OLED provider Universal Display (NASDAQ: OLED) met Wall Street’s revenue expectations in Q4 CY2025, with sales up 6.6% year on year to $172.9 million. On the other hand, the company’s full-year revenue guidance of $675 million at the midpoint came in 6.3% below analysts’ estimates. Its GAAP profit of $1.39 per share was 8.4% above analysts’ consensus estimates.
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Universal Display (OLED) Q4 CY2025 Highlights:
- Revenue: $172.9 million vs analyst estimates of $173.4 million (6.6% year-on-year growth, in line)
- EPS (GAAP): $1.39 vs analyst estimates of $1.28 (8.4% beat)
- Operating Margin: 38.9%, up from 32.3% in the same quarter last year
- Free Cash Flow Margin: 8.7%, down from 13.6% in the same quarter last year
- Inventory Days Outstanding: 531, up from 515 in the previous quarter
- Market Capitalization: $5.70 billion
Company Overview
Serving major consumer electronics manufacturers, Universal Display (NASDAQ: OLED) is a provider of organic light emitting diode (OLED) technologies used in display and lighting applications.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Universal Display’s sales grew at a decent 8.7% compounded annual growth rate over the last five years. Its growth was slightly above the average semiconductor company and shows its offerings resonate with customers. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore's Law) could make yesterday's hit product obsolete today. Universal Display’s annualized revenue growth of 6.2% over the last two years is below its five-year trend, but we still think the results were respectable. 
This quarter, Universal Display grew its revenue by 6.6% year on year, and its $172.9 million of revenue was in line with Wall Street’s estimates. Additionally, Universal Display’s growth inflected positively this quarter, news that will likely give some shareholders hope.
Looking ahead, sell-side analysts expect revenue to grow 8.8% over the next 12 months. Although this projection indicates its newer products and services will spur better top-line performance, it is still below average for the sector. At least the company is tracking well in other measures of financial health.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Universal Display’s DIO came in at 531, which is 106 days above its five-year average, suggesting that the company’s inventory has grown to higher levels than we’ve seen in the past.
Key Takeaways from Universal Display’s Q4 Results
It was good to see Universal Display beat analysts’ EPS expectations this quarter on in-line revenue. On the other hand, its full-year revenue guidance missed. Overall, this was a mixed quarter. The stock traded up 1.8% to $119.15 immediately after reporting.
Is Universal Display an attractive investment opportunity at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
