POET Technologies Reports First Quarter 2024 Financial Results
POET Technologies announced their first quarter 2024 financial results, reporting a net loss of $5.7M ($0.12 per share), which increased from $5.3M ($0.14 per share) in Q1 2023. The company highlighted significant breakthroughs, including a major design win with Foxconn for 800G and 1.6T optical transceivers, and collaborations with MultiLane and Luxshare. Financially, POET raised approximately C$26.4M from private placements and C$10.8M from ATM offerings. As of May 15, 2024, the company holds $23.6M in cash and $22.8M in working capital. Revenue from non-recurring engineering services dropped to $8,700 from $181,000 in Q1 2023.
- Major design win and collaboration with Foxconn for high-speed optical transceivers.
- Collaborations with MultiLane and Luxshare.
- Raised approximately C$26.4M from private placements.
- Raised C$10.8M from ATM offerings.
- Cash and cash equivalents of $23.6M.
- Working capital of $22.8M.
- Net loss of $5.7M in Q1 2024, up from $5.3M in Q1 2023.
- Decline in non-recurring engineering revenue to $8,700 from $181,000 in Q1 2023.
- Continued high expenditure on research and development ($1.9M).
- Stock-based compensation and depreciation costs remain high.
Insights
POET Technologies has delivered a mixed financial performance for the first quarter of 2024. The company's net loss of
The announcement of non-recurring engineering revenue declining to
From a strategic standpoint, the collaboration with Foxconn and the product launches at the Optical Fiber Conference signify positive industry traction and potential future revenue streams. Yet, the financial analyst will keep a close watch on the cash burn rate and whether the anticipated market opportunities translate into commercial success. If the company can continue securing such partnerships and ramping up production, the long-term prospects might outweigh the near-term financial losses.
The introduction of new products like the 800G transceiver and the 800G transmit optical engine chiplet indicates POET Technologies' commitment to cutting-edge innovation in the high-speed optical communications market. These products are targeted at AI and cloud data centers, which are expected to see explosive growth in the coming years.
The collaboration with MultiLane Inc. to develop next-generation transceivers is particularly significant. MultiLane's expertise in high-speed interconnect test solutions can complement POET's optical engines, potentially leading to highly optimized and reliable products. This is important as high-speed data communication solutions must meet stringent performance and reliability standards. Additionally, the partnership with Foxconn for developing and selling optical transceiver modules could provide POET a substantial market foothold, leveraging Foxconn’s extensive manufacturing and distribution capabilities.
However, technological advancements in this space come with high R&D costs and product development risks. The success of these collaborations and new product introductions will heavily depend on their performance in real-world applications and the speed at which they can be commercialized. Investors should look at the technological milestones and validation from key industry players as a metric for potential success.
POET Technologies' entry into the optical module market for AI and cloud data centers aligns well with market trends. The global demand for high-speed optical communications is projected to grow significantly due to increasing data traffic and the proliferation of AI applications. The collaboration with Foxconn and the expansion of their product portfolio are strategic moves to capture a share of this expanding market.
The Optical Fiber Conference (OFC) served as an effective platform for the company to showcase its new products, indicating strong interest from the industry. The market reception of these products, particularly the 800G and 1.6T transceivers, will be critical. These products are positioned to meet the growing need for high-speed and high-capacity data communication solutions in data centers and AI processing clusters.
Moreover, the company's successful capital raises, despite reporting losses, suggest that they have strong support from institutional investors who are likely betting on the long-term growth potential of POET's technology. However, the company's performance will need to be closely monitored to ensure that these investments translate into sustainable revenue growth and market share gains in a competitive landscape.
Strong Balance Sheet and Recent Major Design Win Mark Beginning of Second Quarter
TORONTO, May 15, 2024 (GLOBE NEWSWIRE) -- POET Technologies Inc. (“POET” or the “Company”) (TSX Venture: PTK; NASDAQ: POET), the designer and developer of the POET Optical Interposer™, Photonic Integrated Circuits (PICs) and light sources for the data center, tele-communication and artificial intelligence markets, today reported its unaudited condensed consolidated financial results as of and for the three months ended March 31, 2024. The Company’s financial results as well as the Management’s Discussion and Analysis have been filed on SEDAR+ in Canada and EDGAR in the U.S. All financial figures are in United States dollars (“USD”) unless otherwise indicated.
First Quarter and Recent Business Highlights:
- Participation at the Optical Fiber Conference (OFC) held in San Diego in mid-March represented a major commercial turning point for the Company, with the announcement of its first entry into the optical module market for artificial intelligence and cloud data center markets with an 800G pluggable transceiver.
