Universal Display Q1 2025 Earnings Call Transcript

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Operator

Good day, ladies and gentlemen, and welcome to Universal Display Corporation's First Quarter twenty twenty five Earnings Conference Call. My name is Sherry, and I will be your conference moderator for today's call. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Darice Liu, Senior Director of Investor Relations. Please proceed.

Darice Liu
Darice Liu
Senior Director of Investor Relations & Corporate Communications at Universal Display

Thank you, and good afternoon, everyone. Welcome to Universal Display's first quarter earnings conference call. Joining me on the call today are Steve Abramson, President and Chief Executive Officer and Brian Millard, Chief Financial Officer and Treasurer. Before Steve begins, let me remind you that today's call is a property of Universal Display. Any redistribution, retransmission or rebroadcast of any portion of this call in any form without the expressed written consent of Universal Display is strictly prohibited.

Darice Liu
Darice Liu
Senior Director of Investor Relations & Corporate Communications at Universal Display

Further, this call is being webcast live and will be made available for a period of time on Universal Display's website. This call contains time sensitive information that is accurate only as of the date of the live webcast of this call, 05/01/2025. During this call, we may make forward looking statements based on current expectations. These statements are subject to a number of significant risks and uncertainties, and our actual results may differ materially. These risks and uncertainties are discussed in the company's periodic reports filed with the SEC and should be referenced by anyone considering making any investments in the company's securities.

Darice Liu
Darice Liu
Senior Director of Investor Relations & Corporate Communications at Universal Display

Universal Display disclaims any obligation to update any of these statements. Now I would like to turn the call over to Steve Abramson.

Steven Abramson
Steven Abramson
President, Chief Executive Officer & Director at Universal Display

Thanks, Daris, and welcome to everyone on today's call. 2025 began on a solid note. First quarter twenty twenty five revenue was $166,000,000 operating profit was $70,000,000 and net income was $64,000,000 or $1.35 per diluted share. Looking ahead, we continue to see tremendous growth opportunities in the OLED market. At the same time, we're operating in a global environment that is increasingly dynamic and complex.

Steven Abramson
Steven Abramson
President, Chief Executive Officer & Director at Universal Display

In April, we saw an uptick in orders, which we believe was largely in response to ongoing tariff developments. That said, we are taking a measured approach in assessing how this may evolve over coming quarters. Thus far, our business remains largely unaffected. Uncertainty is not new to us. We built this company to be resilient and have shown time and again that we can navigate through challenging times.

Steven Abramson
Steven Abramson
President, Chief Executive Officer & Director at Universal Display

Our innovation engine, strong balance sheet, robust supply chain, and operational agility position us well to navigate through periods of volatility. In the past years, we have diversified our supply chain, expanded our global manufacturing footprint to now include Shannon, Ireland, and optimized our inventory and production mix. This ensures our flexibility to respond, adapt, and lead while staying ahead of the curve with the continued invention, development, and delivery of state of the art OLED technologies and materials for our customers and the industry. The long term trajectory of the OLED market is positive and strong, driven by increasingly diverse product road maps featuring an expanding range of OLED offerings with IT, automotive, and foldable alongside other applications slated to drive demand in the near term. As panel makers and OEMs prepare for new gen 8.6 OLED capacity to start coming online in 2026, recently published Omnia market research forecast that 2025 OLED growth will be in the mid single digits.

Steven Abramson
Steven Abramson
President, Chief Executive Officer & Director at Universal Display

Looking into three largest consumer electronic end markets, OLED smartphones are forecasted to grow by 6% year over year to 848,000,000 units. OLED IT units, which encompasses tablets, laptops, and monitors, are expected to increase by 16% year over year to 27,000,000 units, and OLED TVs are expected to grow by 4.5% year over year to 7,100,000 units. As consumers increase their use time and products continue to evolve with advanced features such as connectivity and artificial intelligence, the energy efficiency of our materials and technology are ever more essential. Our unyielding focus on advancing OLED technology and empowering our customers remains a cornerstone of our strong leadership position. We are innovators, advancing our portfolio of highly efficient, high performing phosphorescent reds, greens, yellows, forthcoming blues to support the market of today and tomorrow.

