Sequans Communications SA (SQNS) 2024 Q3 法說會逐字稿

Good morning, ladies and gentlemen and welcome to the Sequans Communications SA third quarter, 2024 financial results conference call.

女士們、先生們，早安，歡迎參加 Sequans Communications SA 2024 年第三季財務業績電話會議。

at this time, all lines are in listen-only mode.

此時，所有線路都處於只聽模式。

Following the presentation, we will conduct a question and answer session.

演示結束後，我們將進行問答環節。

(Operator Instruction)

（操作員指令）

This call is being recorded on Tuesday, November 5,2024.

該通話於 2024 年 11 月 5 日星期二錄製。

I would now like to turn the conference over to Mrs. Kim Rogers Managing Director at Hayden IR, please go ahead.

現在，我想將會議交給 Hayden IR 的董事總經理 Kim Rogers 女士，請繼續。

Thank you query and thank you to everyone participating in today's call.

謝謝您的詢問，也謝謝參加今天電話會議的每個人。

Joining me on the call today from Sequans is Dr. Georges Karam, Chairman and CEO and Deborah Choate CFO.

今天與我一起參加電話會議的還有 Sequans 公司董事長兼執行長 Georges Karam 博士和財務長 Deborah Choate。

Before turning the call over to Georges, I'd like to remind our participants of the following important information on behalf of Sequans.

在將電話轉給喬治之前，我想代表 Sequans 提醒我們的參與者以下重要訊息。

First Sequans issued an earnings press release this morning and you can find a copy of the release on the company's website at www.sequans.com under the newsroom section.

First Sequans 今天早上發布了一份收益新聞稿，您可以在公司網站 www.sequans.com 的新聞編輯室部分找到該新聞稿的副本。

And before we start, I'd like to remind everyone that this conference call contains projections and other forward-looking statements regarding future events or our future financial performance and potential financing sources, all statements other than present and historical facts and conditions contained in this next release including any statements regarding our business strategy, cost optimization plans, strategic options, the ability to enter into new strategic agreements, expectations for massive IoT sales, our availability to convert our pipeline to revenue and our objectives for future operations are forward-looking statements within the meaning of the private.

在開始之前，我想提醒大家，本次電話會議包含對未來事件或我們未來財務業績和潛在融資來源的預測和其他前瞻性陳述，本次發布中除現在和歷史事實和條件之外的所有陳述，包括有關我們的業務戰略、成本優化計劃、戰略選擇、達成新戰略協議的能力、對大規模物聯網銷售的預期、我們將我們將把收入的可用性以及我們將達成新戰略協議的能力、對大規模物聯網銷售的預期、我們將把收入的可用性轉化為我們未來的目標的可用性。

Securities Litigation Reform Act of 1995, section 27 A of the Securities Act of 1933 as amended and section 21 E of the Securities Exchange Act of 1934.

《1995 年證券訴訟改革法》、經修訂的《1933 年證券法》第 27 A 條以及《1934 年證券交易法》第 21 E 條。

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 risks and uncertainties and subject to change at any time.

經修訂的這些聲明僅為預測，反映了我們當前對未來事件的信念和期望，並且基於假設，受風險和不確定性的影響，並且隨時可能發生變化。

We operate in a very competitive and rapidly changing environment new risks emerge from time to time.

我們在一個競爭激烈且瞬息萬變的環境中運營，新的風險時有出現。

Given these risks and uncertainties, you should not rely on or 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.

鑑於這些風險和不確定性，您不應依賴或過度依賴這些前瞻性陳述，實際事件或結果可能與預測或前瞻性陳述中所述的存在重大差異。

More information on factors that could affect our business and financial results are included in our public filings made with the Security and Exchange Commission and now I'd like to hand the call over to Georges Karam.

有關可能影響我們業務和財務業績的因素的更多信息，包含在我們向美國證券交易委員會提交的公開文件中，現在我想將電話交給喬治斯·卡拉姆。

Please go ahead, Georges.

請繼續，喬治斯。

Thank you, Kim.

謝謝你，金。

Good morning, everyone.

大家早安。

I'd like to thank you all for joining us today.

我感謝大家今天的出席。

I'm excited to share an update on where sequence stands as we continue our transformation following the successful closing of the Qualcomm deal, as you may know, we've been navigating a rebuilding phase and I am pleased to say that we believe sequence is on a strong trajectory towards growth and long term success.

我很高興與大家分享序列的最新情況，因為我們在成功完成高通交易後繼續進行轉型，正如你們可能知道的，我們一直在重建階段，我很高興地說，我們相信序列正朝著強勁的增長和長期成功的軌道前進。

Let me walk you through the recent development, highlighting why we believe in our future success and growth.

讓我向您介紹最近的發展，強調我們為什麼相信我們未來的成功和成長。

First, we successfully closed the Qualcomm transaction, securing $200 million in funding for the company.

首先，我們成功完成了高通交易，為該公司獲得了2億美元的資金。

This was a critical milestone for us.

這對我們來說是一個重要的里程碑。

The deal not only enhances our financial standing but more importantly, validates our technological leadership in the cellular IoT space.

這筆交易不僅增強了我們的財務狀況，更重要的是，確認了我們在蜂窩物聯網領域的技術領先地位。

This bolsters the confidence of both our existing and potential customers in our ability to innovate, compete and support them in multiyear relationships.

這增強了我們現有和潛在客戶對我們創新、競爭和在多年合作關係中為他們提供支援的能力的信心。

Our financial stability is no longer a challenge and a major industry leader has endorsed our technology.

