OLED - Earnings call transcript Q2 2018 | Universal Display Corporation

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Operator

Good day ladies and gentlemen, and welcome to Universal Display's Second Quarter 2018 Earnings Conference Call. My name is Rob, and I will be your conference moderator for today's call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Darice Liu, Director of Investor Relations. Please proceed.

Darice Liu

afternoon good and you everyone. Thank Display's Welcome earnings call. quarter to Universal conference second

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

SEC obligation referenced considering call periodic investments on reports statements as as is statements. prohibited. the contains Private are Before Universal Steve note intentions of those in call this growth of Display begins, the the Company's the portion to not are being Universal or made Corporation's of consent company's potential those that in with the actual Universal of me August the is the remind are these any OLED of retransmission regarding is webcast these any Universal time-sensitive Further, any and projected. this to expected the only statements regarding risks are Display. redistribution, of disclaims is Act Display's XXXX, of date from include to that to to any is such technologies of limited a These call, results statements the conference expectations, results, form that as to live period statements uncertainties or expressed of of risks and today's call Any without relating accurate well live future. market site. and making meaning discussed beliefs, applications by company's and and you Display's Universal differ historical uncertainties market. in rebroadcast Display within will in hopes company's the the property cause as for be Web update not are that Securities that available subject of All the information let opportunities technologies, securities. anyone These forward-looking and of Reform should Universal XXXX. this of call This strictly any Litigation call but important Display time webcast those this filed could Display's in that Universal written It X, be a

like to to I over Steve would Abramson. the turn call Now,

Steve Abramson

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

million quarter been were second or profit million impact revenues was diluted $X.XX share. million, or in quarter operating income, per per was Our net $XX.X and $XX.X $XX.X revenue, XXXX in income of million, net $XX.X million $XX.X second $XX.X would operating in ASCXXX, $X.XX have diluted the share. results Without our and million, profit,

outlined we to pivotal quarter year material continue that and of was leading As a around in second-half up additional we in the anticipated year. new In as the continue OLED quarter, XXXX, for expected. began Vivo, anticipate May, Huawei, be Apple, world, including to Samsung, believe we Oppo, material the poised of the launches growth. orders Google, the the pick to meaningful for be year. is and revenues will in improve OEMs With the an second a to XXXX year first to And it see OLED industry. the we product in for bottom from shipments sales

in of EDO are As mobile and other the to launch. new continues a LG Visionox, slated Tianma, OLED market, their Display, Samsung lead number production makers, to BOE, OLED panel including commence

drive expected will OLEDs the the broader consumer of fueling landscape capacity build OLED adoption industry. significant new across capacity is market. widen to This result, significantly in growth wave of the a electronics As of

yet and portable foreign the [ph] and industry consumer path imagination Additionally, new the enlarging rollable, for factor cutting-edge to new and of next is long-awaited foldable the applications with product year OLED devise. pave introduction to foldable exciting to electronics markets, first the innovative the world's will

OLED official because its the of will year which lightweight, discussed of Samsung is path in key its it plastic in by flexible of players second-half also for company its Samsung the stunning energy panel unbreakable new XX.X the Samsung's the Laboratories, only a that its for and portable characteristics, that inch to OLED super factor were expects earlier and week. very market. off, has rates. last unpacked panel been but X were with the of an company announced the Samsung especially last unveiled the all week, verified to also company suitable XXXX rebound. unbreakable mobile not electronic are Underwriters the conference SX topic fortified all Foldables smartphone bring flagship that, today, foldable on it One half to window beautiful Galaxy utilization rigid the call devices earnings display. because tablet, hardness, a foreign Note highlighted And glass." believes and its foldable "The top tab Samsung. shipments to the company June is Also testing to recently increased leading quarter the rates similar transmissivity the OSHA. loading Samsung's call fab introduction The noted of to AMOLED

