Paris-based Sequans Communications has made a significant move in its financial strategy by selling 1,025 bitcoins during the first quarter of 2026, reducing its digital asset reserves by nearly half. This decision comes amid ongoing challenges as the IoT semiconductor maker faces declining revenues and increasing losses linked to a treasury strategy that has transformed from an ambitious pursuit to a burdensome liability.
Following this sale, Sequans’ bitcoin holdings declined from 2,139 BTC at the end of 2025 to 1,114 BTC by April 30. This marks the company’s second substantial disposal of digital assets within just six months. Notably, less than a year ago, Sequans expressed intentions to accumulate 3,000 bitcoins as a “long-term store of value,” a plan that seems increasingly out of reach.
The financial impact of these decisions is stark. Sequans reported revenues of $6.1 million for the quarter ending March 31, reflecting a significant 24.8% drop from $8.1 million the previous year. This decrease highlights the vulnerability of the company, particularly since the prior-year figures included substantial licensing and services income from Qualcomm—revenue that has not recurred, exposing weaknesses in core product sales.
Although product sales increased by 45% compared to the year-ago quarter, the overall gross margin suffered, contracting to 37.7% from 64.5%. This decline is attributed to lower-margin hardware sales taking precedence over more lucrative licensing income. For an organization already experiencing cash burn, this shift in revenue mix exacerbates the challenges ahead.
Sequans’ strategy regarding its bitcoin holdings, initially viewed as a potential asset for the balance sheet, has instead turned into a significant financial liability. The company reported operating losses of $50.5 million for the quarter, propelled by $29.3 million in unrealized impairment charges related to its bitcoin assets, as well as $11.7 million in realized losses from the sale of those assets.
The proceeds from the bitcoin sale were utilized to redeem convertible debt and support an American Depositary Share buyback program. While this strategic shift may alleviate some liabilities, it starkly illustrates how the company’s treasury approach has transitioned from asset accumulation to a liquidation strategy.
Of the remaining bitcoin holdings, a substantial portion is currently encumbered. As of April 30, 817 bitcoins—representing 73% of the current holdings valued at $62.3 million—are pledged as collateral for $35.9 million in outstanding convertible notes. This over-collateralization, required by cautious lenders wary of cryptocurrency’s volatility, underscores the precariousness of Sequans’ situation.
The remaining convertible debt is expected to be redeemed by June 1, 2026, after which all bitcoin assets would be unrestricted and available for sale. It remains unclear whether Sequans will retain these assets or proceed with further liquidation to support operational needs.
The company experienced a net loss of $54.3 million, or $3.73 per diluted ADS, a stark comparison to a net loss of $7.3 million, or $0.29 per ADS, during the same quarter a year earlier. Even when adjusted for non-IFRS measures—excluding impairment charges and stock-based compensation—the net loss was still significant at $20.7 million, or $1.42 per ADS.
In light of these developments, CEO Georges Karam emphasized that the bitcoin sales represent “decisive steps to simplify and strengthen our balance sheet.” He also pointed to a growing backlog within the company’s core IoT semiconductor business, highlighting progress with design wins and customer interest in various connectivity solutions.
Despite these optimistic remarks, Sequans shares have plummeted by 51.5% over the past six months, now trading at $3.01. This decline reflects investor skepticism regarding both the company’s bitcoin strategy and the trajectory of its core business.
Among publicly traded firms holding bitcoin, Sequans ranks 40th, trailing far behind larger holders like Strategy, which owns 818,334 BTC, and Twenty One Capital with 43,514 BTC.
