IN Brief:
- More than 40 cellular IoT design wins are now in mass production.
- Production programmes represent 55% of Sequans’s $300 million three-year product pipeline.
- Product sales increased 83.7% year on year during the second quarter.
Sequans Communications has moved more than 40 cellular IoT design wins into mass production, giving the French semiconductor company a broader base of recurring product sales after several quarters dominated by licensing and pipeline conversion.
The production programmes represent 55% of a $300 million three-year product-revenue pipeline. Sequans has not identified the customers or unit volumes involved, but the figure is more useful than an undifferentiated design-win count because the projects have moved beyond selection and development into manufacturing.
Second-quarter revenue reached $7.5 million, up 23.2% from the first quarter. Product sales accounted for most of the total and increased 39.4% sequentially and 83.7% year on year. Overall revenue remained 8.4% below the second quarter of 2025 because the earlier period included substantial licence and service income connected with the company’s 2024 Qualcomm transaction.
The change in revenue mix reduced gross margin to 32.9%, compared with 37.7% in the first quarter and 64.4% a year earlier. The comparison is distorted by the previous licence contribution, but it also shows the arithmetic of converting semiconductor designs into shipped devices: physical products bring wafer, packaging, test, inventory, and supply-chain costs that licensing revenue does not.
Sequans’s portfolio spans LTE-M and NB-IoT chipsets and modules, LTE Cat 1bis devices, higher-speed LTE Cat 4 products, RF transceiver technology for software-defined radio, and silicon and software intellectual property. The company is also developing a 5G eRedCap roadmap intended to carry reduced-capability IoT equipment into the 5G standards environment.
Moving a cellular design into volume production normally follows a long chain of hardware integration, radio validation, firmware development, operator or regional certification, and field testing. The 40-plus projects therefore represent accumulated engineering work rather than a single-quarter burst of orders. A backlog extending into 2027 suggests that some of that activity is beginning to provide greater production visibility.
The next transition will be from established 4G IoT categories into reduced-capability 5G. Expanded 5G RedCap conformance testing is already targeting sensors, wearables, gateways, and industrial wireless products, underlining the test and certification burden between roadmap silicon and deployable equipment.
Sequans also secured its first drone customer during the quarter for RF transceiver technology aimed at drone and defence applications. No customer, device, frequency coverage, programme value, or production schedule has been disclosed, so the announcement represents an initial commercial foothold rather than evidence of a broad defence-electronics business.
The company remained loss-making. Its second-quarter operating loss was $7.2 million, compared with $8.5 million a year earlier, while the net loss was $9.8 million. Cash and cash equivalents stood at $21 million at the end of June. Sequans had redeemed its convertible debt in May and described the balance sheet as debt-free, although it still held 314 Bitcoin after reducing a much larger position.
Management is balancing several revenue paths: production sales from 4G IoT devices, licensing discussions, RF opportunities, and eventual 5G eRedCap products. Product growth is the clearest operational signal because it depends on customers reaching manufacturing rather than merely signing development agreements.
The $300 million pipeline is not contracted revenue. Design programmes can change in volume, timing, or commercial scope as customer products approach launch, while connectivity markets remain sensitive to certification delays and inventory corrections. The production count is encouraging, but customer concentration and the rate at which individual designs ramp will determine the quality of the resulting revenue.
The next quarters will show whether the current projects produce stable reorder patterns and whether gross profit expands as volumes rise. More than 40 programmes in production gives Sequans a wider foundation, but the company still has to generate enough scale to support multiple cellular standards, software stacks, and qualification programmes.
