Sequans Communications S.A. (SQNS) Q3 2025 Earnings Report, Transcript and Summary

Welcome to the Third Quarter 2025 Sequans Earnings Conference Call. My name is Jonathan, and I will be your operator for today's call. [Operator Instructions] As a reminder, today's program is being recorded. I would now like to turn the program over to David Hanover, Investor Relations. David, you may begin.

Thank you, Jonathan, and thank you to everyone participating in today's call. Joining me on the call from Sequans Communications are Georges Karam, CEO and Chairman; and Deborah Choate, CFO. Before turning the call over to Georges, I would like to remind our participants of the following important information on behalf of Sequans. First, Sequans issued an earnings press release this morning, and you'll find a copy of the release on the company's website at www.sequans.com under the Newsroom section. Second, this conference call 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 business strategy, cost optimization, strategic plans, the ability to enter into new strategic agreements, expectations for sales, our ability to convert our pipeline to revenue and our objectives for future operations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1999, 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 rely on or 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. And now I'd like to hand the call over to Georges Karam. Please go ahead, Georges.

Thank you, David. Good morning to everyone. We announced this morning that Sequans has taken a proactive approach to reduce its debt by 50% through its strategic asset reallocation of its Bitcoin treasury. We remain fully committed to our Bitcoin treasury strategy, which we continue to believe will deliver meaningful long-term value for our shareholders. This is why we executed our major financing deal in July as the starting foundation of our Bitcoin strategy. As you know, the financing deal included both equity and convertible debt components that introduced approximately 50% leverage into our treasury structure. Initially, we thought the shares would appreciate following the deal announcement and the debt would convert due to share price appreciation. While there is no urgency for us as we are not paying interest on the debt for the first 12 months, we have chosen to act proactively given current digital asset treasury market conditions. With many of our peers currently trading significantly below an mNAV of 1. We find ourselves constrained by the lack of available options to meaningfully advance our treasury strategy at this time. Thus, we have opted to move forward and negotiate with our debt holder to reduce our debt exposure and provide us with greater flexibility moving forward. As a result, we announced today that we are reducing by half our convertible debt via a tactical sale of a portion of our Bitcoin holdings. We undertook this action for the following reasons: First, it has lowered our debt-to-NAV ratio closer to the 35% range, a more appropriate level while still maintaining decent leverage on the remaining portion of the convertible debt. This puts us in a better position for issuing preferred shares in the future. Second, we have reduced some of the debt covenant constraints, increasing our ability to use all of the treasury tools at our disposal, including buying back ADS and executing on the ATM based on market conditions. With respect to our ADS buyback program, factoring in the current valuation, selling Bitcoin on a tactical basis makes sense in this environment to fund the repurchase of our ADS, which are trading at a significant discount to our Bitcoin net value plus our net cash. Note that our current valuation does not reflect the value-creating opportunities we believe are available to us through our IoT business, which I will discuss shortly. And lastly, we have freed up some of the Bitcoin we hold, enabling us to generate some yield with minimum risk. Such yield can be deployed to buy Bitcoin. So to summarize this move -- to summarize, this move was undertaken to unlock shareholder value and put us in a better position to execute on our treasury strategy. We intend to continue to follow a disciplined and opportunistic approach to Bitcoin accumulation. We'll be patient with market conditions, but we remain proactive. Ongoing Bitcoin purchases could be funded by issuance of debt, equity or preferred as well as IoT business monetization and operating cash flow. We have the tools or option in place to execute the strategy. An ATM, which provides us with the option that when our share price is much higher than where it is today, we'll be able to execute opportunistically on our Bitcoin accumulation strategy in an accretive manner. We have also an ADS buyback program in place, which has been approved by the Board. And given the current share price, we'll execute on this as soon as we are able to. We have reduced our debt exposure, which affords us the option to consider other new instruments like preferred shares in the future. Returning to my earlier point about the large valuation discrepancy in our shares, I wanted to stress that our current net equivalent cash position that includes equivalent cash of Bitcoin net asset value minus debt is above $170 million. This is approximately $12 per outstanding ADS. You can see the deep discount our shares are trading at on this basis alone. This ignores any IoT business value we are creating and expect to create in the future. It also ignores the leverage we can create with our Bitcoin treasury strategy. While Bitcoin treasury companies as a whole may be in a transition phase that has affected current equity valuations, we continue to be fully committed to the Bitcoin treasury strategy we have initiated and are exploring all opportunities to unlock shareholder value through our Bitcoin treasury alongside our IoT operations. Our goal remains to create long-term value to our shareholders. As for our IoT business itself, it's moving in the right direction. Our pipeline remains healthy, representing about $550 million in a potential 3 years product revenue across our 4G and RF product lines. In Q3, we won 6 new projects, and I'm pleased to announce that around $300 million of this pipeline