Q1 2025 Universal Display Corp Earnings Call
Welcome to Universal display Corporation's first quarter 2025 earnings Conference call. My name is Sherry and I will be your conference moderator for today's call if anyone needs a operator assistance. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded for replay purposes, I would now like to turn the call over to Darin <unk> Senior director of Investor Relations. Please proceed. Thank you and good afternoon, everyone. Welcome to Universal displays first quarter earnings Conference call. Joining me on the call today are Steve Abramson, President and Chief Executive Officer and Brian.
Speaker Change: Lord Chief Financial Officer, and Treasurer before Steve begins let me remind you that today's call is the 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 further this call is being webcast live and will be made available.
Speaker Change: For a period of time on Universal displays website. This call contains time sensitive information that is accurate only as of the date of the live webcast of this call me for 2025.
Speaker Change: During this call we may make forward looking statements based on current expectations. These statements are subject to a number of significant risks and uncertainties and our actual results may differ materially. These risks and uncertainties are described 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.
Speaker Change: Universal display disclaims any obligation to update any of these statements.
Steve Abramson: Now I would like to turn the call over to Steve Abramson.
Speaker Change: Uh huh.
Speaker Change: Welcome to everyone on today's call two.
Speaker Change: 2025 began on a solid.
Speaker Change: First quarter 2025 revenue was $166 million operating profit was $70 million.
Mhm was $64 million or $1 35 per diluted share.
Speaker Change: Looking ahead, we continue to see tremendous growth opportunities in the OLED at.
Speaker Change: At the same time, we are operating in a global environment that is increasingly dynamic and complex in April we saw an uptick in orders, which we believe was largely in response to ongoing tariff developments.
Speaker Change: We're taking a measured approach in assessing how this may evolve over coming quarters, thus far our business remains largely unaffected.
Speaker Change: Certainteed is not new to us we built this company to be resilient and have shown time and again that we can navigate through challenging times, our innovation engine and strong balance sheet robust supply chain and operational agility position us well to navigate through periods of volatility.
In the past years, we are diversifying their supply chain and expand our global manufacturing footprint to now include Shannon, Ireland, and optimize our inventory and production mix.
Speaker Change: Tours, our flexibility to respond adapt and lead while staying ahead of the curve with a continued invention development and delivery of state of the art OLED technologies and materials for our customers and the industry.
Speaker Change: Long term trajectory of the OLED market is positive and strong driven by an increasingly diverse product roadmaps, featuring an expanding range of older offerings with automotive.
Speaker Change: Automotive affordable alongside other applications slated to drive demand in the near term.
As panel makers and Oems prepare for new Gen eight OLED capacity to start coming online in 2026.
We published <unk> market research forecast that 2025, OLED growth will be in the mid single digits.
Speaker Change: Looking into three largest consumer electronic end markets.
Speaker Change: Smartphones are forecasted to grow by 6% year over year to 848 million units.
Speaker Change: OLED units, which encompasses tablets laptops and monitors are expected to increase by 16% year over year to 27 million units.
Speaker Change: OLED Tvs are expected to grow by four 5% year over year to $7 1 million units.
Speaker Change: As consumers increase their use time and products continue to evolve with advanced features such as connectivity and artificial intelligence.
Speaker Change: The energy efficiency of our materials and technology are ever more essential.
Speaker Change: Yielding focus on advanced OLED technology, and empowering our customers remains a cornerstone of our strong leadership position.
Speaker Change: We're innovators advancing our portfolio of highly efficient high performing phosphorescent Reds Greens yellows are forthcoming blues to support the market of today and tomorrow.
Speaker Change: 1998, our team of World class scientists engineers and technicians have been driving continuous breakthroughs across critical performance metrics boosting efficiency extending lifetime enhancing color points.
Speaker Change: Over the years, we've achieved an impressive eight fold improvement in external quantum efficiency significantly advancing OLED energy efficiency and overall device performance at the same time, we delivered an extraordinary 60000 fold increase in material lifetime setting new industry benchmarks.
Speaker Change: Our expanding portfolio of OLED technologies, and Universal polio materials enables customers to realize greater power savings extend battery life reduce device size and support next generation features like <unk> and AI across a range of consumer OLED products.
Corning Blue.
Speaker Change: Germany has been challenging as all Trailblazing breakthroughs are and our teams continue to work tirelessly.
Speaker Change: We're excited about the strides we are making.
Speaker Change: Pleased by the news release this morning from LG display announcing that they have successfully verified the commercialization level performance, a blue phosphorescent OLED panels.
Speaker Change: We believe that our phosphorescent blue would be a game changer for our customers the industry consumers and for us.
Brian: And on that note, let me turn the call over to Brian.
Brian: Thank you, Steve and again, thank you everyone for joining our call today revenue in the first quarter of 2025 was $166 million compared to $165 million in the first quarter of 2024.
Speaker Change: We expect a certain level of ongoing uncertainty for us and our customers due to the factors mentioned by Steve. We continue to believe our revenues will be in the range of 640 $700 million.
Speaker Change: Our total material sales were $86 million in the first quarter compared to material sales of $93 million in the first quarter of 2024.
Speaker Change: Green emitter sales, which include our yellow Green emitters were $64 million. This compares to $71 million in the first quarter of 2024.
Speaker Change: Red emitter sales were $21 million in the first quarter of 2025 and 2024.
Speaker Change: As we've discussed in the past material buying patterns can vary quarter to quarter.
Speaker Change: First quarter royalty and license fees were $74 million.
Speaker Change: Compared to the prior year's period, a $68 million.
Speaker Change: <unk> first quarter revenue was $6 6 million compared.
Speaker Change: Compared to $3 $7 million in the first quarter of 2024.
Speaker Change: First quarter cost of sales was $38 million translating into total gross margins of 77%.
Speaker Change: This compares to $37 million and total gross margins of 78% in the first quarter of 2024.
Speaker Change: First quarter operating expenses, excluding cost of sales were $58 million in the first quarter of 2024, it was $65 million.
Speaker Change: The year over year decrease was primarily due to the reorganization of Ob JP Corporation and reduced performance based stock compensation.
Speaker Change: We continue to expect 2025 opex to be flat year over year.
Speaker Change: Operating income was $70 million in the first quarter translating into operating margin of 42%.
Speaker Change: This compares to prior year period of $63 million and operating margin of 38%.
Speaker Change: The income tax rate was 20% in the first quarter of 2025, we expect our effective tax rate for the year to be approximately 19%.
Speaker Change: First quarter 2025, net income increased by more than 13% year over year to $64 million or $1 35 per diluted share. This compares to $57 million or $1 19 per diluted share in the comparable period in 2024.
We ended the quarter with approximately $918 million in cash cash equivalents and investments.
Speaker Change: Our board of directors approved a <unk> 45 quarterly dividend, which will be paid on June 32025 to stockholders of record as of the close of business on June 16th 2025.
Speaker Change: Additionally, we announced that $100 million share repurchase authorization.
Speaker Change: Our capital allocation program reflects our expected continued positive cash flow generation and commitment to return capital to our shareholders.
Speaker Change: And lastly, I want to mention that this year's S display week kicks off in San Jose on May 11th to learn more about UDC. Please visit us at Booth number $3 23.
Steve Abramson: With that I'll turn the call back to Steve.
Steve Abramson: Thanks, Brian.
