Q4 2023 Universal Display Corp Earnings Call

Good day, ladies and gentlemen, and welcome to Universal display Corporation's fourth quarter and full year 2023 earnings conference call. My name is Sherry and I will be your conference moderator for today's call if anyone should need operator assistance. During the conference. Please press star zero on your <unk>.

Operator: Good day, ladies and gentlemen, and welcome to Universal Display Corporation's fourth quarter and full year 2023 earnings conference call. My name is Sherry, and I will be your conference moderator for today's call. If anyone should need operator assistance during the conference, please press star zero on your telephone keypad.

Operator: 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. Thank you. Thank you, and good afternoon, everyone.

Darice Liu: Welcome to Universal Display's 4th Quarter Earnings Conference. Joining me on the call today are Steve Abramson, President and Chief Executive Officer, and Brian Millard, Vice President and Chief Financial Officer. 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 express written consent of Universal Display is strictly prohibited.

Darice Liu: 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, February 22, 2021. During this call, we may make forward-looking statements based on current expectations. The 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. Universal Display does not claim any obligation to update any of these statements. Now, I would like to turn the call over to Steve Abramson. Thanks, Darius, and welcome to everyone on today's show.

Scientists are discussed in the company's periodic reports filed with the S. C C and should I be referenced by anyone considering making any investments and accompany securities.

Universal Despite his claims any obligation to update any of these statements now I would like to turn the call over to Stevie Abramson.

Steven V. Abramson: <unk> and welcome everyone on today's call.

Steven V. Abramson: We'll begin with a recap of 2023, and then provide insights into the vast array of opportunities that are fueling our and the OLED market's strong revenue. 2023 revenue was $576 million; operating income was $217 million, and net income was $203 million, or $4.24 per diluted share. Fourth-quarter revenue was $158 million, operating income was $65 million, and net income was $62 million, or $1.29 per diluted share. While soft consumer spending in the smartphone and premium TV markets tempered our 2023 financial results, we continue to foster our strong partnerships, advance our strategic and operational initiatives, enhance our corporate culture, and fortify our leadership position in the OLED economy. During the year, we announced new long-term, multi-year agreements with BOE Technologies. We celebrated the grand opening of our new manufacturing site in Shannon, Ireland.

Steven V. Abramson: Will begin with a recap of 2023.

Steven V. Abramson: <unk> insights into the vast array of opportunities.

Steven V. Abramson: <unk> hour and the mortgage strong trajectory.

Steven V. Abramson: 2023 revenue was $576 million operating income was $217 million.

Steven V. Abramson: Net income was $203 million or $4.24 per diluted share.

Steven V. Abramson: Fourth quarter revenue was $158 million operating income was $65 million and net income was $62 million or $1.29 per diluted share.

Steven V. Abramson: While soft consumer spending and the smartphone and premium T V markets tempered or 2023 financial results. We continued to foster a strong partnerships advance our strategic and operational initiatives enhancer corporate culture, and fortify our leadership position in the olden ecosystem during the year.

Steven V. Abramson: <unk> announced new longterm multiyear agreements with Bowie technology.

Steven V. Abramson: We celebrated the Grand opening of our new manufacturing site and Shannon Ireland. This site broadens our global footprint is designed to produce red Green and blue fast rested and miss of materials.

Steven V. Abramson: This site broadens our global footprint and is designed to produce red, green, and blue phosphorescent emissive materials. We further enhanced our global IP framework with the acquisition of Merck KGAA's phosphorescent emitter portfolio of more than 550 patents in 172 patent families. 2023 was also another year of continued recognition for us. We were named to the Wall Street Journal's list of best-managed companies, recognized by Newsweek as one of America's greenest companies, awarded a Silver Rating for Corporate Social Responsibility from EcoVedas, and recognized again by the Forum of Executive Women as a champion of board diversity.

Steven V. Abramson: We further enhanced our global IP framework with the acquisition of <unk> K G. A phosphorescent admit her portfolio of more than 550 patents is 172 patent sandwich.

Steven V. Abramson: 2023 was also another year of continued recognition for our company. We were named to the Wall Street Journal's list of best manage companies recognize by Newsweek is one of America's greenest companies or to silver ready for corporate social responsibility from eco Vedis recognize again by the form of <unk>.

Steven V. Abramson: Accurate or women as a champion aboard diversity.

Steven V. Abramson: As a pioneer and leader we are at the forefront of energy efficient Owen materials solutions and best in class, enabling technologies, we continue to make excellent progress in our ongoing development work for a commercial phosphorescent blew a missile system.

Steven V. Abramson: As a pioneer and leader, we are at the forefront of energy-efficient OLED material solutions and best-in-class enabling OLED technology. We continue to make excellent progress in our ongoing development work for commercial phosphorescent and blue emissive OLEDs. We continue to believe that we are on track to introduce a phosphorescent blue that meets commercial specifications into the market in 2024. We believe the expansion of our phosphorescent portfolio, which includes red, green, and blue phosphorescent emissive materials, will unlock a vast array of opportunities for higher energy efficiency and higher performance across a broad range of OLED applications. We also achieved multiple OVJP milestones during the year, including the printing of the world's first ever high-resolution RGB side-by-side full-LED stack with comparable performance to vacuum thermal evapotranspiration.

Steven V. Abramson: We continue to believe that we are on track to introduce a phosphorescent blue that meech commercial specifications into the market in 2024.

Steven V. Abramson: We believe the expansion of our fast Russia portfolio that includes Red Green and Blue Phosphorescent Missive materials will unlock a vast array of opportunities for higher energy efficiency and higher performance across a broad range of OLED applications.

Steven V. Abramson: We also achieve multiple O V J P milestones during the year, including the printing of the world's first ever high resolution RGB side by side full it start with comparable performance to vacuum thermal evaporation.

Steven V. Abramson: Looking ahead to 2024 and beyond we anticipate growth as we capitalize on the investments, we're making and the extensive range of opportunities that lie before us including.

Steven V. Abramson: Looking ahead to 2024 and beyond, we anticipate growth as we capitalize on the investments we're making and the extensive range of opportunities that lie before us, including the commencement of OLED IT adoption, further penetration in the smartphone market, including the rise of foldable OLED TVs, the burgeoning OLED automotive market, as well as AR, VR, wearables, gaming, and science. We are well positioned to enable the continued proliferation of OLEDs across the consumer landscape and to drive value for our customers. Market Research Firm, Omdia, foresees OLED growth in multiple consumer electronic markets in the coming years and forecasts that smartphone OLED panel shipments will increase to 855 million units in 2030 with a CAGR of 5% from 2023. As more mid-range phone OEMs design in OLEDs as a preferred display, we estimate that OLED penetration in the smartphone market will increase from today's approximately 50% to 65% in 2030.

