OLED's Q4 Earnings Beat Estimates, Revenues Rise Y/Y

Universal Display Corporation OLED reported relatively healthy fourth-quarter 2025 results, with adjusted earnings beating Zacks Consensus Estimate while the top line matched the same. The company reported a top-line expansion year over year, owing to higher material sales, royalty and license fees.

Growing OLED proliferation in multiple end markets, such as consumer electronics and automotive, is a major growth driver. A strong balance sheet and robust supply chain are positives. Management is undertaking several measures to improve operational and strategic infrastructure to bolster its leadership position in the industry.

Net Income of OLED

Net income in the fourth quarter was $66.3 million or $1.39 per share compared with $46.01 million or 96 cents per share in the year-ago quarter. Top-line growth supported the net income growth. The bottom line beat the Zacks Consensus Estimate by 11 cents.

In 2025, the company reported a net income of $242.1 million or $5.08 per share compared with $222.1 million or $4.65 per share in 2024.

Revenues of OLED

The company generated $173 million in revenues compared with $162.3 million in the year-ago quarter. Higher material sales, royalty and license fees boosted the top line. The top line matched the consensus estimate.

For 2025, the company reported revenues of $650.6 million compared to $647.7 million in 2024.

Material sales contributed $95.5 million to revenues compared with $93.3 million in the prior-year quarter. The net sales beat our estimate of $90.4 million. Revenues from green emitter sales rose to $74 million from $67 million in the year-ago quarter, whereas those from red emitter sales were $21 million compared to $25 million in the year-ago quarter.
Revenues from royalties and license fees were $72.6 million, up from $64.4 million in the year-ago quarter. The net sales missed our estimate of $73.1 million.

Revenues from Contract research services were $4.8 million compared with $4.6 million in the prior-year quarter. The segment’s revenues missed our estimate of $9 million.

Other Details of OLED

Quarterly gross profit was $131.6 million compared to $124.9 million in the prior-year quarter. The gross margin was 76%, down from 77% a year ago. Operating income was $67.2 million, and the margin was 39% compared with the year-ago quarter’s $52.5 million and 32%, respectively.

OLED’s Cash Flow & Liquidity

In 2025, Universal Display generated $210.8 million in cash from operating activities compared with $253.7 million in the year-ago period. As of Dec. 31, 2025, the company had $138.4 million in cash and cash equivalents and $56.5 million in retirement plan benefit liability compared to $98.9 million and $54.5 million respectively a year ago. 

OLED’s Guidance

For 2026, the company currently expects revenues in the range of $650-700 million. The gross margin is predicted at 74-76%.

Despite some uncertainties in the near term, associated with geopolitical volatilities, management remains optimistic about the company’s long-term growth potential. Growing OLED usage in IT applications encompassing tablets, laptops, monitors, automotive and various other consumer electronics applications, such as smartphones and TVs, will likely drive growth in the upcoming quarters.

Zacks Rank

Universal Display carries a Zacks Rank 3 (Hold) at present.

Stocks to Consider

Celestica Inc. CLS sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last reported quarter, it delivered an earnings surprise of 8.62%. With rising demand for AI and cloud infrastructure, Celestica is well-positioned to benefit. Its focus on higher-margin markets, diversified portfolio, and strong engineering capabilities support scalable production of complex electronic and data-center solutions. Its strong research and development capabilities enable it to produce high-volume electronics manufacturing across multiple industries.

Ericsson ERIC carries a Zacks Rank #2 (Buy) at present. It delivered an earnings surprise of 17.39% in the last reported quarter.

Ericsson is likely to gain from steady global 5G investments. Its competitive 5G portfolio and disciplined cost focus support network leadership, while expanding enterprise and private-network offerings create new growth opportunities. The company continues to execute its plan to become a leading mobile infrastructure provider. Ongoing innovation and partnerships should further strengthen its position in the wireless infrastructure market.

Ubiquiti Inc. UI currently carries a Zacks Rank #2. It delivered an earnings surprise of 38.08% in the last reported quarter.

It offers a broad portfolio of networking solutions for enterprises and service providers. Its efficient and flexible business model supports healthy margins and scalable expansion. The company continues to invest in research and development to launch innovative networking products and advanced technologies. Strong channel management and a wide global distributor network improve demand visibility and inventory control.

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This article originally published on Zacks Investment Research (zacks.com).

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