我們的財務穩定不再是一個挑戰，主要的產業領袖已經認可了我們的技術。

Second, as we have retained perpetual licensing rights to our 4G IoT technology, we can maintain and enhance our 4G product offerings with the LTE-M and IoT Monarch 2 and Cat 1 this LTE-M 2 platforms.

其次，由於我們保留了 4G IoT 技術的永久許可權，我們可以透過 LTE-M 和 IoT Monarch 2 和 Cat 1 這個 LTE-M 2 平台維護和增強我們的 4G 產品供應。

This enables us to support our design win pipeline and drive short term revenue growth.

這使我們能夠支持我們的設計勝利管道並推動短期收入成長。

Meanwhile, we'll focus our R&D resources on developing next generation innovative 5G redcap and E redcap solutions to continue our growth trajectory and create more value for our shareholders.

同時，我們將集中研發資源開發下一代創新5G紅帽和E紅帽解決方案，以延續我們的成長軌跡並為股東創造更多價值。

Let me provide more detail on these points starting with financial stability.

讓我從金融穩定開始更詳細地闡述這些觀點。

I'm pleased to confirm that in October, we fully repaid all mature debt, and it cleared all overdue payables to our suppliers.

我很高興地確認，十月我們已完全償還所有到期債務，並結清了所有欠供應商的逾期應付款項。

Our balance sheet is now nearly debt free marking a significant turning point in our ability to operate with greater flexibility.

我們的資產負債表現在幾乎沒有債務，標誌著我們以更大靈活性運作的能力的一個重要轉折點。

With our strategy centered on massive IoT we are now well positioned to make targeted investments in R&D while effectively managing and reducing our cash burn rate in 2025 combined with anticipated revenue growth next year, we are confident in our trajectory toward achieving breakeven by 2026.I want to recognize the incredible support we have received from our customers.

我們的策略以大規模物聯網為中心，現在我們已做好準備，可以有針對性地投資研發，同時有效地管理和降低 2025 年的現金消耗率，再加上明年預期的收入增長，我們對 2026 年實現收支平衡充滿信心。

Over the past year, our customers have remained steadfastly committed to Sequence.

在過去的一年裡，我們的客戶始終堅定地致力於 Sequence。

Despite our challenges as a result, we have retained almost 100% of our existing design win projects representing a corresponding $3 revenue pipeline that accounts for approximately $250 million of future revenue.

儘管我們面臨挑戰，但我們仍然保留了幾乎 100％ 的現有設計中標項目，這意味著相應的 3 美元收入管道，約佔未來 2.5 億美元的收入。

These design wins cover a variety of it applications for multiyear deployments with must in the large markets of metering tracking and fleet management.

這些設計獎項涵蓋了多種IT應用，可用於多年部署，並且必須在計量追蹤和車隊管理等大型市場中應用。

While previous financial challenges limited our ability to secure a new project wins this didn't reduce our customer attraction particularly in our Cat 1 bis LTE 2 product.

雖然先前的財務挑戰限制了我們贏得新專案的能力，但這並沒有降低我們對客戶的吸引力，特別是我們的 Cat 1 bis LTE 2 產品。

Now with a solid financial footing, we are back to work on the pipeline of opportunities and anticipate securing new design wins in 2025.

現在，我們擁有了穩固的財務基礎，重新開始著手尋找機會，並有望在 2025 年獲得新的設計勝利。

In fact, both existing and potential new customers as well as partners were impressed by our Qualcomm transaction and they fully support our strategy post deal the testimonial in our recent press release, affirm their view of the value of our technology and of Sequence as a trusted partner, the recognition of our leadership in the 4G,5G IoT industry underscores the competitive strength of our products and solutions.

事實上，現有和潛在的新客戶以及合作夥伴都對我們與高通的交易印象深刻，他們全力支持我們交易後的策略，我們在最近的新聞稿中的推薦，肯定了他們對我們的技術價值和對Sequence作為值得信賴的合作夥伴的看法，對我們在4G，5G物聯網行業領導地位的認可凸顯了我們產品和解決方案的競爭實力。

Now, with our team solely focused on executing our business strategy, we are devoting all of our energy and resources to driving growth.

現在，我們的團隊專注於執行我們的業務策略，我們投入所有精力和資源來推動成長。

Importantly, we are more confident than ever in our competitive edge.

重要的是，我們對我們的競爭優勢比以往任何時候都更有信心。

This confidence stems from our ability to execute on innovative product strategy that enhances our existing 4G LTE platform and drives the introduction of next generation 5G Redcap and E Redcap products.

這種信心源於我們執行創新產品策略的能力，該策略增強了我們現有的 4G LTE 平台並推動下一代 5G Redcap 和 E Redcap 產品的推出。

We expect this will accelerate new design wins while the existing design win projects move to mass production.

我們預計這將加速新設計的獲勝，同時現有設計獲勝項目將轉向大規模生產。

Let's take a closer look at our revenue growth and outlook for the upcoming quarters.

讓我們仔細看看我們的收入成長和未來幾季的前景。

Two key factors provide us with a strong visibility into our revenue trajectory from the coming year and beyond for the coming year and bill.

兩個關鍵因素使我們對來年及以後的收入走勢和帳單有了清晰的了解。

First on the product side, our design win pipeline remain robust with more projects transitioning into mass production starting in the fourth quarter of this year and continuing through 2025.

首先在產品方面，我們的設計得標管道依然強勁，從今年第四季開始將有更多項目轉入量產，並持續到 2025 年。

Second, we have a line of sight for new projects coming online in 2025 that we expect to accelerate our growth in 2026.

其次，我們預計 2025 年將有新專案上線，這將加速我們在 2026 年的成長。

All this anticipated growth is based on existing matured Monarch 2 and Calliope platforms that require limited R&D investments.

