Good morning, ladies and gentlemen, and welcome to the Sequans Fourth Quarter and Full Year 2023 Results Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. [Operator Instructions]. I would now like to turn the conference over to Kim Rogers. Please go ahead.

Thank you, Terry. And thank you to everyone participating in today's call. Joining me on the call today from Sequans Communications are Georges Karam, Chairman and Chief Executive Officer; and Deborah Choate, Chief Financial Officer. Before turning the call over to Georges, I would like to remind our participants of the following important information on behalf of Sequans. Sequans issued the earnings press release this morning, which was posted to the company's website at www.sequans.com under the Newsroom section. Before we start, I would like to remind everyone that 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 within this release, including any statements regarding our business strategy, cost optimization plans, strategic options, the ability to enter into new strategic agreements, expectations from Massive IoT 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 1995, Section 27A of the Securities Act of 1993, 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 Security and Exchange Commission. And now I'd like to hand the call over to Georges Karam. Please go ahead, Georges.

Thank you, Kim. Good morning, everybody. Welcome to our fourth quarter and full year 2023 Financial Results Conference Call. I'll begin with comments on our business, followed by a review of the strategic options we are pursuing. Fourth quarter 2023 revenue was $4.8 million, of which approximately $4 million was product revenue, which is a significant increase as compared with the prior quarter. The reduction in licensing revenue was due to the revenue recognition profile of our primary 5G licensing deal. However, we are pleased that channel and customer inventory issues began to clear up in the fourth quarter, driving an increase in product shipments with customers launching new projects into mass production. Based on customer forecasts and backlog, we expect total Q1 revenue to be over $7 million, followed by sequential revenue growth for the remaining quarters of 2024, mainly driven by product revenue ramp. We expect to reach total revenue levels similar to those of 2022 as we exit 2024. This renewed top-line momentum is fueled primarily by multiple new customer product launches in asset tracking, smart metering and fleet management, using our LTE-MNB-IoT Monarch 2 and Cat 1 Calliope 2 platforms. The momentum is expected to continue into 2025 as the anticipated movement of design wins to production accelerates. Also, later in 2025, we expect our initial 5G chipset sales to begin coming online. Let's take a high-level look at how we expect to achieve this revenue ramp. Our product growth challenge in 2023 was primarily due to delays in customer projects moving from design into mass production. Despite these delays, our design win pipeline continued to grow from the addition of new projects from new and existing customers. In the fourth quarter of 2023, we were encouraged as customers finally moved several projects into production. Notably,…

Thank you, Georges, and good morning, everyone. Although revenues for the full year 2023 decreased 45 -- 44.5% from $60.6 million in 2022 to $33.6 million in 2023. We were pleased to see product revenues rebound in the fourth quarter as customers work down their inventory levels and new projects from multiple customers moved into mass production. Gross margin remained strong at 71.8% versus 70.8% in 2022 due to the contribution of high-margin licensing revenue. Over time, we expect product gross margins to be in the mid-40s as we transition from more module sales to more chipset sales. And as product sales become an increasing part of the revenue mix, overall gross margin should return closer to our target overall margin of 50%. Operating expenses in 2023 increased by $7.4 million to $54.1 million compared to $46.7 million in 2022, reflecting both the increase in our investment in 5G, but also the temporary increase of expenses of approximately $3.5 million from deal costs related to the Renesas tender offer. The combination of lower revenue and higher operating expenses resulted in an IFRS operating loss of $30 million, up from an operating loss of $3.8 million in 2022. On a non-IFRS basis, the operating loss was $22.7 million in 2023 compared with an operating gain of $1.6 million in 2022 and a non-IFRS net loss of $30.7 million in 2023 compared with a loss of $5.4 million in 2022. Moving to the fourth quarter, product revenue increased sequentially by more than 4x as our business began to recover from the consequences of high customer inventory of earlier generation products, which had a significant impact on our business in 2023. But more importantly, the revenue increase reflects the launch of new customer products into production. Revenue from Massive IoT product sales in…

So thank you again for joining the call today. We'll keep you apprised of any strategic developments as they occur. Again, we appreciate your continued trust and support as we move forward. Thank you, operator. You can close the call.

Ladies and gentlemen, this concludes your conference call for today. We thank you for joining, and you may now disconnect your lines. Thank you.