Sequans Communications S.A. Q1 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

  • Revenue: $8.8M, down 4.3% sequentially from Q4 2019 ($9.2M), but up 35.6% YoY (Q1 2019: $6.5M).
  • Gross Margin: 51.3%, improved from 47% in Q4 2019 and 35.9% in Q1 2019 due to a better chip-to-module mix.
  • Operating Expenses: $12.3M in Q1, up from $9.9M in Q4 2019, primarily due to hiring a new 5G R&D team and non-cash G&A expenses.
  • Net Loss: $10.6M ($0.44 per ADS), compared to net loss of $9.2M ($0.38 per ADS) in Q4 2019 and $9.6M ($0.41 per ADS) in Q1 2019.
  • Non-IFRS Net Loss: $8.7M ($0.36 per ADS), compared to $7.9M ($0.33) in Q4 2019 and $8.3M ($0.35) in Q1 2019.
  • Cash Position: $5.1M as of March 31, 2020. Additional cash infusions in Q2 amount to over $10M from French research tax credit ($2.8M), BPI loan ($2.2M), and €5M COVID-related government loan (~$5.4M).
  • Q2 2020 Revenue Outlook: At least $12M, representing 35% QoQ growth and ~50% YoY growth.
  • Full-Year 2020 Outlook: Company remains on track for pre-COVID revenue targets, with potential upside if supply chain issues are resolved.

Business Segment Highlights

  • Broadband IoT:
    • Strong demand for JetPack mobile hotspot used by Verizon, driven by remote work/school trends.

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Operator: Welcome to the Sequans First Quarter 2020 Results Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time. As a reminder, this conference is being recorded. Before I turn the conference over to our host Mr. Georges Karam, I would like to remind you of the following important information on behalf of Sequans. This call contains projections and other forward-looking statements regarding future events, our future financial performance and potential financing sources. All statements other than present and historical facts and conditions discussed in this call, including any statements regarding our preliminary results over the first quarter – for the first quarter of 2020, expected revenue for the second quarter of 2020, the timing and availability of expected debt financing and tax credits, future results of operations and financial positions, business strategy and plans, expectations for Massive IoT and Broadband and Critical IoT sales, the ability to continue to operate remotely at high levels of productivity, increasing backlog of orders, the impact of the coronavirus on our manufacturing operations, ability to operate remotely, and on customer demand, and our objectives for future operations, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and

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