{"url_path":"/sec/oled/10-k/2026/item-16","section_key":"item-16","section_title":"Item 16 FORM 10-K SUMMARY","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-02-19","source_url":"https://www.sec.gov/Archives/edgar/data/1005284/0001193125-26-059371-index.html","accession_number":"0001193125-26-059371","cik":"0001005284","ticker":"OLED","issuer_name":"UNIVERSAL DISPLAY CORP \\PA\\","edgar_url":"https://www.sec.gov/Archives/edgar/data/1005284/0001193125-26-059371-index.html","primary_entity_key":"0001005284","primary_entity_name":"UNIVERSAL DISPLAY CORP \\PA\\"},"word_count":19968,"has_tables":true,"body_markdown":"ITEM 16. FORM 10-K SUMMARY\n\nNone.\n\n42\n\n \n\nSIGNATURES\n\nPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.\n\nUNIVERSAL DISPLAY CORPORATION\n\nBy: /s/ Brian Millard\n\nBrian Millard\n\nVice President, Chief Financial Officer and Treasurer\n\nDate: February 19, 2026\n\n \n\nPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.\n\nName\n\nTitle\n\nDate\n\n/s/ Steven V. Abramson\n\nPresident, Chief Executive Officer and Director (principal executive officer)\n\nFebruary 19, 2026\n\nSteven V. Abramson\n\n \n\n/s/ Brian Millard\n\n \n\nVice President, Chief Financial Officer and Treasurer\n\n \n\nFebruary 19, 2026\n\nBrian Millard\n\n \n\n(principal financial and accounting officer)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n/s/ Sidney D. Rosenblatt\n\n \n\nChair of the Board of Directors\n\n \n\nFebruary 19, 2026\n\nSidney D. Rosenblatt\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n/s/ Elizabeth H. Gemmill\n\nLead Independent Director\n\nFebruary 19, 2026\n\nElizabeth H. Gemmill\n\n \n\n \n\n \n\n \n\n \n\n \n\n/s/ Nigel Brown\n\n \n\nDirector\n\n \n\nFebruary 19, 2026\n\nNigel Brown\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n/s/ Cynthia J. Comparin\n\nDirector\n\nFebruary 19, 2026\n\nCynthia J. Comparin\n\n \n\n/s/ Richard C. Elias\n\nDirector\n\nFebruary 19, 2026\n\nRichard C. Elias\n\n \n\n \n\n/s/ C. Keith Hartley\n\n \n\nDirector\n\n \n\nFebruary 19, 2026\n\nC. Keith Hartley\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n/s/ Celia M. Joseph\n\nDirector\n\nFebruary 19, 2026\n\nCelia M. Joseph\n\n \n\n \n\n \n\n \n\n \n\n \n\n/s/ Lawrence Lacerte\n\n \n\nDirector\n\n \n\nFebruary 19, 2026\n\nLawrence Lacerte\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n/s/ Joan Lau\n\n \n\nDirector\n\n \n\nFebruary 19, 2026\n\nJoan Lau\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n/s/ April Walker\n\n \n\nDirector\n\n \n\nFebruary 19, 2026\n\nApril Walker\n\n \n\n \n\n \n\n \n\n \n\n43\n\n \n\nUNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES\n\nINDEX TO CONSOLIDATED FINANCIAL STATEMENTS\n\n \n\nConsolidated Financial Statements:\n\n[Management’s Report on Internal Control Over Financial Reporting](#managements_report_on_internal_control_o)\n\nF-2\n\n[Reports of Independent Registered Public Accounting Firm](#report_independent_registered_public_acc)\n\nF-3\n\n[Consolidated Balance Sheets](#consolidated_balance_sheets)\n\nF-6\n\n[Consolidated Statements of Income](#consolidated_statements_income)\n\nF-7\n\n[Consolidated Statements of Comprehensive Income](#consolidated_statements_comprehensive_in)\n\nF-8\n\n[Consolidated Statements of Shareholders’ Equity](#consolidated_statements_shareholders_equ)\n\nF-9\n\n[Consolidated Statements of Cash Flows](#consolidated_statements_cash_flows)\n\nF-10\n\n[Notes to Consolidated Financial Statements](#notes_to_consolidated_financial_statemen)\n\nF-11\n\n \n\n \n\nF-1\n\n \n\nMANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING\n\nOur management is responsible for establishing and maintaining adequate internal control over financial reporting for Universal Display Corporation and its subsidiaries (the Company). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Consolidated Financial Statements for external purposes in accordance with generally accepted accounting principles. Our system of internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\nManagement performed an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025 based upon criteria in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management determined that the Company’s internal control over financial reporting was effective as of December 31, 2025, based on the criteria in Internal Control-Integrated Framework (2013) issued by COSO.\n\nThe effectiveness of our internal control over financial reporting as of December 31, 2025, has been attested to by KPMG LLP, an independent registered public accounting firm, as stated in its report which appears on the following page.\n\nSteven V. Abramson\n\nPresident and Chief Executive Officer\n\nBrian Millard\n\nVice President, Chief Financial Officer and Treasurer\n\n \n\nFebruary 19, 2026\n\nF-2\n\n \n\nReport of Independent Registered Public Accounting Firm\n\nTo the Shareholders and Board of Directors\n\nUniversal Display Corporation:\n\nOpinion on Internal Control Over Financial Reporting\n\nWe have audited Universal Display Corporation and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February 19, 2026 expressed an unqualified opinion on those consolidated financial statements.\n\nBasis for Opinion\n\nThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.\n\nDefinition and Limitations of Internal Control Over Financial Reporting\n\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\n/s/ KPMG LLP\n\nPhiladelphia, Pennsylvania\n\nFebruary 19, 2026\n\nF-3\n\n \n\nReport of Independent Registered Public Accounting Firm\n\nTo the Shareholders and Board of Directors\n\nUniversal Display Corporation:\n\nOpinion on the Consolidated Financial Statements\n\nWe have audited the accompanying consolidated balance sheets of Universal Display Corporation and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 19, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.