Speaker Change: Our company is grounded in innovation strategic execution and operational discipline.
Speaker Change: You did today was fueled by a relentless drive and refine through trials and challenges to shape more than success and laid the foundation for the corporate culture, We live and breathe. The day, one build curiosity creativity commitment and collaboration our culture empowers our team to solve complex problems right.
Speaker Change: Imagine what's possible and lead with purpose.
Speaker Change: I would like to thank each of our employees for their drive desire dedication and heart in elevating and shaping universal displays accomplishments and advancements 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 a cut.
And for our shareholders.
Speaker Change: And with that operator, let's start the Q&A.
Amundsen: Thank you Mr Amundsen.
Amundsen: We will now be conducting a question and answer session. If he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Speaker Change: Press Star two if he would like to remove your question from Mikael and for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment, while we poll for questions our first.
Speaker Change: First question is from Brian Lee with Goldman Sachs. Please proceed.
Speaker Change: Hey, guys. This is Tyler bisset on for Brian Thanks for taking our questions.
Speaker Change: On the Blue update from LG display it sounds like your customer has reached commercialization, which was great to see so how should we think about what that means for a timeline for when blue could show up in our commercial device and are there certain milestones here for reaching more firm pricing terms.
Speaker Change: And then is it fair to assume that this is for a mobile device and not Tvs.
Speaker Change: Yes, Thanks, Tyler thanks for the questions.
Speaker Change: Yes, I'm Blue we are certainly pleased to see the report today from LG display highlighting the success that they've had utilizing our phosphorescent blue.
Speaker Change: We've previously commented that having a customer indicates success with our material would be a positive step forward. So we're pleased by the announcement.
Speaker Change: Any specific plans and timeline of introducing into a product or really for our customers.
Speaker Change: Their customers the Oems to speak to.
Speaker Change: And on pricing, we are in constant dialogue with our customers on various commercial matters, including blue pricing.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: And then with that announcement from LG display how should we think about the impact on other customers developing blue does this sort of started an acceleration of sorts or potential race towards blue.
Speaker Change: Yes, our customers and we've been working with multiple customers on blue for a few years now so.
Speaker Change: Customers each have their own development programs that they're working toward all blue.
Speaker Change: Yeah.
Speaker Change: Alright, Thank you very much.
Speaker Change: Thanks.
Speaker Change: Our next question is from James Ricchiuti with Needham <unk> Company. Please proceed.
James Ricchiuti: Hi, Thanks, I guess why aren't they continue on the.
Speaker Change: A new theme.
Speaker Change: The LG release.
Speaker Change: Talks about a hybrid solution.
Speaker Change: And I'm wondering if you can give us.
Speaker Change: Some sense as to where you are in.
Speaker Change: In terms of.
Speaker Change: Working with the industry too.
Speaker Change: C commercial viability of our pure phosphorescent EV.
Speaker Change: Sure.
Speaker Change: How far along are we there I mean is that bumped the way you described.
Speaker Change: Previously.
Speaker Change: Going back to your original commentary around Luke.
Speaker Change: Thanks, Jim our prior prior commentary on Blue had really been focused on achieving commercial specs of our material, we haven't specified which architecture our structure it would begin.
I think the key thing is this is a positive step forward in the use of our material in a commercial application and we're supporting all of our customers and their development efforts with blue.
Speaker Change: Okay.
Speaker Change: One one thing that I think costs are.
Speaker Change: It was out in the press release was when LG talked about the stability of the.
Speaker Change: The Russians the legacy material and I am wondering can you help us better understand what that means.
Speaker Change: As it relates to the stability of your materials and maybe what still needs to be achieved.
Speaker Change: Sure the uplift fluorescence has been in market for for decades now so it's a established product. So inherently just based on the duration of the product being a market, there's more stability as well as.
Speaker Change: The wavelength of Blue just creates a little bit of different characteristics, especially one developing phosphorescent material.
Speaker Change: Is this and I'll jump back in the queue, but is it <unk>.
Speaker Change: Your expectation that the advantages you have on the low power side and low power consumption side with phosphorescence that this is potentially.
Speaker Change: Over the near term going to be even more commercial.
Speaker Change: Solution or we see a combination of blue fluorescence and phosphorescence.
Speaker Change: I think it's really going to depend on the country.
Speaker Change: Alright approach that LG display has taken that they've highlighted in their release today and were pleased to see the progress that they've had but different customers may have different solutions for blue.
Speaker Change: The key thing is the energy efficiency of the phosphorescent material is critical compared to the fluorescent because by replacing.
Speaker Change: Replacing the fluorescent with phosphorescent are able to increase the energy efficiency as noted in the release today.
Speaker Change: Okay. Thanks, I'll jump back in the queue I appreciate it.
Jim: Thanks, Jim.
Speaker Change: Our next question is from Mehdi Hosseini with S. E. T. Please proceed.
Mehdi Hosseini: Yes. Thanks for taking my question a couple of follow ups on me, Brian I think I understand the pressure.
Mehdi Hosseini: I understand the challenges in forecasting.
Mehdi Hosseini: Adoption, but I think it also it would be helpful for shareholders of UPC to understand the market developing so it's this is a lg's announcement is kind of a high proof for the restaurant blue kind of attending junction would it be fair to think of this as a bridge it would be live.
Mehdi Hosseini: Get it to a high end premium devices.
Mehdi Hosseini: When the florist and Blue is ready for commercialization standalone than it would have a wider adoption could we think about this of the sequencing of bridge and into mass adoption is that fair assessment.
Mehdi Hosseini: Hello.
Matt: Sure Hi, Matt so.
Speaker Change: I think the key thing is this is a tandem structure that LG display highlighted in their release today. So it's using a layer of fluorescent material and a layer of phosphorescent material from U D C.
Speaker Change: And from our perspective. This is a positive step in the use of our material in a commercial application.
Speaker Change: The ultimate product that LG or any of our other customers may choose to introduce our material into is <unk>.
Speaker Change: For them to speak to them in the Oems and very difficult for us to predict at this time, because it's really in their hands to carry it forward from here.
Speaker Change: Sure that's fair and then regarding the material gross margin should we think about a step up in gross margin improvement.
Operator: Good day, ladies and gentlemen, and welcome to Universal Display Corporation's first quarter 2025 earnings conference call. My name is Sherry, and I will be your conference moderator for today's call. If anyone needs operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded for replay purposes.
Speaker Change: To get the low 60% for the year or would this improve and be more material.
And I have a follow up.
Sure Hi, Matt so.
I think the key thing is this is a tandem structure that LG display highlighted in their release today. So it's using a layer of fluorescent material in a layer of phosphorescent material from UTC.
Speaker Change: You would go back to the 60% to 65% range.
Speaker Change: Yeah, So our guidance for the year for total gross margin of 76% to 77% and that remains unchanged from what we communicated back in February the materials gross margin does vary based on your customer mix as well as as we have new contracts. We can also have different mixes of royalty and license to.
And from our perspective. This is a positive step in the use of our material in a commercial application.
Darice Liu: I would now like to turn the call over to Darice Liu, Senior Director of Investor Relations. Please proceed. Thank you, and good afternoon, everyone.
The ultimate product that LG or any of our other customers may choose to introduce our material into is.
