Universal Display Corporation Announces Fourth Quarter and Full Year 2024 Financial Results

About this update from Universal Display Corporation

EWING, N.J. --(BUSINESS WIRE)-- Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED® technology and materials, today reported financial results for the fourth quarter and full year ended December 31, 2024 . “We are pleased to report that 2024 was a record-breaking year of solid financial performance,” said Brian Millard , Vice President and Chief Financial Officer of Universal Display Corporation . “Across the OLED industry, product roadmaps are expanding, and leading panel makers are investing in new fabs to meet the increasing demand, particularly in the emerging IT and automotive markets. We believe this new capex cycle will pave the way for meaningful new OLED capacity, new OLED products, and new OLED adoptees. As a pioneer and leader in the ecosystem, we are well positioned to continue supporting our customers and enabling the industry with our broadening portfolio of energy-efficient, high-performing phosphorescent materials and OLED technologies.” Financial Highlights for the Fourth Quarter of 2024 Total revenue in the fourth quarter of 2024 was $162.3 million as compared to $158.3 million in the fourth quarter of 2023. Revenue from material sales was $93.3 million in the fourth quarter of 2024 as compared to $82.2 million in the fourth quarter 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 $64.4 million in the fourth quarter of 2024 as compared to $72.9 million in the fourth quarter of 2023. The decrease was primarily due to a reduction in cumulative catch-up adjustments related to royalty and license fees and changes in customer mix. Cost of material sales was $34.2 million in the fourth quarter of 2024 as compared to $33.4 million in the fourth quarter of 2023 due to higher unit material volume. Total gross margin was 77% in the fourth quarter of 2024 and 2023. Fourth quarter 2024 results include $8.9 million of restructuring costs, recorded in research and development expenses, related to the planned closure of the OVJP California location and related reorganization; and $6.7 million of foreign currency exchange losses related to a tax receivable denominated in Korean Won. These two items resulted in a combined $0.26 reduction in diluted earnings per share for the fourth quarter of 2024. Foreign exchange gains of $2.6 million were recognized in the fourth quarter of 2023 related to this tax receivable denominated in Korean Won, resulting in a $0.04 increase in diluted earnings per share. Operating income was $52.5 million in the fourth quarter of 2024 as compared to $64.7 million in the fourth quarter of 2023. The effective income tax rate was 16.8% and 18.0% in the fourth quarter of 2024 and 2023, respectively. Net income was $46.0 million or $0.96 per diluted share in the fourth quarter of 2024 as compared to $62.0 million or $1.29 per diluted share in the fourth quarter of 2023. Revenue Comparison ($ in thousands) Three Months Ended December 31 , 2024 2023 Material sales $ 93,265 $ 82,240 Royalty and license fees 64,411 72,865 Contract research services 4,617 3,215 Total revenue $ 162,293 $ 158,320 Cost of Materials Comparison ($ in thousands) Three Months Ended December 31 , 2024 2023 Material sales $ 93,265 $ 82,240 Cost of material sales 34,248 33,379 Gross margin on material sales 59,017 48,861 Gross margin as a % of material sales 63 % 59 % Financial Highlights for the Full Year of 2024 Total revenue in the full year 2024 was $647.7 million as compared to $576.4 million in the full year 2023. Revenue from material sales was $365.4 million in the full year 2024 as compared to $322.0 million in the full year 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 $266.8 million in 2024 as compared to $238.4 million in 2023. The increase in royalty and license fees was primarily the result of higher unit material volume and changes in customer mix. Cost of material sales was $137.0 million in 2024 as compared to $123.1 million in 2023 primarily due to an increase in materials sales volume and product mix, partially offset by a $5.4 million decrease in inventory reserve expense. Total gross margin was 77% in the full year 2024 and 2023. Results for 2024 include $8.9 million of restructuring costs, recorded in research and development expenses, related to the planned closure of the OVJP California location and related reorganization; and $7.2 million of foreign currency exchange losses related to a tax receivable denominated in Korean Won. These two items resulted in a combined $0.27 reduction in diluted earnings per share for the full year 2024. Foreign exchange losses of $732,000 were recognized in the full year 2023 related to this tax receivable denominated in Korean Won, resulting in a $0.01 decrease in diluted earnings per share. Operating income was $238.8 million in 2024 as compared to $217.2 million in 2023. The effective income tax rate was 18.4% and 17.2% in 2024 and 2023, respectively. Net income was $222.1 million or $4.65 per diluted share in 2024 compared to $203.0 million or $4.24 per diluted share in 2023. Revenue Comparison ($ in thousands) Year Ended December 31 , 2024 2023 Material sales $ 365,419 $ 322,029 Royalty and license fees 266,820 238,389 Contract research services 15,445 16,011 Total revenue $ 647,684 $ 576,429 Cost of Materials Comparison ($ in thousands) Year Ended December 31 , 2024 2023 Material sales $ 365,419 $ 322,029 Cost of material sales 137,006 123,076 Gross margin on material sales 228,413 198,953 Gross margin as a % of material sales 63 % 62 % 2025 Guidance The Company believes that its 2025 revenue will be in the range of $640 million to $700 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 first quarter 2025 cash dividend of $0.45 per share on the Company’s common stock. The cash dividend is payable on March 31, 2025 to all shareholders of record as of the close of business on March 17, 2025 . Conference Call Information In conjunction with this release, Universal Display will host a conference call on Thursday, February 20, 2025 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 6,500 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, 2024 . Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document. Follow Universal Display Corporation X Facebook YouTube (OLED-C) UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) December 31 , 2024 December 31 , 2023 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 98,980 $ 91,985 Short-term investments 393,690 422,137 Accounts receivable 113,648 139,850 Inventory 182,938 175,795 Other current assets 110,575 87,365 Total current assets 899,831 917,132 PROPERTY AND EQUIPMENT, net of accumulated depreciation of $169,877 and $143,908 195,239 175,150 ACQUIRED TECHNOLOGY, net of accumulated amortization of $203,621 and $186,850 73,554 90,325 OTHER INTANGIBLE ASSETS, net of accumulated amortization of $11,842 and $10,414 5,446 6,874 GOODWILL 15,535 15,535 INVESTMENTS 457,593 299,548 DEFERRED INCOME TAXES 78,320 59,108 OTHER ASSETS 106,815 105,289 TOTAL ASSETS $ 1,832,333 $ 1,668,961 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 36,590 $ 10,933 Accrued expenses 46,026 52,080 Deferred revenue 33,074 47,713 Other current liabilities 9,720 8,096 Total current liabilities 125,410 118,822 DEFERRED REVENUE 537 12,006 RETIREMENT PLAN BENEFIT LIABILITY 54,450 52,249 OTHER LIABILITIES 35,411 38,658 Total liabilities 215,808 221,735 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, 48,834,541 and 48,731,026 shares issued, and 47,468,893 and 47,365,378 shares outstanding at December 31, 2024 and December 31, 2023 , respectively 488 487 Additional paid-in capital 723,719 699,554 Retained earnings 934,655 789,553 Accumulated other comprehensive loss (1,055 ) (1,086 ) Treasury stock, at cost (1,365,648 shares at December 31, 2024 and December 31, 2023 ) (41,284 ) (41,284 ) Total shareholders’ equity 1,616,525 1,447,226 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,832,333 $ 1,668,961 UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except share and per share data) Three Months Ended December 31 , Twelve Months Ended December 31 , 2024 2023 2024 2023 REVENUE: (Unaudited) Material sales $ 93,265 $ 82,240 $ 365,419 $ 322,029 Royalty and license fees 64,411 72,865 266,820 238,389 Contract research services 4,617 3,215 15,445 16,011 Total revenue 162,293 158,320 647,684 576,429 COST OF SALES 37,352 36,019 148,461 135,376 Gross margin 124,941 122,301 499,223 441,053 OPERATING EXPENSES: Research and development 46,287 33,641 157,187 130,481 Selling, general and administrative 19,529 16,830 74,286 67,387 Amortization of acquired technology and other intangible assets 4,552 4,551 18,200 15,993 Patent costs 1,964 2,300 8,699 9,356 Royalty and license expense 120 233 2,048 647 Total operating expenses 72,452 57,555 260,420 223,864 OPERATING INCOME 52,489 64,746 238,803 217,189 Interest income, net 10,609 7,865 40,682 28,166 Other (loss) income, net (7,773 ) 2,996 (7,357 ) (184 ) Interest and other (loss) income, net 2,836 10,861 33,325 27,982 INCOME BEFORE INCOME TAXES 55,325 75,607 272,128 245,171 INCOME TAX EXPENSE (9,306 ) (13,629 ) (50,049 ) (42,160 ) NET INCOME $ 46,019 $ 61,978 $ 222,079 $ 203,011 NET INCOME PER COMMON SHARE: BASIC $ 0.97 $ 1.30 $ 4.66 $ 4.25 DILUTED $ 0.96 $ 1.29 $ 4.65 $ 4.24 WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE: BASIC 47,545,820 47,571,382 47,548,931 47,559,669 DILUTED 47,671,374 47,657,854 47,652,662 47,622,763 CASH DIVIDEND DECLARED PER COMMON SHARE $ 0.40 $ 0.35 $ 1.60 $ 1.40 UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31 , 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 222,079 203,011 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 25,940 27,409 Impairment of property and equipment and right-of-use asset due to OVJP restructuring 7,498 — Amortization of intangibles 18,200 15,993 Amortization of premium and discount on investments, net (7,399 ) (11,603 ) Stock-based compensation 30,032 24,109 Deferred income tax benefit (19,117 ) (3,766 ) Retirement plan expense, net of benefit payments 1,808 3,129 Decrease (increase) in assets: Accounts receivable 26,202 (47,186 ) Inventory (7,143 ) 7,425 Other current assets (23,210 ) (41,574 ) Other assets (2,968 ) 4,450 Increase (decrease) in liabilities: Accounts payable and accrued expenses 10,357 4,047 Other current liabilities 1,269 (21,481 ) Deferred revenue (26,108 ) (4,159 ) Other liabilities (3,700 ) (5,027 ) Net cash provided by operating activities 253,740 154,777 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (42,637 ) (59,792 ) Purchase of intangibles — (66,563 ) Purchases of investments (594,848 ) (531,103 ) Proceeds from sale and maturity of investments 473,075 574,165 Net cash used in investing activities (164,410 ) (83,293 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 2,220 2,012 Payment of withholding taxes related to stock-based compensation to employees (8,386 ) (8,206 ) Cash dividends paid (76,169 ) (66,735 ) Net cash used in financing activities (82,335 ) (72,929 ) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 6,995 (1,445 ) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 91,985 93,430 CASH AND CASH EQUIVALENTS, END OF YEAR $ 98,980 $ 91,985 SUPPLEMENTAL DISCLOSURES: Unrealized gain on available-for-sale securities $ 411 $ 8,938 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 (9,448 ) 678 Cash paid for income taxes, net of refunds 71,973 96,176 View source version on businesswire.com : https://www.businesswire.com/news/home/20250220659738/en/ Universal Display Contact: Darice Liu [email protected] [email protected] +1 609-964-5123 Source: Universal Display Corporation

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