Sequans Communications SA Q4 FY2024 earnings call

• Successful completion of the $200 million Qualcomm deal, which doubled product revenue in Q4 2024 to $4.7 million. • Design win pipeline is ~$250 million, with smart metering accounting for over 50% of the pipeline; these projects have longer time to revenue due to industry inventory overhang and complex qualification requirements. • Design-in pipeline exceeds $200 million, with 1/3 pending award decisions in Q1 2025. • As a European semiconductor company, Sequans benefits from shrinking competition outside China; product portfolio spans 4G to 5G RedCap/eRedCap. • Implementing actions to reduce net cash operating expenses to below $10 million per quarter average in 2025, expecting $7 million from government R&D financing.

Full year 2024 revenues increased 9% to $36.8 million from $33.6 million in 2023. Fourth quarter 2024 revenues were $11 million, up 130% from $4.8 million in Q4 2023 and up 9% sequentially. Product revenue in Q4 2024 was $4.7 million, accounting for 43% of total revenues. Gross margin for 2024 was 75.5% vs 71.8% in 2023, with product gross margin 35.1% in 2024 vs 6.2% in 2023. Fourth quarter gross margin was 68.1%, with product gross margin 37.6%.

• Expect Q1 2025 total revenue to be in the range of $7 million to $8 million, with product revenue contributing about 50%. • Aim to reduce net cash operating expenses to below $10 million per quarter average in 2025. • Nearly $8 million of licensing revenue from the Qualcomm deal expected to be recognized over 2025. • $250 million design win pipeline is expected to contribute to revenue growth from 2025-2028, averaging ~$60 million annually.

• Competitive and rapidly changing environment with new risks emerging. • Uncertainties in converting design win pipeline to revenue, especially for metering projects with long time to production. • Geopolitical factors affecting the competitive landscape, potentially shrinking competitors outside China. • Timing uncertainties in revenue recognition from licensing and new project launches.

Q: Clarification on the $250 million design win pipeline, applications, and design cycles A: The $250 million design win pipeline represents 3+ years of revenue from projects, with over 50% from metering (longer time to revenue) and other segments like telematics, security, industrial (shorter cycles, 18 months to 2 years).

Q: Geopolitical impact on customers and Ublox opportunity A: Geopolitical factors influence customer interest, positioning Sequans to benefit, but details on Ublox deals are not finalized as they are pending award decisions.

Q: Licensing progress, RedCap status, and cash flow A: Licensing is progressing, RedCap is in development with customer interest, and cash position is comfortable with measures to reduce expenses and government funding expected in 2025.