Sequans Communications S.A. (SQNS): Business Model Canvas [Dec-2025 Updated]

You're digging into Sequans Communications S.A.'s strategy as of late 2025, and honestly, it's not just another semiconductor story you need to analyze. This firm is balancing deep-tech R&D for ultra-low-power 4G/5G IoT modules-like their Monarch 2 family-with a truly unique financial play: holding a treasury reserve of 3,234 Bitcoin as of Q3 2025. With a massive $480 million potential revenue design-win pipeline waiting to convert to mass production, understanding how Sequans Communications S.A. manages both the complex silicon roadmap and that crypto exposure is absolutely key to valuing their next move, so let's break down the nine blocks of their current Business Model Canvas below.

Sequans Communications S.A. (SQNS) - Canvas Business Model: Key Partnerships

Sequans Communications S.A. operates as a fabless semiconductor company, meaning its reliance on external partners for the physical fabrication of its chips is a core element of its structure.

The partnerships supporting the global deployment of Sequans Communications S.A. chipsets and modules are extensive, covering manufacturing, carrier acceptance, and market access.

Foundry partners for semiconductor manufacturing are essential to the fabless model, though specific, current, long-term foundry agreements are not publicly detailed as of late 2025.

Global mobile network operators (MNOs) are critical for carrier certification, which is necessary for product deployment in various regions. The Monarch 2 GM02S module, for instance, has secured certification from major US operators and others globally.

• T-Mobile certification for Monarch 2 GM02S, following AT&T and Verizon.
• Certifications also secured from Vodafone, NTT Docomo, KDDI, Deutsche Telekom, Spark New Zealand, and Chunghwa Telecom.
• Cassiopeia CA410 module was designed in collaboration with Anterix, a major US spectrum holder.
• The Monarch 2 GM02S module has regulatory and industrial certifications including PTCRB, GCF, FCC/ISED, RED/UKCA, ACMA, JATE/TELE, and NCC Taiwan.

Strategic IP licensing partners provide both upfront revenue and a foundation for future technology adoption. Sequans Communications S.A. formally launched a dedicated technology IP licensing and engineering services business line in September 2025. This builds on prior IP monetization, such as the 2024 sale of 4G IoT technology to Qualcomm, which included a perpetual license agreement allowing Sequans Communications S.A. to continue commercial use.

The financial impact of prior licensing activities provides context for the current IP strategy, especially as the company targets new verticals beyond traditional IoT product sales.

The Chinese partner for the 5G TORUS platform is secured via a multi-year strategic 5G licensing agreement closed in August 2022. This partner holds exclusive rights to manufacture and sell the Taurus platform in the Chinese market, subject to negotiated royalty payments on future chipset sales. The agreement projected licensing revenue in excess of $50 million over the first three years.

Module makers and system integrators are key for product distribution and end-user integration. For example, Oki Electric Industry Co., Ltd. selected Sequans Communications S.A.'s Monarch platform in November 2025 to power its zero-energy IoT series.

• The Monarch 2 GM02S module is available from distributors including Mouser, DigiKey, Avnet and Richardson RFPD.

Sequans Communications S.A. (SQNS) - Canvas Business Model: Key Activities

Sequans Communications S.A. (SQNS) focuses its key activities on dual tracks: advancing its core cellular IoT semiconductor business and executing a significant digital asset treasury strategy.

Cellular IoT chipset (4G/5G) R&D and design

The core engineering effort centers on developing next-generation cellular IoT chipsets, specifically targeting the transition to 5G standards for low-power applications. Sequans Communications is progressing in 5G NR RedCap and eRedCap technologies. The company unveiled its third-generation low-power semiconductor solutions, Calliope 3 and Monarch 3, at Mobile World Congress 2025.

Key R&D milestones and financial context include:

• Planned launch of next-generation Monarch 3 and Calliope 3 chips by the end of 2026.
• Calliope 3 adds 5G NR eRedCap to LTE Cat 1bis.
• Monarch 3 adds 5G NR eRedCap to LTE-M, completing the Monarch 2 solution.
• No research and development costs were capitalized in Q2 2025, contrasting with over $5 million capitalized in Q2 2024.

