Universal Display (OLED) 30 Oct 242024 Q3 Earnings call transcript

Good day, ladies and gentlemen, and welcome to Universal Display Corporation's Third Quarter Earnings Conference Call. My name is Sherry, and I will be your conference moderator for today's call. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes.

I would now like to turn the call over to Darice Liu, Director of Investor Relations. Please proceed.

afternoon, good and you, everyone. Thank Display's Welcome Earnings Call. Quarter to Universal Conference Third

today on Abramson, Brian Vice Financial me the are Officer; Millard, Officer. Chief and Joining call President and Executive Steve Chief President and

remind available me Universal is written is portion for consent the of webcast Universal redistribution, of let begins, call Any prohibited. Further, Steve date you live today's this and as of made October XXXX. webcast any time call a Display. will call this of call of rebroadcast live period is or Display on XX, expressed a be Display's in of contains being of strictly that time-sensitive retransmission this accurate the This website. Universal the property call, is information any of that without Before only form

in may uncertainties, These expectations. of During uncertainties SEC update by forward-looking this and filed statements significant our any Display should with of a securities. materially. call, risks and disclaims to statements. risks the any differ the any investments actual to Universal these referenced are we on statements may These considering making obligation number anyone based reports current be company's and discussed are make subject the in company's periodic and results

call Now I'd the like to Abramson. over Steve to turn

welcome Thanks, Darice, to and everyone on today's call.

than to XXXX record modest income revenue be Our expected profits. $X.XX. Operating year million another of $XX were previously growth, net record earnings projected. growth. $XXX revenues and us third though, diluted Growth and The for and was was is quarter profit that more of per share million. is rate positions

customers a third the but year note, the we their for The first QX. quarter, forecast end as strong of of off approach started on the lowered half

XXXX the to forecast range million trend million. forecast our revising revenue of revisions, $XXX downward to are $XXX we Given

IT, across tempered believe of the the in the in OLED from market pace we the to this activity quarter that term, While of AR/VR as expected units the for in OLED more forecasts Near driver expands we new devices, and mobile landscape than have year's XXXX, million to with growth, CapEx of momentum OLED trajectory watches, estimated TVs. tremendous are multiyear up to lower-than-expected expect XXXX. OLED here grow fourth automotive smartphones, Omdia XX million consumer market sales electronics continue to medium-sized IT XX cycle is XXX% be a PCs growth an This driving the market. units new primary growth. smart

its billion Samsung facility on $X.X brings total to designed that in OLED X.X During for will monthly facilities BOE's be investments plates believe XX,XXX $X a Gen-X.X current are further OLED in Visionox's per OLED Display's new OLED Similar the approximately to ground Visionox billion month to Gen-X.X fab new month. quarter, facility, with Hefei. the billion, works. plate Add of new $X per Gen-X.X broke greenfield capacity Gen that billion, IT XX,XXX $XX investments we the and plant.

mostly its of factories to construction a to and OLED Visionox build new August, module factory modules. $X.X Gen-X module in on recently OLED new in module According Display OLED rise. OLED to completed also and are line the reports, New billion $X.X produce decided billion production invest the flexible IT automotive Vietnam, Samsung to

Lotus, Audi, OLED the models new during automotive, and screens. OLEDs quarter, automotive car Zeekr unveiled and of with HONGQI myriad Speaking makers, including

technology phosphorescent those of picture energy OLEDs quality automotive with refresh continue push boundaries materials form enabling From and brilliant enabled and design are and models electronics both efficiency were greater as of to well by our the market. low lighter, taillights. to OLED products. in OLED's and factor some thinner as and numerous And rollable being conformable, other OLEDs fast power with benefits, and inherently OLEDs consumption displays flexibility the consumer bendable designed OLED

as XXXX, its will with much XX.X-inch total XX.X-inch that the quarter, OLED fully to tablet. During year. up project rollable development not smartphone its almost a make large device trifold, will the was that only can phone, X% Trifoldables XX% factor and Samsung up reports plans smartphone the are display. XT from when to launch Research smartphone of to full rollable forecasts These world's the form Mate consumer launched the first today. the open, note rollable support that OLED next foldable definition what by first phones broadening first screen shipments, a from reports, of X.X-inch UBI Samsung's a transforms is size progressing be. According fancier into a product