OLED BOE's launch durability And from X% growth. at Samsung of calls it transparent made displays, ahead OLED on high November. when large OLED flexible and the in flexible trial front, with pilot second Electronics approved million EDO OLED CAGR is phase, company mobile adoptees, later its During to plans, from is investor's TV at Gen quarter plant, light-feel XXXX. to Week capacity OLEDs plans Live it these design company SID combined announced commitment Paju, its include commercial LCD Samsung will design construction in schedule lighting the driving some XXXX Mobile flagship X.X plant to plans OLED, start of LG it's other Gen LG with TV the to And smartphone, unbreakable the GenX ramping OLED the of Display's to construction XX And in the of year, Pro, the production flexible month. is China, line, this progressing OLED OLEDs, GenX utilize Cup its it June X secured that including second-half GenX is second commence to and the in company Mianyang, will opened we opening continues the BMW, Guangzhou, for material capacity TV automotive activity month, which of approximately [ph] OLED started XXXX, recent scheduled noted the OLED Tianma opened earnings Samsung capacity million two environment. TV during million million and and call, to in XXXX, the three the X to Japan, grow. to XXXX of launched including Moscow, at OLEDs, as market, XXXX. than many market The all-plastic And conference a Chongqing of attire grow Display the hat in shipments in that Last a facility OLED expected manufacturers in less Singapore its its in last Huawei's it's cope XXXX, and XX,XXX branded with inch square forum, and XXX,XXX ceremony expected plates fab automotive of of OLED fourth automotive June. long-term faster efforts flexible OLED been year. OLED X% grow next the reiterating TV of billion automotive top Korea. in segment including of shared has XX.X production Royole of total is just XX,XXX players, capacity recently this month its to the OLED a is on with what and in next lot X production that reaffirmed Gen wearables BOE Benz, At converting the is in smartphone XX% these expect materials. OLED forecasts that meters additional of company per car quarter OLED glass the finals to Chengdu, of automotive million unbreakable lines and OLED to lighting. which year. additional a agreements option license Shanghai, year. first in Technology's the is paying the Mercedes approximately splash market units, Also reviewing its an in in BOE shirt week second-half TV of to BOE's smartphone the of that And highlighted X.X interesting World million TVs in display as targeting much the while and third OLED equivalent OLED mass those first and the per with an production It million X market year, XX in discussions total Audi. in is completed XX TV investment the over In Display flexible production unveiled already OLED approximately OLED and is its displays, CAGR, year. production respect to That line Gen their Visionox, reported total has and flexible in automotive An units of our at XXXX. TV And of a XXX mass units. billion, XXX% displays production XX China, plant players' targeting Construction successfully rollable in OLED end XXXX. reportedly plates in XXXX. be quite which fact, units its size Display and demonstrated has demand. signed OLED while OLED for company Mate commence it display plant, the in win OLED with OLED phase additional automotive in unveiled fab million in X.XX in Sharp GenX curved, are a XX units with this shipments rate, whom is this $X of for X.X held approximately its reportedly LG will an XXXX, by an off.

still $X.X an released the grow lighting OLED has Audi, a but XXXX. research is specs TT of Audi will and have feature. forecasts a and XXXX market its small OLED both it last bright UBI AX, approximately Speaking big XXXX market, market by that as future. to of flagship billion lighting OLED taillights available and the month

commercial a new internal On respect believe system. invent in and the closely blue technologies, yellows, work blue, emissive that systems commercialize R&D excellent phosphorescent are working material With with greens, we next to including our generation to continue and making higher-performing development we our and for customers, ongoing and reds, emissive front, we cost-effective hosts. are

Additionally, TVs. Vapor is groundbreaking and Printing help growth technologies important that R&D market. the developing OVJP, is to And can Jet advance for our Organic large-area one our of strategy initiatives component OLED major

We note, month. On the further advancements me Sid. this making be dry mask-less are our call system installing printing prototype our next over with help technology. pilot will progress we To novel to direct solvent-less turn that let