所有這些預期的成長都是基於現有成熟的 Monarch 2 和 Calliope 平台，這些平台只需要有限的研發投入。

Our design wins pipeline is built with industry leading customers such as (in audible) Geotab as well as with major ODM partners aggregating numerous OEM customers.

我們的設計獲勝管道是與業界領先客戶（例如（可聽見）Geotab）以及聚集眾多 OEM 客戶的主要 ODM 合作夥伴共同建立的。

Many of these design wins have an average life cycle that exceeds 5 years providing stable revenue streams over the long term.

許多設計的平均生命週期超過 5 年，可長期提供穩定的收入來源。

Similarly, we are engaged with tier one customers on numerous new opportunities that we are targeting to close in the coming quarters.

同樣，我們正在與一級客戶合作，尋找眾多新的機會，目標是在未來幾季內完成這些機會。

It's important to highlight that in addition to 4G,5G product sales sequence will continue expanding its licensing and services business.

值得強調的是，除了4G、5G產品銷售之外，中興通訊也將繼續擴大其授權和服務業務。

First, we continue supporting our existing Chinese partner and expect this relationship to generate services and royalty revenue in the future.

首先，我們繼續支持我們現有的中國合作夥伴，並期望這種關係將來能夠產生服務和特許權使用費收入。

Second, we have other engagements we believe could lead to new licensing and service deals in 2025.

其次，我們還有其他合作，我們相信這些合作可能會在 2025 年帶來新的授權和服務協議。

In fact, our existing 5G IP and future innovations on Redcap and E Redcap should allow us to secure new licensing deals similar to what we have done in the past.

事實上，我們現有的 5G IP 以及 Redcap 和 E Redcap 上的未來創新應該使我們能夠獲得與過去類似的新授權協議。

Our licensing strategy involves addressing new market segments or regions through partnerships and securing new business opportunities with limited investment.

我們的授權策略包括透過合作夥伴關係開拓新的細分市場或地區，並以有限的投資獲得新的商機。

This approach could bring incremental growth through high margin licensing and service revenue, further advancing our path to break it up.

這種方法可以透過高利潤的授權和服務收入帶來增量成長，進一步推進我們分拆的進程。

We are optimistic about near term revenue growth with backlog in hand, we expect 4th quarter product revenue to double from the 3rd quarter.

我們對近期營收成長持樂觀態度，鑑於手頭上有積壓訂單，我們預計第四季度產品收入將比第三季翻一番。

Looking ahead to 2025 we anticipate product revenue growth to continue as the new design win projects move to mass product.

展望 2025 年，我們預計隨著新的設計中標項目轉向量產產品，產品收入將持續成長。

Additionally, we expect some licensing and service revenue from existing engagements and new deals that we target closing in 2025.

此外，我們預計從現有合作和新交易中獲得一些授權和服務收入，目標是在 2025 年完成。

Operationally, we are targeting cash operating expenses, meaning excluding depreciation, amortization and equity compensation expense to fall below $10 million per quarter in 2025.

在營運方面，我們的目標是現金營運費用（不包括折舊、攤提和股權補償費用）到 2025 年每季降至 1,000 萬美元以下。

Driven by a combination of cost efficiencies and focused R&D investments supporting our revenue growth.

在成本效率和重點研發投資的推動下，我們的收入不斷成長。

This reduction in expenses will allow us to reduce our cash needs.

減少開支將使我們能夠減少現金需求。

Now, as the last point I want to dive into one of the key questions on investors' mind how Sequence will remain competitive in the IoT market, especially in such a rapidly evolving industry.

現在，作為最後一點，我想深入探討投資者心中的一個關鍵問題：Sequence 將如何在物聯網市場中保持競爭力，尤其是在如此快速發展的行業中。

The answer lies in our ability to continue delivering products in which I'm proud to say that we've retained a world class engineering team with deep expertise in 4G and 5G.

答案在於我們繼續提供產品的能力，我很自豪地說，我們保留了一支在 4G 和 5G 方面擁有深厚專業知識的世界級工程團隊。

This team's expertise is drive is the driving force behind our road map for improving Monarch two and Calliope two platforms and introducing next generation 5G products sequence also has a differentiated go to market strategy with the flexibility to support our customers in unique ways by providing everything required as one stop shop chips modules and software solutions which are customizable as needed for a broad scope of IoT applications.

團隊的專業知識是我們改進 Monarch two 和 Calliope two 平台和推出下一代 5G 產品系列路線圖的驅動力，同時還擁有差異化的市場營銷策略，能夠靈活地以獨特的方式支援我們的客戶，提供一站式晶片模組和軟體解決方案所需的一切，這些解決方案可根據廣泛的物聯網應用需要進行客製化。

Additionally, 5G Redcap and E Redcap technology are gaining significant importance with IoT industrial customers who are looking for a future proof cellular connectivity solution in anticipation of the evolution of the network to pure 5G.

此外，5G Redcap 和 E Redcap 技術對於物聯網工業客戶來說越來越重要，他們正在尋找面向未來的蜂窩連接解決方案，以期網路向純 5G 演進。

Our road map is closely aligned with 5G standalone deployments with the first to market approach.

我們的路線圖與 5G 獨立部署緊密結合，並採用率先進入市場的方法。

Setting the stage for us to take advantage of the growing demand for next generation 5G connectivity solution.

為我們利用對下一代 5G 連接解決方案日益增長的需求奠定基礎。

Another factor supporting our continued relevance is the industry's growing need for at least 2 reliable sources of Western design technology from suppliers fully committed to cellular IoT with a comprehensive 4G and 5G product offering.

