The following is a summary of the Sequans Communications S.A. (SQNS) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Q3 revenue increased by 29.5% to $10.1 million from $7.8 million in Q3 2023, with product revenue making up 23.4% of total revenues.

• Gross margin maintained at a favorable 82.5%, reflecting the impact of high margin license revenue.

• Notable improvement in IFRS operating profit to $87 million, driven by the net gain from the sale of 4G assets to Qualcomm.

• Net profit for Q3 was $80.5 million or $2.91 per diluted ADS, a significant turnaround from previous losses.

Business Progress:

• Completed the Qualcomm transaction securing essential funding and reducing nearly all debt.

• Retained perpetual licensing rights for 4G IoT technologies, ensuring the continuation of product support and innovation.

• Maintained robust design win pipeline with major customers like Itron, Honeywell, and Geotab, ensuring stable revenue streams.

• Focused R&D efforts on next-generation 5G RedCap and eRedCap solutions, aligning with market demands for lower-cost 5G technologies.

Opportunities:

• Significant opportunities in licensing and service revenues expected from ongoing and new projects in 2025.

• Positioned for market expansion with next-generation 5G solutions and a strong pipeline of potential licensing deals.

• Secured $250 million design win pipeline anticipated to drive revenue growth over the next three years.

Risks:

• Market competition and rapid technological changes in the IoT sector pose risks; however, Sequans' strategic technology partnerships and product development aim to mitigate these risks.

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