Sequans launches IP licensing business to expand beyond IoT

PARIS - Sequans Communications S.A. (NYSE:SQNS), a $130 million market cap semiconductor company whose shares have declined over 67% in the past year, announced Monday the formal launch of a new business initiative focused on technology IP licensing and engineering services, expanding beyond its traditional semiconductor product sales for Internet of Things (IoT) applications.

The company, which specializes in wireless cellular technology and maintains a strong 70% gross profit margin, will now offer its radio frequency (RF) transceiver and analog silicon IP, modem and system-on-chip IP based on 5G RedCap and eRedCap technologies, and carrier-grade 5G protocol stack to customers across various industries. According to InvestingPro data, the company holds more cash than debt on its balance sheet, positioning it well for this strategic expansion.

"This initiative reflects the growing demand for our core technologies across a wide range of industries," said Georges Karam, CEO of Sequans, in a press release statement.

The strategic expansion aims to serve markets beyond IoT, including space, defense, automotive, wearables, and consumer electronics sectors. The company will complement its IP assets with engineering design services to support customization and integration into customers’ products.

Sequans, founded in 2003 and headquartered in France, has previously collaborated with Fortune 500 companies and technology leaders, according to the company. This business model evolution formalizes these capabilities as a dedicated business line.

The company will continue its existing business of providing semiconductor solutions for IoT applications while pursuing this new revenue stream. Sequans maintains offices across multiple countries including the United States, United Kingdom, Switzerland, Israel, Finland, Taiwan, and China. While the company’s stock currently trades below its InvestingPro Fair Value, investors should note that analysts anticipate a sales decline in the current year. For deeper insights into Sequans’ financial health and growth prospects, including 13 additional ProTips and comprehensive valuation metrics, explore the full Pro Research Report available on InvestingPro.

In other recent news, Sequans Communications reported underwhelming financial results for the first quarter of 2025. The company posted an earnings per share (EPS) of -$3.6, significantly missing the analyst forecast of -$0.06. Revenue also fell short of expectations, registering at $8.14 million compared to the anticipated $15.4 million. Additionally, Sequans announced a change in the ratio of its American Depositary Shares (ADS) to ordinary shares from 1:10 to 1:100, which will take effect on September 17, 2025. This adjustment will act as a one-for-ten reverse ADS split for current holders. Furthermore, Sequans has set up an "at the market" equity offering program, allowing the sale of up to $200 million in ADS. This program is part of their shelf registration statement filed with the U.S. Securities and Exchange Commission. These developments come as Sequans navigates a challenging financial landscape.

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