NEWS

Sequans Communications Announces Preliminary

FirstQuarter2020Financial Results

PARIS - April 23, 2020 - Sequans Communications S.A. (NYSE: SQNS), a leading developer and provider of 5G/4G chips and modules, today announced preliminary financial results for the first quarter ended March 31, 2020.

First Quarter 2020 Highlights:

Revenue: Revenue was $8.8 million, a decrease of 4.3% compared to the fourth quarter of 2019 and an increase of 35.6% compared to the first quarter of 2019.

Gross margin: Gross margin was 51.3% compared to 47.0% in the fourth quarter of 2019, and compared to 35.9% in the first quarter of 2019.

Operating loss: Operating loss was $7.8 million compared to $5.6 million in the fourth quarter of 2019 and $8.0 million in the first quarter of 2019.

Net loss: Net loss was $10.6 million, or ($0.44) per diluted ADS, compared to $9.2 million, or ($0.38) per ADS, in the fourth quarter of 2019 and $9.6 million, or ($0.41) per ADS, in the first quarter of 2019.

Non-IFRS Net loss: Excluding the non-cash stock-based compensation, the non-cash impact of convertible debt amendments, effective interest adjustments related to the convertible debt and other financings, and deferred tax benefit or expense related to the convertible debt and other financings, non-IFRS net loss was $8.7 million, or ($0.36) per ADS, compared to $7.9 million, or ($0.33) per ADS in the fourth quarter of 2019, and $8.3 million, or ($0.35) per ADS, in the first quarter of 2019.

Cash: Cash and cash equivalents at March 31, 2020 totaled $5.1 million compared to $14.1 million at December 31, 2019. The cash balance at the end of March 2020 excludes $2.2 million in proceeds from a new loan from BPI France, the French government investment bank, as well as $2.8 million expected in May from the payment of the 2019 French research credit and €5 million of proceeds from new French government debt financing expected to be finalized in the second quarter as part of the French Covid-19 economic support plan.

In millions of US$ except percentages, shares and per share amounts	Key Metrics
	Q1 2020			%*		Q4 2019 (1)			%*		Q1 2019 (1)			%*
Revenue		$8.8					$9.2					$6.5
Gross profit	4.5			51.3	%	4.3			47.0	%	2.3			35.9	%
Operating loss	(7.8		)	(88.8	)%	(5.6		)	(61.0	)%	(8.0		)	(123.3	)%
Net loss (2)	(10.6		)	(120.9	)%	(9.2		)	(99.8	)%	(9.6		)	(148.6	)%
Diluted earnings per ADS		($0.44	)				($0.38	)				($0.41	)
Weighted average number of diluted ADS	23,904,935					23,797,256					23,697,182
Cash flow from (used in) operations	(7.7		)			16.3					(4.6		)
Cash, cash equivalents and short-term deposit at quarter-end	5.1					14.1					7.6
Additional information on non-cash items:
- Stock-based compensation included in operating result	0.7					0.5					0.5
- Non-cash interest on convertible debt and other financing	1.3					1.3					0.9
- Non-cash impact of deferred tax expense (benefit)	—					(0.5		)			(0.1		)
Non-IFRS diluted earnings per ADS (excludes non-cash stock-based compensation, impact of convertible debt amendments, effective interest adjustments related to the convertible and other debt and embedded derivative, impact of revaluation of interest-free government loan) and related deferred tax benefit (expense)		($0.36	)				($0.33	)				($0.35	)

* Percentage of revenue

(1) Updated from the prior earnings releases; as set forth in the annual report on Form 20-F

(2) Preliminary financial results: The Company has not yet finalized its valuation of the March 20, 2020 amendments to the Company's five issues of convertible debt. The accounting entries resulting from this process are expected to lead to changes in presented financial and deferred tax expenses and the consolidated IFRS net loss for the period, as well as certain balance sheet accounts, but are not expected to change the Company’s cash position, operating results or non-IFRS loss.

