Universal Display Corp. \Pa\: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 30 July 2026: press release. Guidance figures: 1 lowered, 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Second-quarter revenue and earnings declined: Total revenue was $152.2 million against $171.8 million a year earlier. Net income was $49.4 million, or $1.06 per diluted share, against $67.3 million, or $1.41. Source
• Material sales fell on volume and mix: Material sales were $66.2 million against $88.7 million. Management cited lower unit volume, customer mix, and a $6.9 million unfavorable catch-up adjustment on material sales. Source
• Royalty income rose on catch-up adjustment: Royalty and license fees were $81.2 million against $75.7 million. The increase reflects a $16.3 million favorable catch-up adjustment, partly offset by lower unit volume and customer mix. Source
• Material gross margin fell to 50%: Gross margin on material sales was $32.8 million, or 50% of material sales, against $54.5 million and 61% a year earlier. Source
• Consumer electronics faces near-term challenges: Management said portions of the consumer electronics market face near-term challenges. Source
• Investment continues in new capacity: Management cited continued investment across the OLED ecosystem, including new Gen 6 and Gen 8.6 capacity and expanding adoption in IT, automotive and emerging form factors. Source
• Full-year revenue now at lower end: Management now expects 2026 revenue around the lower end of the $630 million to $670 million range. Source
• Operating cash flow rose in first half: Net cash provided by operating activities was $133.9 million for the first half, against $82.5 million in the prior-year first half. Source
• Second-quarter buybacks totaled $48.2 million: The company repurchased 531,211 shares for $48.2 million in the second quarter, and 1,163,884 shares for $114.2 million in the first half. Source

“We see OLED's next growth phase beginning to take shape,”

Brian Millard, Chief Financial Officer of Universal Display

Guidance

What changed from last quarter

• Guidance lowered: 2026 revenue is now expected around the lower end of the prior $630 million to $670 million range, which was itself reduced in April from $650 million to $700 million. Source
• Ended: The $100 million share repurchase program that began in April 2025 was completed during the second quarter. Source

Results and growth drivers

• Second-quarter revenue and earnings declined: Total revenue was $152.2 million against $171.8 million a year earlier. Net income was $49.4 million, or $1.06 per diluted share, against $67.3 million, or $1.41. Source
• Operating income declined year over year: Operating income was $53.6 million against $68.5 million. The effective income tax rate was 19.0%, against 19.8% in the second quarter of 2025. Source
• First-half revenue and net income lower: First-half total revenue was $294.4 million against $338.1 million. Net income was $85.3 million, or $1.82 per diluted share, against $131.7 million, or $2.76. Source

Revenue lines and drivers

• Material sales fell on volume and mix: Material sales were $66.2 million against $88.7 million. Management cited lower unit volume, customer mix, and a $6.9 million unfavorable catch-up adjustment on material sales. Source
• Royalty income rose on catch-up adjustment: Royalty and license fees were $81.2 million against $75.7 million. The increase reflects a $16.3 million favorable catch-up adjustment, partly offset by lower unit volume and customer mix. Source
• Contract research services declined: Contract research services were $4.8 million in the second quarter, against $7.5 million a year earlier. Source
• First-half material sales lower: Material sales for the first half were $149.9 million, against $174.8 million in the prior-year first half. Source

“While portions of the consumer electronics market face near-term challenges, we continue to see significant investment across the OLED ecosystem, including new Gen 6 and Gen 8.6 capacity”

Brian Millard, Chief Financial Officer of Universal Display

Costs, margins and pricing

• Total gross margin eased to 76%: Total gross margin was 76%, against 77% a year earlier. Total cost of sales was $36.8 million, against $39.2 million. Source
• Material cost of sales slightly lower: Cost of material sales was $33.4 million, against $34.2 million in the second quarter of 2025. Source
• Material gross margin fell to 50%: Gross margin on material sales was $32.8 million, or 50% of material sales, against $54.5 million and 61% a year earlier. Source

Demand and market conditions

• Consumer electronics faces near-term challenges: Management said portions of the consumer electronics market face near-term challenges. Source
• Investment continues in new capacity: Management cited continued investment across the OLED ecosystem, including new Gen 6 and Gen 8.6 capacity and expanding adoption in IT, automotive and emerging form factors. Source
• Royalty price per gram rose: The favorable royalty catch-up mainly reflected a higher average royalty and license fees price per gram, tied to lower anticipated demand from certain customers. Source

“Through our leadership in OLED materials and innovation, we remain focused on helping customers unlock the next generation of OLED performance and adoption.”

Brian Millard, Chief Financial Officer of Universal Display

2026 revenue guidance

• Full-year revenue now at lower end: Management now expects 2026 revenue around the lower end of the $630 million to $670 million range. Source
• Range was cut in April: The April release lowered the 2026 revenue range to $630 million to $670 million from $650 million to $700 million.
• April caveat on guidance variables: In April, management said many variables could have a material impact on results and caveated its guidance accordingly.

Cash flow and balance sheet

• Operating cash flow rose in first half: Net cash provided by operating activities was $133.9 million for the first half, against $82.5 million in the prior-year first half. Source
• Cash and short-term investments declined: Cash and cash equivalents were $120.6 million at June 30, against $138.4 million at December 31. Short-term investments were $350.7 million, against $464.0 million. Source
• Current deferred revenue rose: Current deferred revenue was $40.8 million at June 30, against $21.0 million at December 31, 2025. Source
• Acquired technology rose with purchase: The cash flow statement shows a $40.0 million purchase of intangibles in the first half. Acquired technology, net, was $96.2 million at June 30, against $56.8 million at December 31. Source
• Property purchases lower than last year: Purchases of property and equipment were $13.2 million for the first half, against $27.5 million in the prior-year first half. Source

Share repurchases and dividends

• Second-quarter buybacks totaled $48.2 million: The company repurchased 531,211 shares for $48.2 million in the second quarter, and 1,163,884 shares for $114.2 million in the first half. Source
• $100 million program completed: Second-quarter repurchases included completing the $100 million program that began in April 2025, alongside purchases under the additional $400 million program. Source
• Cash spent on buybacks in first half: Repurchases of common stock, inclusive of excise tax, were $115.2 million in the first half. The release does not give a prior-year figure for this line. Source
• Dividends declared rose to $1.00: Cash dividends declared per common share were $0.50 in the second quarter, against $0.45, and $1.00 for the first half, against $0.90. Source
• Shares outstanding fell in first half: Shares outstanding were 46,231,008 at June 30, against 47,259,748 at December 31, 2025. Treasury stock rose to $190.5 million from $75.4 million. Source

Coming up, as management said on 30 July 2026

• Third-quarter dividend payable September 30: The third quarter dividend is payable September 30, 2026, to holders of record at the close of business on September 16, 2026. Source

Figures management reported

Risks management discussed

• Demand: Management said portions of the consumer electronics market face near-term challenges. Source
• Financial: Management said the material catch-up adjustment reflects forecast product mix changes over remaining contract lives. Source

Earlier plans management reported on

• Met: Management stated the $100 million program that began in April 2025 was completed during the second quarter. Source
• Not stated: In April, management expected later-2026 customer mix to be more favorable for royalty and license fees than in the first quarter. The July release does not state an outcome.
• Not stated: The April release expected this capacity to come online during 2026. The July release refers to new Gen 6 and Gen 8.6 capacity without stating timing.

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.