\n\nBasis for Opinion\n\nThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\nCritical Audit Matter\n\nThe critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.\n\nEstimated per unit fee for long-term OLED contracts\n\nAs discussed in Notes 2 and 21 to the consolidated financial statements, the Company recognizes revenue for organic light emitting diode (OLED) sales to customers with long-term contracts (i.e., over 1 year in length) using certain estimates. Revenue is determined by estimating total contract consideration expected to be received over the term of the contract and recognized based on material units sold during the period at their estimated per unit fee. The estimated per unit fee includes fixed amounts designated in contracts with customers as license fees and royalty fees, as well as estimates of material units to be sold. The Company uses internal and external data to estimate material units to be sold over the contract terms.\n\nWe identified the assessment of the estimated per unit fee for long-term OLED contracts as a critical audit matter. The estimated per unit fee was dependent upon the estimates of total material units to be sold. Significant auditor judgment was required in evaluating the forecasted material unit sales, as changes in the estimates could significantly affect the estimated per unit fee.\n\nThe following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter. This included controls related to the Company’s revenue recognition process, including the Company’s review and approval of forecasted quantities of material unit sales of OLED products. We assessed the Company’s forecasting policies and procedures and the inputs used in the estimation process. This\n\nF-4\n\n \n\nassessment included considering the availability of other relevant sources of data used for developing the estimate and evaluating any potential management bias. Additionally, we inspected the forecast calculations for a selection of OLED contracts and compared the per-material unit prices used against the respective contract terms. We compared the OLED material unit sales forecast to internal operating and production budgets, and we compared the forecasted OLED material unit sales to the results of inquiries of Company personnel, third party market data, and analyst reports. We assessed the Company’s ability to accurately forecast OLED material unit sales by comparing recent historical forecasts to actual results and evaluating the Company’s conclusions regarding the reasons for changes in the current year’s estimates as compared to prior estimates.\n\n/s/ KPMG LLP\n\nWe have served as the Company’s auditor since 2002.\n\nPhiladelphia, Pennsylvania\n\nFebruary 19, 2026\n\nF-5\n\n \n\nUNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES\n\nCONSOLIDATED BALANCE SHEETS\n\n(in thousands, except share and per share data)\n\n \n\n \n\nDecember 31, 2025\n\n \n\n \n\nDecember 31, 2024\n\n \n\nASSETS\n\n \n\n \n\n \n\n \n\n \n\n \n\nCURRENT ASSETS:\n\n \n\n \n\n \n\n \n\n \n\n \n\nCash and cash equivalents\n\n \n\n$\n\n138,353\n\n \n\n \n\n$\n\n98,980\n\n \n\nShort-term investments\n\n \n\n \n\n464,004\n\n \n\n \n\n \n\n393,690\n\n \n\nAccounts receivable\n\n \n\n \n\n119,953\n\n \n\n \n\n \n\n113,648\n\n \n\nInventory\n\n \n\n \n\n240,912\n\n \n\n \n\n \n\n182,938\n\n \n\nOther current assets\n\n \n\n \n\n123,836\n\n \n\n \n\n \n\n110,575\n\n \n\nTotal current assets\n\n \n\n \n\n1,087,058\n\n \n\n \n\n \n\n899,831\n\n \n\nPROPERTY AND EQUIPMENT, net of accumulated depreciation of $189,326 and $169,877\n\n \n\n \n\n214,947\n\n \n\n \n\n \n\n195,239\n\n \n\nACQUIRED TECHNOLOGY, net of accumulated amortization of $220,392 and $203,621\n\n \n\n \n\n56,783\n\n \n\n \n\n \n\n73,554\n\n \n\nOTHER INTANGIBLE ASSETS, net of accumulated amortization of $13,269 and $11,842\n\n \n\n \n\n4,019\n\n \n\n \n\n \n\n5,446\n\n \n\nGOODWILL\n\n \n\n \n\n15,535\n\n \n\n \n\n \n\n15,535\n\n \n\nINVESTMENTS\n\n \n\n \n\n377,034\n\n \n\n \n\n \n\n457,593\n\n \n\nDEFERRED INCOME TAXES\n\n \n\n \n\n79,454\n\n \n\n \n\n \n\n78,320\n\n \n\nOTHER ASSETS\n\n \n\n \n\n128,932\n\n \n\n \n\n \n\n106,815\n\n \n\nTOTAL ASSETS\n\n \n\n$\n\n1,963,762\n\n \n\n \n\n$\n\n1,832,333\n\n \n\nLIABILITIES AND SHAREHOLDERS’ EQUITY\n\n \n\n \n\n \n\n \n\n \n\n \n\nCURRENT LIABILITIES:\n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts payable\n\n \n\n$\n\n23,344\n\n \n\n \n\n$\n\n36,590\n\n \n\nAccrued expenses\n\n \n\n \n\n52,564\n\n \n\n \n\n \n\n46,026\n\n \n\nDeferred revenue\n\n \n\n \n\n21,011\n\n \n\n \n\n \n\n33,074\n\n \n\nOther current liabilities\n\n \n\n \n\n11,094\n\n \n\n \n\n \n\n9,720\n\n \n\nTotal current liabilities\n\n \n\n \n\n108,013\n\n \n\n \n\n \n\n125,410\n\n \n\nDEFERRED REVENUE\n\n \n\n \n\n1,943\n\n \n\n \n\n \n\n537\n\n \n\nRETIREMENT PLAN BENEFIT LIABILITY\n\n \n\n \n\n56,541\n\n \n\n \n\n \n\n54,450\n\n \n\nOTHER LIABILITIES\n\n \n\n \n\n36,246\n\n \n\n \n\n \n\n35,411\n\n \n\nTotal liabilities\n\n \n\n \n\n202,743\n\n \n\n \n\n \n\n215,808\n\n \n\nCOMMITMENTS AND CONTINGENCIES (Note 18)\n\n \n\n \n\n \n\n \n\n \n\n \n\nSHAREHOLDERS’ EQUITY:\n\n \n\n \n\n \n\n \n\n \n\n \n\nPreferred Stock, par value $0.01 per share, 5,000,000 shares authorized, 200,000 \n   shares of Series A Nonconvertible Preferred Stock issued and outstanding\n   (liquidation value of $7.50 per share or $1,500)\n\n \n\n \n\n2\n\n \n\n \n\n \n\n2\n\n \n\nCommon Stock, par value $0.01 per share, 200,000,000 shares authorized, 48,916,606\n   and 48,834,541 shares issued, and 47,259,748 and 47,468,893 shares outstanding at\n   December 31, 2025 and December 31, 2024, respectively\n\n \n\n \n\n489\n\n \n\n \n\n \n\n488\n\n \n\nAdditional paid-in capital\n\n \n\n \n\n744,692\n\n \n\n \n\n \n\n723,719\n\n \n\nRetained earnings\n\n \n\n \n\n1,090,479\n\n \n\n \n\n \n\n934,655\n\n \n\nAccumulated other comprehensive income (loss)\n\n \n\n \n\n781\n\n \n\n \n\n \n\n(1,055\n\n)\n\nTreasury stock, at cost (1,656,858 and 1,365,648 shares at December 31, 2025 and\n   December 31, 2024, respectively)\n\n \n\n \n\n(75,424\n\n)\n\n \n\n \n\n(41,284\n\n)\n\nTotal shareholders’ equity\n\n \n\n \n\n1,761,019\n\n \n\n \n\n \n\n1,616,525\n\n \n\nTOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY\n\n \n\n$\n\n1,963,762\n\n \n\n \n\n$\n\n1,832,333\n\n \n\n \n\nThe accompanying notes are an integral part of these Consolidated Financial Statements.