POET Technologies (POET (POET)) had a day on Thursday. The stock jumped 43.15% to close at $20.57 after the company reported first-quarter 2026 earnings that showed revenue more than tripling from a year ago. The excitement was fueled by updates on AI data center partnerships that suggest the company is moving from development to real commercial traction.
Revenue came in at $503,389, up from $166,760 a year earlier and $341,202 in the fourth quarter of 2025. That beat the analyst estimate of $300,000 by a wide margin. The revenue was a mix of non-recurring engineering and product revenue tied to projects using POET's Optical Interposer platform, which is essentially a fancy way of saying they're making the components that help AI data centers move data around faster.
But it wasn't all good news on the bottom line. POET posted a GAAP net loss of $12.3 million, or 8 cents per share, compared with net income of $6.3 million, or 8 cents per share, a year earlier. That loss was worse than the 5-cent loss analysts had expected. The big swing was partly due to a much smaller non-cash gain from derivative liability adjustments — $1.6 million this quarter versus $15.4 million last year. Other income, including interest, jumped to $4.0 million from $528,000, which helped offset some of the pain.
Revenue rose about 202% year over year and about 47.5% sequentially, as POET continues shifting from research and development to actual product sales for AI networking infrastructure. R&D spending was $4.5 million, roughly flat with last year's $4.3 million. Stock-based compensation, however, more than quadrupled to $3.4 million from $0.8 million, and depreciation and amortization ticked up to $1.0 million from $0.7 million.
Cash flow remains a concern. Operating cash flow was negative $8.8 million, similar to the negative $8.9 million a year earlier and an improvement from negative $11.6 million in the prior quarter. The company didn't disclose its quarter-end cash balance, free cash flow, or debt figures, which leaves some questions about how long it can fund operations without additional capital.
The real story, though, is the partnerships. Chairman and CEO Dr. Suresh Venkatesan said, "During the first quarter of 2026, we made significant progress in expanding POET's strategic position within the AI and hyperscale data center ecosystem." During the quarter, POET announced collaborations with LITEON Technology and Lessengers to develop a 1.6T 2×DR4 optical transceiver module for AI clusters and hyperscale data centers. That's the kind of high-speed gear that makes AI training and inference faster.
Even bigger was the supply and joint development agreement with Lumilens, which includes an initial $50 million purchase order for EOI-based optical engines. The deal could expand to more than $500 million in cumulative purchases over five years. That's a meaningful vote of confidence from a customer and suggests POET's technology is gaining traction in the market.
On the strategic front, POET said it plans to move its headquarters and domicile to the U.S. and shift production capacity from China to Malaysia as it scales manufacturing. That's a move that could reduce geopolitical risk and align with the broader trend of supply chain diversification.
As for the stock, after Thursday's 43% surge, shares pulled back 9.48% to $18.62 in Friday premarket trading. That kind of volatility is typical for a small-cap stock that just had a big news day. Investors are clearly excited about the AI data center opportunity, but they're also watching the cash burn and the path to profitability.
