OLED - Earnings call transcript Q2 2024 | Universal Display Corporation

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Operator

Good day, ladies and gentlemen, and welcome to Universal Display Corporation's Second Quarter 2024 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 X, 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 subject a significant we and actual and of call, our to uncertainties, make risks this may based may statements differ on materially. results statements number During These forward-looking current expectations.

in securities. are by be periodic These of company's the making discussed filed and considering obligation any these should anyone the risks and statements. the referenced update to with Universal disclaims company's any Display in SEC investments uncertainties reports any

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

Steven V. Abramson

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

or and Our million, operating million, by fueled was the second landscape. Revenue was across The consumer net of diluted per $XXX income to results $XX $XX was quarter be robust, share. profit were million trajectory $X.XX continues solid. OLED broadening adoption

we the now million. growth raising low our range the trajectory, $XXX million strengthening are our will $XXX to that believe We With XXXX be guidance of the range. end of revenues annual in

tablets. XX, products, tablet. Surface new XPS BookX Samsung's includes Galaxy Tandem Pro its MagicPad journey their embarked launch May PC Magic IT Book Wacom's leading laptop, with including Pro. Apple also on Movink IT X with market its and OLED OLED iPad second laptop laptop, picked and This OLED the with OLED Dell's Other the up OEMs During of and the the first first introduction Honor's series as tablet quarter, launched Edge OEMs new recently global Microsoft their the of speed

panel year-over-year panel According expected are double million to OLED XXXX. triple are OLED in notebook almost expected units year-over-year to units to tablet X to shipments Omdia, million XX.X shipments to and

demand high PCs believes rise. mobile PCs, Omdia PC XX.X rising end by the are jump XXX% for notebook XXXX, for And million will by demand to that With shipments units. also forecasted to approximately AI OLED

incorporating OLED gaming Philips, Electronics, Dell, For to as LG for drive to displays popularity. top-tier Samsung, MSI HP, OLED continues its Asus, their According AOC Omdia, monitor product into more brands more Lenovo, and gigabyte are lineups Acer, monitors, and such XXXX.

forecasts XX% DSCC more market longer And monitors XXXX will than increase that by units term, to research X.X triple OLED Omdia forecasted million. will year-over-year.

per OLED has support IT multiyear growth. and announcements. IT month. May, believe automotive approximately year, OLED billion This to In of investment late a XX,XXX facility production Visionox plant. pipeline a Samsung made BLE to a X.X Last for announced with continues CapEx begun bustling capacity the build new plates expand, plans invest As cycle slated is new Gen greenfield Gen OLED IT we game-changing $X.X to new input this OLED and X.X to

the believe new capacity expect of just and start expansion We continue future. fab announcements investments this to that OLED more the and in is

market. foldable procured that XXXX, the in year, TrendForce the just rollable displays foldable smartphone of XX to that our X.X% penetration According are boost. In slidable plethora of by forecasts was DSCC, models. there different SID broadening foldables, and with Display new Week, this phone as factor for prototypes a as of landscape to well products display and full trifolding the will on quarter smartphone first panels form including customers climb

capturing XXX in in to million Omdia, shipments of shipments year-over-year. according Speaking the million smartphone of up units, XX% the units market. time to shipments the OLED first LCD increased XXXX, research the firm, XXXX first display shipments LCD by market year-over-year, surpassed down to for decreased while the XX% to XXX quarter According of smartphone OLED smartphones, first of quarter XX%

indicates XX% onwards. of quarter the market to shipments quarter short-term for smartphone third OLED smartphone in the and OLED second will from Omdia's display that account in expect lead forecast to the XX% expand shipments and and XXXX display

OLED angles, traction to In is bright, forecasted large shipments growth for year-over-year. reach are form reach beautiful, panel OLED factors, in multiple to brilliant accolades XXX-degree reviews ratio year, countries picture this fast XX of to units with XX% refresh by and its TV rates. OLED Omdia, viewing win nearly TV XXXX. gain and expected TVs units high sales up continue contrast to quality X.X According million rave million

R&D of technicians outstanding front, and and evolving our dedicated exploring are status new team customers' to challenging the scientists, On ideas, developing for continuously our engineers quo solutions the needs.

