Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide more details on the product recovery and how it is expected to progress into 2025, particularly regarding the $250 million design win pipeline and the breakdown by technologies? A: Dr. Georges Karam, Chairman, explained that the design win pipeline remains intact, with customers continuing to design with Sequans despite past challenges. The company is seeing traction again, with new deals being closed. The focus this year has been on Cat M Monarch 2 revenue, with new projects expected to come online in Q4 and continue into 2025. The growth will be driven by existing customers with multiple projects moving to mass production. In 2025, there will be a mix of Monarch 2 and Calliope 2 projects, with Cat 1 expected to ramp up significantly.
Q: How does the Redcap technology fit into your strategy, and when do you expect it to become relevant? A: Dr. Georges Karam, Chairman, stated that Redcap and E Redcap are reduced capacity 5G solutions, with Redcap targeting high-end IoT applications and E Redcap focusing on lower speed needs. The Redcap technology will be introduced next year, with E Redcap following the year after. The demand for these technologies will increase as 5G standalone deployments become more widespread, allowing devices to connect directly to 5G without relying on 4G.
Q: Can you elaborate on the licensing opportunities, particularly in relation to Redcap and E Redcap? A: Dr. Georges Karam, Chairman, mentioned that Sequans has a strong track record in licensing, consistently generating significant revenue from these deals. The company is engaged with multiple partners and expects to sign more licensing agreements in 2025. These deals are carefully selected to avoid impacting product revenue and are expected to continue contributing to Sequans' financial performance.
Q: What is the outlook for product revenue growth and licensing revenue in the near term? A: Deborah Choate, CFO, indicated that product revenue is expected to double in Q4 compared to Q3, with continued growth anticipated in 2025 as new design win projects move to mass production. Licensing and service revenues will remain significant, including contributions from the Qualcomm deal. The company is also implementing cost efficiencies to reduce cash operating expenses below $10 million per quarter in 2025.
Q: How is Sequans positioned to remain competitive in the rapidly evolving IoT market? A: Dr. Georges Karam, Chairman, emphasized that Sequans retains a world-class engineering team with deep expertise in 4G and 5G. The company's strategy includes enhancing existing 4G LTE platforms and introducing next-generation 5G products. Sequans' differentiated go-to-market strategy and comprehensive product offerings position it well to meet the growing demand for reliable Western-designed cellular IoT solutions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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