On collaborate developing new with closely to OLED maps. their and our the are front, growing technologies R&D and product customers we materials road continue support to

are and reds, point, for specifications color discovering, ever-changing delivering We continuously and yellows meet greens, hosts lifetime. to next-generation developing ever-evolving and and the efficiency energy

work Regarding progress phosphorescent on system. for we a to excellent blue commercial development blue, continue emissive our ongoing make

of We believe the manufacturing can consumers fast believe with a blue red, enabling additional to TVs needed for and continue to landscape. On that commercial for Brian. that continue is With let revolutionize years. When turn over that the will the benefits commercial and device, months make us. measured OLED phosphorescent OVJP, that the and to area significant our blue we will OLED phosphorescent in believe and we to the call adopted for efficiently introduce note, marketplace be time the me green into OLED not large track We industry, blue in time side-by-side be progress. an

Thank you, call you, Steve. everyone, again, And thank our for joining today.

year. and for record track on revenue are we shared, this earnings Steve As record

from income from Our XXXX. net reached up million, XX% first the same $XXX revenue our for And the million, XX% year. X up period through months X year-over-year months last of is the first QX $XXX

revenue $XXX million For in of the to third XXXX. quarter $XXX third of XXXX, million the was quarter compared

which sales include the the in XXXX. million compares third $XX.X XXXX. quarter sales, compared $XX.X emitter our material $XX.X quarter to third in the of emitter were million This quarter the million. This of to XXXX. green of to compares million $XX in of Red quarter emitters, in yellow, sales were were million Material Green $XX.X sales third third million. $XX

past, As it in been vary material has buying quarter-to-quarter. patterns discussed can the

royalty were period prior quarter due to fees and mix cumulative year Third adjustment was of to compared $XX the customer increase catch-up of million. The and $XX license year-over-year million. $X million

the $X.X For materials comparable to in compared the was be now full Adesis' period of revenue X.X:X. third quarter year, we in from royalty ratio XXXX. expect license million the of to to million $X.X fees the and ballpark

third XX%. was Third and to gross in of $XX quarter sales compares total million of XX% quarter $XX XXXX. million, cost into of of margins the total This gross translating margins

full be will range the our XX% believe to total year of continue margins gross We in XX%. to

XXXX, operating it $XX were of excluding expenses, quarter million. quarter third sales, Third the In million. was cost $XX of

We expect range in translating the guidance margin third operating our XX% of an operating million million prior to quarter, XX% within OpEx of a XX% to This be $XX $XX the was margin. and compares of XXXX to year-over-year period to XX%. income our increase. Operating year

approximately to We full third XX%. year our XX%. the XXXX. will rate believe for the to be our rate the continue XX% year in of quarter operating to be range now margins We expect was in effective tax tax The of income XX%

in compares investments. Third $XX share. $XXX quarter with $X.XX per and XXXX. share ended or million XXXX equivalents This in $X.XX million diluted approximately million quarter income net We to $XX or cash comparable cash, in diluted per the was period the

December which XXXX. Regarding I'll our a to the guidance, to XXXX, will to return to be cash our earlier, range Directors as record revenues close quarterly our back as XXXX be expected paid The and of will flow we $X.XX million discussed Steve. XX, that, And million. December of Steve shareholders. With dividend approved capital now lastly, the expect dividend, our $XXX XX, call generation reflects on on in of of turn $XXX stockholders of continued business to positive the commitment Board

Thanks, Brian.

the OLED the and ecosystem, of progress. pioneer a cornerstone is As leader that innovation believe we in

this groundbreaking created investments Innovation in the was significant and in research month, electronics announced founder, late in development award innovation and inspire field. our recognize advancements industries. and in belief are to Our Seligsohn the Last science transform I. we to a Sherwin our testament that to of tribute to organic In lives Award. to power encourage and

award, nurture new for commitment automotive, road displays, new IT medium-sized with significant around milestone world. market auto as beginning of their thriving of are in of OLEDs, cycle the these a community investments marks nascent as the segments. adoption deployed OLED facilities broaden as scientists a researchers well the being OLED significant and namely our leading to With notebook, the OEMs and this deepening in are support OLED map founding XXXX the for to monitor tablet, for product and expected we industry

this support long We here are enable runway growth. to of and

to continues industry set technology world-class standards. Our

and we deepen, XX Our to our global expertise to continue and of years. unparalleled expand partnerships continue leverage

of for bright, drive, company's and path shaping employees I like the ahead. In thank heart and excited Our closing, is each and advancements. accomplishments for would Universal desire, our and dedication in elevating future Display's their are we to

and We our achieving and are materials let's And Q&A. and the cutting-edge customers a shareholders. growth our to committed delivering for in operator, long-term the being with OLED superior technologies the leader for ecosystem, start industry, that, for