major of At printed milestone with a is XXX device Week, a we per another for our OLED is blue and red, to One pixels inch, Display which solutions TV. trailblazing XX-inch green equivalent showcased with resolution May's OVJP. XK SID

that panels. enable cost-effective RGB manufacturing believe high-volume, side-by-side OVJP to continue We of will OLED TV

materials our continuously next-generation and discovering, reds, phosphorescent we developing delivering meet hosts ever-changing ever-evolving and greens, are and Regarding customer the to yellows portfolio, specifications.

for advances we progress achieved work, blue and specifications. development our our of beginning significant excellent make entry phosphorescent believe system. nearing to in continue we are the commercial blue phosphorescent ongoing emissive work commercial in a blue, Since we we've XXXX, Regarding development that

in more be is not blue need work we emmissive additional refine needed and beyond further months We years. materials, to believe this our that time and the to phosphorescent extend year. believe expected will we measured However, time

to our has Even phosphorescent it phosphorescent the for though commercial market has delivering a in that forthcoming broad portfolio blue the and will performance array continues higher for our opportunities not to of and higher range increase. OLED phosphorescent the shifting, line applications. a across blue in We Interest industry believe expansion is promise unlock the OLED vast of our tremendous confidence time wavered. efficiency of our a

time the industry, We more When for is coming. some will phosphorescent we in introduction. it consumers for The significant and believe benefits blue before OLED the line us. bottom for adopted that be an commercial device, is just need is

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

Brian Millard

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

revenue up in XXXX. $XXX X% from second quarter million quarter million, second of Our was the year-over-year $XXX

were Our in total material material quarter second $XX the quarter XXXX. second million sales the million $XX in compared of to of sales

Red our in million. were emitter which yellow million million emitters, This This sales of million. $XX.X quarter. prior compares compares emitter $XX.X in to include Green second sales, were $XX.X green the XXXX. year's quarter $XX.X to the

the patterns buying in material discussed vary quarter-to-quarter. have we can past, As

compared and period second year's Second compared million of was quarter $XX to quarter of million. royalty Adesis revenue to $XX the $X.X prior license in fees the quarter million XXXX. second were $X.X million

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

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

Second quarter investments and second cost $XX was infrastructure it the quarter year-over-year primarily excluding XXXX, $XX in expenses, operating innovation The compensation due of million. increase million. our to of sales, was and continued were people, engine. stock-based In higher

future an Operating year-over-year margin operating year our to guidance This range increase at million expect OpEx XX%. our for growth. the was the a XX% $XX of second period compares end income million to of invest XX% We and to $XX of the margin. as XX% of be translating now we into prior operating in continue high to XXXX quarter,

XXXX. range to second XX% was continue the full We operating XX%. the in margins our be will believe income of quarter to year The in XX% of tax rate

effective tax our rate We expect year for be to approximately XX%. the

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

million. September of Regarding capital guidance, continued we And shareholders. our shared, to $XXX in approved as Board The of million generation range our stockholders be XXXX. on which Directors will dividend of XX, to our flow now a believe and will lastly, $X.XX close XXXX dividend, on our commitment the of of Steve XXXX, quarterly XX, the September record business revenues return paid be reflects to as cash positive expected to $XXX

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

Steven V. Abramson

Brian. Thanks,

the Display we June Universal On celebrated of anniversary XX, Corporation. XXth

our Our Seligsohn, dot Sherwin future seconds. green XXXX. of and OLEDs just vision founded of a light in with envisioned late company organic up few who founder, he observed Display a for a Universal From the started that, Sherwin

profitable, we innovation forged a as XX As relentless boundaries commemorate journey, vision, turned long-term of are and perseverance of reality, strong and we XX innovation years possible extraordinary reminded spirit of pushing along we as years what's way. well before the partnerships the the continuously and of our of including

global leader. a from evolved R&D pioneering We to a start-up

enabled have has Our led commitment inventions groundbreaking the industry. and that development and to OLED to advancements research

sort we are the our step growth next of into the story, to new heights of trailblazing collaboration innovation, we As chapter and excellence. excited