Steven V. Abramson: The commencement of it all at I T adoption cycle.

Steven V. Abramson: Further penetration and the smartphone market, including the rise of fold the Bulls <unk> T V growth the burgeoning older automotive market as well as a R V R Wearables gaming and signage.

Steven V. Abramson: We are well positioned to enable to continue proliferation of always across the consumer landscape and to drive value for our customers.

Steven V. Abramson: Market research firm Omnia foresees, all that growth in multiple consumer electronic markets in the coming years and forecast that.

Steven V. Abramson: Smartphone old pedal shipments will increase to 855 million units 2030, with a K or a 5% from 2023 is more mid range phone Oh, Ms <unk> as a preferred display of choice we.

Steven V. Abramson: We estimate that only penetration and the smartphone market will increase from today's approximately 50% to 65 per cent and 23rd.

Steven V. Abramson: Foldable smartphones trend for his forecast it shipments will increase from 18.3 million units in 2023, two approximately 70 million units in 2027, capturing about five per cent of the smartphone market.

Steven V. Abramson: The foldable smartphones trend force forecast that shipments will increase from 18.3 million units in 2023 to approximately 70 million units in 2027, capturing about 5% of the smartphone market. According to Omdia, OLED tablet shipments are expected to reach 32 million units in 2030 for a CAGR of 37%. OLED Notebooks are expected to increase to 58 million units in 2030 for a CAGR of 51%. We have already seen brands like Samsung, Lenovo, HP, Dell, Asus, and Xiaomi adopt OLED into their PC product portfolios, and we expect the trend to continue.

Steven V. Abramson: According to <unk>, Oh, a tablet shipments are expected to reach 32 million units in 2030 for a cake or a 37%.

Steven V. Abramson: <unk> notebooks are expected to increase to 58 million units in 2030 for a cake or a 51% we.

Steven V. Abramson: We have already seen brands like Samsung Lenovo H P. Dell a Susan <unk> adopt all it into their P. C product portfolio and we expect that trend to continue.

Steven V. Abramson: OLEDS make up an estimated 2% of today's global PC and tablet market, but by 2030, that penetration rate is expected to increase to approximately 20%. Note that this does not include OLED monitors, which are currently less than 1% of the PC monitor market. Oddia forecasts that OLED monitor units will grow from less than 1 million units in 2023 to close to 5 million units in 2030. OEM's increasing interest in OLED monitors was evident at last month's CES, where there was a strong showing of new OLED monitors, including a number of models geared for gaming.

Steven V. Abramson: Oh, let's make up an estimated 2% of today's global P. C in tablet market, but by 2030 that penetration rate is expected to increase to approximately 20%.

Steven V. Abramson: Note that this does not include old monitors, which are currently less than 1% of the P. C. Monitor market do you forecast at all and monitor units will grow from less than 1 million units in 2023 to close to 5 million used in 2030, odm's, increasing interest and all it monitors where it's.

Steven V. Abramson: At last month's CES, whether there was a strong showing of new Olin monitors, including a number of models geared for gaming.

Steven V. Abramson: Neil like T V market D. As forecasting 12 million units in 2030, <unk> of 11% or approaching an estimated six per cent penetration of the T V market.

Steven V. Abramson: In the OLED TV market, OMDI is forecasting 12 million units in 2030 for a CAGR of 11% or approaching an estimated 6% penetration of the TV market. The automotive-led market is a nation of opportunity where momentum is beginning to build. Continental Automotive notes that in addition to being aesthetically pleasing to users because of the brilliant deep black background for contrast, impressive wide color space, 180 degree viewing angle, and slim design, OLED displays are also highly sustainable and energy-efficient.

Steven V. Abramson: You'll have a motorola market as it Nathan opportunity or momentum is beginning to build <unk>.

Steven V. Abramson: Continental automotive notes. It in addition to being aesthetically pleasing to users because of the brilliant deep black background for contrast impressive white color space 180 degree viewing angle and swim design. All displays are also highly sustainable and energy savings.

Steven V. Abramson: Do you forecast at all let's shipments for the automotive market will increase of 30 million units in 2034, a cake or a 42%.

Steven V. Abramson: OMDIA forecasts that OLED shipments for the automotive market will increase to 13 million units in 2030 for a CAGR of 42 percent. OLEDs are also being designed as car taillights. During CES, OLEDWorks showcased its latest OLED lighting technology for the automotive industry at an OLEC capacity.

Steven V. Abramson: All of US are also being designed this cartelize during CES all it works showcases latest all at lighting technology for the automotive industry.

Steven V. Abramson: From an older capacity standpoint, the proliferation of O as in these diverse market verticals is expected to drive utilization rates up and prompt new all the capacity to be built.

Steven V. Abramson: The proliferation of OLEDs in these diverse market verticals is expected to drive utilization rates up and prompt new OLED capacity to be built. We estimate that the 2023 installed base of OLED square meter capacity increased by approximately 11% over year-end 2021. Market research firm DSCC estimates that OLED utilization rates were an average 57% in 2020. As we look ahead, we estimate that by year-end 2025, installed oil capacity, as measured in square meters, will increase by approximately 10% over year-end 2023.

Steven V. Abramson: We estimate that 2023 installed base of old square meter capacity increased by approximately 11% over a year and 2021 is a soft macro weight on install plants.

Steven V. Abramson: Market research firm D. S. C C estimates it only utilization rates or an average 57% in 2023.

Steven V. Abramson: As we look out we estimate that year and 2025 install all the capacity is measured in square meters will increase by approximately 10% over a year in 2023.

Steven V. Abramson: Therefore cast includes Samsung's 3 billion dollar investment in the first phase of Bowie is 9 billion dollar investment for their respective new Gen 8.6, I T fax.

Steven V. Abramson: These new plants are slated to begin production in 2026, we believe that we are embarking on an exciting new multiyear capex cycle and anticipate additional new Oh, let's add investment announcements and on that note, let me turn the call over to Brian.

