Ladies and gentlemen, thank you for standing by. Welcome to the Sequans Second Quarter 2015 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session; instructions will be given at that time. As a reminder, this conference is being recorded. Before I turn the conference over to our host, Mr. Georges Karam, I would like to remind you of the following important information on behalf of Sequans. This call contains projections and other forward-looking statements regarding future events or our future financial performance. All statements other than present and historical facts and conditions discussed in this call, including any statements regarding our future results of operations and financial positions, business strategy and plans, sources of funding, 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 risks 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 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. More information on factors that could affect our business and financial results are included in our public filings made with the Securities and Exchange Commission. Please go ahead, sir.

Thank you, Craig. Good morning, ladies and gentlemen. This is Georges speaking. Deborah Choate, our Chief Financial Officer and we are pleased to welcome you to our second quarter 2015 results conference call. We are pleased to report a 56% sequential increase revenue for the second quarter, with a decline in operating expenses, and thus reduced our non-IFS net loss to $0.11 per share. We continued to build momentum since our last quarterly call with more tangible evidence that the revenue ramp beginning in the second quarter will continue. To illustrate the amount of progress, we have made since our last call, I want to start by giving you a few highlights. Then I will provide more details during my discussion of our three main business segments. First, as you have seen recently in the quarter, the first Sequans based M2M routers supporting Verizon frequency bands was launched by NetComm. We now have Sequans based devices shipping in volume for all three categories; Home and Portable Routers, Mobile Computing and Machine-to-Machine/Internet of Things. Second, our customer is preparing for the launch of the two tablets we have spoken about on the last call and we made very good progress on few other design wins for various devices. So we expect more customer product launches to come in the second half of the year. Also you saw this morning that our game changing Category 1 Calliope platform has been certified by Verizon, clearly establishing our time-to-market advantage in M2M/IoT. The huge interest in Category 1, we mentioned in April has already transformed into a variety of specific projects and opportunities some of which are already design wins. We made it public that we began working on a specific project with Gemalto, one of the top global module OEMs with a major…

Thank you, Georges, and good morning everyone. I would like to add some details about our Q2 financial results and discuss the financial outlook including our guidance for Q3. Revenues in the second quarter of 2015 were $7.5 million a 56% sequential increase from Q1 and a 48% increase compared to the second quarter of 2014. We shipped over 300,000 units in the quarter a substantial increase from Q1. With the production of modules and the mix higher in Q2 compared with Q1. In the quarter, we had four 10% customers, a Taiwanese ODM with 25.7% of the total, a distributor for several Asian customers with 24.3%, a Taiwanese OEM with 17.1% and another OEM in Australia with 13.8%. We realized an overall non-IFRS gross margin of 36.4% inline with our guidance of at least 35%. Operating expenses were $8.8 million in Q2, a 13% sequential decrease from Q1. Our second quarter operating loss was included stock-based compensation expense was $6 million compared to an operating loss of $8.2 million in the first quarter and an operating loss of $8.7 million in the second quarter of 2014. Basic and diluted loss per share was $0.12 in the second quarter of 2015 based on 59.1 million shares outstanding compared to net losses of $0.14 in the first quarter and $0.15 in the second quarter of 2014. To facilitate comparisons we have also reported our results on a non-IFRS basis, which excludes some net loss, the non-cash fair value and effective interest rate adjustments related to the convertible debt issued in April and it's embedded derivative and stock-based compensation expense. Non-IFRS net loss was $6.4 million in Q2 compared to net losses of $7.8 million in Q1 2015 and $8.4 million in Q2 2014. Non-IFRS basic and diluted loss per share was…

Thanks Deborah. So maybe few last words before taking your questions. And to summarize this conference call, I would like you to essentially to address two points, I mean about Sequans and the progress we have made. First, just to keep in mind that our leadership is single-mode LTE, our IoT strategy how we have [approached] [ph] this CAT 1 and now we are planning to CAT 0 and CAT M in the company are giving us really the advantage of being in first to market addressing a huge market which is Internet of Things segment. So if you look to the company, we can say that the medium long-term business growth is somehow secured with the position we have and the execution we are doing and the leadership we have in the space. The other bullet that I wanted to have in mind is obviously for short-term, the design win we have whether in shipment mode, product shipping from our customers today in variety of carriers. The others that they are in development stage or just only ready to be launched because just on the – everything is ready and the launch date has been announced and it's not yet, it's in the production phase as well as the number of new opportunity that we are working on and we hope to converge them very soon. On this covering the three segments; home router, portable router, mobile computing and now IoT and M2M. All this is evidenced that we are on the right track with our sequential revenue growth quarter-after-quarter towards profitability. So these are my two messages. I thank you for listening and I'm happy now to take your questions. Operator?

