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Technology Stocks : Sequans, the investors board
SQNS 0.995-0.5%Sep 17 4:02 PM EDT

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From: frmrVZguy5/13/2019 8:11:47 PM
   of 252
 
1Q19 CC Selected Comments Deserving Highlight - Some Gems and Surprises in his own words.
Buried comments that deserve emphasis: both positive and some truly odd disconnected euphemisms.

I have highlighted in RED a few that are genuinely hopeful... if there is any truth to them... which isn't certain because,... y'know... GK

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Paris May 10, 2019 (Thomson StreetEvents) -- Edited Transcript of Sequans Communications SA earnings conference call or presentation Thursday, May 9, 2019...
Georges Karam...
I'm pleased to report that the signs of improvement we were expecting in the first quarter have indeed materialized... Only the vertical business was below our target this quarter...

First, we believe we are close to finalizing a new strategic deal we've been working on for some time. This deal will include a new business model for Sequans with a new go-to-market approach allowing us to expand our market share in IoT. It is a multimillion-dollar deal bringing a new source of revenues based on licensing and royalties. We are also working on a couple of similar deals that could materialize this year...



*****Meanwhile, together with the Board, we are continuing to explore the full array of possible alternatives and timing considerations for significantly strengthening our financial position and maximizing shareholders' value.

Since our clear preference would be to accomplish our balance sheet objectives, while avoiding or at least minimizing further dilution, we are concentrating a lot of energy on the strategic deals, while also making sure we are fully prepared to take whatever decision may be in the best interest of shareholders in the future. There is no doubt that the intrinsic value of our technology, our know-how, our relationships and our pipeline of business is increasing all the time....



Also, we have finished the
**** certification of our Sprint CAT 1 module and started shipping to several of our customer as planned. This will be a new revenue stream within our CAT 1 business...

Also, we have identified a potential opportunity to capitalize on our clear leadership in CAT 1 with
*****a new low power, lower cost variant that would expand the market. This innovation would make it clear -- would make it very difficult for other vendors to compete with us using their adapted CAT 4 technology. We are getting strong interest in this approach from some large potential customers, and it's becoming clear to us that the CAT 1 market is going to be around in some form for a long time... We believe that despite some cannibalization by the CAT M/NB, the CAT 1 market size will be more than $400 million by 2023, and we are committed to maintaining a strong position in this segment...

Several new Sequans-powered CAT M/NB devices will go into mass production around midyear, and we are starting to receive orders from them. The total number of Sequans-powered CAT M/NB devices in mass production is expected to reach 50 by the end of the year... represented an estimated $200 million of future revenue. Many of those that were nearly secured at year-end were converted to fully secured design wins during the first quarter. Counting all CAT M/NB devices already in mass production, design wins and those nearly secured, we now are looking at over $250 million of estimated future revenue represented by these projects...

... In the U.S., we are making good progress on the engagements we have on CBRS and enterprise router markets.
... we have started a proof-of-concept phase on a very large deal, and we are in the design-in phase with 2 other major opportunities. If we manage to secure them, our broadband business will recover completely and should show significant growth in 2020.
...
Our strategy here is to focus on 5G for fixed wireless access addressing consumer preferences and industrial applications. The goal is to optimize our 5G platform for applications allowing us to differentiate from those building 5G to address the smartphone market. Also this will give us different timing to launch our product as we need to align with the deployment of the 5G networks when they can achieve a high level of coverage. After 5 years of research activity, we are now moving to the development phase, and we are very excited about this new market opportunity.
...

Deborah Choate
... The full effect of recent cost-reduction moves does not show completely in our Q1 results, and we continue to expect operating expenses to average about $9.5 million per quarter in 2019 on a non-IFRS basis... we expect our revenue for the second quarter of 2019 to continue the trend we saw in Q1 and to be better than the first quarter with continued sequential improvement through the balance of the year...

Georges Karam
Thanks, Deborah. So just to conclude and to give you a little bit ...
*****our business is doing very well...
But what we can say today is that, first of all, I mean, we're reaching the bottom of this, and we start to see improvement as planned for the second half...

**** we have an ODM in Asia addressing at least 4, 5 design win that we have, and this is Asiatel. There is some public information on this. And this is addressing various devices, I mean, some tracking devices in general for telematic, but also for other kind of application...

****We have a buy-here-pay-here service as well that we announced with Connected Holdings. So these are the kind of application that we are going to see them in the short term....

Japan is very, very nice. I mean, we have a lot of very nice deals that we have secured in Japan. They turned to be more in shipment -- full shipment end of the year, beginning next year,... multiyear contract, big deals. And in terms of ASP holders, we're talking about CAT M around $4 chipset ASP in average. This is what you should put in the model.
...
the existing business of broadband... in the emerging, Huawei is capturing and capture a big part of the emerging market. And this has what impacted, if you want, my customers, and that's why, by the way, we had some losses of market share at the end really in the emerging market, mainly on the CAT 6 product, not on the CAT 4. On the CAT 4, we still have an attractive solution that's very -- even if Huawei will not make major difference there. But for sure, Huawei is taking some market share in the emerging to be very, very hard for my customers to take from them...

Deborah Choate
So the first question was -- on broadband was -- so, first of all, IoT was over half of our revenues, and broadband was a bit more than 20%....

Georges Karam
And again, Scott, for the broadband, you need to understand that it's very weak now... Brazil is moving well, but this is going to improve, as you're saying, in Q2 a little bit and improvement will start to get even better in Q3, Q4...

Our business is really to focus on IoT, on fixed wireless, for industrials and so on which is big enough for a company the size of Sequans to bring this technology and differentiate it. And obviously, not having Intel playing there has a positive side effect for Sequans in this game. Having, I'll say, the main competitor focusing more and more on the smartphone give us more room to focus on the IoT and the space where we want to play and makes less competition in this space. For example, Intel, they end of life their CAT 1 platform. The traction on CAT 1 is not -- you could say because of our position, but also because you have less people as well that they can offer this platform because the other guys, they didn't do anything special on the CAT 1. They just only took their CAT 4 product and they put a software for CAT 1...

Very frankly, what I said, in Q1, we didn't ship much. We shipped in Q1 below 100,000 unit.
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