OLED Universal Display Corporation

Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED® technology and materials, today reported financial results for the third quarter ended September 30, 2024.

“With strong year-to-date results, we are on track to achieve record revenues, earnings, and operating cash flow in 2024 as we continue our growth trajectory. The rate of growth this year, though, is expected to be more modest than previously projected. With recent updates to customer order expectations for the fourth quarter, we are lowering our 2024 revenue forecast range to $625 million to $645 million,” said Brian Millard, Vice President and Chief Financial Officer of Universal Display Corporation. “We believe that 2024 marks the start of a new OLED adoption cycle for medium-sized displays, namely IT and automotive. With leading tablet, notebook, monitor, as well as auto OEMs expected to broaden their product roadmaps for OLEDs, significant investments in new OLED facilities are being deployed for these nascent market segments. As a leader in the OLED ecosystem, we are enabling and supporting this long runway of growth. Our world-class technology continues to set industry standards, our global partnerships continue to expand and deepen, and we continue to leverage our unparalleled expertise.”

Financial Highlights for the Third Quarter of 2024

• Total revenue in the third quarter of 2024 was $161.6 million as compared to $141.1 million in the third quarter of 2023.
• Revenue from material sales was $83.4 million in the third quarter of 2024 as compared to $92.5 million in the third quarter of 2023. The decrease in material sales was primarily due to changes in customer mix as material volumes were relatively flat between periods.
• Revenue from royalty and license fees was $74.6 million in the third quarter of 2024 as compared to $45.9 million in the third quarter of 2023. The increase in royalty and license fees was primarily the result of changes in customer mix and a $6.8 million increase in cumulative catch-up adjustment between periods.
• Cost of material sales was $33.2 million in the third quarter of 2024 as compared to $31.6 million in the third quarter of 2023. The increase in cost of material sales was primarily due to product mix.
• Total gross margin was 78% in the third quarter of 2024 as compared to 76% in the third quarter of 2023.
• Operating income was $67.0 million in the third quarter of 2024 as compared to $48.4 million in the third quarter of 2023.
• The effective income tax rate was 17.9% and 4.4% in the third quarter of 2024 and 2023, respectively. The relatively low effective income tax rate in the third quarter of 2023 was primarily due to the change in IRS regulations, issued in July 2023, that permitted withholding taxes to be credited against U.S. taxable income for the taxable years 2022 and 2023.
• Net income was $66.9 million or $1.40 per diluted share in the third quarter of 2024 as compared to $51.5 million or $1.08 per diluted share in the third quarter of 2023.

Revenue Comparison

($ in thousands)

 

Three Months Ended September 30,

 

 

 

2024

 

 

2023

Material sales

 

$

83,428

 

 

$

92,492

Royalty and license fees

 

 

74,590

 

 

 

45,915

Contract research services

 

 

3,609

 

 

 

2,670

Total revenue

 

$

161,627

 

 

$

141,077

Cost of Materials Comparison

($ in thousands)

 

Three Months Ended September 30,

 

 

2024

 

2023

Material sales

 

$

83,428

 

$

92,492

Cost of material sales

 

 

33,172

 

 

31,639

Gross margin on material sales

 

 

50,256

 

 

60,853

Gross margin as a % of material sales

 

 

60

%

 

 

66

%

Financial Highlights for the First Nine Months of 2024

• Total revenue in the first nine months of 2024 was $485.4 million as compared to $418.1 million in the first nine months of 2023.
• Revenue from material sales was $272.2 million in the first nine months of 2024 as compared to $239.8 million in the first nine months of 2023. The increase in material sales was primarily due to strengthened demand for our emitter materials, partially offset by changes in customer mix.
• Revenue from royalty and license fees was $202.4 million in the first nine months of 2024 as compared to $165.5 million in the first nine months of 2023. The increase in royalty and license fees was primarily the result of higher unit material volume and changes in customer mix during the third quarter of 2024.
• Cost of material sales was $102.8 million in the first nine months of 2024 as compared to $89.7 million in the first nine months of 2023 primarily due to an increase in materials sales volume and product mix, partially offset by a $4.0 million decrease in inventory reserve expense.
• Total gross margin was 77% in the first nine months of 2024 as compared to 76% in the first nine months of 2023.
• Operating income was $186.3 million in the first nine months of 2024 as compared to $152.4 million in the first nine months of 2023.
• The effective income tax rate was 18.8% and 16.8% in the first nine months of 2024 and 2023, respectively.
• Net income was $176.1 million or $3.69 per diluted share in the first nine months of 2024 compared to $141.0 million or $2.95 per diluted share in the first nine months of 2023.