Executing the Bitcoin treasury strategy and asset management

Sequans Communications S.A. (SQNS) launched a major Bitcoin treasury initiative in mid-2025. This was funded by a strategic investment totaling approximately $384 million, comprised of $195 million in equity securities and $189 million in secured convertible debentures, which closed around July 2025. The company has an ambitious long-term goal to accumulate 100,000 BTC by 2030.

The execution and management of this treasury strategy involve specific asset movements as of late 2025:

The company used a portion of the released Bitcoin to repay half of its $189 million convertible debt.

Converting $480 million design-win pipeline into mass production

Sequans Communications S.A. (SQNS) maintains a substantial pipeline of future revenue from design wins, which is a critical activity for future product revenue conversion. The total 3-year revenue pipeline expanded to approximately $480 million as of Q1 2025.

The conversion status as of early to mid-2025 shows progress toward mass production:

• Approximately $250 million of the pipeline was already in the design-win phase as of Q1 2025.
• Management expected around 50% of the design-win pipeline to generate revenue by the end of 2025.
• The company expected the number of design-win projects in production to grow to over 30 by the end of 2025.
• The remaining design-win projects were expected to reach the production phase by the end of 2026.

Providing advanced engineering design and customization services

This activity is primarily reflected in the licensing and services revenue recognized from large technology partners. For instance, in Q1 2025, license and services revenue was $4.5 million, compared to $5.5 million in Q4 2024. This revenue stream included partial recognition related to the 5G license to Qualcomm, which contributed $3.9 million in Q1 2025. Royalty revenue from a Chinese partner, who licensed the 5G TORUS broadband platform, is anticipated to begin in 2026.

Securing carrier certifications for Monarch and Calliope modules

Achieving carrier certification is essential for volume deployment of the Monarch and Calliope modules. The Monarch 2 GM02S module has secured certification from all three major USA operators, following earlier approvals from AT&T and Verizon, with T-Mobile certification also confirmed.

Specific certifications achieved for the Monarch 2 GM02S module include:

• The three major USA operators: AT&T, Verizon, and T-Mobile.
• Global operators: Vodafone, NTT Docomo, KDDI, Deutsche Telekom, Spark New Zealand, and Chunghwa Telecom.
• Regulatory and industrial certifications: PTCRB, GCF, FCC/ISED, RED/UKCA, ACMA, JATE/TELEC, and NCC Taiwan.

For the Calliope 2 Cat 1bis platform, certification by T-Mobile on its commercial network was secured.

Sequans Communications S.A. (SQNS) - Canvas Business Model: Key Resources

Proprietary 4G/5G cellular IoT Intellectual Property (IP)

Sequans Communications S.A. (SQNS) possesses proprietary cellular IoT Intellectual Property (IP) covering 4G/5G solutions. This portfolio includes platforms for LTE-M/NB-IoT and 4G LTE Cat 1bis, alongside a 5G NR RedCap/eRedCap roadmap, which was accelerated by approximately 18 months due to the ACP acquisition.

Treasury reserve of 3,234 Bitcoin (valued at $365.6 million in Q3 2025)

The treasury reserve included a holding of 3,234 Bitcoin as of September 30, 2025, with a recorded market value of $365.6 million. This entire amount was initially pledged against $189 million of convertible debt issued in July 2025. Following a debt agreement amendment, 1,617 Bitcoin were released to repay half the debt, and the company sold 970 of those released coins, leaving a total holding of 2,264 Bitcoin as of the reporting date. The operating loss in Q3 2025 included an $8.2 million unrealized loss on the Bitcoin investment marked to market.

Highly specialized R&D and engineering talent pool

The engineering talent pool supports the design and development of the company's wireless cellular technology for the Internet of Things (IoT). Research and development expense for the first quarter of 2025 was reported at $7,227 thousand. No research and development costs were capitalized in 2025.

