly in an environment where many digital asset treasury peers trade below an “MNAV of one.” During the fourth quarter, the company repurchased about 9.7% of outstanding ADSs, and the board approved a new program authorizing repurchases of up to an additional 10%.
Choate said the company sold Bitcoin in Q4 to fund two “non-operating initiatives”: the early redemption of half of the convertible debt and the ADS buyback. The company recorded an $8.4 million net realized loss on the sale of Bitcoin.
Q4 results: revenue ramp, margin impact, and non-cash items
Sequans reported fourth-quarter revenue of $7 million, in line with management’s expectations, with more than 94% from product sales and roughly 6% from services. Choate said Q4 revenue increased 72.6% sequentially, driven primarily by product revenue.
Gross margin was 37.7%, impacted by provisions for slow-moving inventory. Excluding these provisions, Choate said gross margin would have been approximately 43%, compared with 42.4% in the prior quarter.
Operating expenses declined, with combined R&D and SG&A of $11.5 million in Q4, down from $13.6 million in Q3. Choate said the company intends to keep reducing operating expenses through 2026 to support goals around breakeven operating results and cash burn.
Several items drove a large IFRS net loss for the quarter, including Bitcoin mark-to-market impacts and accounting associated with the company’s convertible financing. Sequans recorded a $56.9 million non-cash impairment charge related to the mark-to-market value of its Bitcoin holdings, compared with an $8.2 million charge in Q3. The company also recorded a $29.1 million loss on early redemption of debt that Choate said was primarily non-cash. As a result, Sequans reported an IFRS net loss of $87.1 million in Q4, compared with an IFRS net profit of $0.9 million in the prior quarter.
On a non-IFRS basis, excluding significant non-cash items, Sequans reported a non-IFRS net loss of $18.5 million, or $1.19 per ADS, compared with a non-IFRS net loss of $11.3 million, or $0.81 per ADS, in Q3. Choate noted the $8.4 million realized loss on Bitcoin sales is included in non-IFRS results, and that absent that element the non-IFRS net loss would have been “just over $10 million.”
Normalized operating cash burn in Q4, including primary working capital movements, was approximately $7.7 million, according to Choate.
Full-year revenue and 2026 outlook
For full-year 2025, Sequans reported total revenue of approximately $27.2 million. Karam noted this included “meaningful” non-recurring Qualcomm-related revenue from a deal closed in 2024; on an adjusted basis, he said the underlying business was closer to $20 million.
Looking ahead, management’s internal plan targets $40 million to $45 million in total global revenue for 2026, supported by what Karam called improving visibility and a significant order backlog. For Q1 2026, the company expects revenue of around $6.5 million, reflecting normal seasonality, with a risk that about $1 million could shift into Q2 due to manufacturing and shipment timing late in the quarter.
In Q&A, Karam said the company is taking a conservative view on licensing within the annual outlook, citing a small amount of secured licensing in backlog and multiple potential deals. He suggested that, conservatively, licensing could add roughly $5 million to $6 million over the year, with the overall revenue mix assumed to be about 80% to 85% product and roughly 15% to 20% services.
Pipeline, product mix, and path to breakeven
Sequans said it exited 2025 with a revenue funnel exceeding $550 million in potential three-year product revenue, including more than $300 million from design win projects. Of those design wins, 44% were in production and generating revenue at year-end, up from 38% at the end of Q3. Karam said that, assuming no changes to customer forecasts, production-stage projects represented about $132 million of potential three-year revenue.
During Q4, the company added nine new customer projects to the design win pipeline, and three existing projects transitioned into production. Management’s target is to have over 50% of current design win projects in production by the end of June 2026; in Q&A, Karam said this estimate is “more than 50 for sure” by mid-year, and he suggested that a year-end figure could be higher, while noting it is not formal guidance.
Management highlighted several core product areas and verticals:
- 4G Cat M: described as a meaningful growth driver in 2026, led by asset tracking and smart metering; Karam cited expanded programs entering production with customers such as Honeywell and Itron.
- Cat 1bis: positioned for a “breakout year” in 2026, supported by ramps in telematics and security. In Q&A, Karam characterized Cat 1bis as a duopoly between Sequans and Qualcomm.
- RF transceivers: management said it has committed backlog and expects additional demand in the second half; in Q&A, Karam said RF revenue could be around $7 million in 2026, “north of $5 million for sure,” with potential longer-term upside if additional customers in areas like defense, public safety, and drones move from sampling to production.
- 5G eRedCap: described as the successor to 4G in IoT deployments; the company expects its first test chips “this quarter,” with customer sampling beginning in mid-2027. In Q&A, management said it still expects meaningful eRedCap revenue to begin around mid-2028, depending on infrastructure readiness and customer product cycles.
On profitability and cash flow, Karam said the company aims to reduce cash burn during 2026 with the objective of reaching a breakeven run rate by Q4. In Q&A, he discussed targeting combined operating expenses around $10.5 million in the second half of 2026, and walked through how services gross margin and product gross margin could support a cash breakeven model as revenue scales.
Supply chain and pricing dynamics
Management said it continues to operate in a dynamic supply chain environment, including substrate constraints and memory pricing pressures. Karam said Sequans is adding suppliers to reduce single-source exposure and is working to pass cost increases through where appropriate, while maintaining customer relationships. The company expects little to no impact in the first half of 2026 and limited impact in the second half, though Karam noted pricing and availability pressures tied to broader industry demand and packaging constraints.
On capital actions going forward, Karam said repurchase cadence will depend on multiple factors, including the share price relative to net cash and Bitcoin value, and that the company continues to evaluate strategic alternatives across both the IoT business and treasury strategy.
About Sequans Communications (NYSE:SQNS)
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.