Sid Rosenblatt

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

you standard, year's were January Before $XX.X remind revenues last quarter old second ASC QX XXXX, standard quarter-over-quarter Samsung's million, note a license year-over-year to QX's revenues adopted second discuss XXX. quarter of million. $XXX.X Beginning from included second under Please I accounting million. new up the are XXXX $XX to from $XX.X our of quarter accounting the Revenues in ASC prior financial XXXX XXXX I down want XXX. that but for results, payment that we million,

a ASC increase additionally second XXX, improved $XX.X $XX.X revenues the the weaker result, As sequential the sluggish cause been our by revenues million. last first believe saw we impact as quarter, and has environment there in XXX in and impacted a of we from would OLED year OLED slowdown the Premium ASC that therefore quarter purchasing. we million stated In QX without market a weaker which smartphone panel in the been material demand second quarter, revenues, have

million, second quarter XXXX. of and XXXX sales million this the this and of XXXX of quarter quarter in quarter quarter the $XX.X $XX.X $XX.X include in XXXX. in of the first million of million compares first material the the in quarter million total of to to yellow Green sales $XX.X emitter second quarter material of XXXX second quarter green sales $X sales second were second in Red in the first the of second our million, emitter to $XX.X were the compared $XX.X in which XXXX XXXX Our million $XX.X emitters in million million quarter the and XXXX. compares of were in $XX

material of mix, number quarter-to-quarter, patterns patterns customers, moving include can us. can discussed the contributing vary past, product efficiency schedules, our some capacity consumer gains. production production to have for customer cycles, buying is this material Since factors for ramp the demand they factors loading variables ordering product we of moving As these the rates, also in variables are and

discuss we occurs under license and XXX will shipments. royalty a remind and we on billing want ASC recognize Before QX you one we of that revenues, OLED license proportion to corresponding to material irrespective quarterly basis revenue

million sales which the $X.X included XXXX of quarter Second the cost of of million second to of of fees gross gross cost XXXX $XX.X XX.X%. XXXX. relate quarter into and which the year-over-year were for Adesis OLED million. comparable $X.X first million and the the quarter in sales include XX.X% This quarter the This and $XX.X translating XXXX second does quarter XXXX second compares to of in not material of quarter $XX.X licensees compares Cost first material in the $XX.X XX.X%. quarter of Cost first the margins of XXXX the compares sales and quarter material was only $XX.X materials This in royalty of million Adesis million sales of or in million. of XXXX. margins

$XX.X quarter was quarter's income QX but quarter from the sales excluding Second million quarter's up impact $XX.X the without down $XX.X for $XX.X year-over-year and is operating $X.X million up cost from expenses, been up XXX income $XX.X quarter the XXXX million. from year-over-year last million. comparable a million last was comparable Operating ASC from million of would $XX.X million operating quarter have of of second

tax $X.XX income was the of as expense per diluted approximately or up but been from from $X.X for without of XXXX $X.XX $XX.X XXXX or XXXX-XX share. net a been have XX%. quarter million diluted quarter $XX.X sequentially or share income year-over-year $X rate comparable second Second diluted quarter second our million would tax would approximately without million share or share of $X.XX or XX% XXXX per of XXX was Net tax million quarter last second quarter down per diluted $X.XX quarter per income impact ASC million the the our have rate $XX.X

million half $XX.X million $XX.X the For XXXX XXXX have $XX.X million, have per or income diluted the million been have first ASCXXX, and $XX.X million $X.XX $XX a compares income was first diluted was $X.XX share. net income XXXX $X.X or of This and first would diluted in and were income of revenues operating net million of $XXX.X million of per revenue, share. Without impact $XX.X $XXX.X half net been in would revenues been results $XX.X million, income to operating million share. would our a operating income per or half

based XXXX, unchanged to looking our is Now quarter. last our forecast, upon XXXX from current guidance

million. shift range of industry's in results. to revenue we impact in be as a $XXX direction We in the the million have note can in financial either our expect past XXXX would We momentum to $XXX

we XX% of consistent the expected vary and to last Operating are Moving material in while margins, overall in XX% to expenses in driven along primarily aggregate is material our of the the increase year-over-year to gross gross patent to can few expect quarterly costs years. to gross quarter XX% R&D. to range by margins which margins with R&D range SG&A, the XXXX be XX% quarter,

take points. the a to We approximately effective tax basis give be or rate expect XX% few

growth For to industry anticipate XXXX, resume. we significant

XX% by over square the to expect XXXX. We of OLED install capacity approximately meter increase base

capacity revenue cash capacity commitment of we back a to the to return cash ramped year turn for of our flow stockholders call continue shareholders. that, installed the which on the expected record will dividend, to the and XX, the Board reflex to capacity lastly, And Steve. positive XXXX. be while the that additional With September the believe and in into capital approved XX, XXXX, timing fluid, to new are during XXXX translates are Dividend With quarterly I'll September generation $X.XX of ramping paid of majority on us. directors opportunities

