Good day, ladies and gentlemen, and welcome to Universal Display Corporation's second quarter 2026 earnings conference call. My name is Sherry, and I will be your conference moderator for today's call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference call over to Darice Liu, Senior Director of Investor Relations. Please proceed. Thank you. Good afternoon, everyone. Welcome to Universal Display's second quarter earnings conference call. Joining me on the call today are Steve Abramson, President and Chief Executive Officer, and Brian Millard, Chief Financial Officer and Treasurer. Before Steve begins, let me remind you that today's call is a property of Universal Display. Any redistribution, retransmission, or rebroadcast of any portion of this call in any form without the express written consent of Universal Display is strictly prohibited. This call is being webcast live and will be made available for a period of time on Universal Display's website. This call contains time-sensitive information that is accurate only as of the date of the live webcast of this call, July 30th, 2026. During this call, we may make forward-looking statements based on current expectations. These statements are subject to a number of significant risks and uncertainties. Our actual results may differ materially. These risks and uncertainties are discussed in the company's periodic reports filed with the SEC and should be referenced by anyone considering making any investments in the company's securities. Universal Display disclaims any obligation to update any of these statements. I would like to turn the call over to Steve Abramson. Thanks, Darice. Good afternoon, everyone. As we look across the OLED industry, we continue to see investment, innovation, and expansion throughout the ecosystem. Display manufacturers are investing billions of dollars in new capacity; brands are broadening adoption across a growing range of products and applications. Next-generation technologies continue to push the boundaries of performance and capability. Those developments reflect the industry's long-term growth trajectory, even as portions of the consumer electronics supply chain face a more challenging near-term environment. Rising memory costs and supply constraints continue to weigh on demand expectations, particularly within the smartphone market, where higher component costs are putting pressure on unit volumes. Those near-term headwinds are reflected in our updated outlook, which Brian will discuss in more detail. We believe it is important to separate the current cycle from the longer-term direction of the industry. While demand expectations have softened in the near term, we believe the industry's fundamental growth drivers remain firmly intact. Industry forecasts call for OLED area growth to be relatively flat this year, with positive growth expected to resume in 2027. Many of the investments that will support that next phase of growth are already underway today. After years of planning and development, Gen 8.6 OLED manufacturing is becoming a commercial reality. Samsung Display and BOE recently commenced mass production at their Gen 8.6 facilities, while Visionox and TCL China Star continue advancing their greenfield projects. In addition, LG Display and Samsung Display have announced further Gen 6 investments. Most of these investments target end markets where adoption remains in its early stages. While OLED is already well established in smartphones with approximately 65% market penetration, IT, automotive, and TVs remain at a much earlier stage, with shares still in the low single digits. In automotive, recent introductions such as the Genesis GV70, Volvo EX60, and Zeekr 9X demonstrate how OLEDs are driving sophisticated digital cockpits in premium and electric vehicle interiors. Beyond expanding into new applications, one of OLED's key advantages is its ability to enable entirely new form factors. Foldable, trifold, and rollable devices are demonstrating how OLED flexibility can unlock new product designs and user experiences. Last week, Samsung unveiled its Galaxy Fold 8 series, featuring new Flex Titanium technology that significantly reduces crease visibility while improving durability. As additional brands enter the market and performance continues to improve, foldables are expected to evolve from a niche category into a more mainstream segment in the years ahead. Collectively, these industry developments highlight the significant runway that remains as OLED expands across new applications, larger display formats, and emerging form factors. As adoption broadens, customers continue to demand higher brightness, lower power consumption, longer lifetime, broader color gamut, and more advanced display architectures. Meeting these needs requires continued advances in materials and device technologies, which is where our expertise and technology leadership matters most. We are continuing to play a central role in advancing the materials and technology that underpin and drive the industry. Our decades of invention, development, and manufacturing know-how, a portfolio of more than 7,000 patents, strong customer relationships, and a global support infrastructure position us well as the industry leader entering its next phase of growth. One of the most important opportunities on our roadmap continues to be phosphorescent blue and the meaningful energy efficiency benefits it is expected to deliver. At SID Display Week in May, we presented additional technical results demonstrating continued progress towards a more robust phosphorescent blue system, including advances in efficiency, color performance, operational lifetime, and manufacturability. While commercialization timing continues to depend on customer roadmaps, we believe phosphorescent blue is a significant opportunity for both UDC and the broader industry. Beyond blue, we continue advancing and broadening our portfolio of next generation OLED technologies, including