are design win projects, a 20% increase versus our last reported figure. Some of the design win projects are in mass production phase currently generating revenue and others are under development by our customers with revenue potential in 2026 and beyond. Our execution remains focused on increasing the design win pipeline, but more importantly, on helping our customers with projects not yet in production, finishing the development and certification of their products and turning them to revenue-generating design wins. In Q3, 3 design win projects transitioned to production. In Q4, we expect to add 5 more, positioning us to enter 2026 with over 45% of our design win projects in production and generating revenue. This aligns with the target we set at the beginning of 2025 and represents a more than 2x improvement of this key business metric. We anticipate this positive trend to continue into the first half of 2026, supporting our revenue growth in the second half of 2026. Our design win projects span multiple verticals. Tracking, fleet management and smart metering remain the strongest verticals for us with good presence in security and e-health and medical. Looking at smart metering, we are now shipping product for 3 projects of Honeywell and 2 of Itron and should have 2 new metering customers ramping early 2026. In fleet management, Geotab is ramping, and we will have another customer ramping in early 2026. We continue to have strong business with AsiaTEL, a channel partner addressing auto tracking and other vertical applications. Now I will briefly review the third quarter business and discuss our fourth quarter outlook. Let me start by highlighting that Q3 was the first quarter without any remaining revenue -- revenue recognition tailwind from the Qualcomm deal closed last year. While this has an optical impact on the licensing and services revenue component, it does not affect cash flow. Q3 product revenue was impacted by minor delays as some customer projects shifted their ramp-up scheduled to Q4. While this has postponed our expected Q3 revenue growth, we remain confident that the ramp will materialize in Q4 as planned. In addition, we faced some late production challenges with our OSAT partner and revenue fell short of our target due to substrate availability issue. The impact was around $1 million in Q3. Substrate lead times became extended last quarter due to industry demand from AI leaders. We mitigated this by working with suppliers and anticipating orders. However, our execution timing was right on the edge of the quarter end. This ended up delaying some of our shipments by a couple of weeks. However, this issue is now under control for our fourth quarter shipments. Given our Q4 visibility, our current Q4 view is that product revenue will exceed $6 million with around $1 million incremental revenue of services and IP licensing. We aim to finish the Q4 with revenue above $7 million by adding the 2 components. On the product development front, we launched our 4G Cat1 bis worldwide SKU module and have made very good progress on our 5G IoT. In this regard, I'm pleased to announce that we have just taped out our 5G eRedCap test chip as planned. This is a major milestone in our 5G IoT project. This program will enable us to sample our third generation of IoT chips supporting 5G eRedCap late 2026. This is an extremely advanced technology that we believe has significant value. In summary, our 4G IoT business will grow and generate positive cash flow in 2026, becoming a profitable business line for us with the potential to grow further in 2027 by around 50% year-over-year. This business is helping to fund our ongoing investment in 5G R&D, which can start generating product revenue in 2027 and licensing revenue in 2026. We expect the IP created with this 5G investment could result in strategic deals with significant near-term value creation as we have successfully demonstrated in the past with 4G. More generally, we have launched new IP initiatives and announced a portfolio of IP that we are willing to license. We have done a few licensing deals in the past, but here, we are shifting from an opportunistic approach to a proactive go-to-market strategy, maximizing our customer reach and accelerating the monetization of our IP portfolio, all without additional investment. Currently, we have several opportunities under discussion, and we hope to conclude a few of them in the coming quarters. We believe services and IP licensing should contribute high-margin revenue in 2026. We further expect longer-term product revenue strength based on current design wins and order backlog of 4G chips and module and radio transceivers. Considering the $300 million product design win pipeline, we currently have in hand and factoring that we will enter 2026 with 45% of the design win projects generating revenue, this could generate [ $45 million ] average annual product revenue over the coming 3 years. This doesn't include the growing number of projects that are expected to enter into production in 2026, the new projects we are working on to win or IP licensing and services contribution. On the operating expense front, our goal is to limit cash burn in 2026 in order to reach breakeven in Q4. To support this, we are implementing a 20% cost reduction program across functions while safeguarding core innovation. This approach provides downside protection and preserves flexibility to scale up if upside revenue opportunities materialize. I will now take a moment to discuss some of the IoT-related strategic alternatives we are currently evaluating. Since launching our Bitcoin treasury, we have been actively reassessing how best to position our IoT business to ensure shareholders benefit from its full value potential. Our Board is currently evaluating a range of strategic alternatives we have. While several options being explored, I can share that we are in serious discussions regarding a few strategic partnership opportunities for our IoT business. The objective is to accelerate the path to breakeven, enhance the business overall value and strengthen its cash flow generating capability. I will now turn the call over to Deborah to review the third quarter 2025 preliminary financial results in greater detail. Deborah?

