For second-quarter 2017, POET Technologies Inc of San Jose, CA, USA — which has developed the proprietary planar optoelectronic technology (POET) platform for monolithic fabrication of integrated III-V-based electronic and optical devices on a single semiconductor wafer — has reported revenue of US$648,382, down on US$712,550 last quarter but up on US$576,741 a year ago.
However, excluding non-recurring engineering (NRE) revenue, product revenue rose 39% year-on-year, due to continued shipment of DenseLight photonic sensors (primarily for test & measurement applications).
Gross margin was 50.5%, down from 59.6% last quarter and 51.4% a year ago. However, this was after management performed a detailed review of the firm’s cost structure and determined that certain product costs historically included in cost of sales should be more appropriately categorized in selling, marketing & administration expenses. As a result, gross margin for comparative periods have been adjusted to reflect this determination.
“We continued to diligently manage operating expenses,” says CEO Dr Suresh Venkatesan. “Our collective reductions in wages, professional fees, as well as management and consulting fees, resulted in a meaningful year-over-year improvement in net loss,” he adds.
Net loss has been cut from US$3.4m ($0.02 per share) a year ago and US$3.5m ($0.01 per share) last quarter to US$2.8m ($0.01 per share).
POET ended the quarter with cash and short-term investments of US$9.8m, down from US$14.9m at the end of 2016.
“As outlined at the 2017 annual general meeting (AGM) in July, we are focusing our design and engineering resources on further development of our indium phosphide (InP)-based hybrid dielectric photonics platform to introduce disruptive new solutions with lower cost and higher performance. Also, as discussed at the AGM, we are focused on securing a strategic partner to assist with further developing and commercializing our monolithic gallium arsenide (GaAs) optical engine,” says Venkatesan.
“InP-based solutions for 100G applications have emerged as one of the largest and fastest-growing segments in the data communications market. We believe our recently introduced hybrid dielectric photonics platform based on InP, which leverages a combination of POET’s integrated photonics expertise and proprietary dielectric waveguide technology, provides a compelling and differentiated solution in the multi-billion-dollar transceiver market. Reinforcing our strategic decision to focus on an InP-based hybrid platform is the ability to leverage the company’s established InP fabrication and manufacturing facility in Singapore, which provides a number of operational and economic benefits,” continues Venkatesan.
“As we make progress toward developing a transceiver optical engine, we also expect to introduce photonic transceiver components for the data communications market. As an example, we recently introduced multiplexing and de-multiplexing devices that are based on our proprietary dielectric waveguide technology. We also expect to introduce distributed feedback (DFB) lasers with wavelengths spanning the O-band and C-band, with delivery of engineering samples to customers expected during the third quarter. Additionally, we are making solid progress on incorporating our Hybrid Integrated Photonics Packaging (HiPP) into new high-performance packaged solutions, such as narrow linewidth lasers, that will expand DenseLight’s existing line of sensor products beginning in 2018,” he adds.
“Our fundamental vision continues to be enabling disruptive solutions by leveraging innovative photonics integration to lower cost and increase performance for the data communications and sensing markets. POET’s strategic direction fully capitalizes on our core competencies and assets and is also well aligned with the trends and substantial growth opportunities within our targeted end markets, which is critical to realizing the highest return on investment,” Venkatesan believes.
Grant of options
POET also announced that, under its stock option plan (and subject to the TSX Venture Exchange policies and applicable securities laws), it has granted Kevin Barnes previously approved incentive stock options, consisting of the right to purchase up to 150,000 common shares and a four-year vesting schedule beginning on 13 July 2018. The options are exercisable at CAD$0.28 per share.