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

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

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

Operator

Our Krish question with Instructions] TD Cowen. first Sankar is [Operator from

Hadi Orabi

Krish. for Congrats Eddy the sound again. results on is This

about versus a talked this you a I'm to feels if introduce blue prior that bit tone me when refining but time. less quarter Correct product guys wrong, and optimistic You phosphorus this year. more little expected requires qualification-ready

road the on or Blue that blue expected been it during map development? update if quarter, the an this if be wonder development Also, is share I great. you part of has unexpected and revenues from can So would

Brian Millard

be seen over of some to in beyond beyond commercial more of this do confident expected performance us bit we yes, achieved. still achieve commercial not Sure. believe to Eddy, years, year you blue, need few last year. we lot we Steve had on continues. feel and those will so beyond to years going we work work the it's but very this specs We've hit the a time this time this our need heard think done. material year in more a that have going that But that But little entry for mention, we've the we're specs. improvement that Previously, to to year as months, entry

of it blue on a to a emitter we our and And of the bit QX host. million quarter, the prior compared $X.X So in sales expectations. is had for of revenues change

Hadi Orabi

remind lot about competitive within question industry Chinese or whether there of and There's think taking being in. super you I about But a competitors China. That's helpful. in they're noise that just on if China in it's competitive. local understand place you a from are quick some different it. general. investors that more semis been wonder dynamics And I competition can emerging a Got maybe

about back to dynamics go be I'll on competitive how queue. Just any within you the great. color feel would that China,

Steven V. Abramson

long-term learned is believe our us are don't our believe competitive we the material they we Well, are future. next-generation specification signed our closely working Sure. technologies and customers customers panel all our into materials. major any we've and with agreements. that to understand want that current are with and work all that We of OLED materials of is that What suite why with which state-of-the-art requirements full and today makers solutions, the have the there have

Operator

is Our next with question from SIG. Hosseini Mehdi

Mehdi Hosseini

It's of A couple me. from follow-ups Hosseini SIG. Mehdi from

especially First, guide, raising year updated can you help the guide? calendar of low you understand the end what the drove you

Brian Millard

that looks into we I $XX prior this just Mehdi, the felt up more now and the point made. guidance, we're adjustment what year of as the at have the warranted than by to more rest million coming the Sure. visibility year, months X like we we think like

So as months it's ago. here were visibility where greater few I we a think to we sit compared just

Mehdi Hosseini

is mostly driven by or smartphone across And board? that the

Brian Millard

landed did I customers the our hear I board. we think roll I are -- coming on up for quarter we what of this we're and needs across as forecast mean, we our we process, in through on we that what the months. expectations And our from went based guidance. think it's their where

Mehdi Hosseini

Got you.

conference your rather on this Okay. language we And calls? blue, earnings than progress is by to track any then through could body your reading trying way that there systematically triangulate

Brian Millard

Yes. an would more were -- there love if easier we way. I mean, a

be to anything certainly what sharing need of can't I about our information own share we're think, we and development are customers efforts the mindful obviously, doing. our about

take this where a not going just but we thing, more and it's time when And we go made believe we're to to very phosphorescent matter ourselves So but confident blue periods if and is see here. commercialized, previously. the of little difficult had we with what the and expect future in is than a going it's thought progress we've a

Mehdi Hosseini

Or 'XX? the trying half available I in would what understand the market guess that blue, of should be with it was I be actual to determined? is is, second like to products your still

Brian Millard

there's our question a really those product it's use customers terms product. the how blue. hitting Yes, to in they enables commercial market then entry focused our when which in on commercial customers phosphorescent a in specs, We're for determine with a of our material

Operator

with is next Jim question Needham from Our & Ricchiuti Company.

Chris Grenga

Grenga This is on so differential for far Jim. any pricing you Are Or to applications? -- IT are for approach in in you Chris there? observing quantities any taking pricing sold different

Brian Millard

there's our use of of necessarily not in terms the yes, so Chris, pricing a emitter. difference

we So based on the price differently don't the of necessarily use emitter.