Revenue Comparison

($ in thousands)

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

Material sales

 

$

272,154

 

 

$

239,789

 

Royalty and license fees

 

 

202,409

 

 

 

165,524

 

Contract research services

 

 

10,828

 

 

 

12,796

 

Total revenue

 

$

485,391

 

 

$

418,109

 

Cost of Materials Comparison

($ in thousands)

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

Material sales

 

$

272,154

 

 

$

239,789

 

Cost of material sales

 

 

102,759

 

 

 

89,697

 

Gross margin on material sales

 

 

169,395

 

 

 

150,092

 

Gross margin as a % of material sales

 

 

62

%

 

 

63

%

2024 Revised Guidance

The Company now believes that its 2024 revenue will be in the range of $625 million to $645 million. The OLED industry remains at a stage where many variables can have a material impact on results, and the Company thus caveats its financial guidance accordingly.

Dividend

The Company also announced a fourth quarter cash dividend of $0.40 per share on the Company’s common stock. The dividend is payable on December 31, 2024 to all shareholders of record as of the close of business on December 17, 2024.

Conference Call Information

In conjunction with this release, Universal Display will host a conference call on Wednesday, October 30, 2024 at 5:00 p.m. Eastern Time. The live webcast of the conference call can be accessed under the events page of the Company's Investor Relations website at ir.oled.com. Those wishing to participate in the live call should dial 1-877-524-8416 (toll-free) or 1-412-902-1028. Please dial in 5-10 minutes prior to the scheduled conference call time. An online archive of the webcast will be available within two hours of the conclusion of the call.

About Universal Display Corporation

Universal Display Corporation (Nasdaq: OLED) is a leader in the research, development and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications. Founded in 1994 and with subsidiaries and offices around the world, the Company currently owns, exclusively licenses or has the sole right to sublicense more than 6,000 patents issued and pending worldwide. Universal Display licenses its proprietary technologies, including its breakthrough high-efficiency UniversalPHOLED® phosphorescent OLED technology that can enable the development of energy-efficient and eco-friendly displays and solid-state lighting. The Company also develops and offers high-quality, state-of-the-art UniversalPHOLED materials that are recognized as key ingredients in the fabrication of OLEDs with peak performance. In addition, Universal Display delivers innovative and customized solutions to its clients and partners through technology transfer, collaborative technology development and on-site training. To learn more about Universal Display Corporation, please visit https://oled.com/.

Universal Display Corporation and the Universal Display Corporation logo are trademarks or registered trademarks of Universal Display Corporation. All other Company, brand or product names may be trademarks or registered trademarks.

All statements in this document that are not historical, such as those relating to the projected adoption, development and advancement of the Company’s technologies, and the Company’s expected results, as well as the growth of the OLED market and the Company’s opportunities in that market, are forward-looking financial statements within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements in this document, as they reflect Universal Display Corporation’s current views with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated. These risks and uncertainties are discussed in greater detail in Universal Display Corporation’s periodic reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, including, in particular, the section entitled “Risk Factors” in Universal Display Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023. Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document.

