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Sequans Communications, headquartered in Paris, divested 1,025 bitcoin during the first quarter of 2026, diminishing its cryptocurrency reserves by nearly half as the IoT semiconductor manufacturer contended with shrinking revenue and escalating deficits stemming from a treasury strategy that evolved from bold to burdensome.
This transaction reduced Sequans’ bitcoin holdings from 2,139 BTC at the close of 2025 to 1,114 BTC by April 30. This marks the second significant sell-off within a six-month period for the company, which less than a year ago had announced intentions to amass 3,000 bitcoin as a “long-term store of value.”
The financial strain is clearly reflected in the figures. Sequans reported $6.1 million in revenue for the quarter ending March 31, a 24.8% decrease compared to $8.1 million in the prior year. The year-over-year comparison highlights the company’s vulnerability: the preceding year’s period included substantial licensing and service revenues from Qualcomm that have not been repeated, thereby exposing the underlying weakness in product sales.
Although product sales saw a 45% increase from the same quarter last year, the gross margin contracted to 37.7% from 64.5%, as lower-margin hardware replaced the profitable licensing income. For a company experiencing cash burn, this alteration in the revenue composition intensifies the challenge.
Sequans’ Bitcoin strategy transitioned into a liability
The bitcoin reserves, which CEO Georges Karam had previously described as a balance sheet asset, have now become a source of considerable losses. Operating deficits reached $50.5 million in the quarter, primarily due to $29.3 million in unrealized impairment charges on its bitcoin holdings and $11.7 million in realized losses from the sale of these digital assets.
The company utilized the proceeds from its bitcoin sales to retire convertible debt and finance a share buyback program for American Depositary Shares. While this was a practical measure to decrease liabilities, it underscores the shift in the treasury strategy from accumulation to divestment.
The majority of the remaining bitcoin holdings are significantly encumbered. Of the 1,114 BTC held as of April 30, 817 bitcoin – representing 73% of the current reserves valued at $62.3 million – remain pledged as collateral for $35.9 million in outstanding convertible notes. The pledged bitcoin surpasses the debt amount, indicating the excessive collateralization demanded by lenders cautious of cryptocurrency fluctuations.
The remaining debt is slated for redemption by June 1, 2026, after which all bitcoin will be unencumbered and available for liquidation. Whether Sequans will continue to hold these assets or proceed with further sales to support operations remains an unanswered question.
The net loss amounted to $54.3 million, or $3.73 per diluted ADS, in contrast to $7.3 million, or $0.29 per ADS, in the corresponding quarter of the previous year. Even on a non-IFRS basis – which excludes impairment charges, stock-based compensation, and accounting adjustments related to convertible debt – the net loss was substantial at $20.7 million, or $1.42 per ADS.
CEO Georges Karam characterized the bitcoin sales as “decisive actions to streamline and fortify our balance sheet,” while also emphasizing the positive momentum within the company’s core IoT semiconductor business.
He pointed to an expanding order backlog, the maturation of design wins, and customer interest in Cat-M, Cat-1bis, and 5G eRedCap connectivity solutions, as well as new RF transceivers designed for drones and defense applications.
Sequans shares have experienced a 51.5% decline over the past six months, settling at $3.01, reflecting investor apprehension regarding both the bitcoin strategy and the outlook for the core business.
The company is positioned 40th among publicly traded entities holding bitcoin, significantly trailing Strategy’s 818,334 BTC and Twenty One Capital’s 43,514 BTC.
Learn more at : bitcoinmagazine.com