Thank you. [Operator Instructions] Your first question comes from the line of Quinn Bolton from Needham & Company. Please go ahead.

Hi, Georges and Deborah, congratulations on a nice sequential growth. Georges, I wanted to start with the mobile computing or the tablet design wins. Can you give us a little bit more color about the product portfolio of this company? Are these sort of dedicated single-mode tablets, is it part of a broader tablet offering it may have multi-mode tablets as well and to the extent it's the latter, can you talk about the interplay with the OEM deciding which versions maybe single-mode versus which tablets maybe multi-mode. And then I have got a couple of follow-up questions.

Hi, Quinn. In fact in general, we are seeing by the way if you look to the market – the tablet market you see just a little bit saturating as a WiFi tablet. But on the other side, whether by the way multi-mode or single-mode, we are seeing more and more connected tablet growing. So we are seeing more potential and more guys jumping on this seeing that this is the right timing to differentiate their product and not to have a WiFi only product, but to have it connected. Obviously, we are playing in a segment as I mentioned, which is a mid-range tablet, so we are talking about mid-range tablet, we always said it's below $200 typically. Here we are talking about two designs, one which is 8 inch and one 10 inch. They will be single-mode. It's – I don't know how much I can – I cannot comment more really about the nature of the customer and so on because everything is very sensitive and things will be clear in the quarter. So also as I said, we are seeing more activity around this segment and hopefully other tablet will come, but the two are coming here they will be one 8 inch, one 10 inch both of them are Android and mid-range tablet launch as I said in Q3.

And maybe then just a clarification –

Obviously, the brand name going maybe this is – the brand name that you are going to see this well known brand name which is – they have other tablets and they have typically WiFi tablet maybe in the past they did some 3G as well connected, but this one is the first 4G.

I guess just a clarification in the tablet for the mid-range, are you seeing – just from sort of a price point perspective that mid-range segment looking more now to single-mode capability rather than multi-mode as a way to sort of keep down the cost and to reduce the number of frequency bands the tablet as to support?

I mean absolutely. I mean on one angle, the carrier are more and more ready with their coverage even on a worldwide basis. Even if you take Europe, where the LTE coverage is not yet at the level what we can see in the U.S., with all the carriers in the U.S., we were seeing demand even in Europe for this kind of single-mode LTE tablet because single-mode LTE with limited number of band, you can make this at on – on a cost basis below $30 and the tablet and this allowed operator to find a business model there whether to subsidize this piece and keep the tablet in the mid-range and offer connectivity all the time.

Great. And then sort of second question, I think Huawei has traditionally been a 10% plus customer, just wondering if you could make any comments about what you are seeing in some of the emerging markets home and portable routers which I think are often times serviced by Huawei?

Well, for reality in this emerging market, our main customer as you know is Gemtek, one of them, but its not only one we have by the way NetComm in the Brazil, sorry in Australia shipping to Australia Gemtek is shipping to variety of customers they ship as well very honestly to some major OEM like Huawei even if I don't – it's not publicly because customer like Huawei, they build some products, some product they buy them through ODM and Gemtek has good technical than this. And they have other channel to market as well. So we would any mean an active customer for us. We added by the way another customer, another ODM other than NetComm who is ramping now with nice order we are seeing from them by quarter. So we are diversifying as I said our base there to attack the segment and this remain a solid revenue base for us.

Great. And last question and then I'll get back in the queue. In the press release, you talked about significant through accelerating growth in 2016 with a transition to profitability, can we infer that that you think might actually hit profitability next year or is it you just get a lot closer to break even next year?

Yes. I'm not sure we can comment specifically on that at this point as we haven't given a lot of information on 2016. We can't comment at this point Quinn.

