Paris-Based Chipmaker Sequans Cuts Bitcoin Reserves in Half Amid Revenue Downturn and Growing Losses

Introduction

Sequans Communications, a Paris-based semiconductor company specializing in IoT connectivity, reduced its bitcoin holdings by nearly half during the first quarter of 2026. The firm sold 1,025 BTC, dropping its digital asset reserves from 2,139 BTC at the end of 2025 to 1,114 BTC by April 30. This marks the second substantial disposal in six months for a company that less than a year earlier had outlined plans to amass 3,000 bitcoin as a long-term store of value.

Paris-Based Chipmaker Sequans Cuts Bitcoin Reserves in Half Amid Revenue Downturn and Growing Losses — Source: bitcoinmagazine.com

Financial Pressures Mount as Revenue Slips

The decision to sell comes as Sequans faces a sharp decline in revenue. For the quarter ending March 31, the company reported $6.1 million in revenue, a drop of 24.8% compared to $8.1 million in the same period a year earlier. This year-over-year comparison highlights the company's vulnerability: the prior-year period included substantial license and services income from Qualcomm that did not recur, exposing underlying weaknesses in product sales.

Shift in Revenue Mix Hits Margins

While product sales actually increased by 45% from the year-ago quarter, gross margin contracted significantly—from 64.5% to 37.7%. The shift occurred as lower-margin hardware replaced the lucrative licensing income. For a cash-burning company, this change in revenue composition adds to the financial strain.

The Bitcoin Strategy Becomes a Liability

What CEO Georges Karam once described as a balance-sheet asset has turned into a source of heavy losses. Operating losses for the quarter totaled $50.5 million, driven by $29.3 million in unrealized impairment charges on bitcoin holdings and $11.7 million in realized losses from the sale of digital assets.

Liquidating to Reduce Debt and Buy Back Shares

Proceeds from the bitcoin sales were used to redeem convertible debt and fund an American Depositary Share buyback program. This pragmatic move reduces liabilities but underscores a stark shift from accumulation to liquidation in the company's treasury strategy.

Encumbered Holdings and Uncertain Future

The remaining bitcoin holdings are largely tied up. As of April 30, 817 of the 1,114 BTC—73% of current holdings valued at $62.3 million—remained pledged as collateral for $35.9 million in outstanding convertible notes. The over-collateralization reflects lenders' caution regarding 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 hold onto those assets or continue selling to fund operations remains unclear.

CEO Comments and Outlook

CEO Georges Karam framed the bitcoin sales as a necessary step to strengthen the balance sheet. The net loss for the quarter reached $54.3 million, or $3.73 per diluted ADS, compared to $7.3 million, or $0.29 per ADS, in the prior-year period. 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.

Internal links: Financial Pressures, Bitcoin Strategy as Liability, Encumbered Holdings.