- The Company also announced four new products at OFC all directed at the AI market, including an 800G transmit optical engine chiplet (200G/lane) that is a fundamental building block for 1.6T and 3.2T pluggable transceivers and an 8-channel packaged light source for C-Band and O-Band wavelengths for chip-to-chip data communications for AI systems and co-packaged optics for the data center market.
- To support its entry into the high-speed optical transceiver market, the Company announced a collaboration with MultiLane Inc., a well-known, leading provider of high-speed IO and data center interconnect test solutions, to develop next-generation, performance-optimized pluggable 800G, 1.6T and higher speed transceivers.
- Marking the Company’s success in launching its newly designed transmit and receive optical engines, the Company recently announced a major design win and collaboration with Foxconn Interconnect Technology (FIT) to develop 800G and 1.6T pluggable optical transceiver modules for sale by FIT using POET optical engines with an aim to address the growth in demand for cutting-edge AI applications and high-speed data center networks.
- To provide the development funding needed to address the increased demand for its products, the Company completed a series of previously-announced non-brokered private placements since January 1, 2024 which added a total of approximately C
$26.4 million to its balance sheet. In addition, over the same period, the Company sold 4,947,679 common shares through its ‘at-the-market’ (ATM) offering in the United States through Craig-Hallum LLC using the facilities of the Nasdaq Capital Market at an average price of C$2.17 , for gross proceeds of approximately C$10.8 million . - As of May 15, 2024, the Company had cash and cash equivalents of US
$23.6M and working capital of US$22.8M . There were 60,485,477 issued and outstanding common shares.
Management Comments
“Our team embarked on a dynamic first quarter preparing for the Optical Fiber Conference (OFC) held in San Diego in mid-March,” stated Chairman & CEO, Dr. Suresh Venkatesan. “We could not have guessed at the time that those efforts would lead to a collaboration with Foxconn, one of the world’s leading electronics manufacturing companies to include our optical engines in their 800G and 1.6T optical module products. We are proud to have been selected for their advanced module designs and we look forward to supplying FIT and its global customer base, which includes the largest consumers of optical modules in the AI market. At OFC, we showcased four new products, each of which garnered serious attention from the industry, with the strongest interest in our leading-edge optical engine technology that powers optical modules for AI processing clusters, and in our light source products that facilitate chip-to-chip light-based data communications and high-speed computing. In addition to Foxconn, we are expanding our previously announced relationship with Luxshare, to include additional optical module products, and collaborating with MultiLane, a key supplier of high-speed test equipment in the industry to offer 800G and 1.6T optical modules. The enthusiastic reception from OFC helped us to secure multiple successful capital raises from institutional investors committed to our company's success. The additional capital fortifies our financial foundation as we navigate the next phase of our growth.”
Non-IFRS Financial Summary
The Company reported non-recurring engineering revenue (“NRE”) of
The Company reported a net loss of
Non-cash expenses in the first quarter of 2024 included stock-based compensation of
The Company recognized other income, including interest of
The Company reported non-cash fair value adjustment to derivative warrant liability of
Cash flow from operating activities in the first quarter of 2024 was (
From January 1, 2024 to date, the Company received gross proceeds of
Non-IFRS Financial Performance Measures
Certain financial information presented in this press release is not prescribed by IFRS. These non-IFRS financial performance measures are included because management has used the information to analyze the business performance and financial position of POET. These non-IFRS financial measures are intended to provide additional information only and do not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. These non-IFRS financial measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
| POET TECHNOLOGIES INC. PROFORMA – NON-IFRS AND IFRS PRESENTATION OF OPERATIONS (All figures are in U.S. Dollars) | |||||||||||
| For the Quarter ended: | 31-Mar-24 | 31-Dec-23 | 30-Sep-23 | 30-Jun-23 | 31-Mar-23 | ||||||
| Revenue | 8,710 | 107,551 | - | 177,390 | 180,836 | ||||||
| Research and development | (1,922,066 | ) | (2,142,003 | ) | (2,043,264 | ) | (2,036,953 | ) | (2,316,475 | ) | |
| Depreciation and amortization | (509,260 | ) | (505,869 | ) | (508,484 | ) | (462,743 | ) | (445,044 | ) | |
| Professional fees | (409,726 | ) | (902,368 | ) | (273,905 | ) | (255,094 | ) | (313,404 | ) | |
| Wages and benefits | (768,496 | ) | (676,539 | ) | (640,241 | ) | (655,066 | ) | (677,924 | ) | |
| Stock-based compensation | (947,502 | ) | (1,050,088 | ) | (1,251,648 | ) | (697,690 | ) | (1,202,018 | ) | |
| General expenses and rent | (570,819 | ) | (317,333 | ) | (429,457 | ) | (502,707 | ) | (566,768 | ) | |
| Derivative liability adjustment | (629,824 | ) | (24,865 | ) | - | - | - | ||||
| Interest expense | (19,753 | ) | (13,547 | ) | (34,890 | ) | (11,214 | ) | (10,531 | ) | |
| Other (income), including interest | 52,558 | 54,047 | 45,448 | 57,454 | 78,041 | ||||||
| Net loss | (5,716,178 | ) | (5,471,014 | ) | (5,136,441 | ) | (4,386,623 | ) | (5,273,287 | ) | |
| Net loss per share | (0.12 | ) | (0.13 | ) | (0.13 | ) | (0.11 | ) | (0.14 | ) | |
ATM Quarterly Update
During the fiscal quarter ended March 31, 2024, through the ATM, the Company sold 435,405 common shares at an average price of C
About POET Technologies Inc.