\n\nF-6\n\n \n\nUNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF INCOME\n\n(in thousands, except share and per share data)\n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nREVENUE:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nMaterial sales\n\n \n\n$\n\n352,974\n\n \n\n \n\n$\n\n365,419\n\n \n\n \n\n$\n\n322,029\n\n \n\nRoyalty and license fees\n\n \n\n \n\n275,134\n\n \n\n \n\n \n\n266,820\n\n \n\n \n\n \n\n238,389\n\n \n\nContract research services\n\n \n\n \n\n22,503\n\n \n\n \n\n \n\n15,445\n\n \n\n \n\n \n\n16,011\n\n \n\nTotal revenue\n\n \n\n \n\n650,611\n\n \n\n \n\n \n\n647,684\n\n \n\n \n\n \n\n576,429\n\n \n\nCOST OF SALES\n\n \n\n \n\n154,126\n\n \n\n \n\n \n\n148,461\n\n \n\n \n\n \n\n135,376\n\n \n\nGross margin\n\n \n\n496,485\n\n \n\n \n\n \n\n499,223\n\n \n\n \n\n \n\n441,053\n\n \n\nOPERATING EXPENSES:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nResearch and development\n\n \n\n \n\n146,097\n\n \n\n \n\n \n\n157,187\n\n \n\n \n\n \n\n130,481\n\n \n\nSelling, general and administrative\n\n \n\n \n\n74,318\n\n \n\n \n\n \n\n74,286\n\n \n\n \n\n \n\n67,387\n\n \n\nAmortization of acquired technology and other intangible assets\n\n \n\n \n\n18,198\n\n \n\n \n\n \n\n18,200\n\n \n\n \n\n \n\n15,993\n\n \n\nPatent costs\n\n \n\n \n\n8,790\n\n \n\n \n\n \n\n8,699\n\n \n\n \n\n \n\n9,356\n\n \n\nRoyalty and license expense\n\n \n\n \n\n504\n\n \n\n \n\n \n\n2,048\n\n \n\n \n\n \n\n647\n\n \n\nTotal operating expenses\n\n \n\n \n\n247,907\n\n \n\n \n\n \n\n260,420\n\n \n\n \n\n \n\n223,864\n\n \n\nOPERATING INCOME\n\n \n\n \n\n248,578\n\n \n\n \n\n \n\n238,803\n\n \n\n \n\n \n\n217,189\n\n \n\nInterest income, net\n\n \n\n \n\n39,708\n\n \n\n \n\n \n\n40,682\n\n \n\n \n\n \n\n28,166\n\n \n\nOther income (loss), net\n\n \n\n \n\n6,510\n\n \n\n \n\n \n\n(7,357\n\n)\n\n \n\n \n\n(184\n\n)\n\nInterest and other income, net\n\n \n\n \n\n46,218\n\n \n\n \n\n \n\n33,325\n\n \n\n \n\n \n\n27,982\n\n \n\nINCOME BEFORE INCOME TAXES\n\n \n\n \n\n294,796\n\n \n\n \n\n \n\n272,128\n\n \n\n \n\n \n\n245,171\n\n \n\nINCOME TAX EXPENSE\n\n \n\n \n\n(52,721\n\n)\n\n \n\n \n\n(50,049\n\n)\n\n \n\n \n\n(42,160\n\n)\n\nNET INCOME\n\n \n\n$\n\n242,075\n\n \n\n \n\n$\n\n222,079\n\n \n\n \n\n$\n\n203,011\n\n \n\nNET INCOME PER COMMON SHARE:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBASIC\n\n \n\n$\n\n5.09\n\n \n\n \n\n$\n\n4.66\n\n \n\n \n\n$\n\n4.25\n\n \n\nDILUTED\n\n \n\n$\n\n5.08\n\n \n\n \n\n$\n\n4.65\n\n \n\n \n\n$\n\n4.24\n\n \n\nWEIGHTED AVERAGE SHARES USED IN COMPUTING\n     NET INCOME PER COMMON SHARE:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBASIC\n\n \n\n \n\n47,548,046\n\n \n\n \n\n \n\n47,548,931\n\n \n\n \n\n \n\n47,559,669\n\n \n\nDILUTED\n\n \n\n \n\n47,658,295\n\n \n\n \n\n \n\n47,652,662\n\n \n\n \n\n \n\n47,622,763\n\n \n\nCASH DIVIDEND DECLARED PER COMMON SHARE\n\n \n\n$\n\n1.80\n\n \n\n \n\n$\n\n1.60\n\n \n\n \n\n$\n\n1.40\n\n \n\nThe accompanying notes are an integral part of these Consolidated Financial Statements.\n\nF-7\n\n \n\nUNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\n(in thousands)\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nNET INCOME\n\n \n\n$\n\n242,075\n\n \n\n \n\n$\n\n222,079\n\n \n\n \n\n$\n\n203,011\n\n \n\nOTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nUnrealized gain on available-for-sale securities\n\n \n\n \n\n1,986\n\n \n\n \n\n \n\n411\n\n \n\n \n\n \n\n8,745\n\n \n\nEmployee benefit plan:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nActuarial (loss) gain on retirement plan, net of tax of $101, $178\n   and ($2,168), respectively\n\n \n\n \n\n(320\n\n)\n\n \n\n \n\n(559\n\n)\n\n \n\n \n\n7,207\n\n \n\nAmortization of prior service cost, actuarial loss and curtailment charge for\n   retirement plan included in net periodic pension costs,\n   net of tax of ($5), ($84) and ($299), respectively\n\n \n\n \n\n18\n\n \n\n \n\n \n\n261\n\n \n\n \n\n \n\n996\n\n \n\nNet change in employee benefit plan\n\n \n\n \n\n(302\n\n)\n\n \n\n \n\n(298\n\n)\n\n \n\n \n\n8,203\n\n \n\nChange in cumulative foreign currency translation adjustment\n\n \n\n \n\n152\n\n \n\n \n\n \n\n(82\n\n)\n\n \n\n \n\n418\n\n \n\nTOTAL OTHER COMPREHENSIVE INCOME\n\n \n\n \n\n1,836\n\n \n\n \n\n \n\n31\n\n \n\n \n\n \n\n17,366\n\n \n\nCOMPREHENSIVE INCOME\n\n \n\n$\n\n243,911\n\n \n\n \n\n$\n\n222,110\n\n \n\n \n\n$\n\n220,377\n\n \n\n \n\nThe accompanying notes are an integral part of these Consolidated Financial Statements.