phosphorescent sensitized fluorescence or PSF tandem architectures, and innovations designed to enhance light extraction, increase power efficiency, and improve the visual appearance of the display. We look forward to sharing additional technical developments at Korea's IMID Conference next month. We are also accelerating materials discovery and development through our internal advanced computational tools, artificial intelligence, machine learning, and agentic AI, as well as strategic collaborations, including our role as a founding member of CuspAI's recently launched AI Materials Foundry. On the infrastructure front, we continue to invest alongside the OLED industry. Last month, we celebrated the grand opening of our new OLED Technology and Innovation Center in Chengdu, China. As our third innovation tech center in Asia, following Korea and Hong Kong, it reinforces our commitment to providing on-the-ground local support and fostering collaboration with customers. As we look ahead, we remain confident in the OLED industry's growth trajectory. Continued investment in manufacturing capacity, expanding adoption across new applications and form factors, and advances in materials and device architectures reinforce our belief that the next growth phase is taking shape. Through our investments in innovation and infrastructure, we're helping to build the foundation for that future. With that, I'll turn the call over to Brian. Thanks, Steve. Revenue for the second quarter of 2026 was $152 million compared to $172 million in the second quarter of 2025. As a reminder, the prior year period benefited from elevated customer purchases ahead of anticipated tariff increases. Turning to the broader environment, as Steve shared, we continue to see meaningful investment across the OLED ecosystem and encouraging progress in several long-term growth drivers. At the same time, visibility across portions of the consumer electronics supply chain has remained limited. Customer demand forecasts have become more cautious as higher component costs continue to pressure portions of the smartphone market. Given these dynamics, we now expect full-year revenue to track toward the lower end of our previously communicated range of $630 million-$670 million, with second half revenue still expected to exceed first half revenue. Our total material sales in the second quarter were $66 million, compared to material sales of $89 million in the second quarter of 2025. The decrease in material sales was primarily driven by lower material volumes, customer mix, and changes in cumulative catch-up adjustments. Green emitter sales, which include our yellow-green emitters, were $51 million, compared to $64 million in the second quarter of 2025. Red emitter sales were $15 million compared to $24 million in the second quarter of 2025. Revenue from royalty and license fees was $81 million in the second quarter, compared to $76 million in the prior year period. The increase was primarily driven by cumulative catch-up adjustments. Across both royalty and license revenue and material sales, cumulative catch-up adjustments totaled approximately $10 million during the second quarter and the first six months of 2026, had a net favorable impact of approximately $9 million compared to the second quarter of 2025. The ratio of material sales to royalty and license revenue during the second quarter was approximately 0.8:1. When you look at the first half of the year, the ratio was approximately 1.1:1. Based on our current outlook, we now expect the full year ratio to average approximately 1.2:1. Adesis generated $4.8 million of revenue during the quarter, compared to $7.5 million in the second quarter of 2025. Cost of sales was $37 million for the quarter. Total gross margin was 76%, compared to 77% in the second quarter of 2025. Operating expenses, excluding cost of sales, were $62 million, compared to $64 million in the prior year period. We continue to operate as a lean company, investing in key R&D and growth initiatives while maintaining a disciplined approach to spending. Based on our current outlook, we now expect full year operating expenses to increase by a low single-digit percentage compared to 2025. Operating income for the quarter was $54 million, representing an operating margin of 35%. This compares to the prior year period of $69 million and an operating margin of 40%. The effective tax rate for the quarter was approximately 19%. Net income was $49 million, or $1.06 per diluted share, compared to net income of $67 million, or $1.41 per diluted share in the second quarter of 2025. Our business continues to generate strong cash flow and maintain significant financial flexibility. During the second quarter, we repurchased approximately 531,000 shares, for approximately $48 million. Over the last 12 months, we've returned more than $238 million to shareholders through dividends and share repurchases. Today, we announced that our board of directors declared a third quarter cash dividend of $0.50 per share. We ended the quarter with approximately $855 million in cash equivalents, and investments, providing substantial flexibility to invest in innovation, pursue growth opportunities, and continue returning capital to shareholders. Our strong balance sheet and cash flow generation position us well to support both our near-term priorities and long-term growth initiatives. With that, I'll turn the call back to Steve. Thanks, Brian. We are excited about the opportunities ahead. OLED continues to expand into new applications, new products, and new form factors. The technology roadmap also continues to advance, creating new opportunities across the ecosystem. As an OLED pioneer, we have helped shape the industry through scientific leadership, intellectual property, and close collaboration with our customers and partners. We believe those strengths, together with our robust R&D pipeline, global infrastructure, and strong balance sheet, position us well for the future. I would like to thank each of our employees for their drive, desire, dedication, and heart in elevating and shaping Universal Display's accomplishments and advancements. We are committed to being a leader in the OLED ecosystem, achieving superior long-term growth, and delivering cutting-edge technologies and materials for the industry, for our customers, and for our shareholders. With that, operator, let's start the Q&A. Thank you, Mr. Abramson. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Jim Ricchiuti with Needham & Company. Please proceed. Thank you. Good afternoon. I know there's probably some noise in those materials margins that were in the second quarter. Brian, I'm wondering, should we anticipate a return to more normalized material margins in the second half? Yeah. Hi, Jim. Yeah, as you noted, there was a little bit of anomaly in the second quarter. As we went through our reforecasting process, we do now assume that there's going to be a change in some of the materials mix and the product mix. As a result of that, there was roughly a $7 million reduction recorded, compared to where we were in Q2 of last year. So it was a negative item hitting the materials line in the second quarter. And we do expect in the remainder of the year, our materials gross margins to return more toward their historical levels, which have been approximately 60%. Got it. Are you able to say if you expect your revenues to benefit in any meaningful way from the new capacity that you alluded to in the press release and your introductory comments in the second half, or realistically, is this more likely to be a catalyst for you next year? There certainly is some benefit we are seeing in 2026 in the second half and even in the first half as those fabs were getting ready for mass production, and that's already encompassed in our guidance for this year. Next year, we certainly, and in 2027 and beyond, see even more benefit as those fabs are fully operational at mass production scale for a full 12 months each year, as well as more heavily utilized in the coming years. 2026 is really setting up the opportunity for growth in the next few years. Our next question is from Mehdi Hosseini with SIG. Please proceed. Yes. Thanks for taking my question. I want to go back to Steve. This is obviously a recurring question every quarter, and I'm still going to ask you, is there any more detail as to how you're progressing with commercialization of the blue? Has the reliability and the yield and the lifetime improved to the point that we're just waiting for commercial adoption at a larger scale, or is there still some milestones that you need to meet before commercialization of the end market product? Well, Mehdi, as you know, phosphorescent blue is one of our most important opportunities. We've made meaningful progress in the earlier developmental materials to achieve some key milestones, and work is continuing on those programs, and you saw the announcement from LG on the iPad. As the industry has evolved, we've seen multiple pathways emerging for phosphorescent commercial blue OLEDs, and so we're expanding our efforts across a broader range of next generation blue materials and architecture. We're accelerating the development, increasing resources behind the program, including leveraging our AI machine learning to expand the design space and accelerate material discovery and development. We remain confident in the long-term commercial opportunity for full phosphorescent blue, but again, I can't give you any specific timelines right now because that's really dependent on our customers' commercial roadmaps. Yeah. Mehdi, as you're aware, in 2025, LG at SID Display Week showcased a tablet-sized product that had incorporated phosphorescent blue in a hybrid tandem structure. It was a tablet-sized product, and they did re-showcase at this year's SID Display Week a similar prototype that they had developed. We're very encouraged by the progress that we see LG making and talking about very publicly, as well as progress that other customers have made as well that have now gotten to a point of being prototypes that they're able to showcase with others in the industry. Got it. Thanks for the detail. If I may just have a follow-up here, could there be a scenario where increased emphasis on power consumption or reduction in power consumption make the blue a more viable solution for the next generation of a gaming laptop, or even to that extent, a more sophisticated AI-related notebooks that would come into the market next year? Well, other- No, go ahead The more their emphasis is on power efficiency, the more important is our blue phosphorescence. The next year comment, I'm going to hold on to. Got you. Thank you. Our next question is from Scott Searle with Roth Capital Partners. Please proceed. Hey, good afternoon. Thanks for taking the questions. Steve and Brian, maybe to dive in in terms of the guidance for the year, even at the lower end of the range, it still implies a meaningful uptick into the second half of this year. I think, an average of $168 million-ish in revenue per quarter. I'm wondering where you're seeing the strength, what level of confidence is in that? Certainly, it sounds like you've got some early production that's going on with some of the new fabs, I'm wondering if you could update us in terms of where you think channel inventories are and kind of what's driving that comfort and outlook into the second half. Hi, Scott. In the second half, as you're aware, there's a number of products that launch in Q3, as well as early Q1, that we typically see a stronger second half in most years in our business, and we expect that trend this year as well. Based on the visibility we have right now to product cycles, and the details that we're receiving from customers in terms of their forecasts, we do expect the second half to be stronger than the first half, which has really been our expectation all along this