Brian: This forecast includes Samsung's $3 billion investment and the first phase of BOE's $9 billion investment for the respective new Gen 8.6 IT. These new plants are slated to begin production in 2026. We believe that we are embarking on an exciting new multi-year CapEx cycle and anticipate additional new OLED Fab investment announcements. And on that note, I will turn the call over to Brian.

Brian: Thank you, Steve and again, thank you everyone for joining our call today.

Brian: Let me review, our 2023 results for commenting on our guidance for 2024.

Brian: 2023 revenue was $576 million, a decrease of 7% year over year <unk>.

Brian: Material sells for $322 million royalty and license revenues for $238 million.

Brian: And a decent revenues were $16 million or 2023 revenues included accumulative ketchup adjustment of $11 million compared to $30 million in 2022.

Brian: Thank you, Steve. And again, thank you everyone for joining our call. Let me review our 2023 results before commenting on our guidance for 2024. 2023 revenue was $576 million, a decrease of 7% year-over-year. Material sales were $322 million. Royalty and license revenues were $238 million, and Adesis revenues were $16 million.

Brian: 2000, twenty-three gross margins, where 77% for the year compared to 79 per cent and 2022.

Brian: 2023, operating expenses for $224 million compared to $222 million in 2022.

Brian: During the year, we continue to invest in a number of operational answer TG programs.

Brian: Including our phosphorescent admissive materials and all that technologies are.

Brian: Groundbreaking O V J P manufacturing platform.

Brian: Our 2023 revenues included a cumulative catch-up adjustment of $11 million, compared to $30 million in 2022. 2023 gross margins were 77% for the year, compared to 79% in 2022. 2023 operating expenses were $224 million, compared to $222 million in 2022.

Brian: Growing our global team and expanding our infrastructure, including the purchase of our Shannon manufacturing site as well as investments in our Asia footprint and R&D Innovation Center.

Brian: Or 20 twenty-three operating income was $217 million, which translates into operating margins of 38%.

Brian: 2023, net income was $203 million or $4.24 per diluted chair.

Brian: We ended the year with $800 million in cash cash equivalents and investments.

Brian: Yeah, I'm moving onto our fourth quarter results revenue for the fourth quarter of 2023 was $158 million down 6% from $169 million in the fourth quarter of 2022.

Brian: During the year, we continued to invest in a number of operational and strategic programs, including our phosphorescent emissive materials and OLA technology, which is groundbreaking for OVJP manufacturing, growing our global team, and expanding our infrastructure, including the purchase of our Shannon manufacturing site as well as investments in our Asia footprint and R&D innovation. Our 2023 operating income was $217 million, which translates into operating margins of 38%. 2023 net income was $203 million, or $4.24 per diluted year. We ended the year with $800 million in cash, cash equivalents, and investments.

Brian: Fourth quarter 2023 revenue includes accumulative ketchup adjustment of $5 million compared to $13 million in Q4 of 2022.

Brian: Material sales for $82 million in the corner compared to $88 million in the fourth quarter of 2022.

Brian: Greenham it ourselves which include our yellow green emitters for $63 million in the fourth quarter of 2023, which compares to $67 million in the fourth quarter of 2022.

Brian: <unk> sales for $18 million, which compares to $22 million in the fourth quarter of 2022.

Brian: As we have discussed in the past material buying patterns can vary court a quarter.

Brian: Fourthquarter royalty and license fees for $73 million, which compared to the prior year period of $76 million.

Brian: A decent revenue for the fourth quarter of 2023 was $3.2 million compared to $5.1 million in the fourth quarter of 2022.

Brian: Now moving on to our fourth quarter. Revenue for the fourth quarter of 2023 was $158 million, down 6% from $169 million in the fourth quarter of 2022. Fourth quarter 2023 revenue includes a cumulative catch-up adjustment of $5 million, compared to $13 million in Q4 of 2022. Material sales were $82 million in the quarter, compared to $88 million in the fourth quarter of 2022. Green emitter sales, which include our yellow green emitters, were $63 million in the fourth quarter of 2023, which compares to $67 million in the fourth quarter of 2022. Red emitter sales were $18 million, which compares to $22 million in the fourth quarter of 2022. As we have discussed in the past, material buying patterns can vary quarter to quarter. For example, fourth quarter royalty and license fees were $73 million, which compared to the prior year period of $76 million.

Brian: Fourthquarter cost of sales was $36 million translating into total gross margins of 77 per cent.

Brian: This compares to $30 million in total gross margins of 82% in the fourth quarter of 2022.

Brian: Fourth quarter gross margins decreased primarily due to the changing cumulative ketchup adjustments between periods and customer mix.

Brian: Fourth quarter operating expenses, excluding cost of sales were $58 million. This compares to $56 million in the fourth quarter of 2022.

Brian: Operating income was $65 million in the fourth quarter of 2023 translating into operating margin of 41 per cent.

Brian: This compares to the prior year period of $83 million, an operating margin of 49%.

Brian: The fourth quarter of 2023 income tax rate was 18 per cent.

Brian: Net income for the fourth quarter was $62 million or $1.29 per diluted share.

Brian: This compares to the fourth quarter of 2022 $65 million or $1.36 per diluted share.

Brian: Now turning to our outlook looking.

Speaker Change: Looking to 2024 as Steve mentioned, there are a number of key growth drivers for the old industry and for us we.

Speaker Change: We expect our 2024 revenues to be in the range of $625 million to $675 million.

Speaker Change: We estimate that are 2024 ratio of materials to royalty in licensing revenues will be in the ballpark of one and a half to one.

Speaker Change: Total gross margins are expected to be approximately in the range of 76 to 77 per cent.

Speaker Change: <unk> expenses are expected to increase by 10% to 15% year over year with R&D and SG&A, both expect it to be up by 10 to 15 per cent.

Brian: Adesis revenue for the fourth quarter of 2023 was $3.2 million, compared to $5.1 million in the fourth quarter of 2022. The fourth quarter cost of sales was $36 million, translating into total gross margins of 77%. This compares to $30 million and total gross margins of 82% in the fourth quarter of 2022. Fourth quarter gross margins decreased primarily due to the change in cumulative catch-up adjustments between periods and customer mix. Fourth quarter operating expenses, excluding cost of sales, were $58 million.

Speaker Change: 2024 operating margins are expected to be in the range of 35 to 40 per cent.

Speaker Change: We expect the effective tax rate for 2024, and it'd be approximately 20 per cent.

