Sequans Communications

Core Business Architecture Semiconductor products: Provide IoT chips and modules such as 4G LTE Cat 1bis and 5G NR RedCap/eRedCap, with product revenue of 3.509 million USD in Q1 2025, accounting for a total revenue of 43.57%. Customers cover fields such as smart meters and industrial sensors, and partnerships have been established with companies like Qualcomm and Huawei. Bitcoin Reserve Strategy: Completing $384 million in financing by July 2025, with all net proceeds used to purchase Bitcoin, launching the "Bitcoin Treasury Initiative," aiming to increase holdings to over 3,000 coins in the coming months. Collaborating with Swan Bitcoin to establish a secure custody system to ensure asset governance transparency. Technical Collaborative Exploration Blockchain Integrated R&D: Collaborating with a semiconductor giant to develop IoT chips that support Bitcoin mining, planning to launch a low-power mining machine solution, with prototype testing expected to be completed by the end of 2025. The project aims to combine the deployment of blockchain nodes with industrial IoT devices, expanding edge computing scenarios.

Traditional business revenue (80%) Chip sales: In Q1 2025, product revenue reached $3.509 million, mainly from 5G RedCap module orders, a year-on-year increase of 33%. Technical authorization: Providing LTE-M/NB-IoT patent licenses to partners, Q1 license and service revenue of 4.545 million USD, accounting for a total revenue of 56.43%. Bitcoin Associated Earnings (20%) Asset Appreciation: As of July 18, 2025, holding 2,317 bitcoins, with a total cost of approximately 270 million USD, the unrealized gain based on market price is about 50 million USD. In Q2, due to the increase in bitcoin price from 116,000 USD to 118,000 USD, the change in fair value contributed a net profit of approximately 4.8 million USD. Derivatives Hedging: Use the "Bitcoin Yield Swap" product on the XBIT platform to gain price exposure without actually holding the asset. In Q2 2025, the hedging scale accounts for 40% of the position size, effectively reducing volatility risk. Capital operation income Financing leverage: Financing through convertible bonds ($189 million) and private equity ($195 million) to increase Bitcoin holdings with low-interest funds, with an expected annual funding cost of approximately 4.2%, lower than Bitcoin's historical annual return rate (15-20%). Equity appreciation: If the price of Bitcoin exceeds $200,000 in 2027, the company's holdings will be valued at $460 million, representing a 43% increase from the current market value.

Financial Structure Optimization Bitcoin reserves account for 45% of total assets (approximately 270 million USD), becoming the second largest asset category after accounts receivable, significantly enhancing asset liquidity and inflation resistance. In Q2 2025, due to the appreciation of Bitcoin, the company's net asset liability ratio decreased from 120% to 95%. Hedging risks against traditional semiconductor business: When chip demand is weak (such as a 12% year-on-year decline in revenue in Q1 2025), the appreciation gains from Bitcoin holdings can offset losses in the main business. Technical Strategy Extension The blockchain chip research and development project will drive the company to transform from a hardware supplier to a "communication + computing power" service provider, with expected related revenue accounting for 15% by 2026. The "cross-chain mortgage loan" product developed in collaboration with the XBIT platform allows for traditional bank loans (annual interest rate 3.5%) to be obtained using Bitcoin as collateral, providing low-cost funding for semiconductor research and development. Market Value Reassessment The Bitcoin reserve strategy increased the company's price-to-earnings ratio from 12 times to 25 times, attracting cryptocurrency-friendly funds like ARK Invest to increase their holdings. In Q2 2025, the institutional ownership ratio rose from 18% to 27%. Included in the Bitwise IoT & Blockchain Index, becoming the first ETF component stock to cover both the semiconductor and cryptocurrency sectors, driving the stock price up 60% in July alone.

Direct impact Bitcoin (BTC): Demand side: By Q2 2025, a cumulative increase of 1,264 bitcoins, accounting for 1.2% of the net on-chain issuance during the same period, has boosted the purchasing sentiment of institutional investors. Market structure: Conducting large transactions (single orders exceeding 1,000 coins) through the XBIT platform will increase the Bitcoin order book depth from 0.5% to 0.8%, reducing liquidity premiums. Indirect influence Stablecoin (USDC/USDT): As a medium for the exchange of fiat currency and Bitcoin, Q2 exchanged USDC worth 120 million dollars through the XBIT platform, accounting for 3% of the platform's USDC trading volume. Internet of Things tokens (potentially to be issued in the future): If the blockchain chip project is implemented, a dedicated token for value exchange between devices may be issued, creating new application scenarios.