Sequans communications announces fourth quarter 2017 financial results
Paris--(business wire)--4g chipmaker sequans communications s.a. (nyse: sqns) today announced financial results for the fourth quarter ended december 31, 2017. fourth quarter 2017 highlights: revenue: revenue was $11.3 million, flat compared to the third quarter of 2017 and a decrease of 18.9% compared to the fourth quarter of 2016, reflecting decreases in both product and other revenue. full-year revenue increased 5.9% to $48.3 million in 2017 from $45.6 million in 2016. gross margin: gross margin was 41.7% compared to 44.3% in the third quarter of 2017 and compared to 38.2% in the fourth quarter of 2016, reflecting primarily an increase in the proportion of module sales in the revenue mix in the fourth quarter of 2017 compared to the prior quarter and an increase in the proportion of other revenue in the revenue mix compared to the same quarter in the prior year. full-year gross margin remained flat at 43.8% in 2017 and in 2016. operating loss: operating loss was $5.6 million compared to an operating loss of $5.6 million in the third quarter of 2017 and an operating loss of $4.9 million in the fourth quarter of 2016. full year operating loss for 2017 was $19.5 million compared to an operating loss of $19.7 million for 2016. net loss: net loss was $7.6 million, or ($0.10) per diluted share/ads, compared to a net loss of $6.9 million, or ($0.09) per diluted share/ads, in the third quarter of 2017 and a net loss of $5.4 million, or ($0.07) per diluted share/ads, in the fourth quarter of 2016. full year net loss for 2017 was $26.2 million, or ($0.34) per diluted share/ads, compared to a net loss of $24.8 million, or ($0.39) per diluted share/ads, for 2016. non-ifrs net loss: excluding the non-cash items of stock-based compensation, the non-cash impact of convertible debt amendments and effective interest adjustments related to the convertible debt and other financings, non-ifrs net loss was $5.9 million, or ($0.07) per diluted share/ads, compared to a non-ifrs net loss of $5.9 million, or ($0.07) per diluted share/ads in the third quarter of 2017, and a non-ifrs net loss of $4.2 million, or ($0.06) per diluted share/ads, in the fourth quarter of 2016. full year non-ifrs net loss for 2017 was $21.4 million, or ($0.28) per diluted share/ads, compared to a full year non-ifrs net loss of $19.9 million, or ($0.31) per diluted share/ads in 2016. cash: cash, cash equivalents and short-term deposit at december 31, 2017 totaled $3.3 million compared to $13.3 million at september 30, 2017. the cash balance does not reflect the $20.9 million of net proceeds from the january 2018 public offering. full year2017 full year2016 non-ifrs diluted eps (excludes stock-based compensation, impact of convertible debt amendments and effective interest adjustments related to the convertible and other debt and embedded derivative, and the non-cash impact of revaluation of interest-free government loan) * percentage of revenue "we are very pleased with the ramp in our iot business during 2017," said georges karam, sequans' ceo. "iot revenue grew more than 40% from 2016, mainly from the initial ramp in cat 1 revenue. we expect strong acceleration of iot growth in 2018, based on a full year of cat 1 revenue from both the united states and japan, as well as the initial cat m1/nb1 ramp from u.s. design wins already in hand. we expect gradual improvement in our broadband business beginning in the second quarter. we are seeing exciting opportunities for new products and potential new customers and applications, which also contribute to our confidence in the long-term performance of all our markets." q1 2018 outlook the following statements are based on management’s current assumptions and expectations. these statements are forward-looking and actual results may differ materially. sequans undertakes no obligation to update these statements. sequans expects revenue for the first quarter of 2018 to be in the range of $10.5 to $12 million, reflecting seasonal weakness in the first quarter, with non-ifrs gross margin above 40%. based on this revenue range and expected gross margin, non-ifrs net loss per diluted share/ads is expected to be between ($0.07) and ($0.08) for the first quarter of 2018, based on approximately 94.4 million weighted average number of diluted shares/adss. non-ifrs eps guidance excludes the impact of stock based compensation, the non-cash fair-value and effective interest adjustments related to the convertible debt and other financings, and any other relevant non-cash or non-recurring expenses. conference call and webcast sequans plans to conduct a teleconference and live webcast to discuss the financial results for the fourth quarter of 2017 today, february 13, 2018 at 8:00 a.m. edt / 14:00 cet. to participate in the live call, analysts and investors should dial 800-230-1059 (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 march 13, 2018 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: 442126. 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 future results of operations and financial positions, business strategy, anticipation for iot and broadband sales, plans and our objectives for future operations and potential strategic partnerships, 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 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, and (xi) 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 to supplement our unaudited consolidated financial statements prepared in accordance with ifrs, we disclose certain non-ifrs, or non-gaap, financial measures. these measures exclude non-cash charges relating to stock-based compensation and the non-cash financial income and expense related to the convertible debt and its embedded derivative issued in april 2015 and april 2016. we believe that these measures can be useful to facilitate comparisons among different companies. these non-gaap measures have limitations in that the non-gaap measures we use may not be directly comparable to those reported by other companies. we seek to compensate for this limitation by providing a reconciliation of the non-gaap financial measures to the most directly comparable ifrs measures in the table attached to this press release. 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 leading provider of single-mode 4g lte wireless semiconductor solutions for internet of things (iot) and a wide range of broadband data devices. founded in 2003, sequans has developed and delivered seven generations of 4g technology and its chips are certified and shipping in 4g networks around the world. today, sequans offers two lte product lines: streamlitelte™, optimized for iot and m2m devices and streamrichlte™, optimized for feature-rich mobile computing and home and portable router devices. the company is based in paris, france with additional offices in the united states, united kingdom, sweden, israel, hong kong, singapore, taiwan, south korea, and china. visit sequans online at www.sequans.com; www.facebook.com/sequans; www.twitter.com/sequans condensed financial tables follow (in thousands of us$, except share and per share amounts) $0.01 (in thousands of us$, except share and per share amounts)