Speaker Change: And lastly, we are pleased to announce that the board of directors has approved and increased to our quarterly cash dividend.

Speaker Change: Ah dividend payment of 40 cents per share will be paid on March 29th 2024, the stockholders of record as of the close of business on March 15th 2024.

Speaker Change: The dividend increase reflects the confidence in a robust future growth opportunities expected continued positive cash flow generation and commitment to return capital to our shareholders with that I'll turn the call back to Steve.

Steve: Thanks, Bryan we believe we are well positioned for longterm market leadership in longterm profitability and the growing old and work with our extensive experience and unwavering focus on innovation and execution, we're pushing the boundaries of what's possible driving forward breakthroughs that advancements in our fast Reza material and.

Brian: This compares to $56 million in the fourth quarter of 2022. Operating income was $65 million in the fourth quarter of 2023, translating into an operating margin of 41%. This compares to the prior year period of $83 million and an operating margin of 49%. The 4th quarter 2023 income tax rate was $18,000.

Speaker Change: <unk> technology, Roadmaps fostering a corporate culture of inventiveness integrity inclusion in collaboration in our building with a robust first mover position and the oldest ecosystem.

Speaker Change: As we approach the 30th anniversary of Udc's founding we're excited to reach even greater heights in the future and continue to make a lasting impact in the industry.

Brian: Net income for the fourth quarter was $62 million, or $1.29 per diluted share. This compares to the fourth quarter of 2022's $65 million, or $1.36 per diluted share. Now turning to our outline. Looking to 2024, as Steve mentioned, there are a number of key growth drivers for the OLED industry and for us. We expect our 2024 revenues to be in the range of $625 million to $675 million. We estimate that our 2024 ratio of materials to royalty and licensing revenues will be in the ballpark of one and a half to one. Total gross margins are expected to be approximately in the range of 76 to 77. Operating expenses are expected to increase by 10 to 15% year over year, with R&D and SG&A both expected to be up by 10 to 15%.

Speaker Change: I would like to say each of our employees for their drive desire dedication and heart and elevating and shaping universal displays accomplishments and advancements we are committed to being a leader in the old ecosystem, achieving superior longterm growth and delivering cutting edge technologies and materials for the industry for our customers.

Speaker Change: <unk> is it for our shareholders.

Speaker Change: And with that operator, let's start the Q&A.

Speaker Change: Thank you Mr. You've redfin as he would like to ask a question. Please press star one on your telephone keypad a confirmation teller indicate your line is in the question queue. You May press start <unk> as soon as I came of your question from the account and felt packets purchasing speaker equipment and may be necessary to pick up your handset before pressing miss.

Speaker Change: 13th hour.

Speaker Change: Our first question is from Brian Lee with Goldman Sachs. Please proceed.

Brian Lee: Hey, good afternoon, everyone. Thanks for taking my question.

Speaker Change: Uhm.

Brian Lee: I had a question I guess just uhm on the.

Brian Lee: <unk> commercialization trajectory that sounds like it's on track with your targets yeah for some time this year.

Brian: 2024 operating margins are expected to be in the range of 35 to. We expect the effective tax rate for 2024 to be approximately. And lastly, we are pleased to announce that the Board of Directors has approved an increase to our quarterly cash. A dividend payment of $0.40 per share will be paid on March 29, 2024 to stockholders of record as of the close of business on March 15.

Brian Lee: Can you kind of give us a sense of <unk>.

Brian Lee: 24, it seems like a pretty critical year in terms of the blue becoming a bigger part of your you know basically modify for what are what are some of the milestone.

Brian Lee: No targets you'd like to achieve this year.

Brian Lee: Just hitting commercial spec so eight oh it would that include like a contract let the customer would that include.

Steven V. Abramson: The dividend increase reflects our confidence in our robust future growth opportunities, expected continued positive cash flow generation, and commitment to return capital to our shareholders. With that, I'll turn the call back. Thanks, Brian. We believe that we are well-positioned for long-term market leadership and long-term profitability in the growing OLED market. With our extensive experience and unwavering focus on innovation and execution, we're pushing the boundaries of what's possible, driving forward breakthroughs and advancements in our phosphorescent material and an OLED technology roadmap, fostering a corporate culture of inventiveness, integrity, inclusion, and collaboration, and are building on our robust first mover position in the OLED ecosystem. As we approach the 30th anniversary of UDC's founding, we are excited to reach even 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 advances.

Brian Lee: Getting pricing shakes out like what what are other milestones that could be achievable or that you're targeting beyond just getting you know getting to the commercialization specs.

Brian Lee: Performance of our Blue material Uhm, we've seen over the course of last year continue performance each generation of material, though you've introduced to our customers. So we're on the right path, we feel very confident with the progress that we've made.

Brian Lee: To date, and and where we see ourselves going over the course of this year, but I think it's really continuing to improve upon those performance specifications. There's as you said, there's contracting details and pricing details, but we're confident that at the time that is needed to be sorted out there.

Speaker Change: Okay Fair enough and then just embedded in your guidance I know, it's it's still a wide range 625 to 675 million, presumably yeah, you're not embedding a lot of blue revenue in that guidance range is that fair and it is I mean are you even assuming any growth off the.

Speaker Change: You know kind of high single digit millions of revenue you didn't need it in blue for 2023 any growth at all in your guidance embedded for Blue for 24.

Speaker Change: There is a there is growth assumed in Blue development, we had 5.6 million in revenues in 2023, and we do expect growth off of that number in 2024, but as you said, it's not a significant component of our guidance overall.

Operator: 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&A. Thank you, Mr. Iverson. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker Change: Okay, Great and the last one for me I'll pass it on.

Speaker Change: Might've missed it but.

Speaker Change: The two questions on gross margin I guess, Brian can you.

Brian Lee: Kind of walk us through the mechanics of how the 5 million dollar ketchup revenue in the quarter impacts the gross margin reported.

Brian Lee: As much as it did and then secondly.

Speaker Change: You know, presumably it wouldn't continue to repeat unless you have ketchup revenue later in this year, so what what sort of a targeted range of gross margin for materials, we should expect in 2024.

Brian Lee: And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question is from Brian Lee with Goldman Sachs. Please proceed. Hey, good afternoon, everyone.

Speaker Change: Yeah. Good good questions are 2024 guidance. So that we just stayed on in our prepared remarks was 76 to 77 per cent for total gross margin. So that assumes you know essentially zero cumulative ketchup revenue and so there was you know a pair it over a period flip N a cumulative ketchup revenue between 22.

