Benzinga | Aug 3, 2021 07:36AM EDT

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

* Sequans Communications SA (NYSE: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.