Sequans (SQNS) Q2 2025: Bitcoin Holdings Hit 3,072 as Treasury Strategy Drives New Business Model
Sequans’ pivot to a Bitcoin treasury model now places it among the world’s top 25 public Bitcoin holders, fundamentally recasting its capital allocation and investor base. The IoT business continues to deliver design wins and margin strength, but the strategic focus has shifted decisively to digital asset accumulation and yield generation. Investors should track execution on treasury expansion, IoT monetization, and the operational discipline needed to support this dual mandate.
Summary
- Bitcoin Treasury Model Redefines Corporate Strategy: Sequans’ rapid accumulation of 3,072 Bitcoins marks a transformative capital allocation shift.
- IoT Business Remains Cash Flow Targeted: Product revenue and design win momentum continue to support operational cash generation goals.
- Yield and Monetization Opportunities Expand: Management signals further Bitcoin accumulation and IP monetization as core drivers for future value.
Performance Analysis
Sequans’ Q2 2025 results underscore a business in strategic transition, with the launch of a Bitcoin treasury strategy now the primary focus for capital deployment and shareholder value creation. The company completed the deployment of $384 million in new capital to acquire 3,072 Bitcoins, making it one of the largest public Bitcoin holders globally and uniquely positioned as a European Bitcoin treasury company listed in the US. This move is intended to attract a broader international investor base and provide a long-term store of value.
On the operating side, Sequans’ IoT (Internet of Things, connected device technology) business delivered $8.14 million in revenue for the quarter, with product revenue up 10% sequentially and 59% year over year, driven by Monarch 2 modem shipments. Gross margin remained robust at 64.4%, reflecting the ongoing strength of the product mix and disciplined cost management. Operating expenses increased due to non-recurring restructuring and advisory fees, but management reiterated a target to reduce cash operating expenses to $10 million per quarter by year-end. The IoT segment’s three-year revenue pipeline now exceeds $485 million, with $250 million at the design win stage, and management remains confident that half of these wins will reach mass production by the end of 2025.
- Bitcoin Treasury Execution: Sequans deployed all net proceeds from its July equity and debt offering into Bitcoin, with an average purchase price of $116,690 per Bitcoin.
- IoT Revenue Pipeline Strength: The business boasts a $485 million pipeline, with continued design win conversion and shipment ramp expected in H2 2025 and 2026.
- Operating Expense Discipline: Despite elevated non-recurring costs, management maintains a clear path to lower cash burn and targets cash flow positivity in IoT by H2 2026.
Sequans’ Q2 performance reflects a company balancing aggressive treasury innovation with operational execution in IoT, while leveraging intellectual property monetization and licensing to support cash generation.
Executive Commentary
"We are pleased to hold our first earnings conference call since our decision to adopt Bitcoin as our primary treasury reserve asset. We view Bitcoin as a long-term store of value asset and intend to strategically accumulate it over time... We are committed to this strategy and believe it will unlock significant long-term value for our shareholders."
George Karam, CEO & Chairman
"Total revenues in Q2 2025 were $8.1 million, up 1.1% compared to the first quarter of 2025. Gross margin remained strong at 64.4%. ... We continue to target to reduce cash operating expense, meaning expenses excluding depreciation expense, to be around $10 million per quarter by the end of 2025."
Deborah Choate, CFO
Strategic Positioning
1. Bitcoin Treasury as Core Capital Allocation
Sequans’ treasury model now centers on Bitcoin accumulation, with 3,072 coins acquired and a near-term plan to deploy additional balance sheet cash, warrant proceeds, and potential new equity to further build reserves. This approach positions Sequans as a high-profile digital asset play and signals a clear break from traditional treasury management. The company’s partnership with Swan Bitcoin, a specialist in institutional Bitcoin management, underpins this strategy with operational rigor and transparency, including a public dashboard for real-time Bitcoin metrics.
2. IoT Business as Cash Engine and Optionality
The IoT segment remains pivotal as a source of operational cash flow, with a robust pipeline of design wins and new product launches, such as the Calliope 2 platform for fleet management and the Iris RF transceiver for defense and automotive applications. Sequans expects these initiatives to drive revenue ramp and cash flow positivity by the second half of 2026, providing incremental capital to support Bitcoin treasury expansion. The ACP acquisition is already yielding high-margin product wins, with management targeting $6-10 million in incremental revenue from these lines in 2026.
