SEQUANS COMMUNICATIONS current report, Q1 FY2018

Business Context and Reporting Period

Company: Sequans Communications S.A.
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Date: January 16, 2018
Subject: Preliminary Fourth Quarter 2017 Financial Results and First Quarter 2018 Revenue Expectations.

Key Financial Metrics and Guidance

Fourth Quarter 2017 (Preliminary Estimates)

  • Revenue: Expected to be in the range of $11.1 million to $11.3 million.
  • Gross Margin (Non-IFRS): Expected to be above 40%.
  • Net Loss per Diluted Share/ADS (Non-IFRS): Expected between ($0.07) and ($0.08).
  • Adjustments: Non-IFRS figures exclude stock-based compensation, non-cash fair-value adjustments, and effective interest adjustments related to convertible debt.

First Quarter 2018 (Outlook)

  • Revenue: Expected to be approximately flat compared to Q4 2017.
  • Seasonality: The quarter is typically impacted by seasonality.

Note: The filing does not provide specific values for cash flow, total debt, or liquidity positions.

Material Changes and Comparisons

The preliminary Q4 2017 revenue and non-IFRS net loss per share estimates fall within the Company's previously issued guidance ranges ($11-$13 million revenue; ($0.06)-($0.08) net loss per share). No specific year-over-year or quarter-over-quarter percentage changes are provided in this text.

Management Commentary, Risks, and Contingencies

Management Commentary: Forecasts are preliminary estimates subject to change upon completion of the quarter-end fiscal close. Projections assume customer deliveries meet current expectations.

Risk Factors: Investing in the Company's ADSs involves a high degree of risk. Key factors that could cause actual results to differ materially include:

  • Contraction or lack of growth in target markets.
  • Unexpected increases in expenses, including manufacturing costs.
  • Inability to adjust spending quickly to offset revenue shortfalls.
  • Delays or cancellations in customer spending.
  • Unexpected average selling price reductions.
  • Significant revenue fluctuations due to industry cyclicality and technology transitions.
  • Inability to achieve new design wins or convert them to expected shipment levels.
  • Impact of natural disasters on sourcing and supply chain.

Investor Verification Checklist

  • Verify the final audited Q4 2017 financial results once the fiscal close is complete, as current figures are preliminary.
  • Confirm the actual Q1 2018 revenue performance against the "flat" guidance provided.
  • Review the full list of risk factors in Item 3.D of the Annual Report on Form 20-F for the fiscal year ended December 31, 2016.
  • Examine the preliminary prospectus supplement dated January 16, 2018, and the prospectus dated December 22, 2017 (Registration Statement F-3, File No. 333-221919) for additional details on financing and risks.