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UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share data)

 

 

 

September 30, 2024

 

 

December 31, 2023

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

79,559

 

 

$

91,985

 

Short-term investments

 

 

471,993

 

 

 

422,137

 

Accounts receivable

 

 

87,693

 

 

 

139,850

 

Inventory

 

 

175,958

 

 

 

175,795

 

Other current assets

 

 

126,643

 

 

 

87,365

 

Total current assets

 

 

941,846

 

 

 

917,132

 

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $158,992 and $143,908

 

 

191,195

 

 

 

175,150

 

ACQUIRED TECHNOLOGY, net of accumulated amortization of $199,428 and $186,850

 

 

77,747

 

 

 

90,325

 

OTHER INTANGIBLE ASSETS, net of accumulated amortization of $11,484 and $10,414

 

 

5,804

 

 

 

6,874

 

GOODWILL

 

 

15,535

 

 

 

15,535

 

INVESTMENTS

 

 

396,931

 

 

 

299,548

 

DEFERRED INCOME TAXES

 

 

72,138

 

 

 

59,108

 

OTHER ASSETS

 

 

109,686

 

 

 

105,289

 

TOTAL ASSETS

 

$

1,810,882

 

 

$

1,668,961

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payable

 

$

24,698

 

 

$

10,933

 

Accrued expenses

 

 

52,955

 

 

 

52,080

 

Deferred revenue

 

 

47,393

 

 

 

47,713

 

Other current liabilities

 

 

6,119

 

 

 

8,096

 

Total current liabilities

 

 

131,165

 

 

 

118,822

 

DEFERRED REVENUE

 

 

2,376

 

 

 

12,006

 

RETIREMENT PLAN BENEFIT LIABILITY

 

 

54,288

 

 

 

52,249

 

OTHER LIABILITIES

 

 

36,303

 

 

 

38,658

 

Total liabilities

 

 

224,132

 

 

 

221,735

 

SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

Preferred Stock, par value $0.01 per share, 5,000,000 shares authorized, 200,000 shares of Series A Nonconvertible Preferred Stock issued and outstanding (liquidation value of $7.50 per share or $1,500)

 

 

2

 

 

 

2

 

Common Stock, par value $0.01 per share, 200,000,000 shares authorized, 48,826,922 and 48,731,026 shares issued, and 47,461,274 and 47,365,378 shares outstanding, at September 30, 2024 and December 31, 2023, respectively

 

 

488

 

 

 

487

 

Additional paid-in capital

 

 

717,190

 

 

 

699,554

 

Retained earnings

 

 

907,776

 

 

 

789,553

 

Accumulated other comprehensive income (loss)

 

 

2,578

 

 

 

(1,086

)

Treasury stock, at cost (1,365,648 shares at September 30, 2024 and December 31, 2023)

 

 

(41,284

)

 

 

(41,284

)

Total shareholders’ equity

 

 

1,586,750

 

 

 

1,447,226

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

1,810,882

 

 

$

1,668,961

 

 

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(in thousands, except share and per share data)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

Material sales

 

$

83,428

 

 

$

92,492

 

 

$

272,154

 

 

$

239,789

 

Royalty and license fees

 

 

74,590

 

 

 

45,915

 

 

 

202,409

 

 

 

165,524

 

Contract research services

 

 

3,609

 

 

 

2,670

 

 

 

10,828

 

 

 

12,796

 

Total revenue

 

 

161,627

 

 

 

141,077

 

 

 

485,391

 

 

 

418,109

 

COST OF SALES

 

 

35,812

 

 

 

34,248

 

 

 

111,109

 

 

 

99,357

 

Gross margin

 

 

125,815

 

 

 

106,829

 

 

 

374,282

 

 

 

318,752

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

36,089

 

 

 

33,099

 

 

 

110,900

 

 

 

96,840

 

Selling, general and administrative

 

 

15,664

 

 

 

18,084

 

 

 

54,757

 

 

 

50,557

 

Amortization of acquired technology and other intangible assets

 

 

4,551

 

 

 

4,557

 

 

 

13,648

 

 

 

11,442

 

Patent costs

 

 

2,352

 

 

 

2,572

 

 

 

6,735

 

 

 

7,056

 

Royalty and license expense

 

 

154

 

 

 

81

 

 

 

1,928

 

 

 

414

 

Total operating expenses

 

 

58,810

 

 

 

58,393

 

 

 

187,968

 

 

 

166,309

 

OPERATING INCOME

 

 

67,005

 

 

 

48,436

 

 

 

186,314

 

 

 

152,443

 

Interest income, net

 

 

10,592

 

 

 

7,136

 

 

 

30,073

 

 

 

20,301

 

