Loss-making Sequans says it is exploring multiple options

Business news | March 7, 2024

By Peter Clarke

5G RF transmission Analog

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5G/4G fabless chip company Sequans Communications SA (Paris, France) is exploring its options after the collapse of a planned takeover by Japan’s Renesas Electronics Corp.

Sequans has just posted a net loss of US$17.3 million on revenue of US$4.8 million in 4Q23 although this was painted as a low-point with rise in sales predicted throughout 2024.

Georges Karam, CEO of Sequans, said the company’s board of directors is engaging with multiple strategic partners to explore various alternatives. “This includes leveraging our unique market position with 5G intellectual property,” said Karam.

Renesas pulled out of a deal to acquire Sequans in February citing the taxation implications of the takeover as its reason (see Tax note prompts Renesas to end bid to buy Sequans). Renesas had been prepared to pay as much as US$250 million for the maker of cellular IoT RF chipsets.

Sequans has now reported its 4Q23 and full year financial results. The quarterly sales of US$4.8 million were down from US$7.8 million in the previous quarter and US$15.9 million in the same quarter a year before. For the full year Sequans reported a net loss of US$41.0 million on sales revenue of US$33.6 million. The annual sales just over half 2022’s sales of US$60.6 million.

Accentuate the positive

However, the company gave a positive outlook. It said management is “targeting” revenues of US$7.0 million in 1Q24 with further sequential growth for the following three quarters of 2024.

“In the fourth quarter of 2023, our product revenue increased significantly on a sequential basis, indicating a positive trend of growth in this revenue stream that we expect to continue throughout 2024 from the ramp in the shipment of LTE-MNB-IoT Monarch 2 and Cat 1 Calliope 2,” stated Karam, in a statement. “We are extremely pleased with the launches of new projects into mass production by our customers and the improvement in backlog.” He added: “Also, later in 2025, sales of our 5G Taurus chipset should begin to contribute.”

At the end of 4Q23 Sequans had US$5.7 million in cash on hand compared with US$6.7 million at the end of the previous quarter. The company received an additional US$9 million in debt financing from Renesas early 2024.