Universal Display reported their financial results for Q2 2015. UDC generated $58.1 in revenues (down from $64.1 million in Q2 2014) and saw a net loss of $11.8 million (due to a $33 million green host inventory write-down).
Material sales were $24.3 million (down 32% from Q2 2014) and royalties and license fees were $33.7 million (up from $28.1 million in Q2 2014) - out of which SDC paid $30 million. Excluding the inventory write-down, operating income was $28.5 million and the company generated $28.2 million in the quarter and now has $356.2 million in cash and equivalents.
These are disappointing results, which are mostly due to the continue reduction of green host sales. While the company still hopes to supply green host to clients in the future, currently they do not manage to do so. They develop better hosts, but it seems that they gave up on selling the current generation of hosts.
Looking at the positive side, the company is more confident than ever regarding LG's OLED TV ramp. LG's royalties reached 18% of the total revenues in the quarter (about $10.5 million). Interestingly, currently LG is only using a red PHOLED in their flexible OLEDs. It's highly likely that LG will adopt a green PHOLED in the future, which will be a good boost for UDC.
UDC reiterated their guidance for 2015 - revenues are expected to be about $200 million with a possible 5% downside and 15% upside potential.
Disclosure: the author of this post holds some shares in Universal Display