支持我們持續保持相關性的另一個因素是，業界對至少 2 個可靠的西方設計技術來源的需求日益增長，這些技術來自完全致力於蜂窩物聯網並提供全面 4G 和 5G 產品的供應商。

This means that customers, especially those in North America Europe and Japan need more than one cheap alternative to address sovereign challenges and avoid relying too heavily on one supplier.

這意味著客戶，尤其是北美、歐洲和日本的客戶，需要多種廉價的替代方案來應對主權挑戰，並避免過度依賴單一供應商。

This factor combined with the current geopolitical situation position sequence exceptionally well, particularly after the endorsement of our technology with the Qualcomm transaction.

這個因素與目前的地緣政治情勢位置序列結合得非常好，特別是在我們的技術與高通交易獲得認可之後。

In summary, there are four key indicators that demonstrate sequence is in a dynamic rebuilding phase.

總而言之，有四個關鍵指標顯示序列正處於動態重建階段。

First, we significantly, we significantly transformed our balance sheet, eliminating nearly all of our debt and substantially strengthening our cash position.

首先，我們大幅改變了我們的資產負債表，消除了幾乎所有的債務，並大大加強了我們的現金狀況。

Second, we have retained the rights to our 4G IoT technology which enables us to continue supporting our existing customers while building new products and next generation 5G solution.

其次，我們保留了 4G IoT 技術的權利，這使我們能夠在建立新產品和下一代 5G 解決方案的同時繼續支援現有客戶。

Third, we preserved our critical customers and supplier relationships ensuring that the design wins we've secured are entering mass production, giving us visibility into product revenue growth for 2025 plus, we anticipate generating new licensing and services revenue sources that will further limit our cash flow.

第三，我們維護了與關鍵客戶和供應商的關係，確保我們獲得的設計能夠進入大規模生產，這使我們能夠了解 2025 年及以後的產品收入增長，我們預計將產生新的許可和服務收入來源，這將進一步限制我們的現金流。

I will now turn the call over to Deborah to review the third quarter financial results in detail.

現在我將把電話轉給 Deborah，讓她詳細回顧第三季的財務結果。

Thank you Georges and good morning to everyone.

謝謝喬治，大家早安。

Before we get started, please note that the financial results released today are preliminary.

在我們開始之前，請注意今天發布的財務結果是初步的。

Our final results are subject to finalization of the purchase price allocation including receiving purchase price allocation input from Qualcomm which is expected to be completed in December.

我們的最終結果取決於最終確定的購買價格分配，包括收到高通的購買價格分配輸入，預計將於 12 月完成。

This process involves allocating the purchase price among the acquired in tangible and intangible assets based on their estimated fair market value.

此過程涉及根據估計的公平市價在所收購的有形資產和無形資產之間分配購買價格。

This process is required for both financial reporting and tax purposes.

這個過程對於財務報告和稅務目的都是必需的。

Now moving on to our 3rd quarter overview, our revenues for the 3rd quarter of 2024 increased 29.5% to $10.1 million from $7.8 million in the 3rd quarter of 2023 and increased sequentially by 4.2%.

現在轉到我們的第三季概覽，我們 2024 年第三季的營收從 2023 年第三季的 780 萬美元成長 29.5% 至 1,010 萬美元，季增 4.2%。

Product revenue accounted for 23.4% of total revenues compared to 9.7% in the 3rd quarter of 2023 and 25.2% in the prior quarter.

產品收入佔總營收的 23.4%，而 2023 年第三季為 9.7%，上一季為 25.2%。

We experienced a shipment delay at the end of September which prevented us from shipping.

九月底，我們遇到了延遲出貨的問題，導致我們無法出貨。

About $500,000 of product licensing revenue was $7.7 million and 9.8% increase compared to $7 million in the prior year quarter and a 6.7% increase compared to $7.2 million in the 2nd quarter of this year.

約 50 萬美元的產品授權收入為 770 萬美元，比去年同期的 700 萬美元成長 9.8%，比今年第二季的 720 萬美元成長 6.7%。

This quarter, we recognized $6.7 million in revenue from partial delivery under a 5G license to Qualcomm as part of the overall transaction.

本季度，作為整體交易的一部分，我們根據 5G 許可向高通部分交付，從而確認了 670 萬美元的收入。

We expect additional licensing revenue under this agreement to be recognized in Q4 and into 2025.

我們預計根據該協議的額外授權收入將在第四季度和 2025 年實現。

Gross margin in the third quarter of 2024 of 82.5% continues to reflect the favorable impact of higher margin license revenue dominating the mix and is stable compared to 84% gross margin in Q2.

2024 年第三季的毛利率為 82.5%，繼續反映出利潤率較高的授權收入占主導地位的有利影響，與第二季的 84% 毛利率相比保持穩定。

Gross margin on product revenue was 36.9% in Q3 compared to 39.1% in Q2.

第三季產品營收毛利率為 36.9%，第二季為 39.1%。

IFRS operating profit was $87 million in the quarter compared to operating losses of $3.7 million in Q2 of 2024 and $7.8 million in the 3rd quarter of 2023.

本季 IFRS 營業利潤為 8,700 萬美元，而 2024 年第二季的營業虧損為 370 萬美元，2023 年第三季的營業虧損為 780 萬美元。

The increase in operating profit compared to the prior quarters is due to the net gain on the sale of the 4G assets sold to Qualcomm of $141 $152.7 million.

營業利潤較前幾個季度相比有所增加，主要是由於向高通出售 4G 資產的淨收益為 1.41 億美元至 1.527 億美元。

Our estimation of the value of the assets sold is $175.4 million.