Monarch 2 and Calliope 2 product families (Cat 1bis, LTE-M/NB-IoT)

The core product families are Monarch 2 and Calliope 2, supporting the main modem categories of LTE-M and Cat 1bis, respectively. Monarch 2 remained a key driver of product revenue growth. Shipments of Calliope 2 began, with expectations for shipments to ramp through the second half of 2025.

The following table summarizes key financial metrics related to the product business as of Q3 2025:

$480 million potential revenue design-win pipeline

Sequans Communications S.A. (SQNS) maintains a robust design-win pipeline, representing approximately $480 million of potential revenue when counting the first three years of sales for each product. Of this total, $250 million was already categorized as being at the design-win stage. The company expected around 50% of this pipeline to generate revenue by the end of 2025.

The status of the pipeline includes:

• $480 million total potential revenue over three years.
• $250 million already at the design-win stage.
• New momentum seen in metering projects entering the pilot rollout phase.
• Five new IoT projects secured in the second quarter.
• Expectation for design-win projects to move to mass production in the second half of 2025 and accelerate in 2026.

Sequans Communications S.A. (SQNS) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Sequans Communications S.A. over competitors for their cellular IoT needs. It boils down to longevity, a clear upgrade path, and a unique financial underpinning that supports long-term product commitment.

Ultra-low power consumption for multi-year battery life in IoT devices

The value here is extending the operational life of deployed assets, which directly cuts maintenance costs. Sequans Communications S.A. designs its platforms to maximize battery duration for remote devices.

• Monarch 3 platform provides 5G NR eRedCap to LTE-M, delivering ultra-low power efficiency.
• Existing LTE-M/NB-IoT and Cat 1 chip platforms feature industry-leading low power consumption.

Seamless migration path from 4G to 5G eRedCap technology

This addresses the risk of technology obsolescence for customers deploying now. Sequans Communications S.A. offers a defined path forward using its third-generation chips announced at Mobile World Congress 2025.

The migration strategy is built around product compatibility:

• Calliope 3 adds 5G NR eRedCap capability to the existing LTE Cat 1bis solution.
• Monarch 3 adds 5G NR eRedCap capability to the existing LTE-M solution.
• Customers using Calliope 2 (LTE Cat 1bis) and Monarch 2 (LTE-M/NB-IoT) have a clear roadmap to 5G NR eRedCap.

The industry timeline shows this matters now, even if mass adoption is later. Initial RedCap deployments are targeted for 2025-2026, with mass adoption expected closer to 2027-2029. Sequans Communications S.A. plans to start providing samples of the new chips in 2026.

Highly integrated, certified cellular IoT chipsets and modules

You get a complete, ready-to-integrate solution, reducing your time-to-market and certification burden. Sequans Communications S.A. offers a comprehensive portfolio to cover various IoT needs.

Full-package solution: silicon, software stack, and long-term support

This means you are buying more than just silicon; you are buying a commitment to the technology's lifecycle. The company's focus on the IoT business is reflected in its financial targets, showing commitment to supporting the product roadmap.

Financial indicators supporting long-term commitment for the IoT segment:

• Sequans Communications S.A. expects its IoT product business to reach operating breakeven by 2026.
• The company is implementing a 20% cost reduction program to manage expenses.

Financial flexibility and long-term value from Bitcoin treasury strategy

This strategy is positioned as a way to provide long-term protection for shareholder value. The deployment of this treasury has directly impacted financial flexibility, allowing for debt reduction and share support.

Key Bitcoin Treasury Metrics (as of late 2025):

The company used the released Bitcoin to repay half of its debt, which was secured by 3,234 Bitcoin as of September 30, 2025. The company also sold 970 of the released Bitcoin to reinforce its repurchase program. This move enhanced financial flexibility and meaningfully reduced the debt-to-NAV ratio.

Sequans Communications S.A. (SQNS) - Canvas Business Model: Customer Relationships

You're looking at how Sequans Communications S.A. keeps its key customers locked in and engaged, which is defintely more than just shipping chips. The relationship is built on deep technical integration, especially for design-in projects.