\n\nF-8\n\n \n\nUNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY\n\n(in thousands, except for share data)\n\n \n\n \n\n \n\nSeries A\nNonconvertible\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAdditional\n\n \n\n \n\n \n\n \n\n \n\nAccumulated\nOther\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nTotal\n\n \n\n \n\n \n\nPreferred Stock\n\n \n\n \n\nCommon Stock\n\n \n\n \n\nPaid-in\n\n \n\n \n\nRetained\n\n \n\n \n\nComprehensive\n\n \n\n \n\nTreasury Stock\n\n \n\n \n\nShareholders’\n\n \n\n \n\n \n\nShares\n\n \n\n \n\nAmount\n\n \n\n \n\nShares\n\n \n\n \n\nAmount\n\n \n\n \n\nCapital\n\n \n\n \n\nEarnings\n\n \n\n \n\nIncome (Loss)\n\n \n\n \n\nShares\n\n \n\n \n\nAmount\n\n \n\n \n\nEquity\n\n \n\nBALANCE, DECEMBER 31, 2022\n\n \n\n \n\n200,000\n\n \n\n \n\n$\n\n2\n\n \n\n \n\n \n\n49,136,030\n\n \n\n \n\n$\n\n491\n\n \n\n \n\n$\n\n681,335\n\n \n\n \n\n$\n\n653,277\n\n \n\n \n\n$\n\n(18,452\n\n)\n\n \n\n \n\n1,365,648\n\n \n\n \n\n$\n\n(41,284\n\n)\n\n \n\n$\n\n1,275,369\n\n \n\nNet income\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n203,011\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n203,011\n\n \n\nOther comprehensive income\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n17,366\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n17,366\n\n \n\nCash dividends declared\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(66,735\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(66,735\n\n)\n\nStock-based compensation and ESPP activity, net of taxes withheld\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(405,004\n\n)\n\n \n\n \n\n(4\n\n)\n\n \n\n \n\n18,219\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n18,215\n\n \n\nBALANCE, DECEMBER 31, 2023\n\n \n\n \n\n200,000\n\n \n\n \n\n \n\n2\n\n \n\n \n\n \n\n48,731,026\n\n \n\n \n\n \n\n487\n\n \n\n \n\n \n\n699,554\n\n \n\n \n\n \n\n789,553\n\n \n\n \n\n \n\n(1,086\n\n)\n\n \n\n \n\n1,365,648\n\n \n\n \n\n \n\n(41,284\n\n)\n\n \n\n \n\n1,447,226\n\n \n\nNet income\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n222,079\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n222,079\n\n \n\nOther comprehensive income\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n31\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n31\n\n \n\nCash dividends declared\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(76,977\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(76,977\n\n)\n\nStock-based compensation and ESPP activity, net of taxes withheld\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n103,515\n\n \n\n \n\n \n\n1\n\n \n\n \n\n \n\n24,165\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n24,166\n\n \n\nBALANCE, DECEMBER 31, 2024\n\n \n\n \n\n200,000\n\n \n\n \n\n \n\n2\n\n \n\n \n\n \n\n48,834,541\n\n \n\n \n\n \n\n488\n\n \n\n \n\n \n\n723,719\n\n \n\n \n\n \n\n934,655\n\n \n\n \n\n \n\n(1,055\n\n)\n\n \n\n \n\n1,365,648\n\n \n\n \n\n \n\n(41,284\n\n)\n\n \n\n \n\n1,616,525\n\n \n\nNet income\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n242,075\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n242,075\n\n \n\nOther comprehensive income\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n1,836\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n1,836\n\n \n\nCommon stock repurchased\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n291,210\n\n \n\n \n\n \n\n(34,140\n\n)\n\n \n\n \n\n(34,140\n\n)\n\nCash dividends declared\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(86,251\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(86,251\n\n)\n\nStock-based compensation and ESPP activity, net of taxes withheld\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n82,065\n\n \n\n \n\n \n\n1\n\n \n\n \n\n \n\n20,973\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n20,974\n\n \n\nBALANCE, DECEMBER 31, 2025\n\n \n\n \n\n200,000\n\n \n\n \n\n$\n\n2\n\n \n\n \n\n \n\n48,916,606\n\n \n\n \n\n$\n\n489\n\n \n\n \n\n$\n\n744,692\n\n \n\n \n\n$\n\n1,090,479\n\n \n\n \n\n$\n\n781\n\n \n\n \n\n \n\n1,656,858\n\n \n\n \n\n$\n\n(75,424\n\n)\n\n \n\n$\n\n1,761,019\n\n \n\nThe accompanying notes are an integral part of these Consolidated Financial Statements.\n\nF-9\n\n \n\nUNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(in thousands)\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nCASH FLOWS FROM OPERATING ACTIVITIES:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet Income\n\n \n\n$\n\n242,075\n\n \n\n \n\n$\n\n222,079\n\n \n\n \n\n$\n\n203,011\n\n \n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDepreciation\n\n \n\n \n\n28,389\n\n \n\n \n\n \n\n25,940\n\n \n\n \n\n \n\n27,409\n\n \n\nImpairment of property and equipment and right-of-use asset due to OVJP restructuring\n\n \n\n \n\n1,577\n\n \n\n \n\n \n\n7,498\n\n \n\n \n\n \n\n—\n\n \n\nAmortization of intangibles\n\n \n\n \n\n18,198\n\n \n\n \n\n \n\n18,200\n\n \n\n \n\n \n\n15,993\n\n \n\nInvestment gains, net\n\n \n\n \n\n(8,765\n\n)\n\n \n\n \n\n(7,399\n\n)\n\n \n\n \n\n(11,603\n\n)\n\nStock-based compensation\n\n \n\n \n\n28,227\n\n \n\n \n\n \n\n30,032\n\n \n\n \n\n \n\n24,109\n\n \n\nDeferred income tax benefit\n\n \n\n \n\n(1,036\n\n)\n\n \n\n \n\n(19,117\n\n)\n\n \n\n \n\n(3,766\n\n)\n\nRetirement plan expense, net of benefit payments\n\n \n\n \n\n1,694\n\n \n\n \n\n \n\n1,808\n\n \n\n \n\n \n\n3,129\n\n \n\nDecrease (increase) in assets:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts receivable\n\n \n\n \n\n(6,305\n\n)\n\n \n\n \n\n26,202\n\n \n\n \n\n \n\n(47,186\n\n)\n\nInventory\n\n \n\n \n\n(57,974\n\n)\n\n \n\n \n\n(7,143\n\n)\n\n \n\n \n\n7,425\n\n \n\nOther current assets\n\n \n\n \n\n(3,261\n\n)\n\n \n\n \n\n(23,210\n\n)\n\n \n\n \n\n(41,574\n\n)\n\nOther assets\n\n \n\n \n\n(23,694\n\n)\n\n \n\n \n\n(2,968\n\n)\n\n \n\n \n\n4,450\n\n \n\nIncrease (decrease) in liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts payable and accrued expenses\n\n \n\n \n\n2,114\n\n \n\n \n\n \n\n10,357\n\n \n\n \n\n \n\n4,047\n\n \n\nOther current liabilities\n\n \n\n \n\n(441\n\n)\n\n \n\n \n\n1,269\n\n \n\n \n\n \n\n(21,481\n\n)\n\nDeferred revenue\n\n \n\n \n\n(10,657\n\n)\n\n \n\n \n\n(26,108\n\n)\n\n \n\n \n\n(4,159\n\n)\n\nOther liabilities\n\n \n\n \n\n689\n\n \n\n \n\n \n\n(3,700\n\n)\n\n \n\n \n\n(5,027\n\n)\n\nNet cash provided by operating activities\n\n \n\n \n\n210,830\n\n \n\n \n\n \n\n253,740\n\n \n\n \n\n \n\n154,777\n\n \n\nCASH FLOWS FROM INVESTING ACTIVITIES:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nPurchases