Thank you, Georges, and good morning, everyone. I'll cover our third quarter financial results and then speak more about our Bitcoin holdings. Total revenues in Q3 2025 were $4.3 million, a decrease of 47.3% compared to the second quarter of 2025 as the last license revenues from Qualcomm finished in Q2 2025. Gross margin was 40.9% compared to 64.4% in Q2, again, reflecting much lower high-margin license revenue in the mix in Q3. Operating expenses in Q3 2025, excluding the unrealized loss on the marked-to-market of the Bitcoin treasury asset were $14 million, stable compared with Q2 2025. Both quarters included a number of nonrecurring expenses related to various legal and advisory fees related to our strategic transactions. Operating expenses in Q3 included nearly $800,000 in noncash stock compensation expense and $1.6 million in amortization and depreciation expense. As Georges mentioned, we are putting in place cost reduction measures to reduce cash operating expenses, meaning excluding stock comp and depreciation expense to be below $10 million per quarter in 2026. Operating loss was $20.4 million in Q3 compared to an operating loss of $8.7 million in the second quarter of 2025. The operating loss in the third quarter of 2025 included an $8.2 million unrealized loss on impairment of the value of our Bitcoin asset, which was mark-to-market. For the third quarter of 2025, our net loss was $6.7 million or $0.48 per diluted ADS compared to a net loss of $9.1 million or a loss of $3.59 per diluted ADS in Q2 2025. Net loss in the third quarter of 2025 included a noncash $20.6 million gain on the change in value of the embedded derivative related to the convertible debt issued in July and included net interest expense of $6.9 million that was also primarily noncash and related to the IFRS accounting for the convertible debt issued in July. Our non-IFRS loss in Q3 2025 was $11 million compared to a non-IFRS net loss of $8.1 million in Q2 2025. Cash and cash equivalents at September 30, 2025, totaled $13.4 million compared to $41.6 million at June 30, 2025. The September 30 balance does not include the $10 million final payment from the 2024 Qualcomm transaction that was released from escrow in October 2025, giving us a pro forma ending cash of $23.4 million. At September 30, 2025, the company held 3,234 Bitcoin with a market value of $365.6 million, all of which was pledged as security for the $189 million of convertible debt issued in July. Following the recently announced amendment of the debt agreement, 1,617 Bitcoin are being released from the pledge and the company has sold 970 Bitcoin in order to reimburse half of the debt. The remaining 647 unpledged Bitcoin remain in our treasury but are -- that are available for the previously announced ADS repurchase program if needed. I'd also like to refer you to our Bitcoin dashboard on our website at sequans.com/bitcoin-treasury, where investors can find our Bitcoin-related statistics in one location. We now have many tools in place to pursue our Bitcoin treasury strategy and strategic options for our IoT business. We will use these to maximize shareholder value based on our own specific circumstances. And now I'll turn the call back to Georges before we begin Q&A.

Thank you, Deborah. So to conclude this call before the Q&A, I would like to stress like the 2 points. On the Bitcoin, we continue to be committed to the Bitcoin treasury strategy we've launched. Given the current digital asset treasury market condition, we decided to adjust our treasury structure and redeem half of the debt in order to be in a better shape to execute on our Bitcoin treasury strategy. With this move, we have now a more appropriate debt-to-NAV ratio while still maintaining decent leverage, also put ourselves in a stronger position to execute on the ADS buyback program as well as other financial instruments. On the IoT business, our design win pipeline is growing well, and we remain on track to have by end of this year, more than 45% of the projects -- of the customer projects moving to mass production and generating revenue. In parallel, we are taking all actions needed to control our OpEx and limit cash burn with the target to reach breakeven in Q4 2026. And finally, we are seriously considering a few strategic alternatives to ensure shareholders benefit from the full value potential of our IoT business. With that, let's now begin the Q&A session. Operator?

