Universal Display (OLED) Q1 2025 Earnings Call May 01, 2025 05:00 PM ET Speaker0 Good day, ladies and gentlemen, and welcome to Universal Display Corporation's First Quarter twenty twenty five Earnings Conference Call. My name is Sherry, and I will be your conference moderator for today's call. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Darice Liu, Senior Director of Investor Relations. Please proceed. Speaker1 Thank you, and good afternoo ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ___________ Commission File Number 1-12031 UNIVERSAL DISPLAY CORPORATION (Exact name of registrant as specified in its charter) | Pennsylvania ...

Exhibit 99.1 Press Release Universal Display Contact: Darice Liu investor@oled.com media@oled.com +1 609-964-5123 Universal Display Corporation Announces First Quarter 2025 Financial Results EWING, N.J. – May 1, 2025 – Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED® technology and materials, today reported financial results for the first quarter ended March 31, 2025. "We began 2025 on a solid financial note and continue to remain confid ...

Universal Display Corp. (OLED) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.Since a ch ...

Group 1 - Universal Display Corp. (OLED) shares increased by 17.4% to close at $125.17, following a period of 28.8% loss over the past four weeks, indicating notable trading volume [1] - The company has a strong patent portfolio, attracting large customers and generating significant licensing revenues, driven by the growth of small-area OLEDs in smartphones and wearables, and large-area OLEDs in televisions [2] - The automotive industry presents new opportunities, with major automakers like Audi, Lotus, and Zeekr introducing car models featuring OLED screens [2] Group 2 - Universal Display generates most of its revenues from international markets, with operations in South Korea, Ireland, China, Japan, and others, making it susceptible to geopolitical risks [3] - The U.S. Government's recent decision to pause higher tariffs for 90 days for most countries, except China, is seen as a positive development for the company [3] - The company is expected to report quarterly earnings of $1.03 per share, reflecting a year-over-year decline of 13.5%, with revenues projected at $154.85 million, down 6.3% from the previous year [4] Group 3 - The consensus EPS estimate for Universal Display has been revised 1.3% higher in the last 30 days, indicating a positive trend that may lead to price appreciation [5] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [5] - Littelfuse, another company in the same industry, closed 11.3% higher at $166.62, but has seen a return of -28.5% in the past month [5][6]

Core Insights - Universal Display Corp. (OLED) has shown a mixed performance in international markets, which is crucial for assessing its financial resilience and growth prospects [1][2][10] Group 1: Financial Performance - For the quarter ending December 2024, Universal Display reported total revenue of $162.29 million, reflecting a year-over-year increase of 2.5% [4] - South Korea generated $92.13 million, accounting for 56.77% of total revenue, but fell short of the $93.3 million expected by analysts, representing a surprise of -1.26% [5] - China contributed $65.37 million, or 40.28% of total revenue, exceeding expectations by 30.79% compared to the forecast of $49.98 million [6] - Japan's revenue was $0.6 million, making up 0.37% of total revenue, which was below the consensus estimate of $0.92 million, resulting in a surprise of -35.22% [7] Group 2: Revenue Forecasts - Analysts predict total revenue of $151.23 million for the current fiscal quarter, indicating an 8.5% decline from the previous year [8] - For the full year, total revenue is expected to reach $665.2 million, marking a 2.7% increase from the prior year, with South Korea, China, and Japan projected to contribute $399.89 million, $277.38 million, and $6.82 million respectively [9] Group 3: Market Dynamics - The company's reliance on international markets presents both opportunities and challenges, particularly in light of global economic interconnections and geopolitical uncertainties [3][10] - Monitoring trends in overseas revenues is essential for predicting future performance, especially for companies with significant international operations [10]

Core Viewpoint - Universal Display Corporation (OLED) has increased its quarterly dividend payout by approximately 12.5% to 45 cents per share, reflecting a commitment to providing attractive risk-adjusted returns to its shareholders [1][2]. Dividend and Financial Strategy - The new dividend results in a modest yield of 1.22% based on the closing price of $147.34 on February 20, 2025, and is part of the company's long-term strategy to ensure steady returns for stockholders [2]. - The company has a history of healthy dividend increases, which is considered one of its key strengths [2][7]. Growth Drivers - Universal Display is a leading developer in the OLED market, with applications in various industries such as smartphones, televisions, virtual reality devices, and automotive markets [3][4]. - The increasing demand for small-area OLEDs in smartphones and wearables, as well as large-area OLEDs in televisions, presents significant growth opportunities [4]. - OLED technology is noted for its efficiency and cost-effectiveness, particularly in high-volume manufacturing for solid-state lighting applications [4]. Competitive Advantage - The company holds a strong portfolio of around 6,000 patents, with its UniversalPHOLED technology being four times more efficient than fluorescent OLEDs and significantly more efficient than current LCDs [5]. - Collaborations with prestigious institutions like Princeton University and the University of Southern California are expected to enhance its patent portfolio and drive innovation in OLED applications [6]. Financial Performance and Outlook - Universal Display has a Zacks Rank of 3 (Hold) and a long-term earnings growth expectation of 19.5%, with an average earnings surprise of 9% over the last four quarters [7]. - The combination of favorable growth dynamics and sound financial management supports the recent dividend increase, making it an attractive option for investors seeking steady income [7].