Steve Abramson

path OEM emerging well this is such as increasing and Thanks, foldable UDC OLED panel materials our and around this job the paving delivering lines, found amount our in OLED to as proliferation including dedication possibilities the The OLED of exceptional TVs, and employees take the of of spectrum With disruptive The we and heart the driven in of OLED continues CapEx of multi-year of growth innovative of displays broadening. augmented shaping desire, would at the technology new activity to lighting Display's reality world. and makers industry. follow. resulted the phosphorescent to in design should electronic drive, like OLED an most market our nature consumer Sid. across further cycle, wearables every thank in has increasingly IT, advancements. markets. exciting product universal by opportunity elevating automotive incredible for more applications team display their AMOLED OLED is the of opportunities and landscape a an virtual I production and Universal reality technology building including virtually pilot creating primarily lighting. In do is Today's and in being as and capacity OLED and smart But phones. OLED The each accomplishments see value for

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

Operator

Sidney question questions. Bank. line First Please Deutsche proceed Instructions] is Ho [Operator of from Thank your with coming you, Mr. with Abramson. the

Sidney Ho

you quarterly customer by activities or mostly to did restock and the now or the that my a better maybe so quarter this there's depleted believe on do think understand talk question solid you material especially little quarter. results that started year's high-end, about? side. but on your Do can your came that basis, is guide little I other taking not earlier and on a in for a build for second inventory the are I than modeled, starting they congrats factors Thanks you you sales a some

Steve Abramson

going pre-purchasing of forward, of our last expect not We the no the do end that shipments. believe occurred that impact at we will year longer impacts. any And materials material

Sidney Ho

year, Okay. revenue XX% versus that second how you half of My the if half to about guidance SKUs with think of second high-end second your this do year. smart compare shipment that the just expected will also Is implied number to in should realm follow-up guidance, this last closer I a of for about high-end your this conservative. year is phone production consider? little given two the be want seems year? unit And anything is was else OLED think there we question half last And you the phones ASCXXX, X%,

Steve Abramson

We year, of number really based predict in expect quarter-to-quarter. obviously to the a quarter, is the guidance. our of it's really upon units the And for us difficult our business. half And pick-up second not

is is do the year. product a the if we we the and market new and see in it believe and recover of in it So of process what's phone half smart launches, recovering important to second pick-up we the expect does with

Sidney Ho

you want you do that longer your Maybe emitter I to couple squeeze don't how updated on noise some I And but development, understand much of conference to materials at a to alternative blue give too right. seem those compare display your term one making in can us ago. months yours? view be can emitter the All the about disclose specs question.

Steve Abramson

quite point significant we And else. on haven't some color all on on But we lifetime, significantly blue, one anybody efficiency specs on time. our we point Well, making progress color -- and we're on both for all are in disclosed blue believe ahead of device.

Sidney Ho

All right. much. Thank you very

Steve Abramson

Sidney. you, Thank

Operator

proceed Hosseini with Susquehanna. of from Next the your question questions. is line Mehdi Please with

Mehdi Hosseini

in my Yes, taking for Thanks mute. sorry, was questions. I

it Just rephrase as question, going a follow-up to I'm to Sidney's but differently.

their quantum the TV that past dot of just wondering several I press see focusing have OLED reports TV. been materializing? couple on opportunities may I'm And strategy Over have and months follow-ups. you developing increasingly And how the changed have there those Samsung several a suggesting

Steve Abramson

help know phones customers. with wearables spectacular review you believe can't speak on we're and markets, really and displays, we Sure. other all TVs from We can't addition roadmaps, OLED and customers for Well, to our OLED in about spectacular that to collaborate we customers VR, them. for Mehdi, but which AR, TVs for closely work every to been -- them we here are our our that and has do speak smart automotive, with product to