Chris Grenga

about it. And gets you level expect think how Or thinking the much? should that? it case to about closer Got change R&D Is that that of don't Blue to level how we commercialization? the the you necessarily as are R&D

Brian Millard

robust have program a development the we underway So currently at company. blue

right increase a necessarily there's off So of now. I where we are think don't significant

driven green expenses And But spend. drives uptick continue in a that's continuing higher materials in to don't that seen. whether But the the and I to or of our an we've in materials, of bit expense become and blue. recent the which advance blue, new more think invest itself, that's R&D that seen what's little some red, complex, we're drives in think of we've next-generation I periods.

Chris Grenga

OVJP. Got potentially the In about you it. partnerships. milestone past, talked to you've had And mentioned respect with pursuing the

you've any that there's discussions been with to that if with curious on incremental partners Just front? respect development having

Brian Millard

point equipment to those we partnerships, strongly this in promise We continue terms industry believe continue of but of OVJP, players to to nothing to in customers at partnerships. the talk about very share and and

Operator

next question Our Martin Co. is Instructions] Yang Oppenheimer & with from [Operator

Martin Yang

what Can -- you quarter? to the the contributed maybe PP&E in about what growth attributed talk in

Brian Millard

Yes.

all years of So ahead. doing we're as projects making support as to our CapEx, renovation the network some up we've we we our see sure had our that in have of across -- capabilities in in work terms operational New CapEx the on stood the been recent campus growth well periods the manufacturing Jersey in

point to So year-to-date the are period. X those the things to in

Martin Yang

second that difference question the different details not really that could can half. the strongly between is Chinese growing as performance you there much. Korean customers. or give around Is and My regions? that customers help the growth first in quarter us growth sales Korean in between the Chinese X any first explain

Brian Millard

Yes, ordering years, question. variable customers and mean have revenues it's you've quarter-to-quarter. the think you last from few I a lumpy seen that if our Chinese quite good and I look patterns over our been

what So I seen we've of think that's as recent a well. in periods lot

to of no real So just themes than customers. to point Chinese our other the patterns variable buying

Operator

Goldman Our with next Sachs. Brian question from is Lee

Brian Lee

Sorry, based I on on apologize of kind pretty precise hearing. you jumped here blue of if what several I into answered on update already some I'm you're but months XXXX the so late, this,

get year there? How us a kind to give update the you can trying could of several a months sense this of and sense visibility what takes? become like delay not another So is are your two? puts what Just or

Brian Millard

Yes.

XXXX. final months not of be made last that that's Steve So ones, stages complex some just blue, that's we I the the years phosphorescent I more that's complicated as And R&D and get was as of think as project the stages you the few into can comment I now. of right think are think where an delay beyond

is time the expect felt the And so preparing entry to of specs. months, the get needed beyond like we for call to be commercial few going some as were over year some last this and information we those analyzing to

Brian Lee

but to throughout it guess, Okay. for from can a -- financial been community sounds efforts you does And on commercial with what it's give implication feedback -- once this from mean contract update this you engaging a the or the then, year. like customers sure And I I new sign you've to Fair enough. from practical your call, I'm for us guess, for it example, wanted that ready. this terms Samsung, pricing new with also setting What's molecule community? just standpoint,

Brian Millard

phosphorescent blue project the interest and to interest mean grow. in I in Yes. continues

strong customer blue. engagement phosphorescent board We the on have across

super will point. place there. contracts specs, the We're to we're we're entry to at contracting, that in and really that fall on on not commercial they the need focused when getting this be confident On focused the

Brian Lee

one All numbers enough. Fair me, Last for just related. right.

you hadn't the did something of revenue, that? the in that update jump revenues. terms cover in a in deferred drove contractual there if current Sorry Just big seen some balance, quarters on in the sort or this, that deviations was but I trend line few of deferred

Just wondering be what related that to. might

Brian Millard

Thanks, Yes. Brian.

a a achieved due the was to was that quarter. on milestone in that So really billing contract certain

in based And you as the uptick in were collection billing revenue the up an quarter, cash It that the So relative a timing of milestones there down course, know, of balance goes was recognition. drove there. ordinary a this revenue out deferred few either normal nothing balance. or to on

Operator

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

Brian Millard

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

Operator

Thank will today's you. conclude conference. This

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

Universal Display (OLED) 1 Aug 242024 Q2 Earnings call transcript