Earnings call transcript Q2 2023

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Operator

Good day, ladies and gentlemen, and welcome to Universal Display Corporation's Second Quarter 2023 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 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.

Darice Liu

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

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

remind me Display. strictly consent of of expressed Universal retransmission this let begins, in redistribution, Steve you call form property Any any is of rebroadcast is written any Universal prohibited. today's or call Display of a portion the Before without

for and this time-sensitive of a of call XXXX. only Xrd, available is date be Further, webcast website. information contains the call, the of accurate period live on call will Display's webcast is Universal as time of August this live made being This that

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

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

Steven Abramson

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

second operating of of per $XX was the million reported and income share. $XXX we profit revenue For quarter XXXX, million, net $XX $X.X of million diluted or

half year, expect we second the this to of the into continue. momentum move we As solid

to significant groundwork range promising new revenue a for narrowing continues are guidance For million and the our we OLED is IT $XXX market cycle XXXX adoption beyond growth million. for the industry poised the to year, to commence. to OLED lay in as $XXX The

an recently can panel demand firm area at CAGR forecasted laptop XX% and OLED tablet Omdia XXXX. by basis research grow Market on

to a value delivering engine our of customers. enabler to we know-how, nearly leveraging by the people, discoveries our key and continuing increasing pioneering and the in infrastructure, three are innovation decades in market's support OLED and growth ecosystem, As investing our

infrastructure along the site, front, designed for red, future opening green, we industry and infrastructure produce represents PPG. our more of major of needs. second Ireland which the our quarter our customers' partner with decades celebrated of investment blue Shannon, materials the commitment a the phosphorescent new to two demonstrates On longstanding This the is supporting facility OLED in to and our than

forward. in a the push OLED we forge to pioneer and boundaries possible leader us and redefine ecosystem, As pads that what's drive

of gap ingenuity Our innovation bridges collaborative symphony that imagination engine is and and vision inventiveness, a reality. the between

led phosphorescent edge has technologies high advancements, performing cutting our R&D on breakthrough to focus and steadfast including energy-efficient Our OLED materials.

team brilliant working next-generation in to Blue, engineers, invent, work our system. commercial development to of and and emissive reds, we make Our scientists, yellows, new excellent develop blues. technicians With greens, are a ongoing phosphorescent and for to commercialize blue progress respect and continue together

array of continue the applications. We materials market phosphorescent our full all energy and higher opportunities blue our RGB efficiency unlock performance to suite stack of that believe believe introduction vast and commercial for that a to we OLED will the of broad XXXX. introduce We are in red, range emissive track a phosphorescent of into green, across on higher

product with energy May, red, exhibited is advancement gamut efficiency blue XXXX. lineshape. our Display and important BT narrow green, emission we emission late Week roadmap SID to latest and spectral PHOLEDs spectral next-generation including color At in in narrow The groundbreaking achieving

platform, meaningful continue dry Regarding OVJP, make our progress. novel massless we printing to

first printed PHOLED world's are OVJP milestone with to announce side-by-side performance to fully RGB thermal ever start We evaporation. high-resolution comparable another pleased with the vacuum today

and meaning layers for blue OLED layers PHOLED TVs, cost and OLED complete red, TVs. a smaller platform all putting the effective achievement positions OVJP, way of manufacturing common prime paves significant footprint, deposition and This be the for the OVJP for green, to faster solution throughput,

One of customers. enable support primary mission UDC's is and our to

working challenges, engaging their with deliver partners, needs, tirelessly their meet changing, continuously are to anticipating listening our We solutions to evolving ever to ever and requirements. their

Supplier TCL Strategic received work Partner Award China global a to Most and the and the BOE's in team. Award, is hard wonderful prestigious It outstanding Hand of received dedication our innovation, Hand also commitment highest Star's Diamond award. our are of spirit. recognitions unwavering relentless collaborative reflection to recently, and excellence UDC testament These also

segment interest. this a the electronics industry seamless of recent and interest portability revolutionary Capturing last and years, OLEDs enabling of devices. blend of In foldables the with form witnessed of and heels the off another Samsung introduction has a many, factor. consumer Coming event, are [indiscernible] foldable week of functionality. paradigm the imagination shift are consumer increasing offers revolutionary foldable