Mehdi Hosseini

about player talked you 'XX -- capacity include TV? XX% in When that does Sure. a additional OLED any growth, installed XXXX, the through

Steve Abramson

and data. not enter obviously business by is industry in the end is TV to This any of by OLED volume. any from over anybody XXXX additional OLED really And the the I've right plans market now -- seen TV LG dominated the real

Mehdi Hosseini

phone with inventory? you the more the which of Thank up I how you're sell-through come customers' comfortable inventories at year great. which customers with end to smart comfortable and smart In better guide. come players your Okay, you thought understand material to you words, the at looking looking type feel TV going market they're -- versus revenue other manufacturers, process of you. with that phone inventory second-half? the end the want refresh When your to back are

Steve Abramson

to hearing more then year. this last year than year there determine TV's us sell expects aware be and up well inventory you to year, to sold for year going to down. that as produce I OLED are OLED -- material use we break levels $X.X is this we and difficult going our mean our how and going estimates get million million are next $X so that It's to and much LG we it clearly I we're you're next customers guess from and TV's

Mehdi Hosseini

you. Thank

Steve Abramson

Thank you.

Operator

Goldman from is question with next of line Lee The Please your proceed Brian question. the Sachs. with

Unidentified Analyst

on for for the Brain. questions. [indiscernible] guys. is Hey, Thanks This taking

Steve Abramson

How you? are

Unidentified Analyst

Good.

inching XX% year about detail is it the delayed and some but reports, you or also some optimism this your like capacity of moving So forward expansion with there's can the seems could Samsung for capacity first AX fact what five, half on ahead that there that? been in be why you reason expansion, been has through basically

Steve Abramson

based be Mobile Well, AX. honest XX% China regarding customers OLED can't increase we And it's upon speak estimates obviously and in industry for the but TV. to our mainly is

Unidentified Analyst

enough. fair you but them mentioned with I the materials like there And Okay, production then, are potential? you European clearly OLED relationship would sharp forward is small they of those rank moving customer they're scale using where panel seems what that guess in terms

Steve Abramson

announce Well, the them, and of in just we for an not extended agreement they're up there's a term. capacity lot starting with evaluation there near

Unidentified Analyst

enough. Fair Thanks.

Steve Abramson

Thank you.

Operator

Company. The question with Needham questions. Ricchiuti proceed your the with next line of comes Please from Jim and

Jim Ricchiuti

afternoon. good Hi,

So can be QX relative for I anything a guidance bit of there not us mindful in of to the wonder but if asking terms we QX? that is for of help little QX, to you need give specific seasonality

Steve Abramson

and whether obviously we believe be of group. you're one difficult half but Quarter-to-quarter slip really year in the up the move half the us for going last in, things and is aware really over of so second significant pick there's things pull from year to look and six quarter first as months things is forecasting other a or the it's one we the at the well this up

Jim Ricchiuti

the see of customer that questions strong have couple other same enough. so customer couple looks the over and half showed is quarters? the very last I'm you in growth China fair year-over-year had of wondering in like A you first Okay,

Steve Abramson

expanding quarter, is that landscape see customer in maker but expanding C this it can is the you customer is only a same is the look the you market panel so and Chinese one. panels If not in OLED prior was X% C

Jim Ricchiuti

about how you and your or closely daily these sense is a weekly sight speaking terms specifically you're tracking. or And feel I'm just in characterize aggregate you China in that of overall customers how without trying in but seeing display not of would Okay. that makers line your the interaction you're with to just weekly what get to do maybe it's what's daily

reports I'm you press have a We just wondering see? what and guys

Steve Abramson

very maker about building in and with been constant we we every them them. have our up who We've visiting have just team panel a and people interactions with on is basis China frequent

Jim Ricchiuti

at and blue with what for I last for you that to before excellent is maybe recall is the use emitters the word Steve blue the use this guess describe question, another market? didn't progress stage emitters And you're I Okay. to making of we're describe you, progress before yet don't this there a commercially is ready I'm the wondering this before adjective would you but

Steve Abramson

question using the quarters. you're. adjective you actually I'll I've as Good difference the last for the if was next And two been tell quarter excellent

Jim Ricchiuti

thanks a Okay, lot.