我們估計出售資產的價值為 1.754 億美元。

This gross gain was reduced by the netbook value of R&D capitalized for Monarch 2 and Calliope 2 of $18.4 million and by deal related fees and expenses.

這筆毛收益被 Monarch 2 和 Calliope 2 的資本化研發淨值 1,840 萬美元以及交易相關的費用和開支所減少。

This gain was partially offset by a noncash impairment charge of $56.6 million for intangible and tangible assets related to our tourist product.

這項收益被我們旅遊產品相關的無形和有形資產 5,660 萬美元的非現金減損費用部分抵銷。

As a result of our decision to indefinitely suspend development of the 5G for tourist project, we determined it was appropriate to write off assets on the balance sheet that were dedicated to tourist.

由於我們決定無限期暫停5G旅遊項目的開發，因此我們認為註銷資產負債表上專門用於旅遊的資產是適當的。

We had an increase in R&D expense due to no longer capitalizing the R&D related to Taurus, but we continue to capitalize Calliope 2 costs through the date of the asset sale and we had increases in all lines of operating expenses due to an exceptional bonus to all employees and management interest expense decreased compared to the prior quarter due to lower interest expense on matured debt interest in Q3 was accrued at the contract rate with no IFRS impact.

由於不再將與 Taurus 相關的研發資本化，我們的研發費用有所增加，但我們在資產出售之日繼續將 Calliope 2 成本資本化，並且由於向所有員工發放了特殊獎金，我們的所有營運費用均有所增加，且管理利息支出較上一季度有所減少，原因是到期的利息支出較低，第三季度的利息

On a non IFRS basis our net profit for Q3 2024 was $80.5 million or $2.91 per sens diluted ADS as compared to a non IFRS net loss of $5.8 million or 23 per sens diluted ADS in the prior quarter.

根據非國際財務報告準則，我們 2024 年第三季的淨利潤為 8,050 萬美元，即每股攤薄 ADS 2.91 美元，而上一季的非國際財務報告準則淨虧損為 580 萬美元，即每股攤薄 ADS 23 美元。

And a non IFRS net loss of $6.8 million or 29 per sense diluted ads in the third quarter of 2023.

2023 年第三季的非 IFRS 淨虧損為 680 萬美元，即每股 29 美元的攤薄收益。

The per ADS numbers reflect the change in our ADS to ordinary share ratio.

每股美國存託憑證 (ADS) 的數字反映了我們的美國存託憑證 (ADS) 與普通股比率的變化。

Effective on October 9th, we changed to one ADS representing 10 ordinary shares from one ADs representing four ordinary shares, cash and cash equivalents totaled $173.6 million at the end of Q3 compared to $13.1 million at the end of Q2.

自 10 月 9 日起，我們將 ADS 代表 10 股普通股，從 1 張 ADS 代表 4 股普通股更改為 1 張 ADS 代表 10 股普通股，第三季末的現金和現金等價物總額為 1.736 億美元，而第二季末為 1,310 萬美元。

The Q3 balance includes $172 million in proceeds from the Qualcomm transaction received on September 30th, 2024.

第三季餘額包括 2024 年 9 月 30 日收到的高通交易收益 1.72 億美元。

Subsequent to quarter end, we repaid about $85 million in mature debt and accrued interest lowering the debt balance shown on the balance sheet as of September 30th by the same amount.

在季度末之後，我們償還了約 8,500 萬美元的到期債務和應計利息，從而降低了 9 月 30 日資產負債表上顯示的債務餘額。

Our remaining debt is a loan from the French government as well as advances for R&D projects including for 5G E Redcap development repayable.

我們剩餘的債務是法國政府的貸款以及包括 5G E Redcap 開發在內的研發項目預付款。

Once we begin to commercialize the underlying products in October, we also paid down overdue supplier accounts and fees related to the transaction.

一旦我們在十月開始將基礎產品商業化，我們也會償還逾期的供應商帳戶和與交易相關的費用。

Turning to the outlook, we expect approximately 10% sequential growth in Q4 2024.

展望前景，我們預計 2024 年第四季將環比成長約 10%。

Product revenue is expected to double from Q3 and licensing and service revenues will remain significant including a licensing component related to the Qualcomm deal note that as of the end of September 2024 there's around $13 million of licensing revenue related to the Qualcomm deal that will be recognized between Q4 and 2025 and the timing will depend on the timing of delivery of various IP components.

預計產品收入將較第三季翻一番，授權和服務收入仍將佔比重，其中包括與高通交易相關的授權部分，請注意，截至 2024 年 9 月底，與高通交易相關的授權收入約為 1,300 萬美元，將在第四季度至 2025 年之間確認，具體時間取決於各種 IP 組件的交付時間。

In addition, as George mentioned, we are implementing actions to reduce our cash operating expenses.

此外，正如喬治所提到的，我們正在採取行動降低現金營運費用。

Meaning excluding depreciation amortization and equity compensation expense to be below $10 million per quarter on average in 2025.

這意味著到 2025 年，不包括折舊攤提和股權補償費用，平均每季將低於 1,000 萬美元。

On a final note, we are attending the upcoming Roth MMMKM conference in New York City on November 20th.

最後要說的是，我們將參加 11 月 20 日在紐約舉行的 Roth MMMKM 會議。

Please contact your Roth representative to schedule a one on one with us.

請聯絡您的 Roth 代表，與我們安排一對一的會面。

In addition, Kim Rogers, our IR consultant can assist, can assist in this in scheduling a call with Georges and me.

此外，我們的 IR 顧問 Kim Rogers 可以協助安排與 Georges 和我通話。

Kim's contact information is at the bottom of today's press release.

