Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Universal Display Corp (OLED, Financial) reported a solid start to 2025 with first-quarter revenue of $166 million, operating profit of $70 million, and net income of $64 million.
- The company sees tremendous growth opportunities in the OLED market, driven by diverse product roadmaps in IT, automotive, and foldable applications.
- Universal Display Corp (OLED) has diversified its supply chain and expanded its global manufacturing footprint, enhancing its operational agility.
- The company has achieved significant advancements in OLED technology, including an eightfold improvement in external quantum efficiency and a 60,000-fold increase in material lifetime.
- A $100 million share repurchase authorization and a $0.45 quarterly dividend reflect the company's commitment to returning capital to shareholders.
Negative Points
- Material sales in the first quarter were $86 million, down from $93 million in the first quarter of 2024, indicating a decline in sales of green emitters.
- The company faces ongoing uncertainty due to global tariff developments, which could impact future orders and revenue.
- First-quarter cost of sales increased slightly to $38 million, resulting in a slight decrease in total gross margins from 78% to 77%.
- The company anticipates flat operating expenses for 2025, which may limit potential for cost reductions or increased profitability.
- Despite progress, the commercialization of blue phosphorescent OLED panels remains challenging, with timelines and pricing terms still uncertain.
Q & A Highlights
Q: On the blue update from LG Display, it sounds like your customer has reached commercialization. How should we think about the timeline for when blue could show up in a commercial device?
A: Steven Abramson, CEO: We were pleased to see the report from LG Display highlighting their success with our phosphorescent blue. Specific plans and timelines for product introduction are for our customers and OEMs to discuss. We are in constant dialogue with our customers regarding commercial matters, including blue pricing.
Q: With LG's announcement, how should we think about the impact on other customers developing blue? Does this start an acceleration towards blue?
A: Steven Abramson, CEO: We've been working with multiple customers on blue for a few years. Each customer has its own development programs for blue.
Q: The LG release talks about a hybrid solution. Can you give us a sense of the commercial viability of a pure phosphorescent TV solution?
A: Steven Abramson, CEO: Our focus has been on achieving commercial specs of our material. The key takeaway is the positive step forward in using our material in a commercial application, and we support all our customers in their development efforts with blue.
Q: Regarding the material gross margin, should we expect a step-up in gross margin improvement?
A: Brian Millard, CFO: Our guidance for total gross margin is 76% to 77%, unchanged from February. Material gross margin varies based on customer mix and contract terms. Focusing on total gross margin is the most useful way to assess profitability.
Q: Can you confirm that with LG's panel announcement, there are no other technical hurdles for commercial device integration?
A: Brian Millard, CFO: This is a question for LG, as it is their product to bring to market. We continue to work closely with our customers to ensure success.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