Steve Abramson

Thanks, Jim.

Operator

from Christopher the with Next question of is Evercore. line with Muse Please proceed question. your

Christopher Muse

smartphones all prices good would curious to as whether love in assumptions your Thanks months may your last we hear going changes and there? taking around the first things for material thoughts Yes, reiterated your the question have XXXX to three question. afternoon. in guidance for though changed it's builds flexible TVs

Steve Abramson

rumors it's pulled two. be second or the question. on obviously the customers we're iPhone's called the increases the whether in got activity this things the guidance the OLED might side we've we're has out half. It on last same with going to about for these a of a quarter that get Thanks you pushed quarter little seeing just bit seeing there's Samsung across or and our to in little been you're seeing or is all all a side combination screen, but whether not the so you TV for bit

Christopher Muse

that think as key see that there fit a area benefit or you would square that? quotable opportunity revenue about Okay. a guys type you is with and And say is a simply as the of has better follow-up, mix, let's

Steve Abramson

the price premium charged so the takes for material a plastic be use, we us It's surface whether it it's on same more fact. that going glass is the royalty the or to the really larger customer a a the is area probably essentially formula than is if it's

Christopher Muse

Okay, thank you.

Steve Abramson

you. Thank

Operator

Next line from with questions. of your Cross proceed question the with is Cross Shannon Research. Please

Shannon Cross

you you lot and Thank end in about the think for you're you're curious taking are to balance it ordering just there's about they're think for in and curious the think sort given a I'm here seeing and more you? loaded do launching be you're as my there of question. talk will opportunity as another should a perhaps or XXXX from thinking be XXXX of figure will the about so how things of momentum much you second, trying out be expecting you back launches timing you very then across the year the when board I'm strong

Steve Abramson

is a see which for will it estimates and that lines and see is XXXX some turned will customers, our a expanding and expect for great is significantly help impacted. obviously get year and lines year being based that a sooner the on online multiple but see we get we really later leading XXXX. on better we us base new than base significant customer XXXX we indicator customers upon XXXX But be fabs turned coming installed new

Shannon Cross

and cash obviously sort seeing announced positions drive of the perspective, that of Okay some in what just next? meeting then from but dividend back I'm curious continuation you're terms

Steve Abramson

sorry. I'm

Shannon Cross

in as to to you think need fill-ins some I stay in expecting XXXX? and strength you're especially Okay, the

Steve Abramson

dividend keep they allocations the the board return Well, cash in start flow and powder We to quarterly best to and you we our M&A the believe want need the at dry then options. that cash keep money any the reviews way things grow, side. to really needs to you grow. look that dividend cash shareholders continues grow But all every obviously opportunities continues quarter the on other a to different our want we capital believe dividend as to as to case we your as is our obviously; or

Shannon Cross

anticipate the on more perspective Right, and what forward? should acquisitions maybe curious there a out focus we going I'm by aggressive you're seeing on right just acquisition

Steve Abramson

spaces. high out our pretty looking constantly at We're are right and still space related acquisitions Prices within there now.

Shannon Cross

Great, you. thank

Steve Abramson

Thanks Shannon you.

Operator

[Operator question [indiscernible] line question. The Cowen Instructions] from next the is Company. of proceed with and your Please James with

Unidentified Analyst

afternoon. quarter. good Hi, on Congratulations strong the

Steve Abramson

you. Thank

Unidentified Analyst

it's accounting I to fact delve think see. would up or under to this was for complete like line not that Let's like I fee slight I'd be according sequentially sales for more XX% trying the increase bit example the just and yet the because so impression understand impact sales. into a no ASC something a XXX material material but and purposes pro-rated little license Samsung royalty in the to like XX% decrease, a license in mess I'm

So work can a through help little bit? through you work math that me

Steve Abramson

to adopted correlation had go occurred we ASC into and some it history experience the We we first a one deeper XX-XX to a we and in we that and which the forward. probably going and going actually When mix expect to it we going sequential is sales and as we forward talked two that quarter Sure. see adjustments ratio. closer material be get with and licenses more XXX about in royalty between

As of to we move forward material and fees license royalty

Unidentified Analyst

up go back in what is expenses, And expenses came going forward the we had Things we thanks. reason great modeled go or that are some kind go these the so up start is on question on but run or Okay, to so continue that just below that's there so they and can of rising? and obviously count should rates.