of property and equipment\n\n \n\n \n\n(56,470\n\n)\n\n \n\n \n\n(42,637\n\n)\n\n \n\n \n\n(59,792\n\n)\n\nPurchase of intangibles\n\n \n\n \n\n(10,000\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(66,563\n\n)\n\nPurchases of investments\n\n \n\n \n\n(375,506\n\n)\n\n \n\n \n\n(594,848\n\n)\n\n \n\n \n\n(531,103\n\n)\n\nProceeds from sale and maturity of investments\n\n \n\n \n\n396,500\n\n \n\n \n\n \n\n473,075\n\n \n\n \n\n \n\n574,165\n\n \n\nNet cash used in investing activities\n\n \n\n \n\n(45,476\n\n)\n\n \n\n \n\n(164,410\n\n)\n\n \n\n \n\n(83,293\n\n)\n\nCASH FLOWS FROM FINANCING ACTIVITIES:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nProceeds from issuance of common stock\n\n \n\n \n\n2,020\n\n \n\n \n\n \n\n2,220\n\n \n\n \n\n \n\n2,012\n\n \n\nRepurchases of common stock\n\n \n\n \n\n(32,881\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nPayment of withholding taxes related to stock-based compensation to employees\n\n \n\n \n\n(9,571\n\n)\n\n \n\n \n\n(8,386\n\n)\n\n \n\n \n\n(8,206\n\n)\n\nCash dividends paid\n\n \n\n \n\n(85,549\n\n)\n\n \n\n \n\n(76,169\n\n)\n\n \n\n \n\n(66,735\n\n)\n\nNet cash used in financing activities\n\n \n\n \n\n(125,981\n\n)\n\n \n\n \n\n(82,335\n\n)\n\n \n\n \n\n(72,929\n\n)\n\nINCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS\n\n \n\n \n\n39,373\n\n \n\n \n\n \n\n6,995\n\n \n\n \n\n \n\n(1,445\n\n)\n\nCASH AND CASH EQUIVALENTS, BEGINNING OF YEAR\n\n \n\n \n\n98,980\n\n \n\n \n\n \n\n91,985\n\n \n\n \n\n \n\n93,430\n\n \n\nCASH AND CASH EQUIVALENTS, END OF YEAR\n\n \n\n$\n\n138,353\n\n \n\n \n\n$\n\n98,980\n\n \n\n \n\n$\n\n91,985\n\n \n\nSUPPLEMENTAL DISCLOSURES:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nUnrealized gain on available-for-sale securities\n\n \n\n$\n\n1,984\n\n \n\n \n\n$\n\n411\n\n \n\n \n\n$\n\n8,938\n\n \n\nCommon stock issued to Board of Directors and Scientific Advisory Board\n   that was earned and accrued for in a previous period\n\n \n\n \n\n300\n\n \n\n \n\n \n\n300\n\n \n\n \n\n \n\n300\n\n \n\nRepurchases of common stock included in other current liabilities\n\n \n\n \n\n1,259\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nNet change in accounts payable and accrued expenses related to purchases\n   of property and equipment\n\n \n\n \n\n8,373\n\n \n\n \n\n \n\n(9,448\n\n)\n\n \n\n \n\n678\n\n \n\nCash paid for income taxes, net of refunds\n\n \n\n \n\n71,438\n\n \n\n \n\n \n\n71,973\n\n \n\n \n\n \n\n96,176\n\n \n\n \n\nThe accompanying notes are an integral part of these Consolidated Financial Statements.\n\nF-10\n\n \n\nUNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\n1.\nBUSINESS:\n\nUniversal Display Corporation and its subsidiaries (the Company) is a leader in the research, development and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications. OLEDs are thin, lightweight and power-efficient solid-state devices that emit light and can be manufactured on both flexible and rigid substrates, making them highly suitable for use in full-color displays and as lighting products. OLED displays are capturing a growing share of the display market, especially in the mobile phone, television, monitor, wearable, tablet, notebook and personal computer, augmented reality (AR), virtual reality (VR) and automotive markets. The Company believes this is because OLEDs offer potential advantages over competing display technologies with respect to power efficiency, contrast ratio, viewing angle, video response time, form factor and manufacturing cost. The Company also believes that OLED lighting products have the potential to replace many existing light sources in the future because of their high-power efficiency, excellent color rendering index, low operating temperature and novel form factor. The Company’s technology leadership, intellectual property position, and more than 20 years of experience working closely with leading OLED display manufacturers are some of the competitive advantages that should enable the Company to continue to share in the revenues from OLED displays and lighting products as they continue to gain wider adoption.\n\nThe Company’s primary business strategy is to (1) develop new OLED materials and sell existing and new materials to product manufacturers of products for display applications, such as mobile phones, televisions, monitors, wearables, tablets, portable media devices, notebook computers, personal computers, automotive applications, and specialty lighting products; and (2) further develop and either license or otherwise commercialize the Company’s proprietary OLED material, device design and manufacturing technologies to those manufacturers. The Company has established a significant portfolio of proprietary OLED technologies and materials, primarily through internal research and development efforts and acquisitions of patents and patent applications, as well as maintaining long-standing, and establishing new relationships with world-class universities, research institutions and strategic manufacturing partnerships. The Company currently owns, exclusively licenses or has the sole right to sublicense more than 7,000 patents issued and pending worldwide.\n\nThe Company manufactures and sells its proprietary OLED materials to customers for evaluation and use in commercial OLED products. The Company also enters into agreements with manufacturers of OLED display and lighting products under which it grants them licenses to practice under the Company’s patents and to use the Company's proprietary know-how. At the same time, the Company works with these and other companies that are evaluating the Company's OLED material, device design and manufacturing technologies for possible use in commercial OLED display and lighting products.\n\n2.\nSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:\n\nPrinciples of Consolidation\n\nThe Consolidated Financial Statements include the accounts of Universal Display Corporation and its wholly owned subsidiaries, UDC, Inc., UDC Ireland Limited (UDC Ireland), Universal Display Corporation Hong Kong, Limited, Universal Display Corporation Korea, Y.H. (UDC Korea), Universal Display Corporation Japan GK, Universal Display Corporation China, Ltd., Adesis, Inc. (Adesis), UDC Ventures LLC, OVJP Corporation (OVJP Corp), OLED Material Manufacturing Limited (OMM), Universal Vapor Jet Corporation Pte. Ltd. (UVJC) and UDC Chengdu OLED Technology, Ltd. (UDC Chengdu). All intercompany transactions and accounts have been eliminated.\n\nSegment Information\n\nThe Company has one reportable business segment, namely OLED technologies and materials. The Company also performs contract development and manufacturing support services through its subsidiary, Adesis. However, the Company’s Chief Operating Decision Maker (CODM) reviews financial operating results for the Company on a combined basis only, with the exception of revenue, for the purposes of resource allocation decisions. Combined entity-level results are deemed sufficient for the assessment of the Company’s operating performance. As a result, Adesis is not considered a reportable business segment and its operations are contained in the OLED technologies and materials segment. Factors that went into this determination included examining the nature and significance of the various business activities the Company engages in, and the availability of discrete data for those business activities.\n\nF-11\n\n \n\nThe Company’s CODM is its President and Chief Executive Officer. The President and Chief Executive Officer is the highest level of management responsible for the allocation of the Company’s resources and acts as the “assessor of the financial performance” of the Company. In a review of the financial decision making process, it was determined that the CODM primarily utilizes information consistent with that already incorporated in the existing consolidated financial statements. These measures include revenue, operating expenses, net income and assets. As such, the Consolidated Financial Statements presentation is consistent with how the Company's CODM evaluates the results of operations and formulates strategic decisions about the business.\n\nManagement’s Use of Estimates\n\nThe preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates made are principally in the areas of revenue recognition including estimates of material unit sales and royalties, the useful life of acquired intangibles, lease liabilities, right-of-use assets, the use and recoverability of inventories, intangibles, investments and income taxes including realization of deferred tax assets, stock-based compensation and retirement benefit plan liabilities. Actual results could differ from those estimates.\n\nCash, Cash Equivalents and Investments\n\nThe Company considers all highly liquid debt instruments purchased with an original maturity (maturity at the purchase date) of three months or less to be cash equivalents. The Company classifies its remaining investments as available-for-sale. These securities (excluding minority equity investments) are carried at fair value, with unrealized gains and losses reported in shareholders’ equity. Gains or losses on securities sold are based on the specific identification method.\n\nTrade Accounts Receivable\n\nTrade accounts receivable are stated at the amount the Company expects to collect and do not bear interest. The Company considers the following factors when determining the collectability of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. The Company’s accounts receivable balance is a result of chemical sales, royalties and license fees. These receivables have historically been paid timely. Due to the nature of the accounts receivable balance, the Company believes there is no significant collection risk. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, allowances for credit losses would be required. When evaluating whether a credit loss has occurred, the Company assumes that the financial condition of its customers as of the balance sheet date remains unchanged throughout the remaining life of current accounts receivable and current contract assets. As of December 31, 2025 and 2024, the allowance for credit losses was $179,000 and $175,000, respectively.\n\nInventories\n\nInventories consist of raw materials, work-in-process and finished goods, and are stated at the lower of cost, determined on a first-in, first-out basis, or net realizable value. Inventory valuation and firm committed purchase order assessments are performed on a quarterly basis and those items that are identified to be obsolete or in excess of forecasted usage are written down to their estimated realizable value. Estimates of realizable value are based upon management’s analyses and assumptions, including, but not limited to, forecasted sales levels by product, expected product lifecycle, product development plans and future demand requirements. A 12-month rolling forecast based on factors, including, but not limited to, production cycles, anticipated product orders, marketing forecasts, backlog, and shipment activities is used in the inventory analysis. If market conditions are less favorable than forecasts or actual demand from customers is lower than estimates, additional inventory write-downs may be required. If demand is higher than expected, inventories that had previously been written down may be sold.