Q3 2024 Summary
Published Jan 14, 2025, 4:02 PM UTC- Sequans has a robust $250 million, 3-year product revenue design win pipeline, indicating strong customer demand and a solid outlook for revenue growth.
- Sequans anticipates significant revenue growth from new licensing deals in 2025, including continued licensing revenue from Qualcomm and potential new deals in 5G RedCap and eRedCap technologies.
- Sequans is well-positioned to capitalize on the transition to 5G stand-alone networks, with plans to bring RedCap to market in 2025 and eRedCap in 2026, meeting the future-proofing needs of industrial IoT customers.
- Dependence on Future 5G Stand-alone Deployments: Sequans' strategy relies on 5G RedCap and eRedCap products, but widespread 5G stand-alone network deployment "will take them maybe a couple of years to be... nationwide coverage". This delay may postpone product adoption and impact revenue growth.
- Execution Risks in Product Ramp-Up: Although expecting sequential growth, the CEO notes that "the shipment level remain... low in comparison to the potential of this customer" and that "Q1 will be okay, and then we'll continue from there growing every quarter". This indicates potential risks in scaling production and realizing revenues.
- Minimal Current Shipments of Cat 1bis Platform: The company acknowledges that "Cat 1bis platform, we didn't ship much. We'll be shipping a little bit in Q4, but really the beginning of this". Given that Cat 1 is expected to be a significant future revenue driver, current minimal shipments may signal challenges ahead.
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2025 Growth Expectations
Q: How will product recovery progress into 2025?
A: Georges Karam affirmed that the $250 million design win pipeline is intact and customers are returning to buy Sequans products. Growth will be driven by new projects moving to mass production, especially in Cat M (Monarch 2) and Cat 1bis platforms. They expect sequential growth every quarter, with Cat 1bis revenues increasing in 2025 and potentially matching Cat M by 2026. -
RedCap and eRedCap Development
Q: What's the timing and relevance of RedCap?
A: Sequans is developing both RedCap and eRedCap, which are low-cost 5G solutions for IoT applications. RedCap, targeting high-end applications like cameras with speeds of 100-150 Mbps, is planned for market release next year. eRedCap, offering speeds up to 10 Mbps, will follow the year after. These technologies are becoming more relevant as customers seek future-proof devices that support 5G standalone networks. -
Licensing Revenue Outlook
Q: Are there new licensing deals like Qualcomm's?
A: Sequans has a consistent track record of strong licensing revenue, often exceeding $10 million annually. They are engaged with several partners and are optimistic about signing more deals in 2025. This licensing business complements their product revenue and supports ongoing innovation.