Brian Lee: Thanks for taking the questions. Um... I had a question, I guess, just on the blue commercialization trajectory. That sounds like it's on track with your targets for some time this year. Can you kind of give us a sense of 24?

Speaker Change: T two and 2023 and as you said in queue for a twenty-three we did have $5 million a cumulative catch up revenue and so those are the the pieces to think about.

Speaker Change: Alright fair enough. Thanks, a lot.

Speaker Change: Thanks.

Crashed Car: Our next question is from crashed his car with television talent. Please proceed.

Brian Lee: It seems like a pretty critical year in terms of the blue becoming a bigger part of your business model going forward. What are some of the milestones and targets you'd like to achieve this year beyond just hitting commercial specifications? Would that include a contract with the customer?

Television Talent: Hi, Thanks for taking my question after a couple of them, Brian I'm, just kind of curious on your gross margin guidance.

Television Talent: Over the last few years. The gross margin has been kind of like I would say, it's been coming down is this a function of some of the Chinese customers <unk> getting better or is there something else going on why is gross margin and I'm one of the mid to high seventies was historically been.

Speaker Change: Right about that.

Speaker Change: Yeah, Hi crash. So gross margin. There's a couple of factors at play one is from a top line perspective, as we sell more units of material to our customers, there's volume pricing dynamics incorporated in each of our customer contract. So some of it is just the fact that as the industry grows we're selling more volume.

Steven V. Abramson: Would that include getting pricing sheets out? What are other milestones that could be achievable or that you're targeting beyond just getting to the commercialization specs? performance of our blue material.

Steven V. Abramson: We've seen continued performance from each generation of material that we've introduced to our customers, so we're on the right path. We feel very confident with the progress that we've made to date and where we see ourselves going over the course of this year. But I think it's really continuing to improve upon those performance specifications. There's, as you said, there are contracting details and pricing details, but we're confident that at the time those need to be sorted out, they will. www. UniversalDisplayCorp.com Okay, fair enough.

Speaker Change: <unk> the per unit price you know it does come down just based on the volume pricing dynamics as well as some of our materials are more becoming more complex in nature. So some of the cost structure elements are also changing so that's I think some of what you've seen over the last few periods is really as the industry scales and we can scale with it there there.

Brian: And then just embedded in your guidance, I know it's still a wide range, 625 to 675 million. Presumably, you're not embedding a lot of blue revenue in that guidance range. Is that fair?

Speaker Change: Has been a slight pressure on gross margin, but it's something we spend a lotta time as a management team focusing on both the top line aspects as well as the cost structure and making sure that you know are being as disciplined as we possibly can.

Speaker Change: Got it got it right and then what are the questions. Just wanted to follow up I understand you know the rest.

Brian: And is, I mean, are you even assuming any growth off the, you know, kind of high single-digit millions of revenue you did in blue for 2023? Any growth at all in your guidance embedded for blue for 2024? There is growth assumed in blue development.

Speaker Change: But he's limited, but he had a spread any of FY 24, 70, guys go out of 8% to 17% cause it'll make to help us understand the puts and takes like you.

Speaker Change: You know what is <unk>.

Speaker Change: Taken to the lower than what is what is taking it up and then what are the 50 million what could surprise us.

Brian: We had $5.6 million in revenues in 2023, and we do expect growth off of that number in 2024. But as you said, it's not a significant component of our guidance overall. Okay, great. And then last one for me, I'll pass it on.

Speaker Change: Yeah, I mean, I mean, I think we obviously have a base case that assumes you know growth across a number of segments. We certainly expect the I T segment to grow in 24 based on some of the the factors that play there as well as T V mobile and an automotive another so it's kind of across the board growth that we're projecting and I think the the high side and.

Brian Lee: I might have missed it, but the two questions on gross margin, I guess, Brian, can you kind of walk us through the mechanics of how the $5 million catch-up revenue in the quarter impacts the gross margin reported by as much as it did. And then, secondly, presumably, it wouldn't continue to repeat unless you have catch-up revenue later in this year. So what's the sort of targeted range of gross margin for materials we should expect in 2024? Yeah, good question.

Speaker Change: And the low side of that are really just based on you know potential other factors that might might cause things to vary.

Speaker Change: But it's <unk>.

Atif Malik: Thank you our our next question is from teeth Malik with city. Please proceed.

Atif Malik: Hi, Thank you for taking my questions.

Atif Malik: I have a question on the pull your guide them. If I can get you a high end of the Guy who did it still below the hiking or.

Atif Malik: <unk> at CCR projecting.

Brian: Our 2024 guidance, which we just stated in our prepared remarks, was 76% to 77% for total gross margin. So that assumes essentially zero cumulative catch-up revenue. And so there was a period-over-period flip in cumulative catch-up revenue between 2022 and 2023. And as you said, in Q4 of 2023, we did have $5 million in cumulative catch-up revenue. And so those are the pieces to think about. Alright, fair enough. Thanks a lot.

Atif Malik: So I'm wondering if you can pull the curtain.

Atif Malik: On what goes into your guide and why is it below.

Speaker Change: <unk> are you <unk>.

Speaker Change: Yeah, So I wouldn't say, there's necessarily conservatism baked into our forecasts. We think it's a balance Ah balanced guidance range imbalance forecast that we have so it's really based on the feedback that we get from our customers in terms of what they are expected demand is going to be as well as you know we look at the similar industry reports as you in terms of where the.

Speaker Change: Industry is going and also layer that intelligence on top of what we're hearing from our customers and our teams in the field. So when were you kind of rolled all that up this year, we got to the the range that we you know a published in terms of our guidance for 24, we certainly hope you're right and it's higher but you know at this point. This is what we're what we're seeing is.

Brian Lee: Thanks. Our next question is from Chris Hedgar with TV Cowan. Please proceed. Hi, thanks for taking my question. I have a couple of them.

Krish: Brian, I'm just kind of curious about your gross margin guidance. If I look at it over the last few years, your gross margin has been kind of, I would say, it's been coming down. Is this a function of some of your Chinese customers' yields getting better, or is there something else going on? Why is gross margin kind of in the mid to high 70s versus historically being well above that? Yeah, hi Krish.

Speaker Change: We as we roll up our forecasts from our field teams.

