Sequans Communications S.A. revenue returned to growth in FY2020: increased 65.0% vs. 23.3% decline a year earliner
02/09/2021 • About Sequans Communications S.A. (
$SQNS) • By InTwits
Sequans Communications S.A. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -29.3%
- Sequans Communications S.A. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 was 0.8% while average EBITDA Margin was -40.9% for the sames years
- Sequans Communications S.A. has high CAPEX intensity: 5 year average CAPEX/Revenue was 20.9%. At the same time it's a lot of higher than industry average of 7.3%.
- CAPEX is quite volatile: $14m in FY2020, $9m in FY2019, $9m in FY2018, $6m in FY2017, $5m in FY2016
- The company has unprofitable business model: ROIC is -201.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 65.0%. Revenue growth showed acceleration in FY20Q4 - it increased 97.4% YoY. During the last 5 years Revenue growth bottomed in FY2019 at -23.3%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.3 pp from 7.3% to 10.6% in 2020.
Gross Margin increased on 5.9 pp from 40.1% to 46.1% in FY2020. During FY2016-FY2020 Gross Margin bottomed in FY2018 at 39.5% and was growing since that time. SG&A as a % of Revenue dropped on 19.6 pp from 53.6% to 33.9% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue topped in FY2019 at 53.6%.
Net Income margin surged on 11.9 pp from -119% to -107% in FY2020. Net Income margin stuck to a declining trend at -17.0 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
Sequans Communications S.A.'s CAPEX/Revenue was 27.1% in FY2020. The company's CAPEX/Revenue jumped on 13.7 pp from 13.3% in FY2017 to 27.1% in FY2020. It's average CAPEX/Revenue for the last three years was 26.5%. CAPEX as a % of Revenue grew at 4.7 pp per annum in FY2016-FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.3x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2020. Debt jumped on 16.5% while cash dropped on 46.3%.
Sequans Communications S.A. has no short term refinancing risk: cash is higher than short term debt (155.2%).
Financial and operational results
Sequans Communications S.A. ($SQNS) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 45.579 | 48.263 | 40.250 | 30.864 | 50.916 | 65.0% |
| Gross Profit | 19.983 | 21.141 | 15.888 | 12.379 | 23.450 | 89.4% |
| SG&A | 13.393 | 15.464 | 19.496 | 16.538 | 17.281 | 4.5% |
| EBITDA | -14.449 | -13.950 | -25.354 | -19.553 | -14.913 | |
| EBIT | | | | -27.958 | | |
| Net Income | -24.787 | -26.160 | -36.224 | -36.697 | -54.476 | |
| Stock Based Compensation | | | | 1.797 | | |
Balance Sheet
|
|---|
| Cash | 20.202 | 2.948 | 12.086 | 14.098 | 7.574 | -46.3% |
| Accounts Receivable | | | | 8.390 | | |
| Inventory | | | | 6.664 | | |
| Accounts Payable | | | | 8.834 | | |
| Short Term Debt | 0.601 | 1.592 | 0.688 | 2.372 | 4.881 | 105.8% |
| Long Term Debt | 16.338 | 17.063 | 19.723 | 39.767 | 44.211 | 11.2% |
Cash flow
|
|---|
| Capex | 5.390 | 6.422 | 9.208 | 9.146 | 13.775 | 50.6% |
Ratios
|
|---|
| Revenue growth | 40.1% | 5.9% | -16.6% | -23.3% | 65.0% | |
| EBITDA growth | -21.3% | -3.5% | 81.7% | -22.9% | -23.7% | |
|
|---|
| Gross Margin | 43.8% | 43.8% | 39.5% | 40.1% | 46.1% | 5.9% |
| EBITDA Margin | -31.7% | -28.9% | -63.0% | -63.4% | -29.3% | 34.1% |
| EBIT Margin | | | | -90.6% | |
| SG&A, % of revenue | 29.4% | 32.0% | 48.4% | 53.6% | 33.9% | -19.6% |
| SBC, % of revenue | | | | 5.8% | |
| Net Income Margin | -54.4% | -54.2% | -90.0% | -118.9% | -107.0% | 11.9% |
| CAPEX, % of revenue | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% | -2.6% |
|
|---|
| ROIC | -114.6% | -80.3% | -165.0% | -199.9% | -201.2% | -1.2% |
| ROE | | -402.2% | | | | |
People
|
|---|
| Insider ownership | | | | 4.6% | | |
| Employees | | | | 208 | | |
| Revenue/Employee, th. $ | | | | 148 | | |
Sequans Communications S.A. ($SQNS) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 9 | 12 | 14 | 16 | | 25.3% | 52.9% | 101.7% | 97.4% |
| EBITDA | -6 | -3 | -3 | -3 | | - | - | - | - |
| Net Income | -11 | -19 | -9 | -11 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 5 | 18 | 10 | 8 | | -35.8% | 193.0% | 73.1% | -45.9% |
| Short Term Debt | 8 | 3 | 10 | 5 | | -12.0% | -63.2% | -26.7% | 144.1% |
| Long Term Debt | 48 | 53 | 42 | 44 | | 11.0% | 141.7% | 6.1% | 10.5% |
Ratios
|
|---|
| Gross Margin | 51.3% | 48.3% | 42.0% | 45.1% | | 10.3% | 8.3% | 4.0% | 4.1% |
| EBITDA Margin | -63.8% | -26.1% | -23.4% | -17.9% | | 7.7% | 36.4% | 62.3% | 32.1% |
| Net Income Margin | -120.9% | -155.0% | -63.7% | -71.3% | | 7.7% | -42.5% | 64.9% | 53.7% |
Peers in Semiconductors
Below we provide Sequans Communications S.A. benchmarking against other companies in Semiconductors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| Monolithic Power Systems, Inc. ($MPWR) | - | 21.2% | 23.7% | 7.8% | 34.5% |
| |
|---|
| Median (43 companies) | 1.2% | 11.0% | 4.9% | -3.0% | 1.0% |
|---|
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| |
|---|
| Median (43 companies) | 48.0% | 49.1% | 50.4% | 50.7% | 49.4% |
|---|
| Sequans Communications S.A. ($SQNS) | 43.8% | 43.8% | 39.5% | 40.1% | 46.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.8% | 13.6% | 17.4% |
|---|
| Sequans Communications S.A. ($SQNS) | -31.7% | -28.9% | -63.0% | -63.4% | -29.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| Rambus, Inc. ($RMBS) | 2.5% | 2.4% | 4.7% | 2.9% | 12.2% |
| |
|---|
| Median (40 companies) | 3.6% | 4.7% | 4.2% | 3.7% | 3.6% |
|---|
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (45 companies) | 1.7% | 3.2% | 3.0% | 3.8% | 5.5% |
|---|
| Sequans Communications S.A. ($SQNS) | -114.6% | -80.3% | -165.0% | -199.9% | -201.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| |
|---|
| Median (32 companies) | 0.2x | 0.4x | 0.3x | 0.5x | 0.3x |
|---|
