PARIS—April 24, 2014–4G chipmaker Sequans Communications S.A. (NYSE:SQNS) today
announced financial results for the first quarter ended March 31, 2014.

First Quarter 2014 Highlights:

Revenue: Revenue of $4.5 million decreased 10% compared to the fourth quarter of 2013, primarily due to lower sales of modules. Revenue increased 96% compared to the first quarter of 2013 due to an increase in revenues from the LTE markets.

Gross margin: Gross margin was 39.5%, compared to gross margin of 43.8% in the fourth quarter of 2013 and 31.3% in the first quarter of 2013, due to a less favorable revenue mix, including less license and other revenue partially offset by an improved product gross margin.

Operating loss: Operating loss was $8.3 million, compared to an operating loss of $8.2 million in the fourth quarter of 2013 and an operating loss of $9.3 million in the first quarter of 2013.

Net loss: Net loss was $8.3 million, or ($0.14) per diluted share/ADS, compared to a net loss of $8.3 million, or ($0.17) per diluted share/ADS, in the fourth quarter of 2013 and a net loss of $9.4 million, or ($0.24) per diluted share/ADS, in the first quarter of 2013.

Non-IFRS Net loss: Excluding stock-based compensation, non-IFRS net loss was $7.9 million, or ($0.13) per diluted share/ADS, compared to a non-IFRS net loss of $7.6 million, or ($0.15) per diluted share/ADS, in the fourth quarter of 2013 and a non-IFRS net loss of $8.8 million,
or ($0.23) per diluted share/ADS, in the first quarter of 2013.

“During Q1, we closed a number of new design wins across multiple device categories, including mobile computing and M2M devices,” said Georges Karam, Sequans CEO. “We also announced a high-performance LTE-Advanced solution that is garnering strong interest from OEM and ODM customers and demonstrated LTE broadcast and carrier aggregation in several different forums. Based on the level of visibility we have on our customers’ launch plans, we continue to anticipate a strong ramp in LTE revenue in the second half of the year.”

The following statements are based on management’s current assumptions and expectations. These statements are forward-looking and actual results may differ materially. Sequans undertakes no obligation to update these statements.

Sequans expects revenue for the second quarter of 2014 to be in the range of $5.0 to $6.0 million, with non-IFRS gross margin of around 40%. Based on this revenue range and expected gross margin, non-IFRS net loss per diluted share/ADS is expected to be between ($0.13) and ($0.15) for the second quarter of 2014, based on approximately 59.1 million weighted average number of diluted shares/ADSs, and reflecting additional operating expenses related to new product finalization and the headquarters move that are expected to be concentrated in the second quarter. Non-IFRS EPS guidance excludes primarily the impact of stock-based compensation.

Conference Call and Webcast

Sequans plans to conduct a teleconference and live webcast to discuss the financial results for the first quarter of 2014 today, April 24, 2014, at 8:00 a.m. EDT /14:00 CEST. To participate in the live call, analysts and investors should dial 800-230-1059 (or +1 612-288-0329 if outside the U.S.). A live and archived webcast of the call will be available from the Investors section of the Sequans website at www.sequans.com/investors/. A replay of the conference call will be available until May 24, 2014, by dialing toll free 800-475-6701 in the U.S., or +1 320-365-3844 from outside the U.S., using the following access code: 323141.

Forward-Looking Statements

This press release contains projections and other forward-looking statements regarding future events or our future financial performance. All statements other than present and historical facts and conditions contained in this release, including any statements regarding our future results of operations and financial positions, business strategy, plans and our objectives for future operations, are forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Actual events or results may differ materially from those contained in the projections or forward-looking statements. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: (i) the contraction or lack of growth of markets in which we compete and in which our products are sold, including WiMAX and LTE markets, (ii) unexpected increases in our expenses, including manufacturing expenses, (iii) our inability to adjust spending quickly enough to offset any unexpected revenue shortfall, (iv) delays or cancellations in spending by our customers, (v) unexpected average selling price reductions, (vi) the significant fluctuation to which our quarterly revenue and operating results are subject due to cyclicality in the wireless communications industry and transitions to new process technologies, (vii) our inability to anticipate the future market demands and future needs of our customers, (viii) our inability to achieve new design wins or for design wins to result in shipments of our products at levels and in the timeframes we currently expect, and (ix) other factors detailed in documents we file from time to time with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

Use of Non-IFRS/non-GAAP Financial Measures

To supplement our unaudited consolidated financial statements prepared in accordance with IFRS, we disclose certain non-IFRS, or non-GAAP, financial measures. These measures exclude non-cash charges relating to stock-based compensation. We believe that these measures can be useful to facilitate comparisons among different companies. These non-GAAP measures have limitations in that the non-GAAP measures we use may not be directly comparable to those reported by other companies. We seek to compensate for this limitation by providing a reconciliation of the non-GAAP financial measures to the most directly comparable IFRS measures in the table attached to this press release.

About Sequans Communications

Sequans Communications S.A. (NYSE:SQNS) is a 4G chipmaker and leading provider of single-mode LTE chipset solutions to wireless device manufacturers worldwide. Founded in 2003, Sequans has developed and delivered six generations of 4G technology and its chips are certified and shipping in 4G networks, both LTE and WiMAX, around the world. Today, Sequans offers two LTE product lines: StreamrichLTE™, optimized for feature-rich mobile computing and home/portable router devices, and StreamliteLTE™, optimized for M2M devices and other connected devices for the Internet of Things. Sequans is based in Paris, France, with additional offices in the United States, United Kingdom, Israel, Hong Kong, Singapore, Taiwan, South Korea, and China. Visit Sequans online at www.sequans.com; www.facebook.com/sequans; www.twitter.com/sequans.

Source: Sequans Communications S.A.