11.06.23
Universal Display reported financial results for the third quarter ended September 30, 2023.
“As we approach the end of 2023, our performance for the year remains on course. Looking ahead, we believe that multiple market verticals are driving the OLED industry’s long-term growth path,” said Brian Millard, VP and CFO of Universal Display Corporation.
“A significant shift in the world of technology is occurring with the introduction of conformable, foldable and rollable consumer electronics, and OLEDs are fueling this form factor revolution,” added Millard. “In addition to the expected commencement of a new OLED IT adoption cycle in 2024, we are also seeing the emergence of OLEDs in the automotive market, especially with electric vehicles. As OLED activity continues to expand across the consumer display and lighting landscapes, we remain steadfast in our commitment to advancing our robust OLED materials and technology leadership.”
Financial Highlights for the Third Quarter of 2023
Total revenue in the third quarter of 2023 was $141.1 million as compared to $160.6 million in the third quarter of 2022.
Revenue from material sales was $92.5 million in the third quarter of 2023 as compared to $84.2 million in the third quarter of 2022. This increase was primarily due to greater sales volumes of our emitter material as well as improved product mix weighted towards increased demand for our new generation of emitter products.
Revenue from royalty and license fees was $45.9 million in the third quarter of 2023 as compared to $71.5 million in the third quarter of 2022. The decrease in royalty and license fees was primarily the result of changes in customer mix, a decrease in the cumulative catch-up adjustments between periods, as well as higher estimated future demand for several of our customers over the remaining lives of their contracts.
Cost of material sales was $31.6 million in the third quarter of 2023 as compared to $34.1 million in the third quarter of 2022. This decrease was primarily due to a reduction in contract manufacturing support costs, a reduction in the underutilization charges of the manufacturing facility in Shannon, Ireland and changes in product mix, offset by an increase in the level of material sales and inventory reserve.
Total gross margin was 76% in the third quarter of 2023 as compared to 77% in the third quarter of 2022.
Operating income was $48.4 million in the third quarter of 2023 as compared to $68.5 million in the third quarter of 2022.
Financial Highlights for the First Nine Months of 2023
Total revenue in the first nine months of 2023 was $418.1 million as compared to $447.6 million in the first nine months of 2022.
Revenue from material sales was $239.8 million in the first nine months of 2023 as compared to $242.7 million in the first nine months of 2022. The decline in material sales was primarily due to reduced demand for emitter material during the first quarter of 2023, partially offset by the introduction of blue emitter and host sales.
Revenue from royalty and license fees was $165.5 million in the first nine months of 2023 as compared to $191.5 million in the first nine months of 2022. The decrease in royalty and license fees was primarily the result of higher estimated future demand for several of our customers over the remaining lives of their contracts.
Total gross margin was 76% in the first nine months of 2023 as compared to 78% in the first nine months of 2022. Increased Shannon facility costs of $6.1 million and the inventory provision of $6.6 million in 2023 contributed to the 2% decrease in total gross margin between periods.
Operating income was $152.4 million in the first nine months of 2023 as compared to $184.0 million in the first nine months of 2022.
Net income was $141.0 million or $2.95 per diluted share in the first nine months of 2023 compared to $144.9 million or $3.04 per diluted share in the first nine months of 2022.
“As we approach the end of 2023, our performance for the year remains on course. Looking ahead, we believe that multiple market verticals are driving the OLED industry’s long-term growth path,” said Brian Millard, VP and CFO of Universal Display Corporation.
“A significant shift in the world of technology is occurring with the introduction of conformable, foldable and rollable consumer electronics, and OLEDs are fueling this form factor revolution,” added Millard. “In addition to the expected commencement of a new OLED IT adoption cycle in 2024, we are also seeing the emergence of OLEDs in the automotive market, especially with electric vehicles. As OLED activity continues to expand across the consumer display and lighting landscapes, we remain steadfast in our commitment to advancing our robust OLED materials and technology leadership.”
Financial Highlights for the Third Quarter of 2023
Total revenue in the third quarter of 2023 was $141.1 million as compared to $160.6 million in the third quarter of 2022.
Revenue from material sales was $92.5 million in the third quarter of 2023 as compared to $84.2 million in the third quarter of 2022. This increase was primarily due to greater sales volumes of our emitter material as well as improved product mix weighted towards increased demand for our new generation of emitter products.
Revenue from royalty and license fees was $45.9 million in the third quarter of 2023 as compared to $71.5 million in the third quarter of 2022. The decrease in royalty and license fees was primarily the result of changes in customer mix, a decrease in the cumulative catch-up adjustments between periods, as well as higher estimated future demand for several of our customers over the remaining lives of their contracts.
Cost of material sales was $31.6 million in the third quarter of 2023 as compared to $34.1 million in the third quarter of 2022. This decrease was primarily due to a reduction in contract manufacturing support costs, a reduction in the underutilization charges of the manufacturing facility in Shannon, Ireland and changes in product mix, offset by an increase in the level of material sales and inventory reserve.
Total gross margin was 76% in the third quarter of 2023 as compared to 77% in the third quarter of 2022.
Operating income was $48.4 million in the third quarter of 2023 as compared to $68.5 million in the third quarter of 2022.
Financial Highlights for the First Nine Months of 2023
Total revenue in the first nine months of 2023 was $418.1 million as compared to $447.6 million in the first nine months of 2022.
Revenue from material sales was $239.8 million in the first nine months of 2023 as compared to $242.7 million in the first nine months of 2022. The decline in material sales was primarily due to reduced demand for emitter material during the first quarter of 2023, partially offset by the introduction of blue emitter and host sales.
Revenue from royalty and license fees was $165.5 million in the first nine months of 2023 as compared to $191.5 million in the first nine months of 2022. The decrease in royalty and license fees was primarily the result of higher estimated future demand for several of our customers over the remaining lives of their contracts.
Total gross margin was 76% in the first nine months of 2023 as compared to 78% in the first nine months of 2022. Increased Shannon facility costs of $6.1 million and the inventory provision of $6.6 million in 2023 contributed to the 2% decrease in total gross margin between periods.
Operating income was $152.4 million in the first nine months of 2023 as compared to $184.0 million in the first nine months of 2022.
Net income was $141.0 million or $2.95 per diluted share in the first nine months of 2023 compared to $144.9 million or $3.04 per diluted share in the first nine months of 2022.