Universal Display Corporation

Good day, ladies and gentlemen, and welcome to Universal Display Corporation's fourth quarter and full year 2024 earnings conference call. My name is Sherry and I will be a conference moderator for today's call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require 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 Darius Liu, Senior Director of Investor Relations. Please proceed.

Thank you. Good afternoon, everyone. Welcome to Universal Display's fourth quarter earnings conference call. Joining me on the call today are Steve Abenson, President and Chief Executive Officer, and Brian Millard, Chief Financial Officer and Treasurer. 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, February 20th, 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 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. Now, I would like to turn the call over to Steve Abramson.

Thanks, Darius, and welcome to everyone on today's call. As we look back on 2024, we are pleased to report record revenues and record earnings. Revenue was $648 million, operating income was $239 million, and net income was $222 million, or $4.65 per diluted share. Brian will take you through the details momentarily. 2024 was a solid growth year for us. cultivated our global partnerships, which included new long-term multi-year agreements with VisionOx, strengthened our leadership position in the OLED ecosystem, and made significant advancements in our operational, strategic, and R&D roadmaps. Amid a dynamic market landscape, shifting consumer demands, and a rapidly evolving global economy, we continue to execute and embrace the opportunities that drive our innovation, growth, and industry-leading positions. Since the inception of our company 30 years ago, we have been at the forefront of the OLED industry. Innovation is the foundation of everything we do. It drives us to push the boundaries of what is possible and to continuously explore new and better ways to solve the challenges of today and tomorrow. Our steadfast commitment to innovate and forge new paths has enabled us to stay ahead of the curve and anticipate the needs of the growing OLED market. We repeatedly traverse the complex path from idea to lab, lab to fab, and fab to high-volume commercial production. Leveraging three decades of pioneering know-how and trade secrets, our team of scientists, engineers, and technicians are continuously inventing, developing, and delivering next-generation phosphorescent reds, greens, yellows, and hosts to meet the evolving needs of our customers, the display industry, and the consumer electronics market. Regarding blue, We believe we are closer than ever and that the commercialization of phosphorescent blue will represent a significant leap forward in OLED technology. We understand the excitement as well as the expectations surrounding it. I want to reassure you that we are on the right path and we are confident in our ability to deliver. The journey has been challenging, as all trailblazing breakthroughs are, and our teams continue to work tirelessly While not yet at the finish line, we are excited about the strides we are making and continue to believe that the additional time needed to introduce a commercial phosphorescent blue into the market will be measured in months and not years. Once commercialized, we believe that our phosphorescent blue can increase the energy efficiency of an oil display by up to 25%. As consumer products continue to evolve with advanced features such as connectivity and artificial intelligence, we believe that panel makers and OEMs can leverage the increased efficiency in various ways, such as adding more functionality and performance to a device without sacrificing battery life. Rostros and Blue is slated to be a game changer for the industry, for consumers, and for us. Looking to 2025 and beyond, we are excited about the opportunities ahead. OLEDs are continuing to proliferate across the consumer electronics landscape, from smartphones to IT and automotive to TVs and more. According to Omdia Research, OLED market growth is expected to rise substantially over the next five years. After reaching more than 50% of the smartphone market in 2024, OLED smartphone displays are expected to grow from 784 million units to 952 million units in 2029. OLED IT displays are expected to nearly quadruple, from 20.2 million units in 2024 to 77.6 million units in 2029. The OLED monitor market? though still in its early stages, already counts gamers among its earliest adopters due to OLED's fast response times, high refresh rates, and superior image quality. Units are forecasted to more than double, from 2 million units in 2024 to 5.1 million units in 2029. The automotive market holds immense potential as carmakers are starting to turn to OLEDs for both interior and exterior applications. driven by demand for enhanced aesthetics, functionality, and safety. The flexibility of OLEDs allows for curved, thin, and lightweight form factors. Additionally, with the shift toward EVs, the adoption of energy-efficient OLED panels aligns perfectly with EVs' low power consumption needs. All automotive displays are expected to approximately quadruple from 2.6 million units in 2024 to 10.6 million units in 2029. And don't forget the exterior, where OLEDs are making their way into automotive lighting, including taillights and turn signals. And on the large panel front, OLED TVs are forecasted to grow from 6.8 million units in 2024 to 7.9 million units in 2029. We believe that the continued proliferation of OLEDs, especially in the nascent medium-sized market, is driving a new multi-year capex cycle. We continue to estimate that year-end 2025 installed OLED capacity, as measured in square meters, will increase by approximately 10% over year-end 2023. These forecasts include initial equipment installs from Samsung's $3 billion investments, and the first phase of BOE's $9 billion investment for the respective new Gen 8.6 fabs. Looking beyond this year, additional investments in new oil capacity are expected with Phase 2 of BOE's Gen 8.6 fab, VisionOx's new $7.7 billion facility, and expected projects that are still in the works. As of today, approximately $20 billion has been committed to building new Gen 8.6 oil capacity. A new and exciting all-in-five investment cycle has begun, and we believe it will fuel the next leg of the growth for the industry and for us. Before I hand the call over to Brian, I would like to go over the next phase for OVJP technology. In December, we announced the appointment of global technology veteran Chandra Nair, the CEO of our new Singaporean subsidiary, Universal Vaporjet Corporation, which encompasses OVJP. While we continue to believe that OVJP could be a cutting-edge technology for large area display manufacturing, all investments are expected to center on the medium area IT market for the next few years. As a result, Chanjot and his team are exploring new market verticals where our dry vapor jet printing technology may be an enabling platform. On that note, let me turn the call over to Brian.