year. We've, since the beginning of the year, expected that the second half was going to be stronger, and that continues to be the case today. Got you. Very helpful. Thank you. If I could just to follow up specifically on some of the geographic mix, I think China took a nice tick up in the second quarter. Are we getting back to a more normalized level of China revenues, or is this some more pre-buying ahead of a second round of tariffs or just new production coming online for BOE? Any color on that front would be helpful. Just to clarify on the gross margins, Brian, I want to make sure I heard correctly. Materials gross margins recovering back to the 60% level in the second half after some of the anomalies that we saw in the second quarter? Yes. That's right on the materials gross margins. We do expect the second half to be more normal, near our historical trends, which have been around 60% in recent quarters. There were some anomalies in Q2 that drove the materials gross margin being lower. As it relates to China, our China sales have always been very lumpy historically, and that continues to be the case. We are projecting growth in Chinese customer revenues in the second half. I'd say overall, we are seeing customers who are more exposed to the mid and low-end segments of the smartphone market. There's just a little more pressure on those customers this year, but we are projecting growth in the second half. Great. Thanks so much. I'll get back in the queue. Thanks, Scott. As a reminder, just star one on your telephone keypad if you would like to ask a question. Our next question is from Nam Kim with Arete Research. Please proceed. Hello. Thank you for taking my question. I think the guidance adjustment, I guess, mainly due to a bit slower material sales growth trend. Is this driven by lower unit volume or ASP pressure, or a combination of both? I mean, IT OLED demand, especially gaming monitor, seems very strong, but smartphone demand is weak. Could you help me understand overall unit impact across your end market? Also, given the rising BOM cost across the industry, are you seeing any price pressure on your OLED material? Or has your material pricing remained relatively stable? Thank you. Yeah. Hi, Nam. The change in the guidance now expecting us to be toward the low end of the prior range, that's really driven by a change in volume expectation. As you're aware, we have long-term, typically five-year deals with our customers. We have very consistent ASPs over those periods, and we haven't seen anything out of the ordinary on the pricing side. That's really driven by a lower expectation of volume this year. Great. Thank you. Our next question is from Martin Yang with Oppenheimer & Co. Please proceed. Hi. Thank you for taking my question. A follow-up on the previous topic on growth in the second half. Do you expect growth in the second half across all of your customers? Hi, Martin. Yeah, we are projecting growth across our customers in the second half. There's product cycles that we expect we'll benefit from in the second half, as well as we are projecting really across the board growth in the customer base on a broad basis in the second half. Got it. Thank you. Second question on gross margin. Looking to maybe a more medium-term perspective, do you think we will see incremental gross margin headwind in 2027, based on raw material costs, and do you have any potential offset to those potential headwinds? Yeah. On gross margins, I think, it's important to focus on total gross margins, which is the much more useful way in our view of assessing our profitability. Our guidance this year for total gross margins is 74%-76%, and on a year-to-date basis, we're tracking right in line with that at just north of 75%. In terms of 2027, too early to give a guide or expectation there. We do have certain input costs into our manufacturing process. One of the key ones being iridium, which is a key component of many of our products. That has fluctuated in price recently. On the other side, as we can put more volume through the six components of our manufacturing plants, we're able to achieve greater operating leverage there. We'll give more color in February about what that means for next year. We're certainly very focused on the sourcing side of things, making sure that we're sourcing our raw materials and inputs in the most efficient and cost-effective way and working with PPG as well to make sure that the manufacturing processes are optimized to the greatest extent. Got it. Last question on the sales of maybe blue sample materials have stayed at a very low level in the past two quarters. Can you maybe comment on what should we interpret the lower level of sample sales versus the past few quarters or the same time last year, and what we should expect for the rest of this year? Thank you. Yeah. I think that the blue development sales have been low, as you noted in the last couple of quarters. The progress with our customers continues to move positively in the right direction. In the R&D stage and development cycle that they're in, a little bit of material can go a long way. We are also, as Steve noted, continuing to focus our resources on inventing new materials and providing those to customers to open even more doors for them in blue development. The revenue number is certainly an interesting anecdote, but it's not necessarily the best way of measuring the progress that we're making in moving closer to commercialization of blue. Got it. Thank you, Brian. That's it for me. Thanks. Thank you. This concludes the question-and-answer session. I would like to turn the program back over to Brian Millard for any additional or closing remarks. Thanks for joining us today. We are confident in the underlying growth drivers for UDC and the OLED industry. We appreciate your continued interest and look forward to speaking with you again next quarter. Thank you. This concludes today's conference call. You may now disconnect.