Sequans SQNS Q2 2025 Earnings Preview Downside Expected Amid Lowered EPS Forecasts

Forward-Looking Analysis
Sequans Communications is expected to release its Q2 2025 earnings data on July 31st. Analysts have set moderate revenue growth expectations, with projections indicating an annual increase of 32%. However, there’s a stark contrast in earnings projections, with EPS forecasts having been downgraded significantly. Analysts have adjusted EPS expectations from -$0.10 to -$0.27 over the past year, a reduction of 170.0%. Roth Capital analyst S. Searle has further lowered quarterly EPS estimates to -$0.08, down from a previous forecast of -$0.07. Despite a challenging financial outlook due to rising operational costs, the company remains focused on product sales as a primary revenue driver. The consensus among analysts reflects a cautious stance as the company navigates these financial challenges.

Historical Performance Review
In the first quarter of 2025, Sequans reported revenue of $8.05 million, slightly beating its guidance. However, the company faced a net loss of $7.25 million, translating to an EPS of -$0.29. Gross profit stood at $5.19 million, reflecting the company's struggle with profitability despite revenue growth. This mixed financial performance sets a cautious tone for the upcoming earnings report.

Additional News
Sequans remains committed to reducing cash operating expenses to an average of $10 million per quarter throughout 2025. The company’s strategy focuses heavily on product sales as the main source of revenue. Despite its challenging financial outlook, Sequans has demonstrated progress in the first quarter of 2025, with revenue slightly exceeding expectations. However, the reduction in earnings estimates and financial forecasts underscores the challenges faced by the company. Sequans's ability to manage operational costs will be crucial in determining future performance, particularly given the current expectations for revenue growth and declining earnings.

Summary & Outlook
Sequans faces a mixed financial landscape, characterized by moderate revenue growth yet significant challenges in profitability and earnings. The company’s focus on product sales as a primary revenue source presents a growth opportunity, but rising operational costs and declining EPS forecasts create risks. Given these contrasting elements, the outlook remains cautious, leaning towards a bearish perspective. The company’s ability to manage expenses effectively will be critical in navigating these challenges and achieving sustainable growth.