3. Intellectual Property Monetization and Licensing
Sequans continues to monetize its IP through strategic licensing agreements, including a $60 million 5G Taurus license in China and a $200 million 4G IP sale to Qualcomm. The company expects royalty revenue from its Chinese partner to begin in 2026, and is actively pursuing additional licensing deals that could inject further non-dilutive capital to fuel its treasury strategy.
4. Operational Discipline and Cost Structure
Despite elevated non-recurring expenses in Q2, management remains focused on reducing quarterly cash operating expenses to $10 million, with a disciplined approach to spending and ongoing support from government R&D programs. The company expects to collect a final $10 million payment from Qualcomm in Q3, further supporting liquidity.
5. Shareholder Transparency and International Positioning
Sequans is emphasizing best-in-class disclosure, with a dedicated Bitcoin dashboard and detailed reporting on treasury activities. Its unique position as a European Bitcoin treasury company listed in the US could attract new global investors and differentiate it from US-centric peers.
Key Considerations
Sequans’ Q2 marks a structural pivot toward a dual-engine model: Bitcoin treasury and IoT-driven operational cash flow. Investors must weigh execution risk in both domains as the company seeks to deliver on its new value proposition.
Key Considerations:
- Bitcoin Treasury Volatility: The marked-to-market accounting treatment under IFRS may introduce significant earnings volatility, even though it does not affect cash flow.
- IoT Pipeline Conversion: Sustained momentum in design win conversion and shipment ramp is critical for delivering on cash flow positivity targets in 2026.
- Licensing and IP Monetization: Additional licensing deals and royalty streams could materially impact Sequans’ ability to fund further Bitcoin accumulation without dilutive capital raises.
- Capital Markets Access: The company’s ability to raise equity or debt on favorable terms will be a key determinant of future Bitcoin purchasing power and yield generation.
Risks
Sequans faces material risks from Bitcoin price volatility, the potential for regulatory shifts impacting digital asset treasury strategies, and execution risk in both IoT ramp and IP monetization. The IFRS accounting treatment could obscure underlying operating performance, and capital markets access is not guaranteed if sentiment turns. Management’s ability to balance aggressive treasury accumulation with operational discipline will be closely watched by investors.
Forward Outlook
For Q3 2025, Sequans expects to:
- Continue expanding its Bitcoin holdings using available cash, warrant proceeds, and potential new equity issuances.
- Ramp IoT product shipments as more design wins transition to mass production.
For full-year 2025, management reaffirmed:
- Target to reduce cash operating expenses to $10 million per quarter by year-end.
- IoT business remains on track to reach cash flow positivity in H2 2026.
Management highlighted several factors that will shape results:
- Execution on further Bitcoin accumulation is contingent on warrant exercise and successful capital raising.
- Continued progress in licensing and IP monetization could provide non-dilutive capital and incremental yield.
Takeaways
Sequans’ Q2 marks a decisive shift toward a Bitcoin-centric capital allocation model, with operational execution in IoT and IP monetization providing the cash engine to support this strategy.
- Bitcoin Treasury as Value Lever: The company’s status as a top 25 public Bitcoin holder is now central to its equity narrative and investor appeal.
- Operational Execution Remains Pivotal: IoT revenue momentum and cost discipline are still essential to funding the treasury strategy and supporting business resilience.
- Future Watchpoints: Investors should monitor further Bitcoin accumulation, IoT design win conversion, and the pace of new licensing deals as primary drivers of value and risk.
Conclusion
Sequans has fundamentally recast its business model by prioritizing Bitcoin as its primary treasury asset, while maintaining disciplined execution in IoT and IP monetization. The success of this dual-engine approach will depend on management’s ability to deliver operational cash flow, execute on treasury expansion, and navigate the volatility inherent in digital asset markets.
Industry Read-Through
Sequans’ aggressive Bitcoin treasury strategy signals a new playbook for tech companies seeking to leverage digital assets as a core capital allocation tool. This move may prompt other mid-cap technology and IoT firms to consider similar treasury diversification, especially as traditional sources of yield remain constrained. The continued strength in IoT design wins and high-margin product launches reinforces the sector’s resilience, while the focus on IP monetization highlights the growing importance of licensing as a lever for cash generation in semiconductor and connectivity businesses. Investors should watch for broader adoption of digital asset treasury models and increased scrutiny on capital allocation discipline across tech peers.