Speaker Change: Okay, and I have my follow up I'm gonna be near ninth around.

Speaker Change: <unk> Chinese customers working with domestic private companies like summer spelled technology and sang fee and I understand you guys have long term agreement with with the new Chinese customers that I need to talk about.

Speaker Change: Competitive dynamics them in China and is there a risk.

Brian: So on gross margin, there are a couple of factors at play. One is, from a top line perspective, as we sell more units of material to our customers, there are volume pricing dynamics incorporated in each of our customer contracts. So some of it is just the fact that as the industry grows, we're selling more volume, and the per unit price, you know, does come down just based on those volume pricing dynamics, as well as some of our materials are becoming more complex in nature. So some of the cost structure elements are also changing. So that's I think some of what you've seen over the last few periods is really, as the industry scales, and we scale with it, there has been a slight pressure on gross margin, but it's something we spend a lot of time as a management team focusing on both the top line aspects, as well as the cost structure and making sure that, you know, we're being as disciplined as we possibly can. Got it, got

Speaker Change: <unk> added a domestic at the buyers are getting qualified.

Speaker Change: Well. We are we are we are seeing some localization coming from the Chinese government trying to get some some localization and in the <unk> industry, but.

Speaker Change: What what we were.

Speaker Change: What we're seeing is that customers wanted are full suite of of current and next generation old materials and technology solutions, which is one of the reasons why all of these major panel makers are working with us. So long term agreements because we work closely with our customers to understand all the specification requirements.

Speaker Change: That they have today and and into the future.

Speaker Change: Thanks.

Speaker Change: Our next question is from Nam Kim at Saint Research. Please proceed.

Nam Kim: [laughter] hi, Thank you for taking my question <unk> question on Blue can you also explain about the timing of your come on sharp production. This year and also do you expect customer qualification to kick off this year or next here and then I I also wonder.

Speaker Change: <unk> <unk> do you expect the <unk> to the N I T forest or a close to a segment at the same time in.

Krish: And then one of the questions I just want to follow up on. I understand, you know, the visibility is limited, but your spread in your FY 24 revenue guide is a growth of 8 to 17 percent. Is there a way to help us understand the puts and takes?

Speaker Change: Yeah. Thanks, ma'am so in terms of the commercialization timeline I think you know our team is really focused right now on making sure that we continue to increase the performance of our material and get closer to those commercials specifications were again as I said earlier very pleased with the progress that we've made to date continued to feel like for moving.

Krish: Like, you know, what is baked into the lower end versus what is baked into the upper end or in the 50 million? What could surprise us? Yeah, I mean, I think we obviously have a base case that assumes growth across a number of segments. We certainly expect the IT segment to grow in 24 based on some of the factors that play there, as well as TV, mobile, and automotive and others. So it's kind of across the board growth that we're projecting. And I think the high side and the low side of that are really just based on, you know, potential other factors that might cause things to vary.

Speaker Change: In the right direction in terms of what our customers may introduce that into their product portfolios, that's really up for them to determine but we continue to feel like we're moving much closer toward the mark that our <unk> our material would be considered a commercial performance. So I think that's you know kind of as much as I can say at this point based on where things.

Speaker Change: Oh, Okay and then.

Speaker Change: I I see some momentum picking up in China, because Chinese so oh, let's apply are increasing their production and full of course my phone vendor now can you share your view on Chinese <unk>, how much girls do you expect from Chinese customer. This yoga assess last year. Thank you.

Krish: Thanks, bye. Thank you. Our next question is from Atif Malik with Citi. Please proceed. Hi, thank you for taking my questions. I have a question on the four-year guide.

Speaker Change: Yeah. So so we're certainly projecting growth you know, we as Steve just mentioned, we ever longstanding partnerships with our customers in China. We provide you know best in class materials to our customers also with the next gen platforms as well as access to our current materials. You know we think that there is a strong.

Atif Malik: If I look at your high-end of the guide, it's still below the high-teen OLED materials growth that some third parties like DSCC are projecting. So I'm wondering if you can pull the curtain a little bit on what goes into your guide and why it is below the industry growth for OLED materials, and are you just being conservative? I wouldn't say there's necessarily conservatism baked into our forecast.

Speaker Change: And our ship between us and our Chinese customers and we expect to be long standing.

Brian: We think it's a balanced guidance range and balanced forecast that we have. So it's really based on the feedback that we get from our customers in terms of what their expected demand is going to be, as well as similar industry reports as you in terms of where the industry is going. And we also layer that intelligence on top of what we're hearing from our customers and our teams in the field. So when we rolled all that up this year, we got to the range that we published in terms of our guidance for 2024. We certainly hope you're right and it's higher, but at this point, this is what we're seeing as we roll up our forecast from our field teams.

Speaker Change: Okay. Okay. Thank you.

Speaker Change: Thanks.

Speaker Change: As a reminder to star one on your telephone keypad, if he would like to ask a question.

Camera Shooting: Our next question is from camera shooting with me the main company. Please proceed.

Christopher James Muse: Hi. This is this is Chris crank offer Jan.

Christopher James Muse:

Christopher James Muse: Did you I'm, sorry, I can't I cut out earlier, but uhm did you mention any any progress updates with respect to discussions you're having around M. A G N V J P with with potential partners.

Christopher James Muse: We did not but as we've talked about previously we're certainly open to partnerships with a V. J P that could help US advance. The project forward. We continue to believe that a V. J PS you know the solution for large area televisions library displays on T V sized.

Steven V. Abramson: Great. And as a follow-up, we hear noise around some of your Chinese customers working with domestic private companies like Summersprout Technology and Shaanxi. And I understand you guys have long-term agreements with your Chinese customers, but can you talk about the competitive dynamics in China and is there a risk of some of these domestic suppliers getting qualified? Well, we are seeing some localization coming from the Chinese government; they're trying to get some localization in the OLED industry.

Brian Lee: And so we're we're open to very various discussions and have had and continue to have various discussions with potential partners.

Steven V. Abramson: Got it and S. S G&A stepped down sequentially and year over year could you provide any color on on that.

Christopher James Muse: Sure. The the biggest factor there is for the first half of 2022 before we operationalized are Shannon site. We were recording the cost of that site to SG&A for the first half of 2022 and that was around $5 million and then so from mid 22 onward those costs are classified in <unk>.