Steve Abramson

I to year weighted towards going R&D that We continue rise. year the we it's about usually should for XX% do expected the it that year-over-year to quarter believe or is be and this of the range think and for to XX% in and but is full-year. increase be to the in this be They the range we are I expect fourth to highest

Unidentified Analyst

the so speak something quarter did question the if model without understand half by you just Okay. one more pull in but and our strong confidence or you what pull does have I guidance, half can may $X the million in in beat the expecting second you And the this the so don't the that full-year you numbers so or is been second anticipated way? in did been in you that in in in half might or quarters something raise I the have any second guide on

Steve Abramson

inventory just we the excess here hands outs no we orders. ship purchase it overall need we the XX-hours it a just way maintain but times let's unexpected materials. are us We're pull so order always because going to ship maintain customer do within in it gives specific actually work, does the and of and or inventory of supplier ensure we we We that date well to out and could with really a push that

Unidentified Analyst

of that the make might just and let ask might to revenue different to a you way, be end? low be end guidance that a a solve you what me Well, would the circumstance would what that go circumstance the take to high

Steve Abramson

and the customers things fabulousation fast rates they depends and expect and occurred, flexible things a occur customers that Samsung at on the when as a don't these occur they we based be really TV's have it it's in it and about at based LGs sell our talked by end. so to rebound we higher at particularly is end expect and utilization low and side It sometimes upon pulled through talked just [ph] get just rates if whether just $X.X noted upon OLED the about we as million

Unidentified Analyst

you. Okay, great. Thank

Steve Abramson

you. Thank

Operator

The with proceed Hosseini is question. with next question line from Susquehanna. of Mehdi your the Please

Mehdi Hosseini

well these much be through the can us going helps rate any OpEx and just you blue Yes, to of for and are R&D just outside one by quick that color your the by follow-up; get you think these XXXX? how to XX% areas will a priorities, is decade the key about of sustainable material of XX% to up next that said the kind us we growth to R&D growth R&D, really majority and remind that make as sure in you beyond think into investing trying

Sid Rosenblatt

for creams, materials, Well, us and is reds, fast to our directed yellows principally and. R&D blues,

Jet focusing which R&D other a additional is project been Organic Printing, we've The methodology OVJP, makes RBG on that TVs. is that side-by-side Vapor

farther-out university phosphorescent We partners and some research our technology. materials it's additional But ideas. with on basically are focusing of

Mehdi Hosseini

is that you're initial about assume blue --? additional life I the I the the done, already side needed Should phosphorous on to in the for expectancy R&D R&D into testing phosphorus just Sure. recipes, how think should and and for that develop is new

Steve Abramson

our and efficiency just a And experience customers lifetime. as little color they're on product we're our continue improved materials on growing. materials to I'll our are continuing more roadmaps efficiency differently, because focusing products demand different We their say bit continually points. on it and lifetime with And improve -- gain the customer

color may efficiency goals. So their and each to R&D lifetime color require point meet additional

Mehdi Hosseini

that that samples? they Does see. mean blue have I already

Steve Abramson

to speak that. can't I

Mehdi Hosseini

I you. Thank right. all tried. Okay,

Operator

questions. is Company. and with question next line proceed Gabelli from of Our Susanto the your with Hendi Please

Hendi Susanto

Good Steve, your to laughters. Sid, good And hear and evening it's Darice.

Steve Abramson

Thank you, Hendi.