But Quinn, the real point, I mean the message is here that, if you looked at our revenue this year, they remain from shipment product, it's not the flow of 10 product shipping and making this earning, so its really few of them. We talk about the emerging few customer we have very little in China and India and we have one design in Verizon. So this is what we have today and now the tablet the second – and the tablet. Now with acceleration of all those new design we are getting further routers by the way coming even in the U.S. as I mentioned we have new design win for another carrier in the U.S. Other potential – with other carrier as well in the U.S. as well, so we are getting the multiple of more carriers than the same space plus obviously, the design win we are accumulating in the Internet of Things space where with some specific relationship with customer like we mentioned Gemalto, but we mentioned another guy that they have the ability to address larger number of customer very quickly. Let us feel like we are going to see an acceleration becoming more and more real in 2016 and we are going from few number of customer to more than a dozen active production. So definitely this put us in a very good feeling about 2016.

Great. Thank you.

Your next question comes from the line of Jaeson Schmidt from Lake Street Capital. Please go ahead.

Hey, guys, thanks for taking my questions. Just wondering if you could talk a little bit about your confidence in your visibility and if current macro conditions are causing some of your customers to delay some of the launches? I know you indicated in your prepared remarks some of the tablets have been delayed, but wondering if you're seeing any caution or hesitation from any of your other customers?

Hi, Jaeson. Very honestly we're not seeing an impact on this and I believe then it sounds we are really active in all this Internet of Things space with a lot of -- we were really in the right places we are in the U.S. and so on. Obviously, they are emerging you could have a little bit of impact because it's very hard to measure it, its moving well. We could not say there is no impact at all, but it's very hard to sense it like measure. But the good thing about it, the big flow of potential that on which we are building the company, I will say the main lag of the company, which is really building on operator kind of in the U.S. as similar to operator in the U.S. like Verizon plus this IoT activity and so on, all this is quite solid. Now on the tablet, the comment I said is not related to really to any macro stuff. You need to keep in mind that all those, this is by the way the once that -- between the other two segment whether M2M/IoT or home router, portable router, you are with a customer you have the delay of two weeks, it caused you two week delay because its just only a matter of fact and honestly the guy who decided to launch the product June and he's ready July 15, he will launch in July 15. The tablet segment as you know, you have windows of launches because its consumer and its the lifecycle is very short and it's organized somehow that if the -- for whatever reason in terms of execution of the project you get the delay of three weeks sometimes because they were just in time to launch on a given window they can miss the window and decide to delay it to another second window and this gives a little bit less can hurt a little bit in the short-term because you see a little bit of shift larger than really the delay because the original delay could be two weeks, but then it's costing us two months because you are moving from one window to another window of the consumer product launches.

Okay. Thank you. And then wondering, if you could help us size the CAT 1 opportunity at Verizon and how that potentially could ramp going forward?

Yes. I mean essentially in CAT 1, first of all, as I said the good things about it that obviously Verizon was aggressive and we push with them in order to see the CAT 1. But now I can tell you its really -- all the carrier without giving anything confidential, but I can assure you, the big number of carrier they see this -- this is the right things to do and not questioning at all and decided to move CAT 1. And they are interesting phase and so on. So it's becoming kind of mainstream, which is offering if you want a LTE solution that can put a pricing because what we are talking about is that this CAT 1 solution compared some pricing with the 3G and everyone knows that they want to go out to the 2G and re-farm it or shut it down and so on. So by definition, you are just only the first piece of the market is a replacement of existing devices use to be running on 2G. They need to transition to something else and this something else could be 3G, but now the availability of LTE IP solution at the price of the 3G why you will go to 3G where you have more risk and more challenge and its not the best technology. So we are seeing adoption of this CAT 1 from all the carrier across the world really globally all the people are moving on this as the right solution. So I tend to say, obviously, it's a question of transition, but if you take all them to market, it's going to [transition] [ph] to CAT 1, it's just only question of time, is it going to happen in two years or three years and that's it.…

Okay. Thank you. That's very helpful. And last one before I jump back into queue, wondering how much WiMAX revenue you still had in Q2?

Q2 we were almost exclusively LTE.

Okay, great. Thanks a lot guys.

Your next question comes from the line of Tristan Gerra from Baird. Please go ahead.

Hi, guys. Could you give us a little bit of an update on the ramp that you're seeing in India, I think last quarter, you talked a little bit about some of the carriers target before if you could give us a quick update telling on that one?