Dedicated, long-term technical support for design-in projects

Sequans Communications S.A. embeds its support into the customer's product lifecycle. This isn't a simple help desk; it's technical partnership for the long haul. While specific 2025 support team size isn't public, in 2023, the company supported its design-ins with a team of 42 specialized engineering professionals. This support structure is critical because once a customer integrates a Sequans Communications S.A. modem into a device, switching vendors becomes very difficult.

• Support channels in 2023 included Phone Support with 4-8 hours response time regionally.
• Email Support offered a 24 hours response time globally.

Strategic, high-touch engagement for IP licensing and custom design services

Sequans Communications S.A. formally launched its dedicated IP licensing and engineering services business line in September 2025. This signals a shift to high-touch, strategic engagements beyond standard product sales. The value proposition here is access to core technology assets, which requires close collaboration.

The financial commitment to these relationships is visible in past and current licensing deals. For example, Sequans Communications S.A. has a history of significant IP monetization, including a $200,000,000 sale of its 4G IP to Qualcomm. Furthermore, a Chinese licensing partner for the 5G Taurus platform, valued at $60,000,000, is expected to begin generating royalty revenues in 2026. The License and services revenue for the first quarter of 2025 was $4.5 million.

The new offering includes:

• Advanced RF Transceiver and Analog Silicon IP.
• Modem and SoC IP based on 5G RedCap and eRedCap technologies.
• Carrier-grade 5G Protocol Stack.

Direct sales and engineering teams managing the design-win pipeline

The pipeline of future business is managed through direct engagement, which translates into confirmed design-wins. This is where the long-term revenue visibility comes from. As of the third quarter of 2025, the total three-year revenue design win pipeline stood at $300m.

Here's a look at the pipeline health:

The company maintains a network of relationships to support this, including 23 active technology partnership agreements as of 2023.

High stickiness due to carrier certification and embedded software

The stickiness comes from the deep integration of Sequans Communications S.A.'s technology into certified, deployed IoT devices. Once a chip is certified by a major carrier for use in a specific region or application, the cost and time for a customer to re-certify a competitor's chip are substantial barriers to switching. This embedded nature of the software and certification creates high switching costs.

The intellectual property underpinning this is significant. As of December 31, 2023, Sequans Communications S.A. held 212 granted patents. For instance, 42 of those patents were specifically related to IoT Connectivity. The Monarch 2 Platform, for example, offers 90% hardware configurability, allowing deep customization that locks in the customer.

Finance: draft 13-week cash view by Friday.

Sequans Communications S.A. (SQNS) - Canvas Business Model: Channels

You're looking at how Sequans Communications S.A. gets its semiconductor and service offerings into the hands of customers as of late 2025. The channels are a mix of direct engagement for big deals and leveraging partners for broader reach, which is clearly reflected in the revenue composition we see in the latest filings.

Direct sales force to large OEMs and industrial customers (e.g., Honeywell, Itron)

Direct engagement targets major Original Equipment Manufacturers (OEMs) and large industrial players, often securing significant technology licensing deals. The impact of these large, lumpy deals is evident when looking at the revenue mix. For instance, in the second quarter of 2025, license and services revenue accounted for $4.3 million, or 52.44% of the total revenue of $8.1 million. By the third quarter of 2025, this high-margin license revenue stream significantly diminished, with total revenue dropping to $4.3 million, which caused the gross margin to fall from 64.4% in Q2 to 40.9% in Q3. The Q3 results specifically noted the impact of the last license revenues from Qualcomm being recognized in Q2 2025.

Global network of distributors for module sales to smaller integrators

Module sales to smaller integrators and a wider customer base rely on the global distribution network. This channel is represented by the product revenue component. In Q2 2025, product revenue was $3.9 million, making up 47.56% of the total revenue. We see this product business strengthening year-over-year, as Q1 2025 product revenue of $3.5 million was up 42.2% compared to Q1 2024. Management noted strong business with AsiaTel, which acts as a channel partner for vertical applications like auto tracking. Furthermore, the company expects to have more than 30 customer projects moving from design-win to production by the end of 2025, up from about 18 in production at the start of the year.