Darice Liu: Welcome to Universal Display's first quarter earnings conference call. Joining me on the call today are Steve Abramson, President and Chief Executive Officer, and Brian Millard, Chief Financial Officer and Treasurer.
Up for them to speak to them in the Oems and very difficult for us to predict at this time, because it's really in their hands to do carry it forward from here.
Speaker Change: Immaterial, so focusing on the total gross margin of 76 to 77, we think is the most useful way of assessing the profitability of our contracts.
Operator: 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. Further, this call is being webcast live and will be made available for a period of time on Universal Display's website.
Sure that's fair.
And then regarding the material gross margin should we think about a step up in gross margin improvement.
Speaker Change: Okay. Thank you.
Speaker Change: Thanks.
Speaker Change: Our next question is from Scott Searle with Roth Capital Partners. Please proceed.
To get the low 60 percents would be year.
Speaker Change: Hey, guys. Thanks for taking the questions I apologize I'm going to go back to the Logan.
With this improvement be more material.
Speaker Change: I just wanted to clarify that.
You would go back to the 60% to 65% range.
Operator: This call contains time-sensitive information and is accurate only at the date of the live webcast of this call, May 1, 2025. During this call, we may make forward-looking statements based on current expectations. These statements are subject to a number of significant risks and uncertainties and are actually resulting differ materially.
Speaker Change: The <unk> implementation in terms of a universal displays materials, you'll take commercial specs is that correct in terms of their implementation and not using a fluorescent and in effect to cover up the shortcomings of your commercial blue and just in terms of materials that are used in tandem architecture here.
Speaker Change: Yeah, So our guidance for the year for total gross margin of 76% to 77% and that remains unchanged from what we communicated back in February the materials gross margin does vary based on your customer mix as well as as we have new contracts. We can also have different mixes of royalty and license to <unk>.
Operator: These risks and uncertainties are discussed in the company's periodic reports, followed with the SEC, and should be referenced by anyone considering making any investments in the company's security. Universal Display displays any obligation to update any of these statements.
Speaker Change: Is this in.
In the ballpark of what you guys were expecting in terms of materials per device.
Speaker Change: Materials, so focusing on the total gross margin of 76 to 77, we think is the most useful way of assessing the profitability of our contracts.
Speaker Change: Yes, Scott so the in terms of the specs I mean, we've been previously talking about specs being achieved and we've previously said that a customer using our material in application that was deemed commercial would be a positive step forward. So that should be released today from LG display we think demonstrates that our material is <unk>.
Speaker Change: Okay. Thank you.
Steve Abramson: Now, I will let you turn the call over to Steve Abramson. Thanks, Darice, and welcome to everyone on today's. 2025 began on a solid note. First quarter 2025 revenue was $166 million, operating profit was $70 million, and net income was $64 million, or $1.35 per diluted share. Looking ahead, we continue to see tremendous growth opportunities in the OLED market. At the same time, we're operating in a global environment that is increasingly dynamic and complex. In April, we saw an uptick in orders, which we believe was largely in response to ongoing tariff developments. That said, we're taking a measured approach and assessing how this may evolve over coming quarters.
Speaker Change: Thanks.
Speaker Change: Our next question is from Scott Searle with Roth Capital Partners. Please proceed.
Scott Searle: Hey, guys. Thanks for taking the questions I apologize I'm going to go back to Blue again.
Speaker Change: Performing at commercial levels.
Speaker Change: Just wanted to clarify that.
Speaker Change: And in terms of the ultimate material consumption per square inch in tandem versus single layer. That's really just dependent on each customer's recipe and it's really something we cant comment on directly the quantity of material at this point.
Speaker Change: The <unk> implementation in terms of Universal display is materials you have hit commercial specs is that correct in terms of their implementation and not using a fluorescent in effect to cover up the shortcomings of your commercial blue and just in terms of materials that are used in tandem architecture here.
Speaker Change: Okay, and just as a follow up.
Speaker Change: Looking at the geographic mix.
Speaker Change: Your revenue in China was up a little bit seasonally in the first quarter, I think about $10 million or so.
Speaker Change: Is this in.
Speaker Change: In the ballpark of what you guys were expecting in terms of materials per device.
Speaker Change: It sounds like you've started to see what you are I think our gaming pull ins potentially.
Scott Searle: Yes, Scott.
Scott Searle: In terms of the specs I mean, we've been previously talking about specs being achieved and we've previously said that a customer using our material in an application that was deemed commercial would be a positive step forward. So that can be released today from LG display we think demonstrates that our material is performing at commercial levels.
Speaker Change: Ahead of tariffs are you continuing to see that as we've gotten through the month of April how should we be expecting the I guess the sequential progression as we're going into the second quarter here.
Steve Abramson: Thus far, our business remains largely unaffected. Uncertainty is not new to us. We've built this company to be resilient and have shown time and again that we can navigate through challenging times. Our innovation engines, strong balance sheet, robust supply chain, and operational agility position us well to navigate through periods of volatility. In the past years, we have diversified our supply chain, expanded our global manufacturing footprint to now include Shannon, Ireland, and optimized our inventory and production mix. This ensures our flexibility to respond, adapt, and lead while staying ahead of the curve with the continued invention, development, and delivery of state-of-the-art OLED technologies and materials for our customers and the industry.
Speaker Change: With the current tariff environment. Thanks.
Speaker Change: Yeah.
Speaker Change: So in Q1, we did see heightened Chinese cells.
Scott Searle: And in terms of the ultimate material consumption per square inch in tandem versus single layer. That's really just dependent on each customer's recipe and it's really something we cant comment on directly the quantity of material at this point.
Speaker Change: Sales to Chinese customers as you mentioned, we werent hearing anything from our customers in the first quarter that indicated that was tariff related our preparatory for for tariffs in April as Steve mentioned in his remarks, we did see a heightened level of orders in the first few weeks of April which certainly were in response to tariffs and.
Speaker Change: Okay, and just as a follow up.
Scott Searle: Looking at the geographic mix.
Scott Searle: Your revenue in China was up a little bit seasonally in the first quarter, I think about $10 million or so.
Speaker Change: As you know that we do think thats a pull in from following months.
Scott Searle: It sounds like you've started to see what you are I think our gaming pull ins.
Speaker Change: And the full year, we still have the same guidance of $640 to $700 million.
Scott Searle: Essentially.
Steve Abramson: The long-term trajectory of the OLED market is positive and strong, driven by increasingly diverse product roadmaps featuring an expanding range of OLED offerings, with IT, automotive, and foldable alongside other applications slated to drive demand in the near panel makers and OEMs prepare for new gen 8.6 OLED capacity to start coming online in 2026. Recently published Omnia market research forecast that 2025 OLED growth will be in the mid-single digit. looking at the three largest consumer electronic end markets. All its smartphones are forecasted to grow by 6% year-over-year to 848 million units. OLED IT units, which encompasses tablets, laptops, and monitors, are expected to increase by 16% year-over-year to 27 million units, and OLED TVs are expected to grow by 4.5% year-over-year to 7.1 million units.
Speaker Change: Yeah.
Scott Searle: Ahead of tariffs are you continuing to see that as we've gotten through the month of April how should we be expecting.
Speaker Change: Great. Thank you.
Speaker Change: Thanks Scott.
Speaker Change: As a reminder, this star one on your telephone keypad, if he would like to ask a question. Our next question is.