\n\nProperty and Equipment\n\nProperty and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful life of 30 years for buildings, 15 years for building improvements, and three to seven years for office and lab equipment and furniture and fixtures. Repair and maintenance costs are charged to expense as incurred. Additions and betterments are capitalized.\n\nMajor renewals and improvements are capitalized, and minor replacements, maintenance, and repairs are charged to current operations as incurred. Upon retirement or disposal of assets, the cost and related accumulated depreciation are removed from the Consolidated Balance Sheets and any gain or loss is reflected in other operating expenses.\n\nF-12\n\n \n\nCertain costs of computer software obtained for internal use are capitalized and amortized on a straight-line basis over three years. Costs for maintenance and training, as well as the cost of software that does not add functionality to an existing system, are expensed as incurred.\n\nImpairment of Long-Lived Assets\n\nCompany management continually evaluates whether events or changes in circumstances might indicate that the remaining estimated useful life of long-lived assets may warrant revision, or that the remaining balance may not be recoverable. When factors indicate that long-lived assets should be evaluated for possible impairment, the Company uses an estimate of the related undiscounted cash flows in measuring whether the long-lived asset should be written down to fair value. Measurement of the amount of impairment would be based on generally accepted valuation methodologies, as deemed appropriate.\n\nAs a result of the closure of OVJP Corp's location in California and related restructuring, the Company recorded a $1.6 million right-of-use asset impairment for the year ended December 31, 2025 and a $7.5 million impairment of property and equipment and right-of-use asset for the year ended December 31, 2024. As of December 31, 2025, Company management believed that no additional revision to the remaining useful lives or write-down of the Company’s long-lived assets was required, and similarly, no such revisions were required for the year ended December 31, 2023.\n\nGoodwill and Purchased Intangible Assets\n\nGoodwill is tested for impairment in the fourth fiscal quarter and, when specific circumstances dictate, between annual tests. If after assessing the totality of events or circumstances as those described in the qualitative assessment, it is determined that it is more likely than not the fair value of a reporting unit is less than its carrying amount, then a quantitative goodwill impairment test will be performed. Under the quantitative test, the fair value of the reporting unit is compared to its carrying amount including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit would be considered not impaired. However, if the carrying amount of the reporting unit exceeds its fair value, an impairment loss would be recognized in the amount equal to the excess, limited to the total amount of goodwill allocated to that reporting unit. The Company performed its annual impairment assessment as of December 31, 2025 utilizing a qualitative assessment and concluded that it was more likely than not that the fair value of Adesis is greater than its carrying value. Future impairment tests will continue to be performed annually in the fiscal fourth quarter, or sooner if a triggering event occurs. As of December 31, 2025, no indications of impairment existed.\n\nPurchased intangible assets with finite lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets.\n\nFair Value of Financial Instruments\n\nThe carrying values of accounts receivable, other current assets, accounts payable and other current liabilities approximate fair value in the accompanying Consolidated Financial Statements due to the short-term nature of those instruments. The Company’s other financial instruments, which include cash equivalents and investments (excluding minority equity investments) are carried at fair value.\n\nFair Value Measurements\n\nFair value is defined as an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. The Company uses valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability and are based on market data obtained from sources independent of the Company. Unobservable inputs reflect assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances.\n\nF-13\n\n \n\nMinority Equity Investments\n\nThe Company accounts for minority equity investments in companies that are not accounted for under the equity method as equity securities without readily determinable fair values. The value of these securities is based on original cost less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment in the same issuer. Under this method, the share of income or loss of such companies is not included in the Consolidated Statements of Income. The carrying value of these investments is included in investments on the Consolidated Balance Sheets.\n\nThe Company’s policy is to recognize an impairment in the value of its minority equity investments when evidence of an impairment exists. Factors considered in the assessment include a significant adverse change in the regulatory, economic, or technological environment, the completion of new equity financing that may indicate a decrease in value, the failure to complete new equity financing arrangements after seeking to raise additional funds, or the commencement of proceedings under which the assets of the business may be placed in receivership or liquidated to satisfy the claims of debt and equity stakeholders. The impairment in the value of minority equity investments is included in the other income (loss), net line item on the Consolidated Statements of Income.