Sequans Communications (SQNS) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue was $7.5 million, up 23% sequentially but down 8.4% year-over-year due to prior-year licensing revenue; product sales grew 84% year-over-year, driven by strong IoT momentum and design-win pipeline conversion.

• The company ended Q2 2026 debt-free with $21 million in cash and 314 Bitcoin valued at $18.4 million, after redeeming all convertible debt.

• Operating loss narrowed to $7.2 million from $50.5 million in Q1 2026, aided by realized Bitcoin gains and reduced impairment losses.

• Net loss was $9.8 million ($0.65 per ADS); non-IFRS net loss was $4 million ($0.27 per ADS).

• Focus remains on scaling the IoT semiconductor business, expanding in defense and drone markets, and advancing the 5G eRedCap roadmap.

Financial highlights

• Gross margin was 32.9%, down from 37.7% in Q1 2026 and 64.4% in Q2 2025, reflecting a higher mix of product revenue versus licensing.

• Operating expenses were $11.9 million, flat sequentially; cost reduction initiatives are ongoing.

• Cash and equivalents rose to $21 million, up from $10.6 million at March 31, mainly due to Bitcoin sales.

• Bitcoin holdings reduced from 1,514 to 314 during the quarter, all unrestricted and available for sale.

• H1 2026 revenue was $13.5 million, up 65% year-over-year.

Outlook and guidance

• Q3 2026 revenue is expected between $8.5 million and $10 million, with the upper end dependent on licensing deals closing.

• Sequential growth is anticipated, supported by a growing backlog and design win pipeline; backlog extends into 2027 with over 40 design-win projects in mass production.

• The company targets breakeven in 2027, contingent on continued cost control and licensing revenue.

• Several IP licensing projects are under discussion across diverse markets and geographies.