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”On balance, the impact thus far on the demand for our products from COVID-19-related developments is more positive than negative,’ said Georges Karam, CEO of Sequans. ‘We are seeing a continuation of the surge in demand for modules from the U.S. for use in portable routers. This augments the ongoing improvement expected in our Broadband IoT business driven by new customers serving emerging markets and our strong position in the Citizens Broadband Radio Service (CBRS) market. In our Massive IoT business, demand associated with devices that are in mass production is good, and we are seeing more interest in solutions for devices and applications serving a reduced-contact economy, from industrial monitoring to remote healthcare. The real promise of 5G has never been more apparent than ever in this environment where existing networks are straining to meet current needs.

“On the operations side, our contract manufacturers in China have returned to normal operations after restrictions prompted by COVID-19 caused some capacity constraints for modules during Q1. Most of our own people are still operating under stay-at-home restrictions, with a high degree of productivity given the inherent challenges.

‘With a large backlog of orders, we expect significant revenue growth in the second quarter despite certain supply and delivery risks. We are taking measures to deal with extended lead times on some components, and we are also adding more module capacity, since we see the module demand in Broadband IoT remaining at a relatively high level even after stay-at-home orders are lifted. Meanwhile, we continue to keep a close watch on Massive IoT projects scheduled to launch later this year, which could be subject to delays or changes in priorities due to this unprecedented situation.

“While technology can’t begin to compensate for the human and economic hardship caused by this global pandemic, we are gratified to be able to contribute by supplying connectivity to a variety of devices that help people and businesses carry on and make the transition to the next phase. More significant than the specific level of business in a particular accounting period is the likelihood that this crisis will reinforce and perhaps accelerate established trends that we expect to fuel our growth over the coming years.”

Q2 2020 Outlook

The following statement is based on management’s current assumptions and expectations and assumes no increase in the severity or duration of the COVID-19 pandemic. This statement is forward-looking and actual results may differ materially. Sequans undertakes no obligation to update this statement.

Sequans expects revenue of at least $12 million for the second quarter of 2020, which represents more than 35% sequential growth and approximately 50% growth year over year. The backlog of orders and indications regarding customer demand support upside to this expectation, but the company also sees risks, including potential supply chain issues, caused by the impact of the coronavirus.

Conference Call and Webcast

Sequans plans to conduct a teleconference and live webcast to discuss the financial results for the first quarter of 2020 today, April 23, 2020 at 8:00 a.m. EDT /14:00 CEST. To participate in the live call, analysts and investors should dial 800-347-6311, or 646-828-8144 if outside the U.S. When prompted, provide the event title or access code: 7634244. A live and archived webcast of the call will be available from the Investors section of the Sequans website at www.sequans.com/investors/. An audio replay of the conference call will be available until April 30, 2020 by dialing toll free 888-203-1112 or 719-457-0820 from outside the U.S., using the following access code: 7634244.

Forward Looking Statements

This press release contains projections and other forward-looking statements regarding future events or our future financial performance and potential financing sources. All statements other than present and historical facts and conditions contained in this release, including any statements regarding our preliminary results for the first quarter of 2020, expected revenue for the second quarter of 2020, the timing and availability of expected debt financing and tax credits, future results of operations and financial positions, business strategy and plans, expectations for Massive IoT and Broadband and Critical IoT sales, the ability to continue to operate remotely at high levels of productivity, increasing backlog of orders, the impact of the coronavirus on our manufacturing operations, ability to operate remotely, and on customer demand, and our objectives for future operations, are forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these