Scott Searle: I guess the sequential progression as we're going into the second quarter here with the current tariff environment. Thanks.
Nam Kim: From Nam Kim.
Scott Searle: So in Q1, we did see heightened Chinese sales.
Nam Kim: Okay Research. Please proceed.
Nam Kim: Well. Thank you for taking my question.
Speaker Change: Sales to Chinese customers as you mentioned, we werent hearing anything from our customers in the first quarter that indicated that was tariff related our preparatory for for tariffs in April as Steve mentioned in his remarks, we did see a heightened level of orders in the first few weeks of April which certainly were in response to tariffs.
Nam Kim: One more follow up on Blue for this commercial OLED panels from energy is playing used.
Nam Kim: Do they use of Europe, a little hoarse too much here.
Nam Kim: Or only built.
Speaker Change: Up here I know you guys have been preparing for blue host as well.
So just curious on this.
Speaker Change: As you noted we do think Thats a pull in from following months.
Speaker Change: And then.
Speaker Change: Secondly on this press release.
Speaker Change: And the full year, we still have the same guidance of $640 to $700 million.
Speaker Change: It seems to be light tone TD by the most IC device today already was turned off structure. So that stacking that's being new however, how should I interpret.
Speaker Change: Yeah.
Speaker Change: Great. Thank you.
Speaker Change: Thanks Scott.
Speaker Change: As a reminder, this star one on your telephone keypad. If you would like to ask a question. Our next question is from Nam Kim.
Speaker Change: One thing that struck to any color you can share with you with the name of the great. Thank you.
Steve Abramson: As consumers increase their use time and products continue to evolve with advanced features such as connectivity and artificial intelligence, the energy efficiency of our materials and technology are ever more essential. Our unyielding focus on advancing OLED technology and empowering our customers remains a cornerstone of our strong leadership position. We are innovators, advancing our portfolio of highly efficient, high performing phosphorescent reds, greens, yellows, and forthcoming blues to support the market of today and tomorrow. 1998, our team of world-class scientists, engineers, and technicians have been driving continuous breakthroughs across critical performance metrics, boosting efficiency, extending lifetime, and enhancing color.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Thanks, Dan so on the host we've been selling blue host and emitter to various customers. We can't comment specifically on Lg's recipe that they use for the panel they produced an announced today.
Speaker Change: Search. Please proceed.
Speaker Change: Thank you for taking my question.
Speaker Change: One more follow up on Blue for these commercial OLED panels from energy displaying used.
Speaker Change: Do they use of Europe blue host to mature.
And on the the products our customers have been evaluating our material for tandem as well as single layer. So it's really just dependent on the various development projects that each of them have within their organizations.
Speaker Change: Oney.
Speaker Change: <unk> here I know you guys have been preparing for blue host Edwin.
Speaker Change: So just curious on this.
Speaker Change: And then secondly on this press release.
Speaker Change: Understand thank you.
Speaker Change: It seems to be light ton Iot device.
Speaker Change: Thanks.
Speaker Change: Our next question is from Eddie or hobby with TV Cowen. Please proceed.
Speaker Change: If you divide scale radio is turned on structure so in desk.
Speaker Change: You're not seeing new however, how should I interpret.
Speaker Change: Hey, guys. This is Eddie for Chris.
Speaker Change: Work on single stack structure any color you can share with you with any of the great. Thank you.
Speaker Change: Just a clarification I know this question was asked.
Steve Abramson: Over the years, we've achieved an impressive 8-fold improvement in external quantum efficiency, significantly advancing OLED energy efficiency and overall device performance. At the same time, we've delivered an extraordinary 60,000-fold increase in material lifetime, setting new industry benchmarks. Our expanding portfolio of OLED technologies and universal folio materials enables customers to realize greater power savings, extend battery life, reduce device size, and support next generation features like 5G and AI across a range of consumer OLED products. Regarding Blue, the journey has been challenging, as all trailblazing breakthroughs are, and our teams continue to work tirelessly. We are excited about the strides we are making and are pleased by the news release this morning from LG Display announcing that they have successfully verified the commercialization level performance of blue phosphorescent OLED panels.
Speaker Change: Several times on this call like just.
Speaker Change: Do you think like from a technical perspective, the blue materials can now be used in smartphones. For example, I guess I just want to understand like how important the LG announcement as to the mass adoption for.
Speaker Change: Okay.
Speaker Change: Thanks, Dan so on the host we've been selling blue host and emitter to various customers. We can't comment specifically on Lg's recipe that they use for the panel they produced announced today.
Speaker Change: Blue phosphorus.
Speaker Change: And on the products, our customers have been evaluating our material for tandem as well as single layer. So it's really just dependent on the various development projects that each of them have within their organizations.
Speaker Change: Sure.
Speaker Change: The note.
Speaker Change: Released today from from LG display did reference Houston smartphones as well as it is but I think the key point being you know across all of our customers. We believe there is applicability for blue in all applications.
Speaker Change: Understand thank you.
Speaker Change: Thanks.
Speaker Change: Yeah.
Speaker Change: Certainly smartphones and Tvs as well so.
Speaker Change: Our next question is from Eddie IRB with TV Cowen. Please proceed.
Speaker Change: We believe ultimately there's there's interest in it because of the power and energy efficiency benefits that the phosphorescent material brings to the solution.
Speaker Change: Hey, guys. This is Eddie for Krish.
Speaker Change: Just a clarification I know this question was asked several times on this call.
Speaker Change: We believe and understand from our customers that there's interest in multiple applications.
Speaker Change: Do you think like from a technical perspective, the blue materials can now be used in smartphones. For example, I guess I just want to understand like how important the LG announcement as to the mass adoption for <unk>.
Speaker Change: Got it and do you think you guys cleared most of the milestones.
Speaker Change: That's mass adoption.
Speaker Change: We're very pleased with the progress that we're making and are working closely with our customers too.
Steve Abramson: We believe that our phosphorescent blue will be a game changer for our customers, the industry, consumers, and for us.
Speaker Change: Ensure their success and ours.
Speaker Change: Blue phosphorus.
Speaker Change: Hi, guys.
Speaker Change: Sure.
Speaker Change: The note.
Speaker Change: Just a follow up I think one of our major smartphone Oems they were like some news that they might use foldable phones would you remind us like what's the content difference between Foldable phones and just regular smartphones. That's it for me. Thank you.
Speaker Change: Released today from from LG display did reference Houston smartphones as well as it is but I think the key point being across all of our customers. We believe there is applicability for blue in all applications.
Brian Millard: And on that note, let me turn the call over to Brian. Thank you, Steve. And again, thank you, everyone, for joining our call today. Revenue in the first quarter of 2025 was $166 million compared to $165 million in the first quarter of 2024. While we expect a certain level of ongoing uncertainty for us and our customers due to the factors mentioned by Steve, we continue to believe our revenues will be in the range of $640 to $700 million. Our total material sales were $86 million in the first quarter, compared to material sales of $93 million in the first quarter of 2024.
Speaker Change: Certainly smartphones and Tvs as well so.
Speaker Change: Yeah, so on the Foldable that's really.
Speaker Change: We believe ultimately there's interest in it because of the power and energy efficiency benefits that the phosphorescent material brings to the solution.
Speaker Change: They are thinking about it as square area. So.