Yes. Absolutely, I mean in India, we are active with the four carriers and very engaged with all of them. As I said also there is some of them by the way I tend to say we're kind of exclusive even that they are small obviously. So today in terms of carrier, you have two of them, they -- Bharti and Tikona, they already launched. So they are addressing more as I said businesses. So it's not consumer in a sense user at home, but they are addressing more businesses, so the order we are getting from them in 10,000s and times 10,000s about that are being in 100s of 1000s this is the first phase that they are launching. Aircel Internet of Things which is in a short list and we are in a short list with not only one partner more than one partner there and they need to move to this space. And as you know Reliance they are more into friendly launch and they decided to go full launch in December. And again there, we have initial order for the friendly launch that they are doing in the second half. So definitely the four carrier are moving. It's really start adding up because when you have four carrier and even if you get 10k units from each per quarter you start making 50k unit, but obviously, it remains small in comparison of the opportunity of India, but this is really a good sign that it's going in the right direction that I hope will happen in the -- will materialize in the second half and will really double in 2016.

Okay. That's useful. And then as a follow-up could you give us an update on the situation in China, so some Japanese with the wireless infrastructure is over there and have talked about how market continues to be looked up. And part of that is related to the corruption pushed by the government and lot of excess inventories of basestation, I know that this doesn't really impact you directly the timing of the problems, I mean what's your view on what's happening in China and the timing as to when you think there is more momentum coming for the business?

Yes. I don't know Tristan, if I can comment on all this – all those complicated stories within China, but definitely it's a little bit complicated. However, if you look from business point of view and really the impact for Sequans beyond what's happening on the call it macro or political game, you're seeing two carrier, China Telecom, they move to the single-mode LTE. They get to the beginning some frequency band in the TDS' and they get really the LTE band, so they are really strategizing which one – in which way they go -- on what business they will launch in the TDS and they were a little bit slow to move but they moved single-mode LTE from the beginning. And what happens there that we have local partner, we moved obviously we have some initial win at the beginning to be selective and so on. But now we have really a first project to deploy in a region in the coming 12 months. So we have -- if you want kind of order or our customer have order to go in the coming not only 12, 18 months by the way. They have an order for 18 months and this is really exclusive for us, it will be our product and we have secured business we're happy about this for the first time happening in China. We are hoping that this will expand to other regions and this is in discussion now with other regions and this should give us more opportunity. On the other side, China Mobile so far they were always insisting on getting this 3G, their TDSCMDA multi-mode in bundle with the 4G. And we are -- we were really there in a kind of weak position because we don't have the multi-mode offering. But now they are opening some doors mainly for CPEs, again, which is single-mode and our partner are engaging on this. And interesting enough that a lot of tend to say they are realizing that CAT 1 and the M2M and IoT is a way to go and we are making some good progress on this which is by the way -- when you go to the space there is no more debate any more about multi-mode or single-mode and its CAT 1 full stop, or its CAT 0, CAT M in the future. So it's really much nicer and much better for us to be positioned on this. So in summary, we see good progress, we see new order, new revenue and add more revenue to come already in Q3 and Q4 and we are hoping that this will accelerate for the second year. But we remain on the same time a little bit cautious in terms of expectation when we predict our number for the short-term.

Great. Thank you very much.

Your next question comes from the line of Hanna Wakim from UBS. Please go ahead.

Hi, George, hi Deborah, good morning. I just follow-up on the China comment, if you don't mind. We saw a little news headline coming out of Mobile World Congress that China Telecom also are planning to team on Internet of Things technology. So anything you can further say about that given your relationship with Gemalto?

Yes. I mean, hi, Hanna, first of all, and obviously what I can say more is – I do not – I can say more than what I said because I said that China Telecom definitely is interested in Internet of Things, China Mobile as well by the way, China Telecom is very aggressive on this. Being a leader in this, you can imagine that we are invited to all those tables. There is one in the hour thinking Internet of Things would not consequence except if he is an idiot, I would have to say. So we are invited to all those tables with all the carriers, we are sharing their plan now some of them obviously from the situation where you start seeing the plan and discussion with the guys, how this will materialize in time its going to happen fast or is going to take them three years. I do not. But, I see them very motivated, you are absolutely right, China Telecom is motivated on IoT and we are very good in our position from our technology. And obviously on top of this, we have partners whether Gemalto or the other one we didn't announce the name that depending on the channel to market, we always pick our channel to market to address those guys by taking the best guy to address the right guy. And definitely we are well positioned there. If something will happen we will be in.

Thanks a lot.

[Operator Instructions] And at this time, there are no further questions.

Okay. Craig, thank you very much. Thanks to all of you guys that there is no more question. And looking forward to see you – to talk to you on the next conference call and before if this will happen. Thank you.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.