POET cuts losses year-on-year in Q2, despite rise in R&D spending

For second-quarter 2021, POET Technologies a designer and developer of the POET Optical Interposer and photonic integrated circuits (PICs) for the data-center and telecom markets — has reported non-recurring engineering revenue of $0.2m related to an Optical Interposer design project for a specific customer.

Net loss was $4.2m ($0.01 per share), roughly level with $4.1m ($0.01 per share) last quarter but cut from $6.2m ($0.02 per share) a year ago. This included R&D costs of $1.8m, up from $1.3m both last quarter and a year ago. “R&D for a company at this stage of development will vary from period to period as variable expenses with contract manufacturers fluctuate based on the development cycle and the immediate product development needs of the company,” notes POET. The increased cost was primarily related to completion of the development of the Lightbar 100G and 200G CWDM4 Optical Engines, samples for which should be available this quarter (to end-October).

Debt-related finance costs have fallen from $229,000 a year ago and $235,000 last quarter to $95,000 (of which $49,000 was non-cash, compared with $130,000 a year ago and $128,000 last quarter).

On a non-IFRS basis, cash outflow from operating activities was -$2.6m, roughly level with -$2.5m last quarter but worsening from -$1.7m a year ago.

POET says that it continued to execute on its strategic plan during Q2/2021 and achieved the following milestones during and subsequent to the quarter:

  • Rapidly completed the design of a fully integrated 100G LR4 (4-channel long-reach) optical engine with a reach of 10km for client-side interconnects to data centers, enterprises and edge computing networks (demonstrating the benefit of POET’s investment in the Optical Interposer as a true platform technology);
  • Announced availability of samples of 100G and 200G CWDM4 Optical Engines, enabled by four flip-chipped 28G and 28G PAM4 coarse wavelength division multiplexing (CWDM) distributed feedback (DFB) lasers operating to MSA standards for the QSFP28 module;
  • Announced availability of samples of O-band LightBar product. POET’s LightBar products address the need for remote, aligned light sources to power data communication transceivers, co-packaging of electronics and photonics in applications such as data-center switch architectures, optical computing and various sensing devices;
  • Continued to expand intellectual property portfolio, totaling 77 issued patents, with all 18 patents pending specifically related to the POET Optical Interposer platform;
  • Improved liquidity by $1.03m through the conversion of convertible debentures;
  • Ended period with cash and cash equivalents of $22m (up from $6.9m at the end of December 2020);
  • Filed a US$300m registration statement with OSC and SEC for possible future equity issuances, engaged Computershare as new transfer agent and provided all requested information in support of the company’s application for a future listing on the Capital Market.

2021 continues to be a transformative year for the company,” says chairman & CEO Dr Suresh Venkatesan. “Although supply chain constraints across the broader semiconductor market contributed to scheduling challenges during the first half of the year, we’ve continued to take actions to minimize the impact on our product development timelines and ongoing engagements with customers. We currently have a double-digit number of customers targeted for initial distribution of prototype samples, including customized designs for specific customers and applications. We are also receiving strong interest from prospective customers for custom, differentiated LR4 designs for client-side telecom network applications,” he adds.

Additionally, the team is finalizing preparations for the China International Optoelectronic Exposition (CIOE), now scheduled to be held 16-18 September, along with our joint venture team at Super Photonics Xiamen. Prior to and during CIOE, we will be delivering samples of 100G and 200G optical engines as well as 400G Receive (Rx) optical engines to select customers. We’ve also partnered with Shanghai-based Siluxtek and will be conducting a live demonstration of a 400G FR4 Transmit (Tx) optical engine concurrent to the show at our Xiamen lab,” Venkatesan notes.

With continued execution of our strategic plan and growing product development activity in the second half of 2021, our focus will remain on realizing our vision for POET of becoming a global leader in chip-scale photonic solutions based on our Optical Interposer technology that enables a broad range of vertical market applications.”