Hendi Susanto

this And OLED different Hopefully encapsulation display? display different smiles. and display? to In will how some OLED host furthermore, foldable opportunity will you be technology then today's are materials bring developing are from your address How emitter foldable the materials? OLED

Steve Abramson

the product customer. depends The the materials, from on use

these points for So, efficiency lifetime the foldables what looking When color it's And meters needs, focusing or require are different also as so emissive requirements path new depending and with the market customer we yes, hosts displays. not more that of also We're the you're each focusing at emitters. new consumer factors. as may electronic on in square a creating well may on what on requirements materials. systems, have you'll form

Hendi Susanto

And Okay. in any commercialize foldable are do makers XXXX? display many have estimate then you to how planning displays

Steve Abramson

all BOE about, are Well, working a customers, three our and of LG, on which they we've customers, number we've talked substrates. top Samsung, flexible that our got hare

Hendi Susanto

lower and across than And Sid, customer. without historical it XXXX, largest revelation ASC reasonable this trying trends, in $XX in and royalty XXX, on XXX based royalty I then license forma license And look and year and conclude largest of material then, units million sales That's on license fee second-half first-half your the that license pro was analyze the $XX fee and sold your your numbers to your from spread XXXX. is year? is in is bigger fee those customer If last material royalty royalty helpful. I'm and And of further at fee revenue also. first-half under and is ASC some million get the to

Sid Rosenblatt

counted customers number. are a that are number of that into There

get talk we how is question to obviously about Samsung -- can't about how talk I not -- we your paid license. are we much And is So cannot much by obviously allowed that. the

and this. deferred revenue just customers in is Samsung, and in between there difference the it other are not So XXX XXX

Hendi Susanto

Okay. whether to I'm whether larger I'm wondering not asking numbers, is year. Samsung and you license royalty fee the this quantify are exact able

Sid Rosenblatt

at comment to the fee allowed all about not Samsung. we're license Yes, from

Hendi Susanto

see. I

Thank fair. that's Okay, you.

Operator

Please proceed Supply The is with the Research. your from question. next Market Chain of with question Andrew line Abrams

Andrew Abrams

you Hi, of guys. amount and Again, one-time material, a new got a a consider that that's on rate run on China; or is substantial China? going kind a you've And one new a C, new taking of customer congratulations. question kind the for relatively they're of event where mine would this

Steve Abramson

do do a year. the you lot over when you you up in customer opens year significant Well, times new growth but it by see materials this line, of this got and China open that's next more the we of seated, up line, going, a second-half new and

Andrew Abrams

meaning, generally? blue, any LG, or the a And it call at for let's material OLED and OLED Okay. appreciable look RGB or yellow you sales way LG, versus White difference if being TV the TV, your OLED made change and TV in has not that is built, to

Steve Abramson

in talk are pick sell about that and selling their we're do specifically, not into Well, an seeing a OLED which we we up can't go but TV production. materials

So we are selling more materials.

Andrew Abrams

opportunity way And market that the change you this at was? of for or the sort materials sell give beginning, next lastly, folded foldable, generation backplane an the backplane same a that's flexible is there assuming the that and necessary is evolutionary I'm of rigid will to there a into change, the the is market

Steve Abramson

this Yes, going new it's evolutionary. what use I They're think because they is a to technology. know works,

Andrew Abrams

a it. Got lot. appreciate it. Thanks I

Steve Abramson

Thank you, Andy.

Operator

you. Thank

Our Please next proceed question. with your Sachs. question Lee of Brian comes from the with line Goldman

Unidentified Analyst

Hey, guys. [Indiscernible] here.

swapped and one they -- will commercial potential, blue, a dot phosphorescent got or question just one require Just feasibility be with easily? could a speak you quantum the blue TV it I you technical can blue this OLED on do mean phosphorescent follow-up approach? OLED work of believe

Steve Abramson

customers product. our We can't really speak what goes or into for their

are a phosphorus it's important, and and commercial of is phosphorescent all for mobile, customers think materials. efficiency whether I blue, efficient for is whether for our waiting it's blue TVs,

Unidentified Analyst

Thanks. enough. Fair

Steve Abramson

you. Thank

Operator

concludes This turn would I any additional Rosenblatt for remarks. to closing like the session. Thank Sid the to you. question-and-answer back or program

Sid Rosenblatt

all for have and night. your appreciate interest good hope a support, Thank your time you today. We Thank and you. you

Steve Abramson

Thank you.

Operator

This concludes call. conference today's

You may disconnect. now

Universal Display (OLED) 9 Aug 182018 Q2 Earnings call transcript