Direct licensing of IP to strategic technology partners

Technology licensing is a crucial, albeit variable, channel. The major recent example involved the 5G broadband platform license to Qualcomm, which provided significant revenue recognition tailwinds in Q1 and Q2 of 2025. Looking forward, Sequans Communications S.A. anticipates receiving royalty revenue from a Chinese partner who licensed its 5G TORUS broadband platform starting in 2026. This licensing strategy is key to the company's long-term financial goals, targeting operating income break-even in 2026.

Online resources and technical documentation for developer support

Support for developers using Sequans Communications S.A.'s chips and modules is facilitated through online resources. While specific usage statistics aren't public, the success of new product lines depends on this self-service support structure. The company is seeing momentum with Monarch 2 projects and Calliope 2 pre-production shipments, which are expected to ramp through the second half of 2025. The overall 3-year revenue pipeline was stated to be approximately $480 million as of Q1 2025, with over half representing design-wins that require developer support to reach mass production.

Here's a quick look at how the revenue streams, which flow through these channels, compared in the middle of 2025:

What this estimate hides is the cash flow timing; for example, the Q3 2025 revenue drop was an optical impact from license revenue recognition ending, not necessarily a direct drop in cash from product sales, though cash and equivalents did fall to $13.4 million at September 30, 2025.

You should review the Q4 2025 guidance, which projects total revenue to exceed $7 million, to see if the product channel is picking up the slack left by the license revenue cycle.

Finance: draft 13-week cash view by Friday.

Sequans Communications S.A. (SQNS) - Canvas Business Model: Customer Segments

You're looking at the core customer base for Sequans Communications S.A. as of late 2025. The company's strategy centers on providing cellular IoT semiconductor solutions, with a clear focus on migrating existing 4G customers to future-proof 5G eRedCap platforms. This customer base is segmented by the specific connectivity technology they require, which maps directly to Sequans' product families like Monarch and Calliope.

The overall health of customer engagement is reflected in the design-win pipeline. As of the first quarter of 2025, the total 3-year revenue pipeline stood at approximately $480 million, with more than half of that amount representing confirmed design-wins. By the third quarter of 2025, management noted that the IoT business design win pipeline was growing well, with a target for more than 45% of customer projects to move into mass production and start generating revenue by the end of 2025. This pipeline activity is the best indicator of future commercial segments, even though Q3 2025 revenue was only $4.3 million, reflecting the completion of prior license revenue recognition.

The primary customer groups are those building high-volume, power-sensitive connected devices. The company's technology supports a wide array of applications, from smart metering to asset tracking. Furthermore, Sequans Communications S.A. also targets technology companies directly for IP licensing, especially for their new 5G eRedCap technology, which is a key differentiator for future-proofing customer products.

Here is a breakdown of the key customer segments and the associated quantitative context available from recent performance indicators:

The product roadmap directly addresses the longevity and transition needs of these segments:

• Monarch 2 is designed for industries like smart metering, healthcare, and asset tracking.
• Calliope 3 adds 5G eRedCap to LTE Cat 1bis, suitable for fleet management and security devices.
• Monarch 3 adds 5G eRedCap to LTE-M, targeting cellular LPWA applications.
• Sequans plans to begin providing samples of the third-generation chips (Calliope 3 and Monarch 3) to customers in 2026.
• The company noted a specific 5G broadband platform license recognition with Qualcomm in Q1 and Q2 2025.

Finance: draft 13-week cash view by Friday.

Sequans Communications S.A. (SQNS) - Canvas Business Model: Cost Structure

You're looking at the cost side of Sequans Communications S.A. (SQNS) as of late 2025, and it's a mix of heavy upfront investment and recent balance sheet management. The cost structure is heavily influenced by their semiconductor development cycle and their unique treasury strategy.

High fixed cost for Research and Development (R&D) for 5G RedCap

The development of next-generation platforms, like the Monarch 3 and Calliope 3 supporting 5G eRedCap, necessitates significant, ongoing Research and Development spending. This R&D functions as a high fixed cost base, essential for maintaining a competitive product portfolio in the cellular IoT space. To be fair, the company reported that no R&D costs were capitalized in 2025, meaning the full weight of these development expenditures hit the income statement as an expense during the year. This focus on R&D is what management sees as necessary to offset against the cost discipline in operating expenses to reach breakeven by 2026.

