Sequans Misses On Q2 Revenue Due To Supply Chain Constraints, Dodges Q3 Guidance

Sequans Communications SA SQNS reported second-quarter FY21 revenue growth of 5.1% year-on-year to $12.9 million, missing the analyst consensus of $13.6 million.
Product revenue declined 15.7% Y/Y to $7.4 million, and Other revenue rose 58.1% to $5.5 million.
The revenue grew 4.4% Q/Q due to increased Massive IoT revenues, higher Vertical services revenue, partially offset by continued supply chain constraints for materials, and the absence of portable router sales.
The gross margin expanded 830 bps to 56.6%. It grew 650 bps Q/Q due to a shift in revenue mix with increased service revenue.
The Non-IFRS loss per ADS of $(0.15) beat the analyst consensus for a loss of $(0.17).
Sequans held $30.3 million in cash and equivalents at June 30, 2021. It generated $6.5 million in operating cash flow during the six months ended Jun. 30.
Massive IoT was the primary driver of growth in Q2, increasing 14% Q/Q and 120% Y/Y, CEO Georges Karam said. The increase in its Broadband CBRS business and a new deal for Vertical applications also contributed to the Q2 growth.
The business pipeline is well over $600 million, with the design win portion increasing by 18% Q/Q to $280 million.
Sequans said unable to offer Q3 guidance due to supply chain constraint concerns.
Price action: SQNS shares closed higher by 1.31% at $5.43 on Monday.

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