Universal Display Lowers Revenue Outlook as Material Sales Decline
Net income fell to $49.4 million in the second quarter as material sales revenue dropped to $66.2 million.
Universal Display Corp (OLED), the developer of organic light-emitting diode technology, reported a decline in second-quarter revenue. The company shifted its full-year outlook toward the lower end of its previous guidance range following a drop in material sales volume.
Total revenue for the second quarter was $152.2 million, down from $171.8 million in the same period last year. This contributed to a first-half revenue total of $294.4 million, compared with $338.1 million during the first half of 2024.
Material sales revenue fell to $66.2 million from $88.7 million in the prior-year quarter. The decline was due to lower unit material volume, changes in customer mix, and a $6.9 million unfavorable cumulative catch-up adjustment.
Royalty and license fees revenue rose to $81.2 million from $75.7 million in the second quarter of 2024. The increase was primarily driven by a $16.3 million favorable cumulative catch-up adjustment that reflected a higher average price per gram.
Profitability metrics compressed during the period. Total gross margin fell to 76% from 77% a year earlier. Gross margin as a percentage of material sales dropped to 50% from 61% in the second quarter of 2024. Operating income declined to $53.6 million from $68.5 million.
Net income decreased to $49.4 million, or $1.06 a diluted share, compared to $67.3 million, or $1.41 a diluted share, in the prior-year period.
Universal Display now expects 2024 revenue to be around the lower end of its $630 million to $670 million range. The company had previously provided the full range during the first quarter.
The company repurchased 531,211 shares for $48.2 million in the second quarter. This activity followed the completion of a $100 million program in the first quarter and the initiation of a new $400 million authorization established in April 2024.