金的聯絡資訊在今天的新聞稿底部。

At the conclusion of this call, we will post a written version of our formal remarks in the investor relations section of our website on the webcast and presentations page, the same location where you can find the audio replay and I'll turn the call back to George.

在本次電話會議結束時，我們將在我們網站的投資者關係部分的網路廣播和演示頁面上發布正式發言的書面版本，您也可以在同一位置找到音訊重播，然後我會將電話轉回給喬治。

Thank you, Deborah operator.

謝謝接線生 Deborah。

We are ready to open the call for Q&A, please.

我們已準備好開始問答環節。

Thank you.

謝謝。

(Operator Instruction)

（操作員指令）

Our first question comes from the line of Scott from Rock capital.

我們的第一個問題來自 Rock capital 的 Scott。

Please go ahead.

請繼續。

Hey, good morning, good afternoon.

嘿，早上好，下午好。

Congrats on getting the deal closed.

恭喜您完成交易。

Georges and congrats on the improving outlook and customers returning to to buy sequence product.

喬治斯，祝賀前景改善以及客戶回來購買序列產品。

Thank you.

謝謝。

Georges, maybe just to start on that front.

喬治，也許只是從這方面開始。

The product recovery seems to be strongly underway.

產品復甦似乎正在強勁進行。

You provided some details in some of the verticals.

您提供了一些垂直領域的一些細節。

I'm wondering if you could go a little bit more into detail to, to seeing how that recovery progresses into 2025.

我想知道您是否可以更詳細地介紹一下這種復甦在 2025 年的進展。

I

我

know there's a lot of meter opportunities.

知道有很多儀表機會。

There's a lot of fleet opportunities there in the pipeline and how you expect that to kind of continue to ramp in 2025.

目前有大量的船隊機會正在醞釀中，您預計到 2025 年這些機會將繼續增加。

Given that you've got a $250 million design win pipeline and kind of how that's starting to break down also by technologies, you know, are you starting to skew more towards cat one versus cat m any color on that front would be helpful?

鑑於您擁有價值 2.5 億美元的設計中標管道，以及它如何開始按技術細分，您是否開始更傾向於 Cat One 而不是 Cat M，這方面的任何顏色都會有幫助嗎？

I mean, it's got yeah, as you mentioned, I mean, really the design win pipeline is intact and this is maybe the best thing we achieved.

我的意思是，是的，正如你所提到的，我的意思是，設計獲勝管道確實是完整的，這可能是我們所取得的最好的結果。

I would say during in the last couple of years of challenge or a year and a half of challenge because we could, we could lose a lot of these, but customers stick with us, and they continue to design.

我想說在過去幾年或一年半的挑戰中，我們可能會失去很多，但客戶會堅持與我們合作，他們會繼續設計。

And I mentioned a little bit like although the design win conversions was not fast or, or was very minimum, I should say now it's back to life and, and we are seeing traction again and, and we start closing new deals.

我提到過，儘管設計獲勝的轉換速度不快或非常低，但我應該說現在它又恢復了生機，我們再次看到了發展勢頭，我們開始達成新的交易。

But to talk about, you know, the, the specifically the growth, you need to imagine that this year, most of our business was really focusing in terms of product on cat m monarch to revenue, which are projects that they were, they moved to production beginning of the year and, and, and they were progressing, you know, we start seeing new, new ones coming in Q4.

但是要具體談論成長，你需要想像今年我們的大部分業務實際上都集中在產品和收入方面，這些項目在年初就已投入生產，並且正在取得進展，我們開始看到新產品在第四季度上市。

And this will continue next year with more projects turning and when I talk about projects, not necessarily always, by the way, new customers, sometimes we have the same customer with whom we have like multiple projects.

明年這種情況還會繼續，會有更多的專案開始實施。

And in the 1st year, we saw only one project converging to revenue and we are shipping to this customer, but the shipment level remain.

並且在第一年，我們只看到一個項目產生收入，我們正在向該客戶發貨，但出貨量水準保持不變。

I'll say low in comparison to the potential of this customer.

我想說，與該客戶的潛力相比，這個數字很低。

When three more projects will be turning to mass production as scheduled by our customer executing.

另外三個項目也將依照客戶的計畫轉入量產。

So, we're going to see sequential growth, maybe Q1 will be a little bit Q4, as I said, will double Q1 will be okay and then we'll continue from there growing every quarter based on, on what we are seeing in terms of convergence of product.

因此，我們將看到連續的成長，也許第一季會比第四季度增長一點，正如我所說的，第一季將翻一番，然後我們將根據所看到的產品融合情況，每個季度繼續增長。

Really one, you know customer we want just only waiting for the customer to turn to most production and there is an inflection point as well next year related really to what you mentioned about the product nature.

真的，你知道客戶，我們想要的只是等待客戶轉向大部分生產，明年也會有一個轉折點，這確實與你提到的產品性質有關。

As I said, we're shipping more to the monarch and Cat M and Cat 1, this platform we didn't ship much.

正如我所說的，我們向君主、Cat M 和 Cat 1 運送了更多的貨物，而這個平台我們的運送量並不多。

We'll be shipping a little bit in Q4, but really the beginning of this, however, we had many customers projects where you know, turning again to production, we start getting backlog for next year with, some customer ready already with, with their platform and others, you know, to turn to production in more towards end of Q1 and Q2.

我們將在第四季度出貨一些產品，但實際上，在開始階段，我們有許多客戶的項目，你知道，它們又轉向生產，我們開始為明年積壓訂單，一些客戶已經準備好了他們的平台，而其他客戶，你知道，將在第一季末和第二季末轉向生產。

So next year, we are going to have continuity of Monarch 2 projects.