Speaker Change: All things being equal assuming it's a single stack like most smartphones are made today you would really just take the square area of any application to market today and determined the square area of the tab.
Speaker Change: We believe and understand from our customers that there is interest in multiple applications.
Speaker Change: Got it and do you think you guys cleared most of the milestones.
Speaker Change: The foldable to determine the incremental.
Speaker Change: Material opportunity for us.
Speaker Change: That's mass adoption.
Brian Millard: Green emitter sales, which include our yellow green emitters, were $64 million. This compares to $71 million in the first quarter of 2024. Red emitter sales were $21 million in the first quarter of 2025 and 2024. As we've discussed in the past, material buying patterns can vary quarter to quarter. First quarter royalty and license fees were $74 million compared to the prior year's period of $68 million. Adesis's first quarter revenue was $6.6 million, compared to $3.7 million in the first quarter of 2024. First quarter cost of sales was $38 million, translating it to total gross margins of 77%.
Speaker Change: We're very pleased with the progress that we're making and are working closely with our customers to <unk>.
Speaker Change: Okay.
Martin Yang: Our next question is from Martin Yang with Oppenheimer <unk> Company. Please proceed.
Speaker Change: Ensure their success and ours.
Speaker Change: Alright, guys.
Speaker Change: Just a follow up I think one of the major smartphone Oems they were like some news that they might use foldable phones would you remind us like what's the content difference between foldable phones and just regular smartphones.
Alright, Thank you for taking my question.
Martin Yang: The first question is regarding things can look forward to before we see product shipping with your two <unk>.
Speaker Change: You point to any other.
Speaker Change: Thank you.
Martin Yang: Milestones either by you or by your customers.
Speaker Change: Yes, so on the Foldable Thats really.
Speaker Change: They are thinking about it as square area. So.
Speaker Change: Before we see actual products shipping.
Speaker Change: All things being equal assuming it's a single stack like most smartphones are made today you would really just take the square area of any application and market today and determined the square area of the tab.
Speaker Change: So thanks. Thanks for the question Martin I think from this point forward, it's really going to be up to our customers to really communicate you know a lot of the progress that they're making as well as how there.
Brian Millard: This compares to $37 million in total gross margins of 78% in the first quarter of 2024. First quarter operating expenses, excluding cost of sales, were $58 million. In the first quarter of 2024, it was $65 million.
Speaker Change: The foldable to determine the incremental.
Speaker Change: Interactions are going with Oems to introduce it into a product.
Speaker Change: Material opportunity for us.
Speaker Change: We continue on our side to do work to develop new materials, new blue materials that increase their performance characteristics just.
Okay.
Speaker Change: Our next question is from Martin Yang with Oppenheimer <unk> Company. Please proceed.
Brian Millard: The year-over-year decrease was primarily due to the reorganization of OVJP Corporation and reduced performance-based stock compensation. We continue to expect 2025 OPEX to be flat year over year. Operating income was $70 million in the first quarter, translating into operating margin of 42%. This compares the prior year period of $63 million and operating margin of 38%. The income tax rate was 20% in the first quarter of 2025. We expect our effective tax rate for the year to be approximately 19%. First quarter 2025 net income increased by more than 13% year-over-year to $64 million, or $1.35 per diluted share.
Speaker Change: Just like we do on the Red and Green side of our business, where we're continually inventing new materials, but we're very pleased with the progress we've made to date I'm happy to see the announced to date not spent today by LG display.
Martin Yang: Alright, Thank you for taking my question.
First question is regarding seems to look forward to before.
Martin Yang: We see product shipping with you too can you point to any other.
Speaker Change: But much of the communication from this point forward is probably going to come from the customers as they make progress in their efforts.
Martin Yang: Milestones either by you or by your customers before.
Speaker Change: Thanks, Brian.
Martin Yang: Before we see actual products shipping.
Speaker Change: And then.
Speaker Change: Can you confirm that with today's announcement.
Martin Yang: So thanks. Thanks for the question Martin I think from this point forward, it's really going to be up to our customers to really communicate a lot of the progress that they're making as well as how they're.
Speaker Change: And with Lgs panel, there will be no other technical hurdles to clear but that.
Speaker Change: Allergy product.
Martin Yang: Interactions are going with Oems to introduce it into a product and.
Speaker Change: Hugh.
Speaker Change: You'd be in a commercial device.
Brian Millard: This compares to $57 million, or $1.19 per diluted share, in the comparable period in 2024. We ended the quarter with approximately $918 million in cash, cash equivalents, and investments. Our Board of Directors approved a $0.45 quarterly dividend, which will be paid on June 30, 2025, to stockholders of record as of the close of business on June 16, 2025. Additionally, we announced a $100 million share repurchase authorization. Our capital allocation program reflects our expected continued positive cash flow generation and commitment to return capital to our shareholders.
Martin Yang: We continue on our side to do work to develop new materials, new blue materials that increase their performance characteristics just.
Speaker Change: So that's really a question more for LG than for us since it's their product to bring to market and bring to the Oems.
Martin Yang: Just like we do on the Red and Green side of our business, where we're continually inventing new materials, but we're very pleased with the progress we've made to date happy to see the announced to date now spent today by LG display.
Speaker Change: Got it.
Speaker Change: Last question from me is overall.
Speaker Change: Indication strategy.
Speaker Change: Regarding other potential announcements by your customers.
Martin Yang: But much of the communication from this point forward is probably going to come from the customers as they make progress in their efforts.
Speaker Change: So should we expect similar.
Speaker Change: At <unk>, where the customers will be the one leading the press release.
Brian: Thanks, Brian.
Martin Yang: And then.
Martin Yang: Can you confirm that with today's announcement.
Speaker Change: Announcing.
Speaker Change: Breakthrough innovation with your Peru material.
Brian Millard: And lastly, I want to mention that this year's SID display week kicks off in San Jose on May 11. To learn more about UDC, please visit us at booth number 323.
Martin Yang: And with Lgs panel, there will be no other technical hurdles to clear.
Speaker Change: Yes, so the todays release was LG displays release.
Speaker Change: Our other customers choose to release information, that's fine with us, but we're not the ones driving the strategy here on the communications front.
Martin Yang: Allergy product.
Martin Yang: Hugh.
Steve Abramson: With that, I'll turn the call back to Steve. Thanks, Brian.
Martin Yang: It would be in a commercial device.
Steve Abramson: Our company is grounded in innovation, strategic execution, and operational discipline. The journey to today was fueled by a relentless drive and refined through trials and challenges to shape more than success. It laid the foundation for the corporate culture we live and breathe today, one built on curiosity, creativity, commitment, and collaboration. Our culture empowers our teams to solve complex problems, reimagine what's possible, and lead with purpose.
Martin Yang: So thats really a question more for LG than for us since it's their product to bring to market and bring to the Oems.
Speaker Change: Got it. Thank you that's it for me.
Speaker Change: Thanks, Brian.
Speaker Change: As a reminder, it is star one on your telephone keypad, if he would like to ask a question. Our next question is a follow up from Jim Ricchiuti with Needham <unk> Company. Please go ahead.
Martin Yang: Got it.
Martin Yang: Last question from me is overall.
Martin Yang: Indication strategy.
Martin Yang: Regarding other potential announcements by your customers.
James Ricchiuti: Did you quantify the.
Martin Yang: So should we expect similar.
