PARIS – August 30, 2022 – Sequans Communications S.A. (NYSE: SQNS), a leading developer and provider of 5G/4G solutions for IoT devices, today announced the closing of a multi-year, strategic 5G licensing agreement with a new strategic partner.
Under the terms of the agreement, the first three years’ revenue is expected to be in excess of $50 million. An initial payment in excess of 25% of the license will be received within 30 days of the closing, with additional milestone payments scheduled to be received regularly over the next three years. The partner has the rights to manufacture and sell the Taurus platform exclusively in the Chinese market for negotiated royalty payments on its future chipset sales.
“We are delighted to announce this new 5G strategic licensing agreement for our Taurus platform, which we expect to fund the balance of its development and expand our addressable market to China, a market currently not served by Sequans,” stated Georges Karam, CEO of Sequans. “The agreement will generate licensing revenue over the first three years and royalty revenue for 20 years on the sale of partner’s products based on our 5G technology. For the remainder of 2022, we expect this licensing revenue, when combined with our current expectations for the rest of our business, will enable us to target non-IFRS operating profitability for the second half of the year and non-IFRS operating break-even in 2023.”
Mr. Karam concluded, “We believe our Taurus technology is uniquely positioned to be a leading 5G solution fully optimized for enhanced broadband and critical IoT applications. This, combined with the flexibility of our business model, makes us an attractive potential partner to many players interested in new 5G applications and markets.”
Updated Q3 2022 Outlook
The following statement is based on management’s current assumptions and expectations and assumes no increase in the severity or duration of the COVID-19 pandemic, China’s pandemic lockdowns and supply chain disruptions on the timing of product shipments and project advancement. This statement is forward-looking and actual results may differ materially.
Management is targeting sequential revenue growth of at least 10% in the third quarter of 2022, with gross margin in excess of 65%.
Conference Call and Webcast
Sequans plans to conduct a teleconference and live webcast to discuss the 5G strategic partnership agreement today, August 30, 2022 at 8:00 a.m. ET /14:00 CET.
To participate in the live call, analysts and investors should dial 877-407-0792 or +1 201-689-8263 if outside the U.S. When prompted, provide the event title or access code 13732569. A live and archived webcast of the call will be available from the Investors section of the Sequans website at https://www.sequans.com/company/investor-relations/webcasts-and-presentations/.
An audio replay of the conference call will be available until September 13, 2022 by dialing toll free 844-512-2921 or +1 412-317-6671 from outside the U.S., using the access code 13732569.
Sequans Communications S.A. (NYSE: SQNS) is a leading developer and supplier of cellular IoT connectivity solutions, providing chips and modules for 5G/4G massive and broadband IoT. For 5G/4G massive IoT applications, Sequans provides a comprehensive product portfolio based on its flagship Monarch LTE-M/NB-IoT and Calliope Cat 1 chip platforms, featuring industry-leading low power consumption, a large set of integrated functionalities, and global deployment capability. For 5G/4G broadband IoT applications, Sequans offers a product portfolio based on its Cassiopeia Cat 4/Cat 6 4G and high-end Taurus 5G chip platforms, optimized for low-cost residential, enterprise, and industrial applications. Founded in 2003, Sequans is based in Paris, France with additional offices in the United States, United Kingdom, Israel, Hong Kong, Singapore, Finland, Taiwan, South Korea, and China. Visit Sequans online at www.sequans.com, and follow us on Twitter and Linked In.