Sequans Divests 50% of Bitcoin Assets Amid Declining Revenue and Increasing

Paris-based Sequans Communications has divested 1,025 bitcoins during the first quarter of 2026, significantly reducing its digital asset reserves by nearly 50% as the Internet of Things (IoT) semiconductor manufacturer contends with diminishing revenues and escalating losses. This shift appears to be a consequence of a treasury strategy that has transitioned from ambitious investment to a burdensome liability.

The recent sale has decreased Sequans’ bitcoin holdings from 2,139 BTC at the close of 2025 to 1,114 BTC by April 30, representing the second major divestiture in a six-month period. This is notable given that the company had previously announced its intention to accumulate 3,000 bitcoin as a “long-term store of value” less than a year ago.

The financial strain on Sequans is evident in its reported figures. The company disclosed revenue of $6.1 million for the quarter ending March 31, a decline of 24.8% from $8.1 million in the same quarter of the previous year. This year-over-year comparison highlights the company’s vulnerabilities, as the prior year’s figures included significant one-time licensing and services revenues from Qualcomm, which did not recur, thereby exposing underlying weaknesses in product sales.

Despite a 45% increase in product sales compared to the year-ago quarter, the gross margin has notably compressed from 64.5% to 37.7%, primarily due to the introduction of lower-margin hardware displacing more profitable licensing income. For a company facing cash flow challenges, this shift in revenue mix exacerbates the difficulties.

Sequans’ Strategy Regarding Bitcoin Has Become a Financial Burden

The bitcoin assets that CEO Georges Karam once characterized as beneficial for the balance sheet have, in fact, resulted in substantial financial losses. For the quarter, the company reported operating losses of $50.5 million, which were significantly influenced by $29.3 million in unrealized impairment charges related to its bitcoin holdings and $11.7 million in realized losses incurred from the sale of digital assets.

The proceeds from these bitcoin sales have been allocated towards the redemption of convertible debt and the funding of an American Depositary Share buyback program. This pragmatic strategy serves to reduce liabilities but also indicates a shift in treasury strategy from asset accumulation to asset liquidation.

Among the remaining bitcoin holdings, a substantial portion is encumbered. As of April 30, 817 bitcoin—equivalent to 73% of the current holdings, valued at $62.3 million—remain pledged as collateral for $35.9 million in outstanding convertible notes. This over-collateralization reflects the caution employed by lenders in light of cryptocurrency’s inherent volatility.

The remaining debt is due for redemption by June 1, 2026, after which all bitcoin will be unrestricted and available for sale. It remains uncertain whether Sequans will choose to retain these assets or continue to liquidate them to support ongoing operations.

The net loss for the company totaled $54.3 million, equating to $3.73 per diluted American Depositary Share (ADS), a marked increase in contrast to a net loss of $7.3 million, or $0.29 per ADS, in the same quarter the previous year. On a non-IFRS basis—excluding impairment charges, stock-based compensation, and accounting adjustments related to convertible debt—the net loss was still substantial at $20.7 million, or $1.42 per ADS.

CEO Georges Karam characterized the bitcoin sales as “decisive steps to simplify and strengthen our balance sheet,” while also pointing to positive momentum within the company’s core IoT semiconductor operations. He mentioned an increasing backlog, advancing design wins, and customer interest in Cat-M, Cat-1bis, and 5G eRedCap connectivity solutions, as well as newly developed RF transceivers for drone and defense applications.

Over the past six months, Sequans’ stock has decreased by 51.5%, trading at $3.01, reflecting investor skepticism regarding the efficacy of both the bitcoin strategy and the overall trajectory of the core business.

The company ranks 40th among publicly traded entities holding bitcoin, trailing significantly behind competitors such as Strategy, with 818,334 BTC, and Twenty One Capital, holding 43,514 BTC.

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