Sequans Communications S.A. Q3 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

  • Revenue: $14.1 million in Q3 2020 – up 15.5% sequentially and 116.6% YoY (Q3 2019: $6.5 million). Product revenue increased by 32% QoQ.
  • Gross Margin: 42% in Q3 2020 – down from 48.3% in Q2 2020, but up from 30.3% in Q3 2019. Margin impacted by higher proportion of module sales over services.
  • Net Loss:
    • IFRS: $9.0 million ($0.30 per diluted ADS), an improvement from $19.0 million in Q2 2020 and from $9.8 million in Q3 2019.
    • Non-IFRS: $8.4 million ($0.28 per ADS), compared to $7.5 million ($0.28) in Q2 2020 and $8.6 million ($0.36) in Q3 2019.
  • Cash and Equivalents: $25.3 million at the end of Q3, down from $35.5 million in Q2 due to $7.9 million in negative cash flow from operations (vs. $2.3 million in Q2).
  • Q4 Outlook: Targeting at least 10% sequential revenue growth, putting full-year growth over 60% YoY (vs. prior guidance of 50%).

Business Segment Highlights

  • Broadband & Critical IoT:
    • Significant Q3 contribution from JetPack Ellipsis 4G routers (for Verizon) driven by remote learning demand.
    • Expecting flat JetPack demand in Q4 versus Q3. Planning for normalization of router demand by Q1 2021.

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Operator: Welcome to the Sequans Third 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, the 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, or 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 expected revenue for the fourth quarter of 2020, future results of operations and financial positions, business strategy and plans, expectations for Massive IoT and Broadband Critical IoT sales, the ability to continue to operate remotely as required at high levels of productivity, increasing backlog of orders, the impact of the coronavirus on our manufacturing operations, 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 Section 21E of the Securities Exchange Act of 1934, as amended. These statements are only predictions and reflect our current beliefs and expectations with respect

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