Sequans Communications (NYSE: SQNS) reported Q2 EPS of ($0.07), in-line with the analyst estimate of ($0.07). Revenue for the quarter came in at $12.7 million versus the consensus estimate of $13.49 million.

“Overall momentum in our IoT business is very strong, with IoT revenue in the first half of 2018 more than double the first half of 2017, and we continue to add new projects and customers and to expand our engagements with various carriers for both LTE-M and NB-IoT in a growing number of regions,” said Georges Karam, Sequans’ CEO. “Meanwhile, our broadband revenue in Q2 improved sequentially, as expected, and this business remains on track for further gradual improvement. We continue to expect LTE-M shipments to accelerate during the second half of the year; however, a few customer-specific project delays are causing us to be slightly more cautious with Q3 guidance.

“From a strategic perspective, we are making excellent progress. Our goal is to finalize two strategic relationships during the second half of this year. We are aiming to conclude one of them, which includes a funding element, in the current quarter.”

Q3 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 third quarter of 2018 to be in the range of $13.5 to $16 million, 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 ($0.06) and ($0.08) for the third quarter of 2018, based on approximately 94.5 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.

GUIDANCE:

Sequans Communications sees Q3 2018 EPS of ($0.08)-($0.06). Sequans Communications sees Q3 2018 revenue of $13.5-16 million.

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