Steven V. Abramson: But, what we're seeing is that customers want our full suite of current and next-generation OLED materials and technology solutions, which is one of the reasons why all these major panel makers are working with us and have signed long-term agreements because we work closely with our customers to understand all the specification requirements that they have today and into the future. Thanks. Our next question is from Nam Kim with Acrete Research. Hi, thank you for taking my question. A couple of questions on blue.

Christopher James Muse: <unk>. The other factor is we had some reduce stock compensation expenses year over year that are flowing through SG&A. Those are the two largest factors that are contributing to the decrease.

Nam Kim: Got it thank you and and maybe just just one more sort of bigger bigger picture it with.

Nam Kim: Can you also explain the rough timing of your commercial production this year? And also, do you expect customer qualification to kick off this year or next year? And then, I also wonder, do you expect your blue material to be adapted in IT first or across the segment at the same time?

Christopher James Muse: With the recent launch of Apple's device, the Apple, Michigan, and you know the proliferation of of some use case videos.

Christopher James Muse: Showing yep screens, the password and augmented reality across all the surfaces now so.

Steven V. Abramson: Thanks, Ma'am. So, in terms of the commercialization timeline, I think, you know, our team is really focused right now on making sure that we continue to increase the performance of our material and get closer to those commercial specifications. We're, again, as I said earlier, very pleased with the progress that we've made to date and continue to feel like we're moving, you know, in the right direction. In terms of when our customers may introduce that into their product portfolios, that's really up for them to determine, but we continue to feel like we're moving much closer toward the mark where our material will be considered commercial performance. So, I think that's, you know, kind of as much as I can say at this point based on where things stand. Oh, okay. And then, um... I see some momentum picking up in China because Chinese OLED suppliers are increasing their production for local smartphone vendors. Can you share your view on Chinese business?

Christopher James Muse:

Christopher James Muse: You know it would it would strike me as is potentially a potential to display some yeah, maybe T V uneven leapfrog seem to the I T use cases, <unk> <unk> I mean, it's it's early days of course I'm just curious if if you've had any exposure to these devices your similar devices.

Christopher James Muse: And if there's any concern <unk> any concern whatsoever, <unk> <unk> <unk> <unk> <unk> grocery sandwich cited earlier.

Steven V. Abramson: We're we're we're watching the R V or a market we find it very interesting. We don't think it's going to take market share away from any of the other panel makers, we think that there's many many displays many many people and everybody wants displays in various ways for various use cases and they.

Steven V. Abramson: They all seem to want to use all of <unk>. So we see the market growing a R. V. R is you're gonna get an additional bark at that's going to grow and expand the market opportunities. We don't really think it's going to take any market share away from anybody else.

Steven V. Abramson: How much growth do you expect from Chinese customers this year versus last year? Yeah, so we're certainly projecting growth. You know, we, as Steve just mentioned, we have longstanding partnerships with our customers in China. We provide, you know, best-in-class materials to our customers. Also, with the next-gen platforms, as well as access to our current materials, we think that there is a strong partnership between us and our Chinese customers that we expect to be longstanding. Okay, thank you. Thanks.

Speaker Change: Thank you very much.

Speaker Change: Our next question is fine.

Speaker Change: They see me with S. A J. Please proceed.

Speaker Change: Yes, Thanks for taking my question and I apologize if I'm gonna be repeating questions already asked I joined the call late.

Speaker Change: Four one sign up for Steven one for Brian.

Steven V. Abramson: How should I think about the dynamics of your conversation with the customers, especially is blue becomes commercially viable <unk>.

Operator: As a reminder, to press 1 on your telephone keypad if you would like to ask a question. Our next question is from Jim Ricchiuti with NIDA. Hi. This is Chris Grengon on behalf of Jim.

Christopher James Muse: I understand that there needs to be additional contracts will be site. So what are the key catalysts or milestones that would trigger or.

Jim Ricchiuti: Did you, I'm sorry, I cut out earlier, but did you mention any progress updates with respect to discussions you're having around OVJP with potential partners? We didn't, but as we've talked about previously, we're certainly open to partnerships with OVJP that could help us advance the project forward. We continue to believe that OVJP is the solution for large area television, large area displays, TV-sized.

Jim Ricchiuti: Or help you with getting customers commitment by signing the contract for the Blue supply and I have a <unk>.

Jim Ricchiuti: Hello.

Speaker Change: Sure. Thanks, Betty Uhm, so on Blue and supply of Blue. We as you said don't have commercial pricing schemes in place with any of our customers at this point for Blue and we at the point that we need those in place to be supplying them in commercial quantities. You know, we're confident that we'll be able to to to get there we've had <unk>.

Steven V. Abramson: And so we're open to various discussions and have had and continue to have various discussions with potential partners. And as SG&A stepped down sequentially year over year, could you provide any color on that? Sure. The biggest factor there is that for the first half of 2022, before we operationalized our Shannon site, we were recording the cost of that site to SG&A for the first half of 2022, and that was around $5 million. And then, from mid-22 onward, those costs are classified as cost of sales. The other factor is that we had some reduced stock compensation expenses year over year that are flowing through SG&A. Those are the two largest factors that are contributing to the decrease.

Steven V. Abramson: <unk> levels of discussion with certain customers on that at this at this stage and so I I think that that's really the key thing is that once we get to the point, where we need to have commercial pricing in place it will be in place, but we're just not there yet since we don't yet have the commercial specifications performance.

Steven V. Abramson: Okay.

Steven V. Abramson: Did you discuss how much of the.

Steven V. Abramson: R&D Blue was recognized was there any revenue recognized in Dakota.

Speaker Change: Yeah. So there was 1.3 million in Q4 and 5.6 for full year 2000 twenty-three of Blue developmental sales Guy.

Speaker Change: And then and just a quick follow up for you <unk> <unk> 24 relative to 23.

Brian: I got it. Thank you. And maybe just one more sort of bigger, bigger picture. With the recent launch of Apple's device, the Apple Vision, and the proliferation of some use case videos showing screens plastered in augmented reality across all the surfaces in the household, it would strike me as potentially a potential to display some TVs and even leapfrog some of the IT use cases for OLED. It's early days, of course, but I'm just curious if you've had any exposure to these devices or similar devices, and if there's any concern whatsoever that they would pose a risk to some of the growth rates that were cited earlier.

Brian: <unk>.

Speaker Change: Yeah in my prepared remarks, I reference 10 to 15 per cent increase in opex year over year. So so that's the best modeling assumption for now.

