Universal Display reported revenues of US$64.4 million, compared to revenues of US$58.1 million for the same quarter of 2015, an increase of 10.8%.
Material sales were US$22.3 million, down 8.3% compared to the 2nd quarter of 2015, primarily due to a US$2.0 million decline in host material sales.
Royalty and license fees were US$42.0 million, up from US$33.7 million in the 2nd quarter of 2015. The Company recognised US$37.5 million in Samsung Display licensing revenue in the 2nd quarter of 2016, up from US$30.0 million in the same quarter of 2015.
The Company's balance sheet remained strong, with cash and cash equivalents and investments of US$332.0 million as of June 30, 2016.
During the 2nd quarter, the Company added US$96.0 million in intangible assets in the form of intellectual property purchases and certain other assets from BASF, increasing the portfolio to more than 4,100 issued and pending patents worldwide. During the 2nd quarter, the Company generated US$36.2 million in operating cash flow.
While the OLED industry is still at a stage where many variables can have a material impact on its growth, based upon the most recent and best information on hand, the Company believes it is prudent to revise its 2016 revenues guidance. The Company now expects 2016 revenues to be in the range of US$190 million to US$200 million.
Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display, said, "Our second quarter 2016 revenues and net income increased year-over-year, and we maintained our strong margin profile. We are confident that the underlying growth fundamentals of our long-term outlook remain robust, but near-term, we expect our revenue growth will be delayed by about six months,” said Sidney D. Rosenblatt, Executive Vice President and Chief Financial Officer of Universal Display."
Sidney added, "We expect strong revenue growth in 2017. At that time, new OLED production from the multi-year capital expenditure cycle is slated to start contributing to our revenues. Ahead of this wave of high-volume capacity, we have been working to expand and broaden our team and core competencies to advance our strategic initiatives and increase our competitive edge. We expect these initiatives, along with new OLED capacity, coupled with our pipeline of new materials, new technologies and new agreements, to bolster our long-term growth plan."