SEQUANS COMMUNICATIONS Annual Report - How They Did This Year

I’ve put together this guide to help you understand how Sequans Communications performed this year. Instead of digging through dense legal filings, we’re breaking down the important details so you can get a clear picture of the business.

1. What does this company do?

Sequans Communications designs 5G and 4G chips. These chips act as the "brains" inside Internet of Things (IoT) devices, such as smart meters, asset trackers, and industrial sensors that need cellular connections. They sell both standalone chips and integrated modules. Currently, the company is shifting its business model from selling hardware to licensing its technology to others.

2. Financial Performance: A Tough Year

2025 was a difficult year, with the company reporting a loss of $109.3 million.

It is important to note that 2024 was only profitable because of a one-time sale of older 4G technology. In 2025, losses grew by $67.4 million, largely due to a drop in the value of their Bitcoin holdings. With an "accumulated deficit" of $145.1 million—the total amount of money lost since the company started—they remain reliant on outside funding to maintain operations.

3. Major Wins and Challenges

• The Qualcomm Deal: They signed a major licensing agreement with Qualcomm. This validates their engineering quality and offers a path toward steady licensing income, though it also ties their future success to Qualcomm’s strategic execution.
• The Bitcoin Gamble: The company holds Bitcoin as a reserve asset. A large portion of this year’s losses stemmed from the decline in Bitcoin’s price, introducing significant financial volatility that is unrelated to their core chip business.
• Customer Concentration: They rely heavily on a small group of clients. In 2025, their top customers provided 88% of their total revenue. This creates a high level of risk; the loss of a single major partner would significantly impact their budget and research capabilities.

4. Key Risks

• Financial Controls: The company reported "material weaknesses" in their accounting systems. These issues indicate that their internal processes for tracking money have not been fully reliable, which increases the risk of future reporting errors.
• The "Module" Struggle: Their module business, which includes more parts than just their chips, is a low-profit venture. It is expensive to manufacture, requires complex supply chain management, and offers the company little leverage to negotiate pricing.
• Listing Status: They are currently struggling to meet New York Stock Exchange requirements regarding share price and total market value. Failure to meet these standards could lead to delisting, which would reduce liquidity for shareholders.

5. Future Outlook

Sequans is in a high-stakes transition. They are investing heavily in research to remain competitive in the 5G market while operating at a significant loss. Their long-term viability depends on their ability to stabilize their accounting, mitigate the volatility caused by their Bitcoin holdings, and successfully execute their shift toward a licensing-based revenue model.

Investor Takeaway: When evaluating this company, focus on whether the licensing revenue from the Qualcomm deal begins to offset their high research costs. Keep a close eye on their ability to resolve their accounting weaknesses and their progress in meeting exchange listing requirements, as these are the primary indicators of their operational stability moving forward.