Speaker Change: Thank you.

Brian: Thanks.

Speaker Change: Our next question is from <unk> Oppenheimer Company. Please proceed.

Speaker Change: Hi, Good afternoon. Thank you for taking my question. If we are just for the ketchup payments on.

Brian: Revenues.

Brian: <unk> material revenues still decline year over year being twenty-three if so what are the key factors.

Steven V. Abramson: We're watching the ARVR market. We find it very interesting. We don't think it's going to take market share away from any of the other panel makers. We think that there are many, many displays, many, many people, and everybody wants displays in various ways for various use cases, and they all seem to want to use OLEDs in them.

Steven V. Abramson: That contributed to that to hear over decline.

Steven V. Abramson: Hey, Martin so the the majority of the cumulative ketchup adjustments actually flow through a royalty and license online not our materials sales lines. So that would have necessarily be the the way to adjust for it.

Speaker Change: Got it what are the key drivers for the year of decline the material sales 823.

Steven V. Abramson: So we see the market growing. ARVR is yet again an additional market that's going to grow and expand market opportunities. We don't really think it's going to take any market share away from anybody else.

Steven V. Abramson: Well, we had we had relatively flat volumes are volumes were down less than 1% period over a period. So you can call that flat.

Steven V. Abramson: We had yeah and then the remainder would be you know some certain price price differences customer mix also coming into play as in that'd that'd be offset by Blue development sales, which were increased relative to 2022.

Operator: Thank you very much. Our next question is from Mehdi Hosseini with SAG.

Mehdi Hosseini: Thanks for taking my question. I apologize if I'm going to be repeating questions already asked, because I joined the call late.

Mehdi Hosseini: For one follow-up question for Steve and one for Brian. Steve, how should I think about the dynamics of your conversation with key customers, especially as Balloon becomes commercially viable, and I understand that there needs to be additional contracts to be signed. So what are the key catalysts or milestones that would trigger or help you with giving customers commitment by signing a contract for the Balloon supply? And I will follow.

Speaker Change: Alright, Thank you Bryan and.

Mehdi Hosseini: Did any top customers hit volume pricing marshals ink for Q.

Mehdi Hosseini: So the way, we do price with the way that we have to estimate pricing based on our revenue accounting model is we have to estimate over the full five year term what the pricing is going to be on an average basis based on volumes and revenues. So there were you know every quarter there are changes in our assumptions related to that but.

Steven V. Abramson: Thank you. Thank you. Sure. Thanks, Mehdi.

Mehdi Hosseini: In queue for they were in a normal course changes in those changes in assumptions resulted in that 5 million dollar cumulative catch up that I referenced.

Brian: So on Blue and supply of Blue, we, as you said, don't have commercial pricing schemes in place with any of our customers at this point for Blue. And we, at the point that we need those in place to be supplying them in commercial quantities, we're confident that we'll be able to get there. And we've had varying levels of discussions with certain customers on that at this stage. And so I think that that's really the key thing is that once we get to the point where we need to have commercial pricing in place, it will be in place. But we're just not there yet since we don't yet have the commercial specification performance.

Speaker Change: Got it. Thank you and last question is is there any 10 per cent customers in.

Brian: Four Q23, other data customer a P M C.

Brian: No just those three.

Speaker Change: Thank you very much that's it for me.

Speaker Change: Thanks Martin.

Moderator: We have reached the end of our question and answer session I would like to turn the conference back over that Brian for closing comments.

Speaker Change: Thank you all for your time today, we appreciate your interest and support.

Speaker Change: Thank you the smell conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.

Brian: Okay. Brian, did you discuss how much of R&D Blue was recognized? Was there any revenue recognized in the quarter? Yes, so there was $1.3 million in Q4 and $5.6 for full year 2023 of blue developmental sales. And then, just a quick follow-up for you, how should I model the OPEX in 24 relative to 23?

Brian: [music].

Brian: The Office of Growth. Yeah, in my prepared remarks, I referenced a 10 to 15 percent increase in OPEX year over year. So that's the best modeling assumption for now. Okay, thank you.

Martin Yang: Thanks. Our next question is from Martin Yang with Oppenheimer and Company. Please proceed. Good afternoon.

Martin Yang: Thank you for taking my question. If we adjust for the catch-up payment on revenues, did material revenues still decline year-over-year in 2023? If so, what are the key factors?

Brian: that contributed to that year. Hey Martin, so the majority of the cumulative catch-up adjustments actually flow through our royalty and license line, not our material sales line, so that wouldn't necessarily be the way to adjust for it. Got it. What are the key drivers for the year-over-declining material sales? Well, we had relatively flat volumes; our volumes were down less than 1% period over period. So you can call that flat.

Brian: We had, you know, then the remainder would be, you know, some certain price price differences, customer mix also coming into play, as then that'd be offset by blue development sales, which were increased relative to 2022. Thank you, Brian. And did any top customers hit volume pricing milestones in 4Q? So the way that we have to estimate pricing based on our revenue accounting model is we have to estimate over the full five-year term what the pricing is going to be on an average basis based on volumes and revenues. So every quarter, there are changes in our assumptions related to that, but in Q4, they were just normal course changes.

Brian: And those changes and assumptions resulted in that $5 million cumulative catch-up that I referenced. Got it, thank you. Our last question is, are there any 10% customers in 4Q23 other than customers A, B, and C? No, just those three.

Brian: Thank you very much. Thanks, Martin. We have reached the end of our question and answer session. I would like to turn the conference back over to Brian for closing comments. Thank you all for your time today. We appreciate your interest and support. Thank you. This will conclude today's conference.

Brian: You may disconnect your lines at this time, and thank you for your participation. www. UniversalDisplayCorp.com, The Ultimate Parody Site! www.

UniversalDisplayCorp.com BF-WATCH TV 2021, BF-WATCH TV 2021 BF-WATCH TV 2021 BF-WATCH TV 2021, The Universal Publishing House, 2013 BF-WATCH TV 2021 BF-WATCH TV 2021, www. UniversalDisplayCorp.com The Universal Public Library, LLC, www. UniversalDisplayCorp.com, The Universal Public Library, LLC Copyright 2020, Universal Music Publishing LLC, www. UniversalDisplayCorp.com The Universal Publishing House, 2013, The Ultimate Parody Site! The Universal Publishing House, 2013, The Universal Publishing House, 2017 www. UniversalDisplayCorp.com

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