Other income (loss), net

 

 

3,819

 

 

 

(1,693

)

 

 

416

 

 

 

(3,180

)

Interest and other income, net

 

 

14,411

 

 

 

5,443

 

 

 

30,489

 

 

 

17,121

 

INCOME BEFORE INCOME TAXES

 

 

81,416

 

 

 

53,879

 

 

 

216,803

 

 

 

169,564

 

INCOME TAX EXPENSE

 

 

(14,546

)

 

 

(2,363

)

 

 

(40,743

)

 

 

(28,531

)

NET INCOME

 

$

66,870

 

 

$

51,516

 

 

$

176,060

 

 

$

141,033

 

NET INCOME PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

BASIC

 

$

1.40

 

 

$

1.08

 

 

$

3.69

 

 

$

2.95

 

DILUTED

 

$

1.40

 

 

$

1.08

 

 

$

3.69

 

 

$

2.95

 

WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

BASIC

 

 

47,542,114

 

 

 

47,570,099

 

 

 

47,549,976

 

 

 

47,555,734

 

DILUTED

 

 

47,669,439

 

 

 

47,632,431

 

 

 

47,644,026

 

 

 

47,609,692

 

CASH DIVIDENDS DECLARED PER COMMON SHARE

 

$

0.40

 

 

$

0.35

 

 

$

1.20

 

 

$

1.05

 

 

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

176,060

 

 

$

141,033

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation

 

 

19,488

 

 

 

20,128

 

Amortization of intangibles

 

 

13,648

 

 

 

11,442

 

Amortization of premium and discount on investments, net

 

 

(5,930

)

 

 

(9,436

)

Stock-based compensation

 

 

23,812

 

 

 

18,623

 

Deferred income tax (benefit) expense

 

 

(12,878

)

 

 

7,556

 

Retirement plan expense, net of benefit payments

 

 

1,385

 

 

 

2,347

 

Decrease (increase) in assets:

 

 

 

 

 

 

Accounts receivable

 

 

52,157

 

 

 

(29,528

)

Inventory

 

 

(163

)

 

 

1,814

 

Other current assets

 

 

(39,278

)

 

 

(37,653

)

Other assets

 

 

(4,397

)

 

 

8,292

 

Increase (decrease) in liabilities:

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

9,405

 

 

 

(32

)

Other current liabilities

 

 

(1,977

)

 

 

(24,186

)

Deferred revenue

 

 

(9,950

)

 

 

11,809

 

Other liabilities

 

 

(2,355

)

 

 

(4,502

)

Net cash provided by operating activities

 

 

219,027

 

 

 

117,707

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(29,960

)

 

 

(52,208

)

Purchases of intangibles

 

 

—

 

 

 

(66,563

)

Purchases of investments

 

 

(337,949

)

 

 

(303,004

)

Proceeds from sale and maturity of investments

 

 

200,768

 

 

 

346,407

 

Net cash used in investing activities

 

 

(167,141

)

 

 

(75,368

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

1,776

 

 

 

1,532

 

Payment of withholding taxes related to stock-based compensation to employees

 

 

(8,251

)

 

 

(7,895

)

Cash dividends paid

 

 

(57,837

)

 

 

(50,083

)

Net cash used in financing activities

 

 

(64,312

)

 

 

(56,446

)

DECREASE IN CASH AND CASH EQUIVALENTS

 

 

(12,426

)

 

 

(14,107

)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

 

91,985

 

 

 

93,430

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

79,559

 

 

$

79,323

 

SUPPLEMENTAL DISCLOSURES:

 

 

 

 

 

 

Unrealized gain on available-for-sale securities

 

$

4,117

 

 

$

3,304

 

Common stock issued to Board of Directors and Scientific Advisory Board that was earned and accrued for in a previous period

 

 

300

 

 

 

300

 

Net change in accounts payable and accrued expenses related to purchases of property and equipment

 

 

(5,573

)

 

 

887

 

Cash paid for income taxes, net of refunds

 

 

60,772

 

 

 

81,132

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030918292/en/

Universal Display Contact: Darice Liu investor@oled.com media@oled.com +1 609-964-5123