Steven Abramson
Steven Abramson
President, Chief Executive Officer & Director at Universal Display

Since 1998, our team of world class scientists, engineers, and technicians have been driving continuous breakthroughs across critical performance metrics, boosting efficiency, extending lifetime, and enhancing color points. Over the years, we've achieved an impressive eightfold improvement in external quantum efficiency, significantly advancing OLED energy efficiency and overall device performance. At the same time, we've delivered an extraordinary 60,000 fold increase in material lifetime, setting new industry benchmarks. Our expanding portfolio of OLED technologies and universal full of materials enables customers to realize greater power savings, extend battery life, reduce device size, and support next generation features like five g and AI across a range of consumer OLED products. Regarding Blue, the journey has been challenging as all trailblazing breakthroughs are, and our teams continue to work tirelessly.

Steven Abramson
Steven Abramson
President, Chief Executive Officer & Director at Universal Display

We are excited about the strides we are making and are pleased by the news release this morning from LG Display announcing that they have successfully verified the commercialization level performance of blue phosphorescent OLED panels. We believe that our phosphorescent blue will be a game changer for our customers, the industry, consumers, and for us. And on that note, let me turn the call over to Brian.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Thank you, Steve. And again, thank you everyone for joining our call today. Revenue in the first quarter of twenty twenty five was $166,000,000 compared to $165,000,000 in the first quarter of twenty twenty four. While we expect a certain level of ongoing uncertainty for us and our customers due to the factors mentioned by Steve, we continue to believe our revenues will be in the range of $640,000,000 to $700,000,000 Our total material sales were $86,000,000 in the first quarter compared to material sales of $93,000,000 in the first quarter of twenty twenty four. Green emitter sales, which include our yellow green emitters, were $64,000,000 This compares to $71,000,000 in the first quarter of twenty twenty four.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Red emitter sales were $21,000,000 in the first quarter of twenty twenty five and 2024. As we've discussed in the past, material buying patterns can vary quarter to quarter. First quarter royalty and license fees were $74,000,000 compared to the prior year's period of $68,000,000 Adesis' first quarter revenue was 6,600,000 compared to $3,700,000 in the first quarter of twenty twenty four. First quarter cost of sales was $38,000,000 translating into total gross margins of 77%. This compares to $37,000,000 and total gross margins of 78 percent in the first quarter of twenty twenty four.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

First quarter operating expenses, excluding cost of sales, were $58,000,000 In the first quarter of twenty twenty four, it was $65,000,000 The year over year decrease was primarily due to the reorganization of OVJP Corporation and reduced performance based stock compensation. We continue to expect 2025 OpEx to be flat year over year. Operating income was $70,000,000 in the first quarter, translating into operating margin of 42%. This compares to the prior year period of $63,000,000 and operating margin of 38%. The income tax rate was 20% in the first quarter of twenty twenty five.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

We expect our effective tax rate for the year to be approximately 19%. First quarter twenty twenty five net income increased by more than 13% year over year to $64,000,000 or $1.35 per diluted share. This compares to $57,000,000 or $1.19 per diluted share in the comparable period in 2024. We ended the quarter with approximately $918,000,000 in cash, cash equivalents and investments. Our Board of Directors approved a $0.45 quarterly dividend, which will be paid on June 3025, to stockholders of record as of the close of business on 06/16/2025.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Additionally, we announced a $100,000,000 share repurchase authorization. Our capital allocation program reflects our expected continued positive cash flow generation and commitment to return capital to our shareholders. And lastly, I want to mention that this year's SID Display Week kicks off in San Jose on May 11. To learn more about UDC, please visit us at Booth Number 323. With that, I'll turn the call back to Steve.

Steven Abramson
Steven Abramson
President, Chief Executive Officer & Director at Universal Display

Thanks, Brian. Our company is grounded in innovation, strategic execution, and operational discipline. The journey to today was fueled by our relentless drive and refined through trials and challenges to shape more than success. It laid the foundation for the corporate culture we live and breathe today, one built on curiosity, creativity, commitment, and collaboration. Our culture empowers our teams to solve complex problems, reimagine what's possible, and lead with purpose.

Steven Abramson
Steven Abramson
President, Chief Executive Officer & Director at Universal Display

I would like to thank each of our employees for their drive, desire, dedication, and heart in elevating and shaping Universal Display's accomplishments and advancements. We are committed to being a leader in the OLED ecosystem, achieving superior long term growth and delivering cutting edge technologies and materials for the industry, for our customers and for our shareholders. And with that, operator, let's start the Q and A.

Operator

Thank you, Mr. Abramson. We will now be conducting a question and answer Our first question is from Brian Lee with Goldman Sachs. Please proceed.

