Sequans Updates Third Quarter Guidance

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Conference call to discuss Q3 guidance scheduled for Wednesday, Oct. 4, at 8:00 am EDT – details below

Sequans will release its results for the third quarter on Oct. 31 

PARIS – October 3, 2017 Sequans Communications S.A. (NYSE: SQNS) announced that it has revised its guidance for the third quarter ended September 30, 2017, as follows:

  Revised Guidance Previous Guidance
Revenue $11.0 – $11.2 million $15 – $17 million
Gross margin >43% > 40%
Non-IFRS net loss per diluted share/ADS ($0.06) – ($0.07) ($0.05) – ($0.07)

Guidance is based on approximately 79.8 million weighted average number of diluted shares/ADSs .

As previously announced, the company will release its full results for the third quarter on October 31, 2017.

Factors contributing to the company’s revised expectations for Q3 include greater-than-expected weakness from emerging markets for broadband-related products, changes in customers’ forecasts due to excess channel inventory for broadband products in the United States, and a delay in concluding the terms of a project related to a vertical market.  Although it expects the weakness in the broadband-related portion of the business to persist at least through the balance of 2017, Sequans continues to expect significant growth in 2018 driven by its technology leadership and first-mover position in the IoT market.

We believe the long-term growth drivers of our business, particularly for IoT, remain in place despite these near-term headwinds,” said Georges Karam, CEO of Sequans. “Cat M1/NB1 is moving rapidly with design wins addressing a growing list of carriers world-wide. We had initial shipments of Cat M1 chips in Q3, although we thought Cat M1 would not begin ramping before Q4 at the earliest. Regarding the broadband portion of the business, we expect no fundamental change in the dynamics of this portion of the business, despite Q3 softness and our near-term caution. On balance, we believe the intermediate to long-term prospects for the company remain excellent, and we are simply experiencing some of the issues that are characteristic of our current market.”

Update Conference Call and Webcast on Wednesday, October 4, 2017

Sequans plans to conduct a teleconference and live webcast to discuss the revised outlook tomorrow, October 4, at 8:00 a.m. EDT /14:00 CEST.  To participate in the live call, analysts and investors should dial 800-230-1085 (or +1 612-234-9959 if outside the U.S.). A live and archived webcast of the call will be available from the Investors section of the Sequans website at www.sequans.com/investors/.  A replay of the conference call will be available until October 30 by dialing toll free 800-475-6701 in the U.S., or +1 320-365-3844 from outside the U.S., using the following access code: 431414. 

Forward Looking Statements

This press release contains projections and other forward-looking statements regarding future events or our future financial performance.  All statements other than present and historical facts and conditions contained in this release, including any statements regarding our preliminary Q3 and future results of operations and financial positions, are forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended).  These statements are only predictions and reflect our current beliefs and expectations with respect to Q3 final results and future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. We operate in a very competitive and rapidly changing environment.  New risks emerge from time to time.  Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements.  Actual events or results may differ materially from those contained in the projections or forward-looking statements.  Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: (i) the contraction or lack of growth of markets in which we compete and in which our products are sold, (ii) unexpected increases in our expenses, including manufacturing expenses, (iii) our inability to adjust spending quickly enough to offset any unexpected revenue shortfall, (iv) delays or cancellations in spending by our customers, (v) unexpected average selling price reductions, (vi) the significant fluctuation to which our quarterly revenue and operating results are subject due to cyclicality in the wireless communications industry and transitions to new process technologies, (vii) our inability to anticipate the future market demands and future needs of our customers, (viii) our inability to achieve new design wins or for design wins to result in shipments of our products at levels and in the timeframes we currently expect, (ix) our inability to enter into and execute on strategic alliances, (x) the impact of natural disasters on our sourcing operations and supply chain, (xi) adjustments in the Q3 financial close, and (xii) other factors detailed in documents we file from time to time with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. 

Use of Non-IFRS/non-GAAP Financial Measures

We are not able to provide a non-GAAP reconciliation for forward-looking IFRS estimates for gross margin and net loss per diluted share without unreasonable efforts, because certain adjustments are not known until the end of the period.  The impact of these adjustments could be significant to our actual IFRS results.

About Sequans Communications

Sequans Communications S.A. (NYSE: SQNS) is a 4G chipmaker and leading provider of single-mode LTE chipset solutions to wireless device manufacturers worldwide. Founded in 2003, Sequans has developed and delivered six generations of 4G technology and its chips are certified and shipping in 4G networks around the world. Today, Sequans offers two LTE product lines: StreamrichLTE™, optimized for feature-rich mobile computing and home/portable router devices, and StreamliteLTE™, optimized for M2M devices and other LTE devices for the Internet of Things (IoT).  Sequans is based in Paris, France with additional offices in the United States, United Kingdom, Israel, Hong Kong, Singapore, Sweden, Taiwan, South Korea, and China. Visit Sequans online at www.sequans.com; ; 

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