Sequans Communications S.A. Q3 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

  • Revenue: $11.9 million, down 15.8% YoY from $14.1 million in Q3 2020 and down 7.5% sequentially from Q2 2021. Primary driver of YoY decline was the discontinued Verizon Jetpack business.
  • Revenue Growth (Ex-Jetpack): Product revenue grew 123% year-to-date (YTD) and total revenue grew 86% YTD when excluding Jetpack losses.
  • Massive IoT Business: Revenue up 118% YoY in Q3 and 113% YTD. Cat 1 and Cat M/NB revenues increased, with Monarch 2 platform driving pipeline growth. Monarch 2 now shipping in volume; multiple customers may order over 1 million units annually in 2022.
  • Broadband IoT (CBRS): Revenue up 135% YoY (ex-Jetpack). CBRS Cat 4 and Cat 6 modems are seeing strong demand, supported by private LTE network growth. New JACS ruggedized tablet launched.
  • Gross Margin: 49.2%, up from 42% in Q3 2020 but down from 56.6% in Q2 2021. QoQ decline due to a higher product revenue mix versus services.
  • Operating Expenses (Non-IFRS): $9.9 million, up from $9.6 million in Q2 2021.
  • Net Profit: $192,000 or less than $0.01 per ADS, including a $7.7 million noncash gain from convertible debt revaluation. Non-IFRS loss was $5.3 million or $0.14 per ADS.

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Operator: Greetings. Welcome to Sequans Communications Third Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Kim Rogers of Hayden IR. Ms. Rogers, you may begin. Kim Rogers: Thank you, Chemali [ph], and thank you to everyone participating in today's call. Joining me on the call from Sequans Communications are Georges Karam, Chairman and Chief Executive Officer; and Deborah Choate, Chief Financial Officer. Before turning the call over to Georges, I'd like to remind our participants of the following important information on behalf of Sequans. Sequans issued the earnings press release this morning, which and was posted to the company's website at www.sequans.com/investors under the News section. Before we start, I'd like to remind everyone that this conference 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 contained in this call, including any statements regarding future results of operations and financial positions, business strategy and plans, including financing alternatives for our 5G business; expectations for massive IoT and portable router sales, the impact of the COVID-19 on our supply chain and on customer demand, the

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