Reported strong Q1 2024 results with $165 million in revenue, $63 million in operating profit, and $57 million in net income, equating to $1.19 per diluted share.
Raised the lower end of 2024 revenue guidance to a range of $635 million to $675 million.
First quarter revenue increased 27% year-over-year from $130 million in Q1 2023.
Total material sales were $93 million in Q1, with green emitter sales at $71 million and red emitter sales at $21 million.
Royalty and license fees for Q1 were $68 million, up from $55 million in the previous year.
Operating income for Q1 was $63 million, leading to an operating margin of 38%.
Net income for Q1 2024 grew over 40% year-over-year to $57 million.
Announced a $0.40 quarterly dividend to be paid on June 28, 2024.
Market and Product Development
Significant growth in the OLED IT market, with new product introductions across several major brands.
Forecasted growth in OLED tablets and notebooks, with total mobile OLED PC units expected to rise significantly by 2028.
New OLED capacity coming online, including Samsung Display and BOE’s new production lines, indicating a multiyear OLED CapEx growth cycle.
OLED smartphone units expected to increase by 11% year-over-year in 2024.
Foldable OLED shipments forecasted to grow 25% year-over-year in 2024.
OLED TV shipments expected to increase by more than 30% year-over-year.
Entry into the aviation segment with Panasonic Avionics’ 4K OLED in-flight entertainment monitors.
Innovation and Research & Development
Continued focus on innovation as a key driver for leadership and market expansion.
Ongoing development of next-generation OLED materials, including progress on a commercial phosphorescent blue emissive system.
Advancements in organic vapor jet printing (OVJP) technology for manufacturing OLED TVs.
Corporate and Financial Strategy
Q1 cost of sales was $37 million, resulting in total gross margins of 78%.
Operating expenses, excluding cost of sales, were $65 million due to increased employee expenses, amortization costs, and a one-time royalty and license expense.
Effective tax rate for Q1 2024 was 19%, with an expectation of approximately 20% for the full year.
Ended the quarter with approximately $838 million in cash, cash equivalents, and investments.
Question and Answer
Blue Revenue Potential and Adoption
Question
Can blue OLED technology represent a significant revenue opportunity similar to green, and what is the expected adoption curve and ramp-up period?
Answer
The quantity of blue material in a display is similar to green, indicating a substantial revenue potential.
However, the disclosed green revenue includes yellow-green emitters, and blue pricing with customers is not yet finalized.
The adoption of blue OLED technology is expected to be gradual and dependent on customer decisions and timelines.
Blue Pricing and Customer Feedback
Question
How will blue OLED pricing be determined, and what has been the customer feedback regarding its benefits, such as lower power consumption?
Answer
Blue OLED pricing will be based on the value proposition of the product, including its energy efficiency benefits.
Phosphorescent blue OLED technology is more energy-efficient, with an estimated 25% increase in display energy efficiency by adding blue material.
Customer feedback has been positive, leading to continued progress in blue material development and expectations of increased development sales in 2024 compared to the previous year.
Seasonality and Revenue Outlook
Question
What is the expected seasonality for the current year, and how does the strong Q1 performance impact the full-year guidance?
Answer
Historically, the company has had a second-half orientation to revenues, but this year is expected to be more balanced between the first and second half.
The Q1 performance, driven by factors such as the iPad launch, does not necessarily imply no growth for the rest of the year, but the company is optimistic about its full-year guidance.
Customer Contribution and Product Mix
Question
Can you provide insights into the higher revenue contribution from the largest customer in Q1, including any potential factors such as new capacity, yield issues, or tandem structure effects?
Answer
The company cannot comment on specific customer production details but acknowledges increased material sales to the largest customer in Q1, which contributed to the revenue growth.
Some new products, particularly in the IT sector, feature tandem structures, which may have influenced demand.
The company refrains from providing further details on the specific impact of tandem structures on individual customers.
R&D Expense Increase
Question
The R&D expenses have increased sequentially and year-over-year. Could you elaborate on the reasons behind this increase?
Answer
The increase in R&D expenses is attributed to ongoing investments in inventing new materials, reflecting the company’s commitment to innovation.
Additionally, higher employee costs, both in R&D and SG&A, contributed to the overall increase.
The rise in development expenses with outside parties also played a role in the higher R&D costs.