Research, foldable to are to quadruple smartphones by shipment Counterpoint forecasted According million of units XXXX. XX approximately to

As someone looked never have who Fold now a bought and back. the first has I FoldX, Galaxy

note, that Brian. the On let over me turn call to

Brian Millard

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

million second Green the million XXXX. compared the second second yellow our green include to Material quarter second $XXX second which $XX sales in emitter $XXX the $XX material to sales, in last million This XXXX. of compares million quarter in was sales of revenue of $XX Our to compared of $XX were emitters the quarter in million were million. quarter quarter year.

million XXXX in were and Red second both of $XX the XXXX. quarter emitter sales

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

fees of were Second period royalty million. $XX license $XX million and compared to the year quarter prior

period compared XXXX. $X.X from Adesis' in the $X.X million to second revenue million quarter was comparable

XX% second gross in Second to compared second to in $XX of quarter XXXX in quarter XX% margins This in second XXXX. of sales the million was the XXXX $XX into XXXX. quarter of quarter cost million of the of compared translates total

quarter to material material OLED translating were in gross the XX% $XX of margins compares XX%. and sales of quarter of material Cost of margins XXXX. This gross million the million into of XXXX second second in $XX

operating $XX expense XXXX, million. excluding cost sales Second XXXX and of quarter in was

be to at increase low of the the For OpEx X% our to we full forecast now of year-over-year expect range. year XXXX, end the XX%

income in in in compares translating This of was quarter XX%. margin tax rate million second of income XXXX. operating quarter second the $XX Operating operating XX%. of and the margin XX% $XX The million to year period prior of was the

Second million per quarter $XX net income or $X.X XXXX diluted was share.

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

as Regarding revising our mentioned, our we XXXX range the forecast are narrowing guidance, to Steve to $XXX million by $XXX revenue million.

cash paid Directors a our on of return our close record to quarterly as generation and commitment The dividend Board our approved lastly, on XXXX. shareholders. XX, positive business capital XX, to the dividend, September stockholders reflects will September XXXX expected which And to be of of $X.XX of flow continued

I'll that, to back the turn With call Steve.

Steven Abramson

Thanks, Brian.

and consistently For OLED have of world-class invested demonstrated adaptability the nearly and in and We leadership in ecosystem. we XX infrastructure employees, position years, ideas resilience. culture mover advance the and we collaboration our to first creativity a robust fostered

we to look to XXXX we will be industry for future, the for year us. As continue that pivotal a OLED believe and the

to We OLED manufacturers the area OEMs and to are medium curve near-term adoption a preparing believe panel OLED advance the focus. key with IT and large being displays

an our we'll shine Company continues with to heights. future of with ahead forge brilliance, OLEDs determination take unwavering As to to balance new the

dedication, to elevating like desire, would and lastly, and shaping our drive, heart Universal for And and each accomplishments thank advancements. employees in their I Display's of

industry, edge OLED superior We leader our technologies are for long-term committed for cutting the customers materials to and our ecosystem, delivering the and for achieving being growth in a shareholders. and

that, the operator, with let's start Q&A. And

Operator

Instructions] Brian is with question Sachs. from Goldman [Operator proceed. Our first Lee Please

Brian Lee

for I execution Hi, guess in the on everyone. you, afternoon, a Brian. off, just the nice for Good the here housekeeping taking thanks quarter. start questions. To Kudos question.

general terms out the And broken there a just what is commercialization think in maybe the a progress. can you path? time XQ provide blue thoughts I you've then quarter also for revenue achieved one had of blue the since you us you on similar last updated number, last and any in

Brian Millard

revenues XXXX. feel blue Sure, we comments. it as progress, in on of both strong thanks, Brian. to $X.X commercial a as emitter we're predominantly That for available Steve approximately having then really host, million mentioned have I QX. to emitter. sales Yes, And progress in we material continue his like relates in of did the so track make combination was and on

Brian Lee

mean to... I going it's

Brian Millard

I Also are going I quarter-to-quarter. going it's vary to one mean development blue -- the other thing revenues to think to note.

