IoT chipmaker Sequans Communications made two announcements concerning its products, which coincided with the publication of the company’s first-quarter financial results. These developments are the signing of a USD 15 million licensing deal and the decision to suspend the development of the 5G Taurus platform for FWA (Fixed Wireless Access) applications.

While not disclosing the identity of its new license partner, Sequans said that the deal is with a “leading technology company” and paves the way for future collaborative opportunities. The agreement grants the right to manufacture and market the Monarch 2 chip under the partner’s brand name on a non-exclusive basis. It includes an initial payment of USD 15 million, with the possibility of additional revenue in subsequent years.

Sequans noted that this contract should offset the revenue impact from its decision on the 5G Taurus platform. This impact is expected to be USD 10 million in 2024, reflecting a reduced revenue recognition from the 5G license agreement that Sequans signed with a Chinese partner in 2022.

Sequans explained that suspending work on the 5G Taurus platform will reduce R&D expenses, in line with its ambition to achieve break-even in 2025. The product roadmap will be reoriented instead towards low-power 5G variants for Massive IoT, specifically RedCap and eRedCap, said the company.

Meanwhile, discussions are progressing on what was described as a long-term strategic transaction that would address debt maturities and significantly strengthen the balance sheet.

First-quarter revenues miss guidance

Sequans reported revenues of USD 6.03 million for the three months to March, lower than the guidance issued in March (over USD 7 million). This is down from USD 11.90 million generated in Q1 2023, representing a 49 percent drop year-on-year. The gross margin was in line with expectations at 63.9 percent (78.5% Q1 2023), while the operating loss widened to USD 8.5 million, from a comparable loss of USD 4.0 million in the year-earlier period.

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