Martin from & Company. Oppenheimer with is question Yang first Our Instructions] [Operator

for for context customer, what a are the their more single exposures Is or us customer? give cuts? you from multiple reasons cuts? a Can the And order it

very different their any certain of the the we QX. certain as as and and half consumer board, customers really not they're as our approach One forecast first of strong Martin, of some lastly, potentially Steve's as even we of we sentiment macroeconomic prior third customer. A the driving and certainly But across of levels of as for did quarter, those year and of remarks, see being so carrying Yes. a then as yes, lower it we expectations world third And the was end that. reevaluate clearly, in the and materials. we approach in their got be also the things year-end, inventory had QX, quarter, mentioned the that our particular kind than models we number concerns. well of having one customers geographies the end toward sales could is some what

So We changes any to it's things. but customer base of in one we as point thing, across can't see the a ended we did QX. forecast combination

previous feels is there share Can quarters. context to any could it. -- share in little with gross about details Any light margin to you material Got us? you more It more the compared the quarter? a also

product between combined Yes. total customers, materials. the drivers. we is margin gross negotiate license when as that Really just look well customer we way also really because useful of pricing with more the as much at of a talked really the the business about we've profitability pricing and is And before, primary the the we mix believe side mix as evaluating

continues expect So for we range year, to to gross that the total margin be XX%. the XX% within

Scott Searle from is with ROTH question Our Capital next Partners.

know Do Brian, the to this early to slowdowns, XXXX to of a I little end you Steve, we like look customer about seasonality and some good far into wondering of but hard your March have markets of elevated like base? a the seems Because it's visibility in the we're what inventory customer is some it out with I'm some quantify, the start is kind of levels how of quarter. as think idea might across contradictory seeing today. what

but hear more to gone TV to on starting more be recover have front, with panels starting incremental. corrections, smartphones that maybe about inventory less through You're to so that small the seems

thoughts I'm I'll of, seasonality So the inventory. wondering and in normalizing early call terms it, are what

Yes.

is persistent guidance to our we're going don't to we right any XXXX. that relates through And adjustment of it planning indicative firstly, that believe So for now XXXX, really making trend. still process this as we're

have out get adjustments from OLED the think mentioned more really as temporary models. we But as, is we'll earlier, to February impact close some as we certain the once So this to just year well share as kind we of call. I

is look, Okay. the we've could and commercial the process where all see the it not we your we're horizon, another adopting to point it wondering for line on But form How if that could timing years. blue. from the I go X months get I'm up closer, the sales? again, Fair if we of it to comfortable some follow on you into comment expectations to time talking of take before months, what Steve, X success metrics enough. long blue, a green? when calibrate that And your could got once getting that blue guess blue? get is Is of what And Does out to with become XX% design customers out? you're there material? And material a standpoint possibly some about XX years I for looking parity further are

able to commercialize questions. that on color process. be your be I get And closer, closely with our shed questions. is to phosphorescent more very blue, going good iterative as answer it our may is all an we're Scott, my customers. to working we And and important

commercial and blue Yes. introduced And bring and into enables it mass in well focused at really do with cycle it on a a certainly, it's getting material specs to that his that there's the as because as community with projects I device. And progress point in then as once significant performance, this and from customers off as we're But to to will note, designing believe ultimately to that, in adoption we our mentioned think, OEM on will making benefits then continuing that from important kick of adoption development we there. work of that on to the of your production Scott, remarks performance we're And interest question hit and well rates, good number device. commercial the and a our specs blue to having earlier. Steve and getting customers

So slope of sit predict it's here to we really an hard curve the adoption today. as

comes [Operator Instructions] next from Our Kim. Nam question

news they material. successfully and article Display understand try understand blue back Does start Display. your OLED LG Universal what developed ready I once to using certain production? mean to article this meets customers I I mean ramp mass just phosphorescent few mean here. in to to it to think try it According material months what blue ago, a August, panel

Yes.

a some using been August an with it's on development. projects. we working just material development So as others article in as Display them obviously said, LG as well We've progress. And Nam, to for you in blue our of there I was view but can't of back be customers think comment alluding result And indicative a material our and that that we ways speculation our of and good as variety any it applications. published. it And that and different use one, might there, was to positive rumors being material using out shows that was are see in

for will conclude question-and-answer session. program turn back I additional remarks. our the closing any Millard Brian This like would to to

Thank appreciate and you We support. for your today. interest your time

conference. Thank you. today's concludes This

disconnect. You may now