[Operator Instructions] our first question comes from the line of Scott Searle from ROTH.

Deborah, maybe just to dive in quickly. In the third quarter, were there any licensing or service revenues a part of the $4.3 million, trying to understand if there was a sequential uptick in the product revenues. Also, I just want to clarify the timing on the OpEx going below $10 million. And Georges, from a high level, kind of looking at where the net asset value of the company is relative to the current stock price. How aggressive will you be on the buyback? If you got another 600 Bitcoin available to pursue that strategy, given the stock is trading at $7 versus net asset value around $12, would seem like it's a pretty good arbitration move to do that. So how quickly and how aggressively do you plan to tackle that?

Yes. I mean, Scott, first of all, and just to take your last point, as aggressive as needed and as the rational makes sense, right? I mean our Bitcoin value, the Bitcoin get acquired with the share at $14. So technically, if the share is at $7, you will be making 50% gain by selling a Bitcoin that you purchased at $14 and you recover the price you paid for it at $7, right? I mean, which is your share. So we have all in place. Board resolution is there. We were not able to execute on it in this period because, as you know, we were on the window. I mean, we were restricted and we could not act on this. But I don't know any 1 or 2 days, we will be free and we'll be moving on this. And obviously, consider depending where the stock is, but it makes full sense for shareholders today to buy back the shares of the company if it's trading low. And for the people staying with the company, we'll get the value of the NAV we have there. So we are completely committed to be aggressive on this if needed.

Scott, on the revenue side, we are about 2/3 product, 1/3 licensing and services in Q3. And in terms of the OpEx reduction, this is being put in place now. We expect it will be mostly realized in Q1, and we're looking at it fully in place by Q2, but with an overall for the year being below $10 million a quarter. And that includes the new cost of managing the Bitcoin treasury.

Okay. Very helpful. And then, Georges, maybe to follow up in terms of the pipeline building for the IoT business. It's a lot of momentum in 1 quarter where you're growing about 20% in terms of your design wins. I guess, you'll kind of enter 2026 at almost double-digit revenues, right, somewhere in that $10 million to $11 million, I guess, is the run rate off of that 45% that go into production. I think in the past, you talked about what you might be exiting 2026. Is there a figure that you're thinking about right now because it sounds like that gets you to breakeven, particularly given the OpEx reductions that you have ongoing, so we should see that by the fourth quarter of '26.

I mean, Scott, and the business, the IoT business, as you know, is many, many projects, and each project is not huge. So that mix, if you want like at the beginning, when you're ramping, it's a little bit slow and frustrating to some extent. But once the products are in shipment, our customer is shipping, it's there for 7 years in average, like if you take meters, sometimes even more than this. So -- and give us very good visibility for the future. We are -- I'm very happy as we are exiting this year close to our range of 50%. But this will continue because, as you know, the design win project I don't qualify them like 100% secured, but we could have the risk on what we have a win in hand is very, very minimum. More than 90% based on the history of the project continue, I mean, except really some small projects or small company that you could have over the execution of projects, some surprises, but we are dealing with Tier 1 players that are there when you decide to launch a project they are in. It may take them longer than what we thought to be ready for production, but they get it there. So we -- I believe 2026 will continue ramping, and we should be -- because the pipeline will continue, I could not say what we have in hand today, maybe close to 90% plus will be in production. But obviously, in the meantime, we'll be adding new projects. So when we exit, the pipeline should be more than [ 300 ] exit '26. And obviously, the percentage will be less than 90%. But this is what will be funding the growth we'll have in 2027, which I predict to be at minimum 40% to 50% year-over-year, thanks to this.

Just one point on Q1, we do tend to have a little bit of seasonality in.

I mean in that case, the average -- your number, you're right. I mean just to talk about the digital, I'm giving you the [ $45 million ] 3 years average, right? I mean all this is ramping. You imagine the shape because the new projects starting today is not going to yield that full revenue in the first quarter. It takes like 2 quarters or 3 quarters to go to the full revenue. So there is a ramp-up phase, obviously, with every project adding up.

And a couple of follow-ups, if I could then. Congrats on getting the tape-out on the RedCap front. I know that's a big milestone for the company. I think you've talked about licensing opportunities for RedCap. I wondered if you could elaborate on that in terms of what might be in the pipeline, kind of frame in terms of size and opportunities. And IRIS has been ramping up as well, I think, in terms of the potential opportunities. I'm wondering where that fits into the overall design win pipeline that you've talked about, the magnitude of those opportunities, particularly ramping into 2026.