Speaker Change: The level of.
Martin Yang: Honor, where the customers will be the one leading the press release.
James Ricchiuti: Of orders that you saw that.
James Ricchiuti: And related to tariffs I'm, just trying to get a sense of how impactful that might be in terms of potentially pulling from the back half of the year into the June quarter.
Martin Yang: Announcing.
Steve Abramson: 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 events. We are committed to being a leader in the old ecosystem. Achieving superior long-term growth and delivering cutting-edge technologies and materials for the industry, for our customers, and for our shareholders.
Martin Yang: Breakthrough innovation with your Peru material.
Martin Yang: Yes, so the todays release was LG displays release.
James Ricchiuti: We did not quantify the amount of orders that we saw in April but it certainly was a heightened level of compared to what we typically see in any given month.
Martin Yang: Our other customers choose to release information, that's fine with us, but we're not the ones driving the strategy here on the communications front.
James Ricchiuti: We also need to see exactly how may June plays out, but the full year. We still think is within that 60 40 to 700 range based on everything we are hearing at this point.
Martin Yang: Got it. Thank you that's it for me.
Operator: And with that, operator, let's start the Q&A. Thank you, Mr. Abramson. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we pull for questions.
Brian: Thanks, Brian.
Speaker Change: As a reminder, it is star one on your telephone keypad, if you would like to ask a question our next.
James Ricchiuti: And then.
Speaker Change: <unk> is a follow up from Jim Ricchiuti with Needham <unk> Company. Please go ahead.
Speaker Change: I don't recall I may have missed it did you say what the glue development revenue was in the quarter.
Speaker Change: Yes, great question, the Blue development revenues in Q1 were $1 1 million approximately and Thats, both host and emitter sales are to our customers.
Speaker Change: Did you quantify the.
Speaker Change: Hum.
Speaker Change: The level of.
Speaker Change: The orders that you saw that.
Speaker Change: Related to tariffs and I'm, just trying to get a sense of how impactful that might be in terms of.
Speaker Change: And then final question for me is just just on Opex.
Tyler bisset: Our first question is from Brian Lee with Goldman Sachs. Please proceed. Hey, guys.
What are you anticipating opex.
Speaker Change: <unk> pulling for the back half of the year into the June quarter.
Tyler bisset: This is Tyler Bisset on for Brian. Thanks for taking our questions. On the Blue update from LG Display, it sounds like your customer has reached commercialization, which was great to see. So how should we think about what that means for a timeline for when Blue could show up in a commercial device? And are there certain milestones here for reaching more firm pricing terms? And then is it fair to assume that this is for a mobile device and not TV?
Speaker Change: Relative to last year for the full year.
Speaker Change: We did not quantify the amount of orders that we saw in April but it certainly was a heightened level of compared to what we typically see in any given month.
Speaker Change: We're still projecting opex is going to be fairly yes, exactly it's going to be flat compared to 2024, we did see lower level in Q1 due to a number of factors, but the full year will still believing as is relatively flat compared to last year.
Speaker Change: We also need to see exactly how may June plays out, but the full year. We still think is within that $640 to 700 range based on everything we are hearing at this point.
Speaker Change: And I guess, that's where I'm maybe.
Speaker Change: And then.
Speaker Change: Just kidding.
Speaker Change: I don't recall I may have missed it did you say what the Blue development revenue was in the quarter.
Speaker Change: I thought initially you were anticipating.
Steve Abramson: Yeah, thanks, Tyler. Thanks for the questions.
Speaker Change: Opex to be up in 'twenty five.
Steve Abramson: Yeah, on blue, we are certainly pleased to see the report today from LG Display, highlighting the success that they've had utilizing our phosphorescent blue. You know, we previously commented that, you know, having a customer indicate success with our material would be a positive step forward. So we're pleased by the announcement.
Speaker Change: Yes, great question, the Blue development revenues in Q1 were $1 1 million, approximately and Thats, both host and emitter sales to our customers.
Speaker Change: Basically had been saying flat.
Speaker Change: Yes, we've been expecting SG&A to be.
Speaker Change: Slightly up and R&D to be pretty flat in aggregate.
Speaker Change: And then final question for me is just just on Opex.
To be relatively flat as well so.
Speaker Change: Whats.
Steve Abramson: Any specific plans and timeline of introducing into a product are really for our customers and their customers, the OEMs, to speak to. And on pricing, you know, we're in constant dialogue with our customers on various commercial matters, including And then with that announcement from LG Display, how should we think about the impact on other customers developing blue?
Speaker Change: Based on what we know right now we're expecting total opex to be flat for the year.
Speaker Change: Are you anticipating opex.
Speaker Change: Relative to last year for the full year.
Speaker Change: Okay, great. Thank you.
Speaker Change: We're still projecting opex is going to be fair, yes, exactly it's going to be flat compared to 2024, we did see lower level in Q1 due to a number of factors, but the full year will still believing as is relatively flat compared to last year.
Speaker Change: Thanks, Jim.
Speaker Change: Our next question is from Scott Searle with Roth Capital Partners. Please proceed.
Scott Searle: Just a quick question on tandem.
Speaker Change: Given the announcement from LG today.
Speaker Change: We started to see some of the design activity from an Apple standpoint in terms of their tablets is there more of a shift from a market perspective towards tandem architecture or is it still just kind of one off here or there I was just trying to get my hands around if there's any sort of a bigger trend going on here.
Speaker Change: And I guess, that's where I'm maybe.
Speaker Change: Just kidding.
Steve Abramson: Does this sort of start an acceleration of sorts or a potential race towards blue? Yeah, our customers, and we've been working with multiple customers on Blue for a few years now. So our customers each have their own development programs that they're working toward on Blue. All right.
Speaker Change: A little confused I thought initially you were anticipating.
Speaker Change: Opex to be up in 2005.
Speaker Change: Basically had been saying flat.
Speaker Change: Yes. Good question Scott at tandem in house, a number of benefits.
Speaker Change: Yes, we have been expecting.
Speaker Change: <unk> to be.
Speaker Change: Slightly up and R&D to be pretty flat in aggregate.
Speaker Change: It's been used in Peru, primarily it applications to date.
Tyler bisset: Thank you very much. Thanks.
Speaker Change: To be relatively flat as well so based on what we know right now we're expecting total opex to be flat for the year.
Speaker Change: And the benefits being really that by having two layers of emissive material you can have greater lifetime.
James Ricchiuti: Our next question is from James Ricchiuti with Needham and Company. Please proceed. Hi, thanks.
Speaker Change: Okay, great. Thank you.
Speaker Change: And a number of the Oems are after that for products that are on all day long, especially have a lot of white pixels that are on.
James Ricchiuti: I guess we'll have to continue on the blue theme. You know, the LG release talks about a hybrid solution. And I'm wondering if you can give us some sense as to where you are in terms of working with the industry to see commercial viability of a pure phosphorescent GB solution. How far along are we there? I mean, is that months, the way you described, you know, previously? going back to your original commentary around blue.
Jim Ricchiuti: Thanks, Jim.
Speaker Change: Our next question is from Scott Searle with Roth Capital Partners. Please proceed.
Speaker Change: All day long and so that's why tandem has been used in a number of products. So there were a few last year that were announced.
Scott Searle: Just a quick question on tandem.
Speaker Change: Given the announcement from LG today.