Tyler Bisset
Tyler Bisset
Equity Research Associate at Goldman Sachs

Hey guys, this is Tyler Bissett on for Brian. Thanks for taking our questions. On the blue update from LG Display, it sounds like your customer has reached commercialization, which was great to see. So how should we think about what that means for a timeline for when Blue could show up in a commercial device? And are there certain milestones here for reaching more firm pricing terms?

Tyler Bisset
Tyler Bisset
Equity Research Associate at Goldman Sachs

And then is it fair to assume that this is for a mobile device and not TVs?

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Yes. Thanks, Tyler. Thanks for the questions. Yes, on Blue, we are certainly pleased to see the report today from LG Display highlighting the success that they've had utilizing our phosph orescent blue. We previously commented that having a customer indicate success with our material will be a positive step forward.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

So we're pleased by the announcement. Any specific plans and timeline of introducing into a product are really for our customers and their customers, the OEMs to speak to. And on pricing, we're in constant dialogue with our customers on various commercial matters, including blue pricing.

Tyler Bisset
Tyler Bisset
Equity Research Associate at Goldman Sachs

And then with that announcement from LG Display, how should we think about the impact on other customers developing Blue? Does this sort of start an acceleration of sorts or potential race towards Blue?

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Yeah. Our customers and we've been working with multiple customers on Blue for, you know, a few years now. So, you know, our customers each have, you know, their own development programs that they're working toward on Blue.

Tyler Bisset
Tyler Bisset
Equity Research Associate at Goldman Sachs

All right. Thank you very much.

James Ricchiuti
Senior Analyst at Needham & Company

Thanks.

Operator

Our next question is from James Ricchiuti with Needham and Company. Please proceed.

James Ricchiuti
Senior Analyst at Needham & Company

Hi. Thanks. I guess we'll have to continue on the blue theme. You know, the the LG release talks about a hybrid solution. And I'm wondering if you can give us some sense as to where you are in terms of working with the industry to to see commercial viability of a a pure phosphorescent GV solution.

James Ricchiuti
Senior Analyst at Needham & Company

How far along are we there? I mean, is that months the way you described, you know, previously, we going back to, you know, your original commentary around Blue?

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Thanks, Jim. Our prior commentary on Blue had really been focused on achieving commercial specs of our material. We hadn't specified which architecture or structure it would be in. I think the key thing is this is a positive step forward in the use of our material in a commercial application, and we're supporting all of our customers in their development efforts with Blue.

James Ricchiuti
Senior Analyst at Needham & Company

Okay. One one thing that I think caught our you know, it was out in the press release was when LG talked about the stability of blue fluorescence, the legacy material. And I'm wondering, can can you help us better understand what that means as it relates to the stability of your materials and maybe what still needs to be achieved?

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Sure. Blue Fluorescence has been in market for decades now, so it's an established product. So inherently just based on the duration of the product being in market, there's more stability as well as the wavelength of blue just creates a little bit of different characteristics, especially when developing phosphorescent material.

James Ricchiuti
Senior Analyst at Needham & Company

Is this and I'll I'll jump back in the queue. But is it is your expectation that the advantages you have on the low power side, low power consumption side with with phosphorescence that this is the potentially, the over the near term, going to be the more commercial solution that we see a combination of blue fluorescence and and phosphorescence?

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

I think it's really going to depend on the customer's running decision on an approach that LG Display has taken that they've highlighted in their release today, and we're pleased to see the progress that they've had. But different customers may have different solutions for Blue. I think the key thing is the energy efficiency of the phosphorescent material is critical compared to the fluorescent because by replacing the fluorescent with phosphorescent, you're able to increase the energy efficiency as noted in the release today.

James Ricchiuti
Senior Analyst at Needham & Company

Okay. Thanks. I'll jump back in the queue. Appreciate it.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Thanks, Jim.

Operator

Our next question is from Mehdi Hosseini with SIG. Please proceed.

Mehdi Hosseini
Senior Equity Research Analyst at SIG

Yes. Thanks for taking my question. A couple of follow ups for me, Brian. I think I understand the I understand the challenges in forecasting and market adoption. But I think it is also it will be helpful for shareholders of UDC to understand the market development.

Mehdi Hosseini
Senior Equity Research Analyst at SIG

So if this is LG's announcement is kind of

Mehdi Hosseini
Senior Equity Research Analyst at SIG

a

Mehdi Hosseini
Senior Equity Research Analyst at SIG

hyper fluorescent blue, kind of a tandem junction. Would it be fair to think of this as a bridge? It will be limited to high end premium devices. And when the fluorescent blue is ready for commercialization as a stand alone, then it would have a wider adoption. Could we think about this of the sequencing, a bridge and then a mass adoption?