be $X.X So step in it's to forward going variable QX, positive bit little between certainly a a is million commercialization. and here

Brian Lee

Fair enough.

that linear. fair. So be of not That's on expect necessarily just to model guess a couple shouldn't more itself. the we -- I things here,

in year. gross margin, You reiterated second does Even know pickup pretty that, guidance imply a tightening around confidence though full the still Can the plus revenue or to did is mid you few the metrics the on XX% to drivers minus to versus you're but back half. year the speak reach the in second and up you getting for to for the quarter better guidance the quarter. some half XX% kind the it gross of significant of first higher the a level target. I in that of of margins the year

Brian Millard

given, and that so year. as that margins, of the a the generally we increase be volumes true gross in the get guidance is revenues, There's we'd And continues leverage assumption. that expect Yes, some gross reasonable we've XX% second level material operating it at margin to the I obviously for we to there's think ballpark XX% out total for XX% half.

relevant at guidance So figures still are those this point.

Brian Lee

a they're like me your haven't from building there some pass your one historically it up also one. a sense top Presumably, China. And in fairly is us customers enough. you as customer this ramp, of just this that's meaningfully China, It then fair or this Can and customer new one-off see three was was biggest Okay, quarter customers. give their on. looks always one sized I'll of showed larger than capacity, is it your last from they been

So if Thank you share you. can there. color any wondering

Brian Millard

purchases I top say our right, this customers that of have But additional bit customer a going to four around. Yes, tend think remains is we forward. case little yes, see customers, in an kind quarter. so variability at to that we this it hard the up showed in And you're did Chinese from this if go of have point new the

Brian Lee

I pass will fair it lot. Okay, Thanks on. a enough.

Brian Millard

Thanks.

Operator

Jim [Operator question with is from Needham Instructions] proceed. and Ricchiuti Our next Please Company.

Chris Grenga

could you're Hi, is you confidence what's elaborate on Jim. continue the and bit comment you. into With for good the Grenga the This conversations momentum a actually of there. taking afternoon. solid XH, the or to question. nature about respect what very bit you a underpinning you're about the Thank in talk made Chris seeing Thank you for the having more much

Brian Millard

Yes. Thanks, Chris.

this So they're and pretty we've that signals regular each year. been from what are us. of seeing their of customers remain customers forecast our rolling from of those We get seeing in updates expected demand over from from have solid the volumes and what terms we them course consistent our

confidence the So the forming in rest terms the year like. of a is that's of lot look of what we that to have expected

Chris Grenga

at believe been you. opened? it, with the facility that to in quarter, costs, has you the the Got do year thank this I $X.X for expect the what the this facility cadence million of And be of Shannon now rest that came

Brian Millard

that $X the what QX month Yes, so earnings. slightly back I we think what been when that's updated a of million we've a had than in is May -- run-rate more we

$X that think than more number this year. the underutilization million a right I the of month in is for terms slightly

into volume less grand We was have we directly. did, how of it's continue now important underutilization more as site an therefore opening P&L and the activities just ceremonial to put and the have of of hitting utilization which forward site, greater production do of mentioned and matter therefore the that's a step that you kind

Chris Grenga

more thank Great, you. may. one maybe if me, from And just I

portfolio, been revenues have the events integration quarter. contribution the - was any Merck IP of worth And the the there been that's to are QX with contribution you how With mentioning going. in pleased

Steven Abramson

I whole the to this in integrating implement this our revenue patent portfolio to process particular and any technologies more able customers. of part that X,XXX the we Merck quarter. in but into can't were group focus portfolio of of It's our gain on in serve We're the field, patents

Chris Grenga

very thanks color. the it, I Got appreciate much.

Steven Abramson

Thank you.

Operator

I the or for remarks. session. program question-and-answer any you. to back like does over additional This Thank Millard the to Brian turn would conclude closing

Brian Millard

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

Operator

Thank conference. concludes you. This today's

for you You may and participation. disconnect lines your thank at this time your

Universal Display (OLED) 3 Aug 232023 Q2 Earnings call transcript