Sequans Communications S.A. (NYSE:SQNS) Q4 2022 Earnings Call Transcript

Craig Ellis: Yes. Thanks for taking the question and congratulations on a number of the year’s milestones as you look back. Georges, I wanted to start just by clarifying an issue on the supply chain. So you’ve been clear in terms of the impact of the current environment and supply chain issues on your customers, and frankly, we’re seeing that impact across a range of companies that are involved in the IoT. The question though is more about your own supply and how you’re looking at supply potential from your foundry partners and agreement partners in 2023? And then, just as much in 2024, how confident are you that those foundry partners can be what looks like a really steep ramp coming as we exit 2023 into 2024 on the Massive IoT side?

Georges Karam: Yes. Hi, Craig, I mean, we are feeling really that the supply is easing from this point of view. In other words, obviously, even if the tension remains there with the story of Taiwan and so on, so there is a big question mark, but at least practically today, there is access to foundry and there is a way for get now there is always limitation. You know when you ramp, and we are anticipating this, we build inventory in the company already, and this is by the way consume some of our cash. So we’re sitting on more than what we will be sitting on in terms of inventory as well. And that let me feel like 2023 will not have any problem. And from there, for 2024, obviously it’s too early to speak about it, but again with a partnership we will do the Renesas and so on. I don’t expect really an issue there. And hopefully, we’ll be there to support the ramp of our revenue.

Craig Ellis: Got it. That makes sense. And then for the second question, I wanted to follow-up on a question that Scott asked. I don’t think I heard a response just related to the strategic options, what’s the Board involvement? Is there a timeframe to the mandate that you’ve given them, et cetera? Can you just flush that out a little bit for us?

Georges Karam: Yes. I mean, Craig, I mean unfortunately, I mean as you could imagine for those contacts, I cannot give more details. So very honestly obviously three Board member, I mean, we could give the name, but I don’t believe it’s important. But obviously, three key guys that they’re involved when they help me and this is what I could say more than this, I believe when will be the right point we’ll talk about it.

Craig Ellis: Got it. And then lastly, when we look at the part of the funnel that’s that incremental $350 million, that, that hasn’t been as much of a focus prior to this call, but is becoming much more so. As we think about the end market exposure of those opportunities, Georges, how does it compare to what we’ve been looking at previously where there’s a real high smart metering home, et cetera, quotient? Would it be similar mix or significantly different mix from an end market standpoint?

Georges Karam: So I mean, it’s really going in the same direction. When I look to it like backward, beginning of last year, we’re talking about where we are seeing potential win. In 2022, to be honest, we had more and more metering projects. We wanted a lot. I mentioned nine customers, not nine projects. I can tell you close to 20 projects, above 20 projects that the company has and we have more in the pipe. It’s really a place where we ended by the fact that we have the two product, Cat 1 and Cat M and very low power. And it’s a small plus adding many plus. At the beginning, it was very complicated to win this segment because you need to prove yourself as a brand. You can stay there for 10 years, but it’s really playing very positive for us.