所以明年我們將繼續進行 Monarch 2 專案。

You know, growth with the more projects win and really the conversions of the design win of Calliope 2 touring to mass production next year, I will not say like half next year, maybe in dollar amount that will be 60 40 because the Cat 1 value is higher.

您知道，隨著更多項目的中標，以及 Calliope 2 號巡遊設計中標真正轉化為明年大規模生產，增長將會隨之而來，我不會說明年會有一半，也許以美元計算將是 60 到 40 倍，因為 Cat 1 的價值更高。

The Cat 1 is still in the beginning of the Ram.

Cat 1 仍處於 Ram 的起步階段。

However, in 2026 we could see the Cat 1 as big as Cat M even a little bit higher, I tend to say.

然而，我傾向於認為，到 2026 年，我們可能會看到 Cat 1 與 Cat M 一樣大，甚至更高一些。

Great, very helpful and maybe to just build on that and kind of wrap red cap into the conversation, you know, it's clear from, from going to industry trade shows and events that you guys have kind of been pulled into center stage post the Qualcomm acquisition, you know and it seems like from a design activity standpoint, from a relevant standpoint validation standpoint that's driving that opportunity pipeline, that design win pipeline.

非常好，非常有幫助，也許只是在此基礎上，將紅帽子融入對話中，你知道，從參加行業貿易展覽會和活動可以清楚地看出，在高通收購後，你們已經被拉到了中心舞台，你知道，從設計活動的角度來看，從相關驗證的角度來看，這正在推動這一機會渠道，即設計獲勝渠道。

So, I wonder if you could address that as well with Redcap.

所以，我想知道您是否也可以使用 Redcap 來解決這個問題。

You know, the timing of red cap and it seems like it's becoming increasingly more relevant with customer road maps, particularly on the industrial IoT front in terms of your ability to not only offer cat M and cat one but to migrate to Redcap.

您知道，紅帽的時機似乎與客戶路線圖越來越相關，特別是在工業物聯網方面，您不僅可以提供 Cat M 和 Cat One，還可以遷移到 Redcap。

And so how that's all playing together and when red cap starts to become relevant and who the competition is?

那麼，這一切是如何協同運作的？

Yeah.

是的。

Yeah, I mean, it's maybe just one clarification when we talk about red cap obviously is the family reduced capacity of 5G.

是的，我的意思是，當我們談論紅帽時，可能只需要澄清一點，顯然是 5G 的家庭容量減少。

So it's let's call it low cost 5G and we talk about red cap and E red cap and the difference between the two that Redcap is really for high end IoT for camera application because it allows you to do 100, 150 megabits per second.

因此，我們稱之為低成本 5G，我們討論紅帽和 E 紅帽，以及兩者之間的區別，紅帽真正適用於相機應用的高端物聯網，因為它允許您每秒執行 100、150 兆位元。

While when you go to E red cap, you limit the speed really to, let's say 10 megabit and below.

而當您進入 E 紅帽時，您的速度實際上被限制在 10 兆比特及以下。

And the Redcap is the solution that will be I would say the, the 5G flavor of Cat 1 biz and LTM.

我想說的是，Redcap 就是解決方案，它是 Cat 1 biz 和 LTM 的 5G 版本。

And the red cap will be like addressing high end industrial application.

而紅色的帽子將會像是針對高端工業應用。

So we'll work on the two.

因此我們將致力於解決這兩個問題。

As we said, our Redcap will be faster and we bring something to market next year.

正如我們所說，我們的 Redcap 將會更快，明年我們將向市場推出一些產品。

I don't want to say more on this because we'll be announcing this and you know, our customer, they know on and nd a what we are telling them.

我不想就此多說，因為我們會宣布這一消息，而且我們的客戶知道並知道我們告訴他們什麼。

And we believe the red cap will follow the following year to market from execution point of view in a high level view, what I'm saying here.

而我們相信，從高層次的執行角度來看，紅帽將在接下來的一年中進入市場，這就是我在這裡所說的。

Now, when you look to the demand, this will be, you have to, you need to understand that to get Redcap and a red cap, you want to, you need 5G to be standalone, 5G deployment, standalone where today most of the 5G deployment are non stand alone.

現在，當你看需求時，你必須明白，要獲得 Redcap 和紅帽子，你需要 5G 是獨立的，5G 部署是獨立的，而今天大多數 5G 部署都是非獨立的。

In other words, the device will connect first immediately on 5G.

換句話說，該設備將立即在5G上優先連接。

The device doesn't need at all 4G to connect.

該設備根本不需要 4G 來連接。

And we know that in the US carriers started their deployment of standalone and, and this will take them maybe a couple of years to be I would say nationwide coverage where you know the, the Redcap and E Redcap will be almost a must in, in every place.

我們知道，美國營運商已經開始部署獨立設備，這可能需要幾年時間才能實現全國覆蓋，Redcap 和 E Redcap 幾乎在每個地方都成為必需品。

However, you need to think about it like the customers have concern and because you know, they want really to address the evolution of the network and how they can deploy device today, let's say a meter which is going to stay there for 10 years.

然而，您需要從客戶的角度來考慮這個問題，因為您知道，他們真正想要解決的是網路的發展以及他們今天如何部署設備，比如說一個將在那裡使用 10 年的儀表。

And I would like to get this meter operating over 10 years even more.

我希望這台儀表能運作10年以上。

You could say today, maybe it's okay if I deploy today because I can expect 10 more years of 4G network still available.

您可以今天說，也許我今天部署是可以的，因為我可以預期 4G 網路還可以使用 10 年。

So, if I deploy 5G product, it's fine.