Yes. I mean, obviously, in IPR licensing, we have some piece of this, which is established even in our revenue next year. We have already in the backlog revenue of royalty that we are collecting from a couple of customers to whom we did licensing with them, and we'll have other words of design win with licensing and now we're collecting a royalty in 2026. We collect even with one a little bit this year as well. But since we launched this IP strategy, we realized like at least we had more than a dozen of leads talking with us. It doesn't mean that they need the full RedCap -- the full eRedCap or RedCap solution from us. As you know, we have a very advanced radio transceiver technology. We have layer 2, layer 3 protocol that no one have it. And obviously, we have a lot of IP in the modem. And as well, we have the full solution. So you could have customers whether looking for a full solution of modem, mainly to adapt to move from a cellular to something else, if you want, like to satellite or defense application, other radio environment. And some other, they want just only a piece of the technology what we have. So we're talking about licensing deal that could be, I would say, $3 million to $5 million license. I'm not talking about royalty like upfront. Up to these, they could be equal to $15 million, $20 million and all those under discussion, and we have really nice number in discussion. And for sure, next year, we'll have something converging and helping to feed our IP licensing revenue next year.

Got you. And lastly, if I could, George, just to follow up on the strategic comments. Can you frame that a little bit more? Are you talking about more partnerships? Or are you talking about potential outright sale of the IoT business at the current time?

Yes. Scott, I don't want to comment much on this. Obviously, the question -- take the problem like this, like, okay, the company has a serious IoT business, which is extremely valuable, in my opinion. It has as well a nice Bitcoin holding, which is extremely valuable as well. And from there, we're moving as a company to hopefully succeed on both front, building more Bitcoin and building the treasury and buying more -- accumulating more Bitcoin. And on the other side, scale the revenue and the IP potential of the IoT. For the time being, they are not conflicting to each other. They are manageable. But if you project down the road, you could say maybe for shareholders, you can give more value by separating the tool, by doing something different, I would say that. And obviously, this take the factor as well discussing with other partners on the business front to do some strategic partnership and maybe more together. I cannot say more, Scott, I mean, allow me, but you have serious discussion there. And hopefully, when things will be close to sign or signed, we'll be able to announce it to market.

And our next question comes from the line of Mike Grondahl from Northland.

George, talk a little bit about your confidence in $7 million of revenue in 4Q and this $45 million kind of annual run rate you're striving to?

Yes. Mike, obviously, for Q4, I mean, you never say I'm 100% sure, right? I mean we're giving a number that we believe it's in the backlog, if you want, and secure out of, I would say, extraordinary accident, we are very confident about it. If we talk about the annual revenue, I want just again to stress the math I did is I took 45% of the $300 million, which will be in production divided by 3, give you $45 million over 3 years. So this is the average. Obviously, this doesn't mean necessarily that it's flat first year, flat second year, flat third year. It's the reverse. It will start lower and it will go up over 3 years because you have the ramp of those products. And obviously, it's quite -- I'm quite comfortable with the number, even if the projection here, you're talking about longer program. You need to know that in our design win today, when I look, for example, to product shipping, I spoke, for example, about Honeywell. I can name even a smaller guy like Withings, like Coyote, like -- customer like this, that -- they are smaller, but very steady because they ship since more than 1 year. So we have history about their ramp. We know that they are -- how much they do, and we have extreme confidence in their future projection, forecast and so on. Obviously, we can -- we take our, I would say, optimization there. We -- maybe cut 10% for the risk things, but we are very confident. When you have a new project coming in, like even a Tier 1 customer saying, okay, now my product is shipping and I'm planning to ship like per year, let's say, to do 0.5 million units. Obviously, you are going to compute the ramp. First year, maybe 200, the second 350 and then we ramp up to 500. There is still some risk not factored in, which is related to the fact if this customer, we have, if you want, experience about his previous shipment, previous forecast and so on. So in other words, in this number, already more than half of those 4%, 5% are already in production. I'm extremely confident about them. The other half are ramping now like Q3 and Q4. There will be a little bit of risk, but measurable risk. That's why we're presenting this one.

Got it. And the cost reduction efforts, have you started those? Or do those start later this year?