Mehdi Hosseini
Senior Equity Research Analyst at SIG

Is that fair assessment? And I have a follow-up.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Sure. Hi, Mehdi. So I think the key thing is this is a tandem structure that LG Display highlighted in their release today. So it's using a layer of fluorescent material and a layer of phosphorescent material from UDC. And from our perspective, this is a positive step in the use of our material in a commercial application.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

The ultimate product that LG or any of our other customers may choose to introduce our material into is up for them to speak to, them and the OEMs, and very difficult for us to predict at this time because it's really in their hands to carry it forward from here.

Mehdi Hosseini
Senior Equity Research Analyst at SIG

Sure. That's fair. And then regarding the material gross margin, should we think about a step up in gross margin improvement to get the low 60% for the year? Or would this improvement be more material so that you would go back to the 60% to 65% range?

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Yes. So our guidance for the year for total gross margin is 76% to 77, and that remains unchanged from what we communicated back in February. The materials gross margin does vary based on customer mix as well as we have new contracts, we can also have different mixes of royalty and license to materials. So focusing on the total gross margin of 76 to 77%, we think, is the most useful way of assessing the profitability of our contracts.

Mehdi Hosseini
Senior Equity Research Analyst at SIG

Okay. Thank you.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Thanks.

Operator

Our next question is from Scott Searle with ROTH Capital Partners. Please proceed.

Scott Searle
Managing Director, Senior Research Analyst at Roth Capital Partners, LLC

Hey, guys. Thanks for taking the questions. I apologize. I'm going to go back to Blue again. I just want to clarify that the LG implementation in terms of Universal Display's materials, you have hit commercial specs, is that correct, in terms of their implementation and not using a fluorescent in effect to cover up the shortcomings of your commercial blue?

Scott Searle
Managing Director, Senior Research Analyst at Roth Capital Partners, LLC

And just in terms of materials then that are used in a tandem architecture here, is this in the ballpark of what you guys were expecting in terms of materials per device?

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Yes, Scott. So the in terms of the the specs, I mean, we've been, you know, previously talking about specs being achieved, and we previously said that, you know, a customer using our material in an application that was deemed commercial would be, you know, a positive step forward. So that release today from LG Display, we think, demonstrates that our material is performing at commercial levels. And in terms of the ultimate material consumption per square inch in tandem versus single layer, That's really just dependent on each customer's recipe, and it's really something we can't comment on directly, the quantity of material at this point.

Scott Searle
Managing Director, Senior Research Analyst at Roth Capital Partners, LLC

Okay. And just as a follow-up, looking at the geographic mix, your revenue in China was up a little bit seasonally in the first quarter, I think about $10,000,000 or so. It sounds like you started to see what you are, I think, gaming pull ins potentially ahead of tariffs. Are you continuing to see that as we've gotten through the month of April? How should we be expecting the, I guess, the sequential progression as we're going into the second quarter here with the current tariff environment?

Scott Searle
Managing Director, Senior Research Analyst at Roth Capital Partners, LLC

Thanks.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

So in Q1, we did see heightened Chinese sales to Chinese customers, as you mentioned. We weren't hearing anything from our customers in the first quarter that indicated that was tariff related or preparatory for tariffs. In April, as Steve mentioned in his remarks, we did see a heightened level of orders in the April, which certainly were in response to tariffs. And as you noted, we do think that's pull in from following months and the full year we still have the same guidance of $640,000,000 to $700,000,000

Scott Searle
Managing Director, Senior Research Analyst at Roth Capital Partners, LLC

Great. Thank you.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Thanks Scott.

Operator

Our next question is from Nam Kim with Arafay Research. Please proceed.

Nam Hyung Kim
Senior Analyst at Arete research

Oh, thank you for taking my question. One more follow-up on blue. You know, for this commercial OLED panel from energy display news, do do they use your blue host material or only, DOPA material? I I know you guys have been preparing for Bluehost as well. So just curious on this.

Nam Hyung Kim
Senior Analyst at Arete research

And then, you know, secondly, on this press release, it seems to relate on IT device. The most IT device today already use tandem structure. So in that sense, it's nothing new. However, how should I interpret your work on single stack structure? Any, you know, color you can share with you with me would be great.