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risks and uncertainties, you should not place undue reliance on these forward-looking statements. Actual events or results may differ materially from those contained in the projections or forward-looking statements. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: (i) the contraction or lack of growth of markets in which we compete and in which our products are sold, (ii) unexpected increases in our expenses, including manufacturing expenses, (iii) our inability to adjust spending quickly enough to offset any unexpected revenue shortfall, (iv) delays or cancellations in spending by our customers, (v) unexpected average selling price reductions, (vi) the significant fluctuation to which our quarterly revenue and operating results are subject due to cyclicality in the wireless communications industry and transitions to new process technologies, (vii) our inability to anticipate the future market demands and future needs of our customers, (viii) our inability to achieve new design wins or for design wins to result in shipments of our products at levels and in the timeframes we currently expect, (ix) our inability to enter into and execute on strategic alliances, (x) (our ability to meet performance milestones under strategic license agreements, (xi) the impact of natural disasters on our sourcing operations and supply chain, (xii) our ability to remediate material weaknesses in our internal controls relating to the impact of accounting changes relating to deferred tax assets and deferred tax liabilities related to the application of IFRS to deferred taxes on debt instruments with equity components, (xiii) the impact of the coronavirus on the ability to operate our business and research, production of our products or demand for our products by customers whose supply chain is impacted or whose operations have been impacted by government shelter-in-place or similar orders, (xiv) the impact of the coronavirus on capital markets and our ability to raise debt and equity financing, and (xv) other factors detailed in documents we file from time to time with the Securities and Exchange Commission. The financial results described in this earnings release should be considered preliminary, and are subject to change to reflect the completion of our valuation of the convertible debt amendments made in March 2020 and posting of related accounting entries.

Use of Non-IFRS/non-GAAP Financial Measures

To supplement our unaudited consolidated financial statements prepared in accordance with IFRS, we disclose certain non-IFRS, or non-GAAP, financial measures. These measures exclude the non-cash stock-based compensation and the non-cash impacts of convertible debt amendments, effective interest adjustments related to the convertible debt and other financings, and deferred tax benefit or expense related to the convertible debt and other financings. We believe that these measures can be useful to facilitate comparisons among different companies. These non-GAAP measures have limitations in that the non-GAAP measures we use may not be directly comparable to those reported by other companies. We seek to compensate for this limitation by providing a reconciliation of the non-GAAP financial measures to the most directly comparable IFRS measures in the table attached to this press release.

About Sequans Communications

Sequans Communications S.A. (NYSE: SQNS) is a leading developer and provider of 5G and 4G chips and modules for IoT devices. For 5G/4G massive IoT applications, Sequans provides a comprehensive product portfolio based on its flagship Monarch LTE-M/NB-IoT and Calliope Cat 1 chip platforms, featuring industry-leading low power consumption, a large set of integrated functionalities, and global deployment capability. For 5G/4G broadband and critical IoT applications, Sequans offers a product portfolio based on its Cassiopeia 4G Cat 4/Cat 6 and high-end Taurus 5G chip platforms, optimized for low-cost residential, enterprise, and industrial applications. Founded in 2003, Sequans is based in Paris, France with additional offices in the United States, United Kingdom, Israel, Hong Kong, Singapore, Sweden, Taiwan, South Korea, and China.

Visit Sequans online atwww.sequans.com; www.facebook.com/sequans; www.twitter.com/sequans

Media Relations: Kimberly Tassin, +1.425.736.0569, Kimberly@sequans.com

Investor Relations: Claudia Gatlin, +1 212.830.9080, Claudia@sequans.com

Condensed financial tables follow

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SEQUANS COMMUNICATIONS S.A.

PRELIMINARY UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

		Three months ended
(in thousands of US$, except share and per share amounts)		March 31, 2020 (2)			Dec 31, 2019 (1)			March 31, 2019 (1)
Revenue :
	Product revenue	$	5,501		$	5,054		$	4,111
	Other revenue	3,271			4,112			2,357
Total revenue		8,772			9,166			6,468
Cost of revenue
	Cost of product revenue	3,897			4,526			3,575
	Cost of other revenue	373			332			574
Total cost of revenue		4,270			4,858			4,149
Gross profit		4,502			4,308			2,319
Operating expenses :
	Research and development	7,421			5,664			6,157
	Sales and marketing	2,264			1,864			2,221
	General and administrative	2,605			2,374			1,913
Total operating expenses		12,290			9,902			10,291
Operating loss		(7,788		)	(5,594		)	(7,972		)
Financial income (expense):
	Interest income (expense), net	(3,455		)	(3,110		)	(1,976		)
	Other financial expenses	—			—			—
	Foreign exchange gain (loss)	675			(822		)	322
Loss before income taxes		(10,568		)	(9,526		)	(9,626		)
Income tax expense (benefit)		33			(374		)	(17		)
Loss		$	(10,601	)	$	(9,152	)	$	(9,609	)
Attributable to :
	Shareholders of the parent	(10,601		)	(9,152		)	(9,609		)
	Minority interests	—			—			—
Basic loss per ADS			($0.44	)		($0.38	)		($0.41	)
Diluted loss per ADS			($0.44	)		($0.38	)		($0.41	)
Weighted average number of ADS used for computing:
— Basic		23,904,935			23,797,256			23,697,182
— Diluted		23,904,935			23,797,256			23,697,182
(1) Updated from the prior earnings releases; as set forth in the annual report on Form 20-F
(2) The preliminary financial results do not include the valuation of the March 20, 2020 amendments to the Company's five issues of convertible debt.

