Sequans Slashes Bitcoin Holdings by Half Amid Revenue Decline and Heavy Losses in Q1 2026

Paris-based Sequans Communications sold 1,025 bitcoin during the first quarter of 2026, nearly halving its digital asset reserves as the IoT semiconductor company faced declining revenue and mounting losses tied to its treasury strategy.

The sale reduced Sequans’ bitcoin position from 2,139 BTC at year-end 2025 to 1,114 BTC by April 30, 2026. This marks the second major disposal in six months for a company that, less than a year ago, had announced plans to accumulate 3,000 bitcoin as a long-term store of value.

Revenue and Financial Performance

Sequans reported revenue of $6.1 million for the quarter ended March 31, 2026, a 24.8% decline from $8.1 million in the same period a year earlier. The drop reflects the company’s vulnerability, as the prior-year period included significant license and services revenue from Qualcomm that did not recur.

While product sales increased 45% year-over-year, gross margin compressed to 37.7% from 64.5%, as lower-margin hardware replaced lucrative licensing income. For a cash-burning company, this shift in revenue mix further strained financial stability.

Bitcoin Strategy Turns Burdensome

Sequans’ bitcoin holdings, once framed by CEO Georges Karam as a balance-sheet asset, have become a source of substantial losses. Operating losses reached $50.5 million in the quarter, driven by $29.3 million in unrealized impairment charges on bitcoin holdings and $11.7 million in realized losses from selling the digital assets.

The company used proceeds from the bitcoin sales to redeem convertible debt and fund an American Depositary Share buyback program, a pragmatic move to reduce liabilities but one that underscores how its treasury strategy has shifted from accumulation to liquidation.

Encumbered Bitcoin Holdings

As of April 30, 2026, Sequans held 1,114 BTC, with 817 bitcoin—representing 73% of current holdings valued at $62.3 million—pledged as collateral for $35.9 million in outstanding convertible notes. The pledged bitcoin exceeds the debt value, reflecting over-collateralization required by lenders wary of cryptocurrency volatility.

The remaining debt is scheduled for redemption by June 1, 2026, after which all bitcoin will be unrestricted and available for sale. Whether Sequans will retain those assets or continue liquidating to fund operations remains uncertain.

Net Loss and Shareholder Impact

Sequans reported a net loss of $54.3 million, or $3.73 per diluted ADS, compared to a $7.3 million net loss, or $0.29 per ADS, in the prior-year quarter. Even on a non-IFRS basis—which excludes impairment charges, stock-based compensation, and accounting adjustments related to convertible debt—the net loss was $20.7 million, or $1.42 per ADS.

"These bitcoin sales are decisive steps to simplify and strengthen our balance sheet," said CEO Georges Karam. He also highlighted momentum in the company’s core IoT semiconductor business, citing a growing backlog, maturing design wins, and customer interest in Cat-M, Cat-1bis, and 5G eRedCap connectivity solutions, as well as new RF transceivers for drones and defense applications.

Sequans shares have fallen significantly in response to the financial pressures and strategic shifts.