Speaker Change: We started to see some of the design activity from an Apple standpoint in terms of their tablets is there more of a shift from a market perspective towards tandem architecture or is it still just kind of one off here or there I was just trying to get my hands around if there's any sort of a bigger trend going on here.
Speaker Change: That had tandem structures, but we think that even in the it market theres going to continue to be a mix of tandem and single layer based on what we know at this point.
Speaker Change: In smartphones there has been very limited number of tandem smartphones, but.
Speaker Change: The vast majority vast majority of smartphone are single layer and we expect that to continue to be the case.
Speaker Change: Yes. Good question Scott at tandem has a number of benefits.
Speaker Change: Great. Thank you.
Speaker Change: It's been used in Peru, primarily it applications to date.
Scott Searle: Thanks Scott.
Scott Searle: Thank you. This concludes our question and answer session I would like to turn the call back over to Brian Miller for any additional or closing remarks.
Speaker Change: And the benefits being really that by having two layers of emissive material you can have greater lifetime and.
Steve Abramson: Thanks, Jim. Our prior commentary on Blue had really been focused on achieving commercial specs of our material. We hadn't specified which architecture or structure it would be in.
Scott Searle: Thank you for your time today, we appreciate your interest and support.
Speaker Change: Of the Oems are after that for products that are on all day long, especially have a lot of white pixels that are on.
Scott Searle: Thank you. This concludes today's conference call you may now disconnect.
Steve Abramson: I think the key thing is this is a positive step forward in the use of our material in a commercial application, and we're supporting all of our customers in their development efforts with Blue. care. One, one thing that I think caught our, you know, it was out in the press release was when LG talked about the stability of blue fluorescence, the legacy material.
Speaker Change: All day long and so Thats why tandem has been used in a number of products. So there were a few last year that were announced.
Speaker Change: That had tandem structures, but we think that even in the it market theres going to continue to be a mix of tandem and single layer based on what we know at this point.
Speaker Change: In smartphones there has been very limited number of tandem smartphones, but the vast majority vast majority of smartphones are single layer and we expect that to continue to be the case.
Steve Abramson: And I'm wondering, can you help us better understand what that means as it relates to the stability of your materials and maybe what still needs to be achieved?
Speaker Change: Great. Thank you.
Speaker Change: Thanks Scott.
Speaker Change: Thank you. This concludes our question and answer session I would like to turn the call back over to Brian <unk> for any additional or closing remarks.
Steve Abramson: Sure. Blue fluorescence has been in market for decades now, so it's an established product. Inherently, just based on the duration of the product being in market, there's more stability, as well as the wavelength of blue just creates a little bit of different characteristics, especially when developing phosphorescent materials.
Speaker Change: Thank you for your time today, we appreciate your interest and support.
Speaker Change: Thank you. This concludes today's conference call you may now disconnect.
Steve Abramson: Is this, and I'll jump back in the queue, but is it, is your expectation that the advantages you have on the low power side, low power consumption side with phosphorescence, that this is the potentially, over the near term, going to be the more commercial solution that we see, a combination of blue fluorescence and phosphorescence? I think it's really going to depend on the approach that LG Display has taken that they've highlighted in their release today. And we're pleased to see the progress that they've had, but different customers may have different solutions for blue. I think the key thing is the energy efficiency of the phosphorescent material is critical compared to the fluorescent, because by replacing the fluorescent with phosphorescent, you're able to increase the energy efficiency as noted in the release today.
James Ricchiuti: Okay, thanks, I'll jump back in the queue, appreciate it. Thanks, Jim.
Mehdi Hosseini: Our next question is from Mehdi Hosseini with SIG. Please proceed. Yes, thanks for taking my question.
Mehdi Hosseini: A couple of follow-ups for me, Brian. I think I understand the frustration, I understand the challenges in forecasting and market adoption, but I think also it will be helpful for shareholders of UDC to understand the market development. So if this is LG's announcement, it's kind of a hyper-fluorescent blue, kind of a tandem junction. Would it be fair to think of this as a bridge? It will be limited to high-end premium devices, and when the fluorescent blue is ready for commercialization at standalone, then it would have a wider adoption. Could we think about this of the sequencing, a bridge, and then a mass adoption?
Steve Abramson: Is that a fair assessment?
Mehdi Hosseini: And I have a follow-up. Sure.
Steve Abramson: Hi Mehdi. So I think the key thing is this is a tandem structure that LG Display highlighted in their release today. So it's using a layer of fluorescent material and a layer of phosphorescent material from UDC. And from our perspective, this is a positive step in the use of our material in a commercial application.
Steve Abramson: The ultimate product that LG or any of our other customers may choose to introduce our material into is up for them to speak to, them and the OEMs, and very difficult for us to predict at this time because it's really in their hands to carry it forward from here. Sure, that's fair.
Brian Millard: And then regarding the material gross margin, should we think about a step up in gross margin improvement to get the low 60% for the year? Or would this improvement be more material so that you would go back to the 60 to 65% range?
Brian Millard: Yeah, so our guidance for the year for total gross margin is 76 to 77%. And that remains unchanged from what we communicated back in February. The materials gross margin, you know, does vary based on your customer mix, as well as, you know, as we have new contracts, we can also have different mixes of royalty and license to materials. So focusing on the total gross margin of 76 to 77, we think is the most useful way of assessing the profitability of our contract.
Scott Searle: Our next question is from Scott Searle with Roth Capital Partners. Please proceed. Hey, guys, thanks for taking the questions. I apologize.
Scott Searle: I'm going to go back to Blue again. I just want to clarify that the LG implementation, in terms of Universal Display's materials, you have hit commercial specs. Is that correct, in terms of their implementation of not using a fluorescent, in effect, to cover up the shortcomings of your commercial Blue? And just in terms of materials, then, that are used in a tandem architecture here, is this in the ballpark of what you guys were expecting, in terms of materials per device? Yeah, Scott, so the in terms of the specs, I mean, we've been, you know, previously talking about specs being achieved.
Steve Abramson: And we previously said that, you know, a customer using our material in an application that was deemed commercial would be, you know, a positive step forward. So that release today from LG display, we think, you know, demonstrates that our material, you know, is performing at commercial levels. And in terms of the, you know, ultimate material consumption, you know, per square inch in tandem versus single layer, that's really just dependent on each customer's recipe.
Steve Abramson: And it's really, you know, something we can't comment on directly the quantity of material at this point.
Scott Searle: Okay. And just as a follow-up, looking at the geographic mix, your revenue in China was up a little bit seasonally in the first quarter, I think about $10 million or so.
Steve Abramson: It sounds like you've started to see what you, I think, are deeming pull-ins potentially ahead of tariffs. Are you continuing to see that as we've gotten through the month of April? How should we be expecting the, I guess, sequential progression as we're going into the second quarter here with the current tariff environment?
Steve Abramson: Thanks. So in Q1, we did see heightened Chinese sales to sales to Chinese customers, as you mentioned, we weren't hearing anything from our customers in the first quarter that indicated that was tariff related or preparatory for tariffs.
Steve Abramson: In April, as Steve mentioned in his remarks, we did see a heightened level of orders in the first few weeks of April, which certainly were in response to tariffs. And as you noted, we do think that's pull in from following months and the full year, we still have the same guidance of 640 to 700 million.
