UNIVERSAL DISPLAY CORP \PA\ Q3 FY2024 earnings call

• Revenue for third quarter was $162 million, with operating profit and net income at $67 million and earnings per diluted share at $1.40. 2024 revenue forecast revised to $625 million to $645 million. - OLED market growth driven by consumer electronics like AR/VR, smartwatches, smartphones, IT, automotive, and TVs; near term, IT market is primary driver. - Visionox and BOE investing in Gen 8.6 OLED facilities, Samsung Display investing in Gen 8.6 IT facility and OLED module factory in Vietnam. - Automotive makers unveiling new models with OLED screens; tri-fold and rollable OLED devices in development. - Continued R&D collaboration with customers on new OLED materials and technologies; progress on commercial phosphorescent blue emissive system. - $0.40 quarterly dividend approved, to be paid December 31, 2024.

Third quarter revenue was $162 million. Material sales were $83 million; green emitter sales (including yellow-green emitters) were $62.6 million; red emitter sales were $20.1 million; royalty and license fees were $75 million; Adesis' third quarter revenue was $3.6 million. Revenue through Q3 was $485 million, up 16% from same period 2023. Net income for first nine months was $176 million, up 25% year-over-year. Third quarter gross margins were 78%, operating income was $67 million with an operating margin of 41%.

• Revised 2024 revenue forecast to $625 million to $645 million. - Full year total gross margins expected in range of 76% to 77%. - Full year operating margins expected in range of 35% to 40%. - Effective tax rate for the year expected to be approximately 19%.

Q: Can you give more context for the order cuts? Is it from a single customer, multiple customers, and reasons?

A: As approached end of third quarter, customers lowered Q4 forecast across the board. Reasons include certain model sales differing from prior expectations, macroeconomic concerns in certain geographies, and customers reevaluating inventory levels.

Q: Can you share more details about material gross margin in the quarter?

A: Primary drivers are customer mix and product mix; total gross margin remains within expected range of 76% to 77%.

Q: Thoughts on visibility into early 2025 and seasonality/inventory normalization?

A: Adjustment to guidance not indicative of persistent trend; still in planning process for 2025, more to share in February call; temporary adjustments closing out year and impact from certain OLED models.

Q: Timing and expectations for commercial phosphorescent blue?

A: Working closely with customers to commercialize; iterative process; hard to predict exact timeline and adoption rates, but focused on reaching commercial specs and performance first.

Q: What does Energy Display's development of OLED panel using blue phosphorescent material mean for Universal Display?

A: Indicative of progress, customers using their material in development, any use of their material is positive.