Nam Hyung Kim
Senior Analyst at Arete research

Thank you.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Thanks, Sam. So on the host, we we've been selling Bluehost and and emitter to various customers. We can't comment specifically on LG's recipe that they use for the the panel they produced and and announced today. And on the product, our customers have been evaluating our material for tandem as well as single layer, so it's really just dependent on the various development projects that each of them have within their organizations.

Nam Hyung Kim
Senior Analyst at Arete research

Understand. Thank you.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Thanks.

Operator

Our next question is from Eddie Araby with TD Cowen. Please proceed.

Analyst

Hey, guys. This is Eddie for Krish. Just a clarification. I know this question was asked, several times on this call. Like, just do you think, like, from a technical perspective, the blue materials can now be used in smartphones, for example?

Analyst

I guess I just want to understand, like, how important the LG announcement is to the mass adoption for blue phosphorus.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Sure. So, Eddie, the note the release today from from LG Display did, you know, reference use in smartphones as well as IT. But I think the key point being, you know, across all of our customers, we believe there's applicability for Blue in all applications. Certainly smartphones and IT and TVs as well. So we believe ultimately there's interest in it because of the power and energy efficiency benefits that the phosphorescent material brings to the solution.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

We believe and understand from our customers that there's interest in multiple applications.

Analyst

Got it. And do you think you guys cleared most of the milestones for that mass adoption?

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

We're very pleased with the progress that we're making and are working closely with our customers to, ensure their success in ours.

Analyst

Got it.

Analyst

Got it. Just a follow-up. I think one of the major smartphone EMs, there were, like, some news that they might use, foldable phones. Would you remind us, like, what's the content difference between foldable phones and just regular smartphones? That's it for me.

Analyst

Thank you.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Yes. So on the foldable, that's really the way I think about it is square area. So, you know, all things being equal, assuming it's a, you know, single stack like most smartphones are made today, you would really just take the the square area of, you know, any application in market today and determine the square area of the foldable to determine the incremental, material opportunity for us.

Operator

Our next question is from Martin Yang with Oppenheimer and Company. Please proceed.

Martin Yang
Senior Analyst at Oppenheimer & Co. Inc.

Hi, thank you for taking my question. The first question is regarding things to look forward to before we see product shipping with your Blue. Can you point to any other milestones, either by you or by your customers, before we see actual product shipping?

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

So thanks for the question, Martin. I think from this point forward, it's really going to be up to our customers to really communicate a lot of the progress that they're making as well as how their interactions are going with OEMs to introduce it into a product. We continue on our side to do work to develop new materials, new blue materials that increase their performance characteristics, just like we do on the red and green side of our business where we're continually inventing new materials. But we're very pleased with the progress we've made to date. Happy to see the announcement today by LG Display.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

But much of the communication from this point forward is probably going to come from the customers as they make progress in their efforts.

Martin Yang
Senior Analyst at Oppenheimer & Co. Inc.

Thanks, Brian. And then, can you confirm that with today's announcement, and with LG's panel, there will be no other technical hurdles to clear for that LG product to to be in a commercial device.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

So that's really a question more for LG than for us since it's, you know, their product to bring to market and bring to the OEMs.

Martin Yang
Senior Analyst at Oppenheimer & Co. Inc.

Got it. Last question for me is on overall communication strategy regarding other potential announcement by your customers. So should we expect similar pattern where the customers will be the one leading the press release or announcing potential breakthroughs or innovation with your brew material?

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Yeah. So the today's release was LG Display's release. You know, if our other customers choose to release information, you know, that's fine with us. But, you know, we're not the ones driving the, the strategy here on the communications front.

Martin Yang
Senior Analyst at Oppenheimer & Co. Inc.

Got it. Thank you. That's it for me.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Thanks, Martin.

Operator

Our next question is a follow-up from Jim Ricchiuti with Needham and Company. Please go ahead.

James Ricchiuti
Senior Analyst at Needham & Company

Brent, did you quantify the level of orders that you saw that may have been related to tariffs? I'm just trying to get a sense of how impactful that might be in terms of potentially pulling from the back half of the year into the June.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

We did not quantify the amount of orders that we saw in April, but it certainly was a heightened level compared to what we typically see in any given month. And we also need to see, you know, exactly how May, June plays out. But the full year, we still think is is, you know, within that $6.40 to 7 hundred range based on everything we're hearing at this point.

James Ricchiuti
Senior Analyst at Needham & Company

And then, I I don't recall. I may have missed it. Did you say what the, Blue development revenue was in the quarter?