Cost of Goods Sold (COGS) for semiconductor manufacturing and packaging

The direct costs associated with producing the semiconductor chips and modules-the Cost of Goods Sold-are a variable component tied directly to shipment volumes. For the third quarter of 2025, the reported gross margin was 40.9% on revenues of $4.3 million. Here's the quick math on the implied COGS for that quarter:

This lower margin in Q3 2025, compared to 64.4% in Q2 2025, reflects a mix shift away from higher-margin license revenue towards product sales, directly impacting the COGS ratio relative to total revenue.

Operating expenses, targeted to be below $10 million per quarter in 2026

Sequans Communications S.A. is actively working to streamline its overhead. The company has put in place cost reduction measures targeting a specific future metric. The goal for cash operating expenses for 2026 is set quite clearly:

• Cash operating expenses, excluding stock compensation expense and depreciation expense, are targeted to be below $10,000,000 per quarter in 2026.

For context on the recent run rate, the operating expenses in Q3 2025, excluding the unrealized loss on the mark to market of the Bitcoin Treasury asset, were $14,000,000, which was stable compared to Q2 2025.

Non-cash interest expense related to the $189 million convertible debt

A significant non-cash cost stems from the accounting treatment of the convertible debt. The company had outstanding debt that included a $189 million tranche issued in July 2025, which was partially redeemed in November 2025. For Q3 2025, the IFRS reporting included substantial non-cash charges related to this instrument:

• Net interest expense was $6,900,000, which was primarily non-cash and related to IFRS accounting for the July 2025 convertible debt.
• There was also a non-cash $20.6 million gain on the change in value of the embedded derivative related to this debt in Q3 2025.

These non-cash impacts are specifically excluded when calculating Non-IFRS loss, showing the material difference between accounting costs and cash outflows related to financing.

Impairment losses on Bitcoin treasury assets

The decision to adopt Bitcoin as the primary treasury reserve asset introduces a volatile, non-operating cost component that hits the operating loss line item under IFRS rules. For the third quarter of 2025, this was a concrete number you need to track:

The operating loss for Q3 2025 included an $8.2 million unrealized loss on impairment of the value of the Bitcoin investment, which was marked to market. This contrasts with the company holding 3,234 bitcoins valued at $365.6 million at the time of that report.

Sequans Communications S.A. (SQNS) - Canvas Business Model: Revenue Streams

Product sales of cellular IoT chipsets and modules generated $4.3 million in revenue for the third quarter ended September 30, 2025. This compares to $8.1 million in revenue for the second quarter of 2025. The gross margin for Q3 2025 was 40.9%.

Technology IP licensing fees are a component of the revenue mix, which is high-margin. The gross margin compression to 40.9% in Q3 2025 from 64.4% in Q2 2025 reflects the lower amount of this high margin license revenue in the third quarter. The company expects recurring revenue from this stream in 2026.

Engineering services and customization fees are grouped with license revenue, which saw a reduction in Q3 2025. For context, in Q2 2025, license and services revenue was $4.3 million, down from $7.2 million in the prior year period. The three-year revenue design win pipeline stood at $300 million as of Q3 2025.

Potential gains from the Bitcoin treasury strategy are a distinct, long-term optionality revenue consideration. The company holds a significant digital asset position, which is actively managed. Here are the key figures related to this treasury activity as of the Q3 2025 preliminary results announcement on November 4, 2025:

The execution of the treasury strategy involved significant capital raising:

• Initial funding for the initiative was approximately $384 million gross proceeds.
• This funding came from issuing $195 million in equity securities and $189 million in convertible secured debentures.
• The company completed an initial purchase of 370 BTC, with plans to expand holdings to over 3,000 BTC.
• The Q2 2025 financing deployed $384 million to acquire 3,072 Bitcoin.

The company also has a three-year revenue design win pipeline that increased to $300 million in Q3 2025.