Scott Searle: Great, thank you.
Scott Searle: Thanks, Scott.
Operator: As a reminder, there's star one on your telephone keypad if you would like to ask a question.
Nam Kim: Our next question is from Nam Kim with RSA Research, please proceed. Thank you for taking my question. One more follow up on Blue. You know, for this commercial OLED panel from Energy Display News, do they use your Blue host material, or only Doppler material? I know you guys have been preparing for Blue host as well. So just curious on this.
Nam Kim: And then, you know, secondly, on this press release, it seems to relate to an IT device. The most IT devices today already use tandem structure. So in that sense, it's nothing new. However, how should I interpret their work on single stack structure? Any, you know, color you can share with me with the gray.
Steve Abramson: Thank Thanks, Dan. So on the host, we we've been selling Bluehost and and emitter to various customers.
Steve Abramson: We can't comment specifically on LG's recipe that they use for the panel they produced and announced today. And on the the product, you know, our customers have been evaluating our material for tandem as well as single layer. So it's really just dependent on the various development projects that each of them have within their organization.
Nam Kim: Understand. Thank you. Thanks.
Hadi Orabi: Our next question is from Hadi Orabi with TV Cowan. Please proceed. Hey guys, this is Hadi for Krish.
Hadi Orabi: Just a clarification, I know this question was asked several times on this call, like just Do you think, like, from a technical perspective, that blue materials can now be used in smartphones, for example? I guess I just want to understand, like, how important the LG announcement is to the mass adoption for blue phosphorus. Sure.
Steve Abramson: Eddie, the release today from LG Display did reference use in smartphones as well as IT, but I think the key point being across all of our customers, we believe there's applicability for blue in all applications, certainly smartphones and IT and TVs as well. So we believe ultimately there's interest in it because of the power and energy efficiency benefits that phosphorescent material brings to the solution. We believe and understand from our customers that there's interest in multiple applications.
Hadi Orabi: Got it.
Steve Abramson: And do you think you guys cleared most of the milestones for that mass adoption? We're very pleased with the progress that we're making and are working closely with our customers to ensure their success and ours.
Hadi Orabi: All right, guys, just a follow up. I think one of the major smartphone AMs, there were some news that they might use foldable phones.
Hadi Orabi: Would you remind us, what's the content difference between foldable phones and just regular smartphones?
Steve Abramson: That's it for me. Thank you. Yeah, so on the foldables, it's really the way of thinking about it is square area. So, you know, all things being equal, assuming it's a single stack, like most smartphones are made today, you would really just take the square area of, you know, any application in market today and determine the square area of the foldable to determine the incremental material opportunity of progress.
Martin Yang: Our next question is from Martin Yang with Oppenheimer and Company. Please proceed. Hi, thank you for taking my question.
Martin Yang: The first question is regarding things to look forward to before we see product shipping with Europe Blue. Can you point to any other milestones, either by you or by your customers, before we see actual product shipping? So thanks, thanks for the question, Martin. I think, you know, from this point forward, it's really going to be up to our customers to really communicate, you know, a lot of the progress that they're making, as well as, you know, how their interactions are going with OEMs to introduce it into a product. We continue on our side to do work to develop new materials, new blue materials that increase their performance characteristics, just like we do on the red and green side of our business, where we're continually inventing new materials.
Steve Abramson: But we're very pleased with the progress we've made to date.
Steve Abramson: Happy to see the announcement today by LG Display. But, you know, much of the communication from this point forward is probably going to come from the customers as they make progress in their efforts. Thanks, Brian. And then, um, can you confirm that with today's announcement? And with LG's panel, there will be no other technical hurdles to clear for that LG product. to be in a commercial device.
Steve Abramson: So that's really a question more for LG than for us, since it's, you know, their product to bring to market and bring to the OEM.
Steve Abramson: The last question for me is on overall... communication strategy regarding other potential announcement by customers. So should we expect similar? manner where the customers will be the ones leading the press release or announcing potential breakthroughs or innovation with your brew material? Yeah, so the today's release was LG displays release, you know, if our other customers choose to release information, you know, that's fine with us. But we're not the ones driving the strategy here on the communication.
Martin Yang: got it. Thank you.
Martin Yang: That's it for me.
Operator: Thanks, Barton. As a reminder, it is star one on your telephone keypad if you would like to ask a question.
Jim Ricchiuti: Our next question is a follow-up from Jim Ricchuti with Needham & Company. Please go ahead. Fred, did you quantify the level of orders that you saw that may have been related to tariffs. I'm just trying to get a sense of how impactful that might be in terms of potentially pulling from the back half of the year into the June quarter. We did not quantify the amount of orders that we saw in April, but it certainly was a heightened level compared to what we typically see in any given month. We also need to see exactly how May-June plays out, but the full year we still think is within that $640,000 to $700,000 range based on everything we're hearing at this point.
Jim Ricchiuti: And then I don't recall I may have missed it. Did you say what the blue development revenue was in the quarter? Yeah, great question.
Brian Millard: The blue development revenues in Q1 were $1.1 million, approximately, and that's both host and emitter sales to our customers.
Brian Millard: And then one final question for me is just just on OPEX. What are you anticipating OPEX relative to the last year for the full year? We're still projecting OPEX is going to be fairly, yeah, exactly. It's going to be flat compared to 2024. We did see, you know, a lower level in Q1 due to a number of factors, but the full year we'll still be leaving is relatively flat compared to last year.
Brian Millard: And I guess that's where I may be just getting a little confused. I thought initially, you were anticipating OPEX to be to be up in 2025, but basically had been staying flat. Yeah, we've been expecting SG&A to be, you know, slightly up and R&D to be pretty flat and in aggregate, you know, it to be relatively flat as well. So based on what we know right now, we're expecting total OPEX to be flat.
Jim Ricchiuti: Okay, great, thank you. Thanks, Jim.
Scott Searle: Our next question is from Scott Searle with Roth Capital Partners. Please proceed.
Scott Searle: And just a quick question on Tandem, you know, given the announcement from LG today, you know, we started to see some of the design activity from an Apple standpoint in terms of their tablets. Is there more of a shift from a market perspective towards Tandem architectures? Or is it still just kind of one-offs here or there? I'm just trying to get my hands around if there's any sort of a bigger trend going on here.
Steve Abramson: Thanks. Yeah, good question, Scott. Tandem has, you know, a number of benefits that it's, you know, been used in primarily IT applications to date. And the benefits being, you know, really that by having two layers of emissive material, you can have greater lifetime. And, you know, a number of the OEMs are after that for products that are on, you know, all day long, especially have a lot of white pixels that are on all day long. And so that's why Tandem has been used in a number of IT products. So there were a few last year that were announced that had Tandem structures.
Steve Abramson: But we think that even in the IT market, there's going to continue to be, you know, a mix of Tandem and single layer based on what we know at this point. In smartphones, there's been, you know, a very limited number of Tandem smartphones, but the vast, vast, vast majority of smartphones are single layer. And we expect that to continue to be the Great.
Steve Abramson: Thank you. Thanks, Scott. Thank you.
Operator: This concludes our question and answer session.
Brian Millard: I would like to turn the call back over to Brian Millard for any additional or closing remarks. Thank you for your time today. We appreciate your interest and support. Thank you.
Operator: This concludes today's conference call.
Operator: You may now disconnect.