Sequans Communications S.A. (SQNS)

Last CC, GK: "We began 2022 with a record backlog of non-cancellable orders. Our business pipeline exceeds $650 million of product revenue, representing the three-year lifetime, of which $310 million are design wins."

Last year they did $51M revs for the year.

I don't know but does this mean anything?

Sequans is the ultimate tease. The future is always so bright, new opportunities, design wins, strategic relationships yada yada, but never any worthwhile revenue. Will this ever turnaround or just limp along from one cash infusion to the next.

I think the strategic relationship is around embedding LTE-M functionality into someone else's chip. So maybe you'll get a chip with WiFi, BT and LTE-M for $5. Sequans would get upfront cash and an ongoing royalty. Could be a good business if I'm right.

I say this because of an e-Mail exchange with Claudia a few months back when I enquired about the perennially missing Monarch SX. This is part of her response.

"As you know, Monarch SX is optimized for wearables and, in general, this market is developing at a somewhat different pace than the markets for trackers, metering etc. Since the certification process is quite expensive with each carrier, we need to set priorities and allocate resources accordingly and currently, we see a significant opportunity to extend our reach by partnering with MCU companies like ST, announced recently, so that's getting quite a lot of our attention."

SQNS Annual Report
https://www.sec.gov/Archives/edgar/data/1383395/000138339519000028/sequanscommunications-form.htm

A few interesting snippets.
The broadband business has suffered from our decision to focus our development efforts on the IoT business rather than on a second generation Cat 6 product offering. Total IoT product revenue grew 92% from $9.1 million in 2017 to $17.8 million in 2018 and accounted for approximately 61% of total product revenue. Total broadband product revenue decreased 60% from $27.6 million in 2017 to $11.1 million in 2018.

The broadband business has suffered from our decision to focus our development efforts on the IoT business rather than on a second generation Cat 6 product offering. (Did anyone notice he slipped this in during the last conference call like we were all supposed to already know this).

Based on our current plans and after giving effect to our sale of warrants to a new strategic investor in February 2019, we currently believe that our available capital resources will be adequate to satisfy our cash requirements at least for 12 months from the date of this annual report. If our plans change, or if we do not achieve profits or if our profitability is significantly lower than anticipated, we may need additional financing.

Top Shareholders
Bpifrance Participations(1) 12,085,561 12.7%
Nokomis Capital, L.L.C.(2) 9,609,513 9.9%
AWM Investment Co. Participations(3) 9,214,784 9.7%
Divisar Partners QP, L.P.(4) 7,170,592 7.6%
Dr. Georges Karam(5) 4,414,992 4.6%
Total of 44.5%

Total IoT product revenue grew 92% from $9.1 million in 2017 to $17.8 million in 2018 and accounted for approximately 61% of total product revenue. Total broadband product revenue decreased 60% from $27.6 million in 2017 to $11.1 million in 2018.

We expect strong IoT growth in 2019, supported by continued shipment of Cat 1 products in both U.S. and Japan and the ramp of Cat M particularly during the second half of 2019. We believe that the broadband business will remain stable or decline slightly in the short-term, but could be a source of growth longer term, as new design wins are launched by our customers and as we evolve our products toward 5G technology.

ATM Electronic, a distributor serving multiple end customers in China and Taiwan, accounted for 16% and 32% of our revenue in 2017 and 2018.

For a company that was supposed to have 20 LTE-M devices on the market by the end of the second quarter they sure have managed to keep things quiet. Their last PR on a new Monarch power mass market device was back on Feb 15(Neebo baby monitor). Where are all of these new devices? I keep an eye on FCC filings and look for products that might contain Monarch but I mostly find Qualcomm based modules. Now we are into the 2nd half of the year the pace of new Monarch powered devices should be about 1 a week (30 in the next 26 weeks).

Not a good sign but Q1 units of Monarch were less than 100K so it should not be too hard increase revenue on that front.