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Yeah. Great question. The Blue development revenues in q one were 1,100,000.0 approximately, and that's, both host and emitter sales to our customers.

James Ricchiuti
Senior Analyst at Needham & Company

And then one final question for me is just just on OpEx. What what are you anticipating OpEx relative to the last year

James Ricchiuti
Senior Analyst at Needham & Company

for the full year?

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

We're still projecting OpEx is going to be fairly yeah. Exactly. It's going to be flat compared to 2024. We did see, you know, lower level in in q one due to a number of factors, but the full year, we're still believing is, is relatively flat compared to last year.

James Ricchiuti
Senior Analyst at Needham & Company

And I guess that's where I may be, just getting a little confused. I I thought initially you were anticipating OpEx to be to be up in '25, but you basically had been saying flat?

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Yeah. We've been expecting s g and a to be, you know, slightly up and R and D to be pretty flat and in aggregate it to be relatively flat as well. So based on what we know right now, we're expecting total OpEx to be flat for the year.

James Ricchiuti
Senior Analyst at Needham & Company

Okay, great. Thank you.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Thanks, Jim.

Operator

Our next question is from Scott Searle with ROTH Capital Partners. Please proceed.

Scott Searle
Managing Director, Senior Research Analyst at Roth Capital Partners, LLC

Hey, just a quick question on Tandem. Given the announcement from LG today, we started to see some of the design activity from an Apple standpoint in terms of their tablets. Is there more of a shift from a market perspective towards Tandem architectures? Or is it still just kind of one offs here or there? I'm just trying to get my hands around if there's any sort of a bigger trend going on here.

Scott Searle
Managing Director, Senior Research Analyst at Roth Capital Partners, LLC

Thanks.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Yeah. Good question, Scott. Tandem has a number of benefits that it's been used in primarily IT applications to date. And the benefits being really that by having two layers of emissive material, you can have greater lifetime. And, you know, a number of the the OEMs are are after that for products that are on, you know, all day long, especially have a lot of white pixels that are on, all day long.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

And so that's why Tandem has been used in a number of IT products. So there were a few last year that were announced that had had Tandem structures. But we think that even in the IT market, there's going to continue to be, you know, a mix of of Tandem and single layer based on what we know at this point. In smartphones, there's been a very limited number of tandem smartphones, but the vast, vast majority of smartphones are single layer, and we expect that to continue to be the case.

Scott Searle
Managing Director, Senior Research Analyst at Roth Capital Partners, LLC

Great. Thank you.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

Thanks, Scott.

Operator

Thank you. This concludes our question and answer session. I would like to turn the call back over to Brian Mallard for any additional or closing remarks.

Brian Millard
Brian Millard
VP, CFO & Treasurer at Universal Display

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

Operator

Thank you. This concludes today's conference call. You may now disconnect.

Executives
    • Darice Liu
      Darice Liu
      Senior Director of Investor Relations & Corporate Communications
    • Steven Abramson
      Steven Abramson
      President, Chief Executive Officer & Director
    • Brian Millard
      Brian Millard
      VP, CFO & Treasurer
Analysts

Key Takeaways

  • Universal Display reported first-quarter 2025 revenue of $166 million, operating profit of $70 million and net income of $64 million ($1.35 per diluted share), and reaffirmed full-year revenue guidance of $640 million–$700 million with total gross margins of 76–77%.
  • The company ended the quarter with $918 million in cash and equivalents, announced a $0.45 quarterly dividend and a $100 million share repurchase authorization, underscoring its strong free cash flow and shareholder-return focus.
  • Market research from Omnia forecasts mid-single-digit OLED growth in 2025—smartphones up 6% to 848 million units, IT devices up 16% to 27 million units and TVs up 4.5% to 7.1 million units—as new Gen 8.6 fabs ramp in 2026 and applications broaden into automotive and foldables.
  • Since 1998, UDC’s R&D has driven an eightfold increase in external quantum efficiency and a 60,000× extension in material lifetime, and it continues to expand its portfolio of high-efficiency phosphorescent reds, greens, yellows and forthcoming blues to enhance device performance and energy savings.
  • LG Display announced it has successfully verified UDC’s phosphorescent blue OLED materials at commercialization performance levels in a tandem (“hybrid”) panel, representing a significant milestone toward broader blue adoption, though final product roll-outs and pricing remain dependent on OEM timing.
A.I. generated. May contain errors.
Earnings Conference Call
Universal Display Q1 2025
00:00 / 00:00

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