Core Insights - Universal Display Corp. reported revenue of $162.29 million for Q4 2024, a year-over-year increase of 2.5% [1] - The company's EPS for the same period was $1.22, down from $1.29 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $148.67 million by 9.17%, and the EPS surpassed the consensus estimate of $1.07 by 14.02% [1] Revenue Breakdown - Material sales reached $93.27 million, exceeding the average estimate of $78.92 million by analysts, representing a year-over-year increase of 13.4% [4] - Revenue from contract research services was $4.62 million, slightly above the average estimate of $4.29 million, reflecting a significant year-over-year increase of 43.6% [4] - Royalty and license fees totaled $64.41 million, which was below the average estimate of $65.14 million, indicating a year-over-year decline of 11.6% [4] Stock Performance - Over the past month, shares of Universal Display have returned -1%, while the Zacks S&P 500 composite has increased by 2.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Universal Display Corporation reported record revenues of $648 million for 2024, with operating income of $239 million and net income of $222 million, translating to $4.65 per diluted share [8][24] - The company achieved a 12% year-over-year revenue growth, with total gross margins remaining flat at 77% [24][25] - Operating expenses increased to $260 million in 2024 from $224 million in 2023, with a notable restructuring cost of $8.9 million impacting EPS by $0.15 [25][26] Business Line Data and Key Metrics Changes - Material sales reached $365 million, while royalty and license revenues were $267 million, and Adesis' revenues were $15 million for 2024 [24] - In Q4 2024, revenue was $162 million, up 3% from $158 million in Q4 2023, with material sales of $93 million compared to $82 million in the same quarter of the previous year [28][29] - Green emitter sales were $67 million in Q4 2024, up from $63 million in Q4 2023, while red emitter sales increased to $25 million from $18 million [28] Market Data and Key Metrics Changes - The OLED smartphone market is projected to grow from 784 million units in 2024 to 952 million units by 2029, with OLED IT displays expected to nearly quadruple from 20.2 million units in 2024 to 77.6 million units in 2029 [15][16] - The automotive OLED display market is anticipated to quadruple from 2.6 million units in 2024 to 10.6 million units in 2029, driven by demand for energy-efficient displays [17] - OLED TV units are forecasted to grow from 6.8 million in 2024 to 7.9 million in 2029, indicating a continued proliferation of OLED technology [18] Company Strategy and Development Direction - The company is focused on innovation and expanding its leadership position in the OLED ecosystem, with significant advancements in operational, strategic, and R&D roadmaps [9][10] - The introduction of phosphorescent blue technology is seen as a potential game changer, expected to increase energy efficiency by up to 25% once commercialized [13][14] - The company is also exploring new market verticals for its OVJP technology, with a focus on medium area IT markets in the near term [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a dynamic market landscape and emphasized the importance of innovation in meeting evolving consumer demands [9][10] - The outlook for 2025 anticipates revenues in the range of $640 million to $700 million, with operating margins expected to be between 35% and 40% [32][33] - The effective tax rate for 2025 is projected to be approximately 19%, and a quarterly cash dividend of $0.45 per share has been approved [34] Other Important Information - The company ended 2024 with $928 million in cash, cash equivalents, and investments [27] - A new investment cycle in OLED capacity is expected, with approximately $20 billion committed to building new Gen 8.6 OLED capacity [21] Q&A Session Summary Question: Update on blue emitter timeline - Management reiterated that the timeline for commercialization of the blue emitter is still "months, not years," with ongoing progress being made [40][43] Question: Revenue guidance for 2025 and seasonality - The company expects a stronger second half in 2025 compared to the first half, despite macro uncertainties [46] Question: Inventory status and impact on 2025 - Current inventory levels are normal, with no significant issues reported from customers [48][55] Question: Geopolitical impacts and tariffs - Management is monitoring macro factors, including tariffs, but has experience navigating global trade [56][57] Question: Factors influencing 2025 revenue guidance - Revenue guidance is influenced by consumer demand and development work at customer sites, with blue included but not expected to drive significant growth [58][59] Question: Competition in the blue emitter market - Management believes that all paths to high-efficiency blue go through their materials, asserting a competitive edge [111] Question: Local competition in the Chinese market - The company is closely monitoring local Chinese material suppliers but remains confident in its longstanding customer relationships and quality [114]

Company Performance - Universal Display Corp. reported quarterly earnings of $1.22 per share, exceeding the Zacks Consensus Estimate of $1.07 per share, but down from $1.29 per share a year ago [1] - The earnings surprise for this quarter was 14.02%, following a previous quarter where the company reported earnings of $1.40 per share against an expectation of $1.20, resulting in a surprise of 16.67% [2] - The company achieved revenues of $162.29 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 9.17% and up from $158.32 million year-over-year [3] Market Performance - Universal Display shares have increased approximately 0.3% since the beginning of the year, while the S&P 500 has gained 4.5% [4] - The current Zacks Rank for Universal Display is 3 (Hold), indicating that the stock is expected to perform in line with the market in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.99 on revenues of $151.23 million, and for the current fiscal year, it is $4.71 on revenues of $669.78 million [8] - The outlook for the industry, particularly the Electronics - Miscellaneous Components sector, is currently in the bottom 35% of Zacks industries, which may impact the stock's performance [9]