所以，如果我部署5G產品，那就沒問題。

If you project this 2,3 years down the road, you start feeling the same customer.

如果您預測 2、3 年後的情況，您就會開始感受到相同的客戶。

Even if 4G is still operating, he's going to challenge that what he's going to deploy.

即使4G仍在運行，他也會對自己將要部署的內容提出挑戰。

Maybe we will have a problem in 5,6 or 7 years down the road.

也許5、6年或7年後我們會遇到問題。

This means those customer will start asking to have a device capable of supporting Redcap even if they don't want to use it immediately, but they want to have it future proof red cap capable.

這意味著那些客戶將開始要求擁有能夠支援 Redcap 的設備，即使他們不想立即使用它，但他們希望它具有面向未來的 Red Cap 功能。

And this is where why we are pushing for this and essentially support our customer with this transition of the network from 4G to 5G.

這就是我們推動這一進程的原因，並從本質上支持我們的客戶從 4G 到 5G 的網路轉型。

And as I said, we have a very mature platform, LTM and cat one, this, we'll be making some improvement and as usual on existing product.

正如我所說，我們有一個非常成熟的平台，LTM 和 cat one，我們會對現有產品進行一些改進，就像往常一樣。

However, the focus of our R&D will be to innovate on a new platform coming for E RED cap to plan this continuity and support our customers.

然而，我們研發的重點是針對 E RED cap 的新平台進行創新，以規劃這種連續性並支援我們的客戶。

Very, helpful and lastly, if I could just on the licensing front, looks like near term, you're going to have some ongoing licensing recognition of rec from Qualcomm.

非常有幫助，最後，如果我可以就許可方面談談的話，看起來在短期內，你將會得到高通公司的一些持續的許可認可。

But it sounds like there's also a pipeline of opportunities building on the Redcap and E Redcap front that are similar to the licensing deals you've won in the past.

但聽起來 Redcap 和 E Redcap 方面也存在一系列機會，類似於您過去贏得的授權協議。

I'm, wondering if you could elaborate on that front.

我想知道您是否可以就這方面詳細說明。

You know, just how active the engagement pipeline is.

您知道，參與管道有多活躍。

And then I'll get back in the queue.

然後我會回到隊列中。

Thanks.

謝謝。

Yeah Scott, I mean, as you know track record of sequences, you go back even 10 years.

是的，斯科特，我的意思是，正如你所知，序列的記錄可以追溯到 10 年前。

I mean, there is no one year where we didn't do strong licensing and revenue, you know, it was not, it's not the business, the skills, you know, to many $100 millions or whatever, I mean, but this business exists and give the capability to always get 10 plus, maybe sometimes 20 plus and 30 plus million dollars depending on the platform.

我的意思是，沒有哪一年我們沒有獲得豐厚的授權和收入，你知道，這不是業務，不是技能，你知道，不是幾億美元或其他什麼，我的意思是，這項業務是存在的，並且有能力總是獲得1000多萬美元，有時可能2000多萬美元或3000多萬美元，這取決於平台。

And so, and this is because, you know, we are always on the edge with our innovation and we have customer and partner interested in approaching us and get access to this technology and we believe this will continue.

所以，這是因為，你知道，我們始終處於創新的前沿，我們的客戶和合作夥伴有興趣與我們接洽並獲得這項技術，我們相信這種情況會持續下去。

We are engaged with many partners.

我們與許多合作夥伴合作。

Obviously, we will be selective, you know, on the partner because we always do those deals to avoid impacting our product revenue.

顯然，我們會對合作夥伴進行篩選，因為我們總是進行這些交易以避免影響我們的產品收入。

I'll say in terms of relationship by selecting the nature of this partnership.

我將透過選擇這種夥伴關係的性質來從關係的角度來談。

But we are quite optimistic and positive.

但我們非常樂觀和積極。

We have few days under discussion and I'm sure we'll sign more next year in 2025.

我們花了幾天時間進行討論，我相信明年（2025 年）我們會簽署更多協議。

Great, thanks so much.

太好了，非常感謝。

Congrats on closing the deal and looking forward to 2025.

恭喜交易完成，展望 2025 年。

Thanks, Scott.

謝謝，斯科特。

(Operator Instruction)

（操作員指令）

Thank you.

謝謝。

There are no question at this time.

目前沒有問題。

Please continue.

請繼續。

Thank you.

謝謝。

Thank you operator.

謝謝接線生。

Thank you again for joining the call today.

再次感謝您參加今天的電話會議。

Just a few words, you know to conclude this call as I said with the a $250 million,3 years product revenue design win pipeline and the strong support of our customers to the new position of sequence and our innovative product road map, we are confident in our ability to expand our market share in the 4G and 5G IoT marks the road ahead is exciting and I believe sequences is in a strong position to grow and be successful.

我只想說幾句話，在結束這次電話會議時，正如我所說，憑藉 2.5 億美元的 3 年產品收入、設計贏得渠道以及客戶對 Sequence 的新地位和我們創新產品路線圖的大力支持，我們有信心我們能夠擴大我們在 4G 和 5G IoT 領域的市場份額，未來的道路令人興奮，我相信 Sequences 處於強勁的增長地位。

I extend a heartfelt thanks to all our stakeholders who have stood by us and we look forward to your continued support.

我向所有支持我們的利害關係人表示衷心的感謝，並期待你們繼續支持。

Thank you very much.

非常感謝。

Thanks, operator.

謝謝，接線生。

We can close the call now.

我們現在可以結束通話了。

This concludes today's conference call.

今天的電話會議到此結束。

Thank you and you may now disconnect.

謝謝您，您現在可以斷開連線了。