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SEQUANS COMMUNICATIONS S.A.

PRELIMINARY UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

		At March 31,			At Dec 31,
(in thousands of US$)		2020 (2)			2019 (1)
ASSETS
	Non-current assets
	Property, plant and equipment	$	9,066		$	8,858
	Intangible assets	20,462			16,696
	Deposits and other receivables	437			401
	Other non-current financial assets	327			335
	Total non-current assets	30,292			26,290
	Current assets
	Inventories	6,146			6,664
	Trade receivables	8,775			8,390
	Contract assets	1,051			1,587
	Prepaid expenses and other receivables	6,844			2,556
	Recoverable value added tax	871			598
	Research tax credit receivable	3,817			3,132
	Cash and cash equivalents	5,137			14,098
	Total current assets	32,641			37,025
Total assets		$	62,933		$	63,315
EQUITY AND LIABILITIES
	Equity
	Issued capital, euro 0.02 nominal value, 95,784,174 shares authorized, issued and outstanding at March 31, 2020 (95,587,146 shares at December 31, 2019)	$	2,407		$	2,403
	Share premium	233,743			233,720
	Other capital reserves	44,323			43,656
	Accumulated deficit	(319,334		)	(308,733		)
	Other components of equity	(876		)	(607		)
	Total equity	(39,737		)	(29,561		)
	Non-current liabilities
	Government grant advances and loans	6,234			6,150
	Venture debt	5,722			7,071
	Convertible debt	32,372			23,342
	Lease liabilities	3,408			3,204
	Trade payables	2,080			1,139
	Provisions	1,969			1,905
	Deferred tax liabilities	416			429
	Contract liabilities	9,604			11,572
	Total non-current liabilities	61,805			54,812
	Current liabilities
	Trade payables	12,116			8,834
	Interest-bearing receivables financing	6,572			4,068
	Venture Debt	5,585			5,109
	Convertible debt	—			7,329
	Lease liabilities	778			900
	Government grant advances and loans	1,553			1,472
	Contract liabilities	6,154			5,812
	Other current liabilities	8,107			4,540
	Total current liabilities	40,865			38,064
Total equity and liabilities		$	62,933		$	63,315
	(1) Updated from the prior earnings releases; as set forth in the annual report on Form 20-F
	(2) The preliminary financial results do not include the valuation of the March 20, 2020 amendments to the Company's five issues of convertible debt.

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SEQUANS COMMUNICATIONS S.A.

