Universal Display Corporation

for replay purposes, I would now like to turn the call over to Darius Liu, Senior Director of Investor Relations. Please proceed.

Thank you, and good afternoon, everyone. Welcome to Universal Display's second quarter earnings conference call. 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 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. This call contains time-sensitive information that is accurate only as of the date of the live webcast of this call, August 1, 2024. 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 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 disclaims any obligation to update any of these statements. I would like to turn the call over to Steve Abramson.

Thanks, Darius, and welcome to everyone on today's call. Our second quarter results were solid. Revenue was $159 million, operating profit was $56 million, and net income was $52 million, or $1.10 per diluted share. The trajectory of OLEDs continues to be robust, fueled by broadening adoption across the consumer landscape. With a strengthening growth trajectory, we are raising the low end of our annual guidance range. We now believe that our 2024 revenues will be in the range of $645 million to $675 million. During the second quarter, the OLED IT market picked up speed as leading OEMs embarked on their OLED IT journey with the introduction of their first OLED tablets. This includes Apple with the May launch of its iPad Pro series and Microsoft with its new Surface Pro. Other global OEMs also recently launched new OLED PC products, including Samsung's Galaxy Book 4 Edge laptop, Dell's first tandem laptop, the XPS 13, Honor's MagicPad 2 tablet and MagicBook laptop, and Wacom's moving tablets. According to Omdia, OLED tablet panel shipments are expected to triple year-over-year to 14.8 million units, and OLED notebook panel shipments are expected to almost double year-over-year to 8 million units in 2024. With a rising demand for AI PCs, Omdia believes that demand for high-end notebook PCs will also rise. And by 2028, OLED mobile PC shipments are forecast to jump by approximately 600%. 48.6 million units. For OLED monitors, gaming continues to drive its popularity. According to Omdia, top-tier monitor brands such as Dell, HP, Lenovo, Samsung, LG Electronics, AOC Philips, Asus, Acer, MSI, and Gigabyte are incorporating more and more OLED displays into their product lineups for 2024. The SEC market research forecasts that OLED monitors will increase 80% year over year, and longer term, Omnia forecasts that units will more than triple by 2028 to 3.6 million. As the bustling OLED IT pipeline continues to expand, we believe a new multi-year OLED capex cycle has begun to support this growth. Last year, Samsung and BLE made game-changing Gen 8.6 OLED IT investment announced. In late May, Visionox announced plans to invest approximately $7.6 billion to build a new Gen 8.6 plant. This new greenfield facility is slated for OLED IT and automotive production with a capacity input of 32,000 plates per month. We continue to believe that this is just the start of new OLED fab and capacity expansion investments and expect more announcements in the future. At SID Display Week, The broadening form factor landscape was on full display with a plethora of new foldables, including tri-folding displays, as well as slideable and rollable prototypes and products that our customers boost. According to DSCC, just in the first quarter of this year, there were panels procured for 24 different foldable smartphone models. TrendForce forecasts that by 2026, foldable phone penetration will climb to 4.8% of the smartphone market. Speaking of smartphones, according to Omdia, OLED smartphone shipments surpassed LCD shipments for the first time in the first quarter of 2024 by capturing 51% of the market. According to the market research firm, OLED smartphone display shipments increased to 182 million units in the first quarter of 2024, up 39% year over year, while LCD shipments decreased to 172 million units down 10% year-over-year. OMDIA's short-term forecast indicates that OLED will account for 53% of smartphone display shipments in the second quarter and expand to 56% in the third quarter and expects OLED to lead the smartphone display market in shipments from 2024 onwards. In large form factors, Oled TVs continue to win accolades and rave reviews in multiple countries for its bright, beautiful, brilliant picture quality with 180-degree viewing angles, high contrast ratio, and fast refresh rates. According to Omdia, Oled TV panel shipments are forecasted to reach 7.1 million units this year, up 33% year over year. OLED TV sales growth is expected to gain traction and reach nearly 10 million units by 2030. On the R&D front, our outstanding team of scientists, engineers, and technicians are dedicated to exploring new ideas, challenging the status quo, and developing solutions for our customers' continuously evolving needs. One of our trailblazing solutions is OBJP. At May's SID Display Week, we showcased another major milestone with a printed red, green, and blue full-led device with 160 pixels per inch, which is equivalent to 8K resolution for a 55-inch TV. We continue to believe that OVJP will enable high-volume, cost-effective manufacturing of side-by-side RGB OLED TV panels. Regarding our phosphorescent materials portfolio, we are continuously discovering, developing, and delivering next-generation reds, greens, yellows, and hosts to meet the ever-changing and ever-evolving customer specifications. Regarding blue, we continue to make excellent progress with our ongoing development work for a commercial phosphorescent blue emissive system. Since the beginning of 2022, we've achieved significant advances in our phosphorescent blue development work, and we believe that we are nearing commercial entry specifications. However, we believe we need more time to further refine our phosphorescent blue emission materials, and that work is expected to extend beyond this year. We believe the additional time needed will be measured in months and not years. Even though our timeline is shifting, our confidence in delivering a commercial phosphorescent blue to the market and the tremendous promise it has for the oil industry has not wavered. Interest in our phosphorescent blue continues to increase, and we believe that the forthcoming expansion of our phosphorescent portfolio will unlock a vast array of opportunities for higher efficiency and higher performance across a broad range of OLED applications. The bottom line is, phosphorescent blue is coming. We just need some more time before commercial introduction. When it is adopted in an OLED device, we believe that the benefits will be significant for the industry, for consumers, and for us. On that note, let me turn the call over to Brian.