We started many things. And again, cost reduction, we have a lot of stuff. We have -- even I can tell you, for example, our offices, we shave like -- we had the chance to renegotiate pieces of the OpEx, third party and so on. And obviously, some reduction here and there when it's needed. We started a little bit and some of it, not everything is implemented, but some is defined. As I'm speaking, I know what we are going to do if you want in Q4 and Q1. And all this is set without impacting, if you want our innovation and investment into the 5G R&D. A lot of this as well, like our 4G, if you want, product line is becoming fully, I would say, mature because we were still working on some development during the year, we finished it. So we have even some reduction of effort there. And more general, I would say, on the G&A and so on controlling the spend.

Got it. Got it. And then have you disclosed what you -- what price you got per Bitcoin for the 970 you sold?

We didn't. It will be on our -- it will be showing up on our website, but I can give it to you, it will be [ $108,600 ]. Unfortunately, we didn't have the best period to sell, started selling at [ $115,000 ] ended by selling at [ $106,000 ].

Our next question comes from the line of Fedor Shabalin from B. Riley Securities.

Georges and Deborah, I completely understand the rationale behind the Bitcoin sale. You mentioned that this transaction enables our company to pursue a wider set of strategic initiatives to develop and grow the treasury. So could you provide more details on what additional initiatives you're considering beyond the ATM program and share buybacks? And any color on your strategic priorities here would be helpful.

Fedor, thanks for the question. I mean, essentially, and again, I want to stress one point. The company when -- one of the issues, if you want or the structure of the debt, there is -- it was not the risk even some people -- I don't know if people were -- because the collateral was fixed. We didn't have to readjust the price of the Bitcoin. It was just not the collateral is all the Bitcoin that we have and they are sitting there, we cannot do anything with them. If you cannot do anything with your Bitcoin, obviously, your -- the original plan was like the debt will convert at least over the first 6 months and so. And then by definition, some of those Bitcoin will be free and from there, we can use them. So we took this initiative really not under the pressure because we have interest rate to pay or because we are afraid about having the Bitcoin at $100 and have to face any issue. The company will not face any issue even if we stay on this Bitcoin longer. However, the company was stuck. In other words, I could not do anything. I cannot buy Bitcoin. I cannot generate yield on the Bitcoin. I cannot be aggressive on buyback because you can do a buyback, but at the end of the day, I have cash, but this cash needs as well to serve the operational business and the G&A even to manage the treasury. From this situation, we felt like even if it's not -- I will say, maybe we are the first treasury doing this, and we took the decision to act to be proactive. Maybe some people, they don't like it because no one sells Bitcoin in principle in the treasury. I mean, this is -- our aim was as well, but we felt it makes absolute sense now to change the ratio of debt, this often obviously preferred other structure of debt, which is today, I mean, it's not unusual topic for the company. But now they are possible because if your debt is around 30%, it's easy to have 10% preferred next to it. And if you reduce the debt further, you can do more. So this is one option. If we have free Bitcoin, those can be generating yield depending on the risk you want to take there. But if you want to take a very low risk, you can generate like 4% yield, and this will be nice cash that you can use to buy Bitcoin or to fund the G&A of serving the treasury. And obviously, the buyback that gives us -- that boosts the program because we don't need to sacrifice anything on the operation. If really the share stays low, the rational means sell Bitcoin and buy shares and support the shareholders staying with us. So that's the whole logic around it. This is really on the topic that we have. Now I know that there are other topic, if maybe you're raising for this, which is like consolidating and something with other treasury. I know that one happened in the market today and everybody saw this, I don't believe there is urgency on this. For me, honestly, there is not a clear idea currently what's the issue of the treasury strategy in general, why all this is trading below our NAV, which is not logical at the level where it is. And this is not for us, for all our peers. So we're trying to unlock it from where we are by taking -- put ourselves in a position where we are much stronger. And from there, we'll see how things will develop in the coming 6 months or so.

That is helpful. And you already partially answered my follow-up question on debt-to-NAV ratio. But I just want to understand what will be different in the treasury approach going forward? I heard you plan to issue preferred, but if you can just throw some time line on this would be helpful.

Yes. I mean, Fedor, obviously, I mean, the first priority now is really the buyback program. This is what I have on my table, if you want to execute on this and see how things will develop there. And obviously, the second one will be the preferred and the yield on the Bitcoin. These are the 3 options. No time line. Honestly, the option is there, but I don't want to give more time line when we'll do something like this because it depends on negotiation and so on.

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Georges Karam for any further remarks.

Thank you, Jonathan, for helping us with this. Thank you, everybody, staying on the call and for all your questions and looking forward to see you in the next opportunity. Thank you very much.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.