PRELIMINARY UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

			Three months ended March 31,
(in thousands of US$)			2020 (2)			2019 (1)
Operating activities
	Loss before income taxes		$	(10,568	)	$	(9,626	)
	Non-cash adjustment to reconcile income before tax to net cash from (used in) operating activities
		Depreciation and impairment of property, plant and equipment	1,015			1,262
		Amortization and impairment of intangible assets	1,180			1,078
		Share-based payment expense	667			488
		Increase (decrease) in provisions	52			(21		)
		Interest expense, net	3,455			1,976
		Foreign exchange loss (gain)	(545		)	(425		)
		Loss on disposal of property, plant and equipment	—			(32		)
		Bad debt expense	18
	Working capital adjustments
		Decrease (Increase) in trade receivables and other receivables	(1,691		)	3,550
		Decrease in inventories	518			604
		Increase in research tax credit receivable	(490		)	(597		)
		Increase (Decrease) in trade payables and other liabilities	1,425			(2,478		)
		Decrease in contract liabilities	(2,574		)	(317		)
		Decrease in government grant advances	(110		)	(99		)
	Income tax paid		(77		)	13
Net cash flow provided by (used in) operating activities			(7,725		)	(4,624		)
Investing activities
	Purchase of intangible assets and property, plant and equipment		(943		)	(585		)
	Capitalized development expenditures		(1,431		)	(1,080		)
	Sale (purchase) of financial assets		(28		)	12
	Interest received		19			3
Net cash flow used in investments activities			(2,383		)	(1,650		)
Financing activities
	Proceeds from issue of warrants, exercise of stock options/warrants		27			—
	Proceeds from issuing of warrants, net of transaction costs paid		—			8,350
	Proceeds (Repayment of) from interest-bearing receivables financing		2,504			(6,634		)
	Proceeds from interest-bearing research project financing		405			1,126
	Payment of lease liabilities		(439		)	(727		)
	Repayment of venture debt		(811		)	—
	Interest paid		(537		)	(373		)
Net cash flows from financing activities			1,149			1,742
	Net increase (decrease) in cash and cash equivalents		(8,959		)	(4,532		)
	Net foreign exchange difference		(2		)	1
	Cash and cash equivalent at January 1		14,098			12,086
Cash and cash equivalents at end of the period			$	5,137		$	7,555
(1) Updated from the prior earnings releases; as set forth in the annual report on Form 20-F
(2) The preliminary financial results do not include the valuation of the March 20, 2020 amendments to the Company's five issues of convertible debt.

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SEQUANS COMMUNICATIONS S.A.

PRELIMINARY UNAUDITED RECONCILIATION OF NON-IFRS FINANCIAL RESULTS

(in thousands of US$, except share and per share amounts)			Three months ended
			March 31, 2020 (4)			Dec 31, 2019 (3)			March 31, 2019 (3)
Net IFRS loss as reported			$	(10,601	)	$	(9,152	)	$	(9,609	)
Add back
	Stock-based compensation expense according to IFRS 2 (1)		667			517			488
	Non-cash interest on convertible debt and other financing (2)		1,266			1,265			872
	Non-cash impact of deferred tax income (loss)		(13		)	(489		)	(76		)
			$	(8,681	)	$	(7,859	)	$	(8,325	)
IFRS basic loss per ADS as reported *				($0.44	)		($0.38	)		($0.41	)
Add back
	Stock-based compensation expense according to IFRS 2 (1)			$0.03			$0.02			$0.02
	Non-cash interest on convertible debt and other financing (2)			$0.05			$0.05			$0.04
	Non-cash impact of deferred tax income (loss)			$0.00			($0.02	)		$0.00
Non-IFRS basic loss per ADS *				($0.36	)		($0.33	)		($0.35	)
IFRS diluted loss per ADS*				($0.44	)		($0.38	)		($0.41	)
Add back
	Stock-based compensation expense according to IFRS 2 (1)			$0.03			$0.02			$0.02
	Non-cash interest on convertible debt and other financing (2)			$0.05			$0.05			$0.04
	Non-cash impact of deferred tax income (loss)			$0.00			($0.02	)		$0.00
Non-IFRS diluted loss per ADS *				($0.36	)		($0.33	)		($0.35	)
	(1) Included in the IFRS loss as follows:
		Cost of product revenue	$	5		$	4		$	2
		Research and development	272			136			140
		Sales and marketing	124			100			68
		General and administrative	266			277			278
	(2) Related to the difference between contractual and effective interest rates
	(3) Updated from the prior earnings releases; as set forth in the annual report on Form 20-F
	(4) The preliminary financial results do not include the valuation of the March 20, 2020 amendments to the Company's five issues of convertible debt.