Universal Display Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for Q3 2026 was $160.4 million, up from $139.6 million in Q3 2025.
• Material sales revenue was $79.7 million in Q3 2026 compared to $82.6 million in Q3 2025, driven by higher unit volume but offset by customer mix changes and a $4.8 million unfavorable cumulative catch-up adjustment.
• Royalty and license fees revenue was $75.5 million in Q3 2026 compared to $53.3 million in Q3 2025, driven by higher unit volume, customer mix changes, and a $9.5 million out-of-period adjustment reducing prior-year revenue.
• Cost of material sales was $39.6 million in Q3 2026 compared to $32.8 million in Q3 2025.
• Total gross margin was 73% in Q3 2026 compared to 75% in Q3 2025.
• Operating income was $53.7 million in Q3 2026 compared to $43.1 million in Q3 2025.
• Other income, net was $37.3 million in Q3 2026 compared to $952,000 in Q3 2025, primarily due to a $28.9 million gain on a UDC Ventures investment and a $7.2 million foreign currency gain.
• Net income was $78.9 million ($1.72 per diluted share) in Q3 2026 compared to $44.0 million ($0.92 per diluted share) in Q3 2025.
• Non-GAAP adjusted net income was $56.2 million ($1.23 per diluted share) in Q3 2026.
• For the first nine months of 2026, total revenue was $454.8 million compared to $477.7 million in the same period of 2025.
• First nine months 2026 net income was $164.3 million ($3.52 per diluted share) compared to $175.7 million ($3.68 per diluted share) in 2025.
• First nine months 2026 Non-GAAP adjusted net income was $141.5 million ($3.04 per diluted share).
• Deferred revenue increased to $35.0 million at September 30, 2026, from $21.0 million at December 31, 2025.
• Cash and cash equivalents were $93.4 million at September 30, 2026, down from $138.4 million at December 31, 2025.
• Net cash provided by operating activities for the first nine months of 2026 was $234.1 million compared to $179.7 million in 2025.

Guidance and Future Outlook:

• The Company expects 2026 revenue to be around the lower end of the previous guidance range of $630 million to $670 million.
• Management noted continued momentum in the OLED ecosystem, including investments in new OLED capacity and expansion of foldable and IT OLED products.
• Industry trends are shifting toward higher performance, greater power efficiency, and enhanced user experiences, which align with the Company's innovation strategy.

Business Segments and Product Lines:

• The Company introduced OLEDX during the quarter.
• The Company advanced its phosphorescent blue program.
• The Company expanded AI-enabled materials discovery capabilities.
• A key commercialization milestone was achieved with the launch of UVJC's first equipment platform.

Market and Competitive Landscape:

• The Company is a global leader in energy-efficient OLED technologies and materials.
• The Company owns, exclusively licenses, or has the sole right to sublicense more than 7,000 patents issued and pending worldwide.
• The Company's proprietary UniversalPHOLED® phosphorescent OLED technology is recognized as a key ingredient for energy-efficient displays and solid-state lighting.

Risks and Challenges:

• The press release notes that actual results may differ materially from forward-looking statements due to risks and uncertainties detailed in the Company's Form 10-K and Form 10-Q, specifically the "Risk Factors" section.
• Material sales revenue was impacted by changes in customer mix and unfavorable cumulative catch-up adjustments related to product mix changes forecasted over contract lives.

Management Commentary and Tone:

• Brian Millard, Chief Financial Officer, stated that the quarter saw important advancements across the innovation portfolio and continued momentum across the OLED ecosystem.
• Management expressed confidence in long-term opportunities for their technologies and the value they can create for customers and shareholders.

Other Key Points:

• The Company announced a fourth-quarter 2026 cash dividend of $0.50 per share, payable on December 31, 2026, to shareholders of record as of December 17, 2026.
• The Company repurchased 963,333 shares for $78.8 million during the three months ended September 30, 2026.
• The Company repurchased 2,127,217 shares for $192.9 million during the nine months ended September 30, 2026.
• Share repurchases included the completion of a $100 million program commenced in April 2025 and purchases under an additional $400 million program authorized in April 2026.
• The Company completed a $28.9 million gain related to a UDC Ventures investment, which was excluded from Non-GAAP adjusted net income.
• A $7.2 million foreign currency gain was realized on a tax receivable denominated in Korean won.