POET is a design and development company offering high-speed optical modules, optical engines and light source products to the artificial intelligence systems market and to hyperscale data centers. POET’s photonic integration solutions are based on the POET Optical Interposer™, a novel, patented platform that allows the seamless integration of electronic and photonic devices into a single chip using advanced wafer-level semiconductor manufacturing techniques. POET's Optical Interposer-based products are lower cost, consume less power than comparable products, are smaller in size and are readily scalable to high production volumes. In addition to providing high-speed (800G, 1.6T and above) optical engines and optical modules for AI clusters and hyperscale data centers, POET has designed and produced novel light source products for chip-to-chip data communication within and between AI servers, the next frontier for solving bandwidth and latency problems in AI systems. POET’s Optical Interposer platform also solves device integration challenges in 5G networks, machine-to-machine communication, self-contained "Edge" computing applications and sensing applications, such as LIDAR systems for autonomous vehicles. POET is headquartered in Toronto, Canada, with operations in Allentown, PA, Shenzhen, China, and Singapore. More information about POET is available on our website at www.poet-technologies.com.
| Media Relations Contact: Adrian Brijbassi Adrian.brijbassi@poet.tech | Company Contact: Thomas R. Mika, EVP & CFO tm@poet.tech |
Forward-Looking Statements
This news release contains “forward-looking information” (within the meaning of applicable Canadian securities laws) and “forward-looking statements” (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995). Such statements or information are identified with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “potential”, “estimate”, “propose”, “project”, “outlook”, “foresee” or similar words suggesting future outcomes or statements regarding any potential outcome. Such statements include the Company’s expectations with respect to the success of the Company’s product development efforts, the performance of its products, the expected results of its operations, meeting revenue targets, and the expectation of continued success in the financing efforts, the capability, functionality, performance and cost of the Company’s technology as well as the market acceptance, inclusion and timing of the Company’s technology in current and future products and expectations for approval of proposals at the Company’s annual meeting of shareholders.
Such forward-looking information or statements are based on a number of risks, uncertainties and assumptions which may cause actual results or other expectations to differ materially from those anticipated and which may prove to be incorrect. Assumptions have been made regarding, among other things, management’s expectations regarding the success and timing for completion of its development efforts, the introduction of new products, financing activities, future growth, recruitment of personnel, opening of offices, the form and potential of its joint venture, plans for and completion of projects by the Company’s consultants, contractors and partners, availability of capital, and the necessity to incur capital and other expenditures. Actual results could differ materially due to a number of factors, including, without limitation, the failure of its products to meet performance requirements, lack of sales in its products, once released, operational risks in the completion of the Company’s anticipated projects, lack of performance of its joint venture, risks affecting the Company’s ability to execute projects, the ability of the Company to generate sales for its products, the ability to attract key personnel, the ability to raise additional capital and the agreement by shareholders to approve proposals put forth by the Company at shareholders’ meetings. Although the Company believes that the expectations reflected in the forward-looking information or statements are reasonable, prospective investors in the Company’s securities should not place undue reliance on forward-looking statements because the Company can provide no assurance that such expectations will prove to be correct. Forward-looking information and statements contained in this news release are as of the date of this news release and the Company assumes no obligation to update or revise this forward-looking information and statements except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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