Universal Display (OLED) Q1 2025 Earnings Call May 01, 2025 05:00 PM ET Company Participants Darice Liu - Senior Director of Investor Relations & Corporate CommunicationsSteven Abramson - President, Chief Executive Officer & DirectorBrian Millard - VP, CFO & TreasurerTyler Bisset - Equity Research Associate Conference Call Participants James Ricchiuti - Senior AnalystMehdi Hosseini - Senior Equity Research AnalystScott Searle - Managing Director, Senior Research AnalystNam Hyung Kim - Senior AnalystNone - A ...

Universal Display (OLED) Q1 2025 Earnings Call May 01, 2025 05:00 PM ET Company Participants Darice Liu - Senior Director of Investor Relations & Corporate CommunicationsSteven Abramson - President, Chief Executive Officer & DirectorBrian Millard - VP, CFO & TreasurerTyler Bisset - Equity Research Associate Conference Call Participants James Ricchiuti - Senior AnalystMehdi Hosseini - Senior Equity Research AnalystScott Searle - Managing Director, Senior Research AnalystNam Hyung Kim - Senior AnalystNone - A ...

Financial Data and Key Metrics Changes - In Q1 2025, revenue was $166 million, operating profit was $70 million, and net income was $64 million or $1.35 per diluted share, showing a year-over-year increase in net income of over 13% from $57 million or $1.19 per diluted share in Q1 2024 [5][14] - Total material sales were $86 million in Q1 2025, down from $93 million in Q1 2024, while royalty and license fees increased to $74 million from $68 million in the prior year [11][12] - Operating income increased to $70 million with an operating margin of 42%, compared to $63 million and 38% in the prior year [13] Business Line Data and Key Metrics Changes - Green emitter sales were $64 million in Q1 2025, down from $71 million in Q1 2024, while red emitter sales remained at $21 million [11][12] - Adesis' revenue in Q1 2025 was $6.6 million, compared to $3.7 million in Q1 2024, indicating growth in this segment [12] Market Data and Key Metrics Changes - OLED smartphone units are forecasted to grow by 6% year-over-year to 848 million units, OLED IT units are expected to increase by 16% to 27 million units, and OLED TVs are projected to grow by 4.5% to 7.1 million units [8] - The overall OLED market is expected to see mid-single-digit growth in 2025, driven by diverse product roadmaps and applications [7] Company Strategy and Development Direction - The company is focused on innovation and operational agility, with a commitment to advancing OLED technology and materials [7][16] - The long-term trajectory of the OLED market is viewed positively, with expectations for new generation OLED capacity to come online in 2026 [7] Management's Comments on Operating Environment and Future Outlook - Management noted a solid start to 2025, with an uptick in orders in April attributed to ongoing tariff developments, although the business remains largely unaffected by these uncertainties [6][5] - The company maintains a revenue guidance range of $640 million to $700 million for the year, despite ongoing uncertainties [11][45] Other Important Information - The company ended the quarter with approximately $918 million in cash and investments and announced a $0.45 quarterly dividend [14][15] - A $100 million share repurchase authorization was also announced, reflecting confidence in continued positive cash flow generation [15] Q&A Session Summary Question: Update on blue phosphorescent OLED commercialization - Management expressed satisfaction with LG Display's announcement regarding the commercialization of blue phosphorescent OLED panels, indicating that specific timelines for product introduction are up to customers and OEMs [19][20] Question: Impact of LG's announcement on other customers - Management noted that multiple customers have been working on blue materials for years, and the announcement may accelerate development but specifics depend on each customer's program [22] Question: Stability of blue fluorescence materials - Management explained that blue fluorescence has been established in the market for decades, which contributes to its stability compared to new phosphorescent materials [28] Question: Expectations for gross margin improvement - The guidance for total gross margin remains at 76% to 77%, with variations based on customer mix and new contracts [38] Question: Revenue from blue development - Blue development revenues in Q1 were approximately $1.1 million, encompassing both host and emitter sales [74] Question: OpEx expectations for the year - Management expects total operating expenses to be flat compared to 2024, despite a lower level in Q1 due to various factors [76] Question: Shift towards tandem architectures - Management indicated that tandem structures are primarily used in IT applications for their benefits, but the majority of smartphones are expected to remain single-layer [83]

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 ...

Core Viewpoint - Universal Display Corp. (OLED) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system tracks the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts, and is crucial for understanding stock price movements [1][4]. - Changes in earnings estimates are strongly correlated with near-term stock price movements, largely due to institutional investors adjusting their valuations based on these estimates [4][6]. Company Performance and Outlook - The upgrade for Universal Display suggests an improvement in the company's underlying business, which is expected to lead to higher stock prices as investors respond positively [5][10]. - Analysts project that Universal Display will earn $4.73 per share for the fiscal year ending December 2025, reflecting a year-over-year decline of 3.9%. However, the Zacks Consensus Estimate has increased by 0.5% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7][9]. - The upgrade to Zacks Rank 2 places Universal Display in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

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]