\n\nLeases\n\nThe Company is a lessee in operating leases primarily incurred to facilitate manufacturing, research and development, and selling, general and administrative activities. At contract inception, the Company determines if an arrangement is or contains a lease, and if so recognizes a right-of-use asset and lease liability at the lease commencement date. For operating leases, the lease liability is measured at the present value of the unpaid lease payments at the lease commencement date, whereas for finance leases, the lease liability is initially measured at the present value of the unpaid lease payments and subsequently measured at amortized cost using the interest method. Operating lease right-of-use assets are included in other assets on the Consolidated Balance Sheets. The short-term portion of operating lease liabilities is included in other current liabilities on the Consolidated Balance Sheets and the long-term portion is included in other liabilities on the Consolidated Balance Sheets. As of December 31, 2025, the Company had no leases that qualified as financing arrangements.\n\nKey estimates and judgments include how the Company determines the discount rate used to discount the unpaid lease payments to present value and the lease term. The Company monitors for events or changes in circumstances that could potentially require recognizing an impairment loss.\n\nRevenue Recognition and Deferred Revenue\n\nMaterial sales relate to the Company’s sale of its OLED materials for incorporation into its customers’ commercial OLED products or for their OLED development and evaluation activities. Revenue associated with material sales is generally recognized at the time title passes, which is typically at the time of shipment or at the time of delivery, depending upon the contractual agreement between the parties. Revenue may be recognized after control of the material passes in the event the transaction price includes variable consideration. For example, a customer may be provided an extended opportunity to stock materials prior to use in mass production and given a general right of return not conditioned on breaches of warranties associated with the specific product. In such circumstances, revenue will be recognized at the earlier of the expiration of the customer’s general right of return or once it becomes unlikely that the customer will exercise its right of return.\n\nThe vast majority of revenue attributed to material sales is determined through technology license agreements and material supply agreements the terms of which are jointly agreed upon with the Company’s customers. The remaining revenue recognized is in the form of contract research services revenue earned by the Company’s subsidiary, Adesis, and the Company’s occasional material sales to smaller customers. None of the revenue recognized during the years ended December 31, 2025, 2024 or 2023 resulted solely from royalty or license fee arrangements as to which there were not associated material sales.\n\nThe rights and benefits to the Company’s OLED technologies are conveyed to the customer through technology license agreements and material supply agreements. The Company believes that the licenses and materials sold under these combined agreements are not distinct from each other for financial reporting purposes and as such, they are accounted for as a single performance obligation. Accordingly, total contract consideration is estimated and recognized over the contract term based on material units sold at the estimated per unit fee over the life of the contract. Total contract consideration is allocated to material sales and royalty and licensing fees on the Consolidated Statements of Income based on contract pricing.\n\nVarious estimates are relied upon to recognize revenue. The Company estimates total material units to be purchased by its customers over the contract term based on historical trends, industry estimates and its forecast process. Management uses the expected value method to estimate the material per unit fee. Additionally, management estimates the sales-based portion of royalty revenue based on the estimated net sales revenue of its customers over the contract term.\n\nF-14\n\n \n\nContract research services revenue is revenue earned by Adesis by providing chemical materials synthesis research, development and commercialization for non-OLED applications on a contractual basis. These services range from intermediates for structure-activity relationship studies, reference agents and building blocks for combinatorial synthesis, re-synthesis of key intermediates, specialty organic chemistry needs, and selective toll manufacturing. These services are provided to third-party pharmaceutical and life sciences firms and other technology firms at fixed costs or predetermined rates on a contract basis. Revenue is recognized as services are performed with billing schedules and payment terms negotiated on a contract-by-contract basis. Payments received in excess of revenue recognized are recorded as deferred revenue. In other cases, services may be provided and revenue is recognized before the customer is invoiced. In these cases, revenue recognized will exceed amounts billed and the difference, representing amounts which are currently unbillable to the customer pursuant to contractual terms, is recorded as an unbilled receivable.\n\nTechnology development and support revenue is revenue earned from development and technology evaluation agreements and commercialization assistance fees. Technology development and support revenue is included in contract research services on the Consolidated Statements of Income.\n\nOn December 2, 2022, the Company entered into a commercial patent license agreement with Samsung Display Co., Ltd. (SDC), replacing a previous license agreement that had been in place since 2018. This agreement, which covers the manufacture and sale of specified OLED display materials, was effective as of January 1, 2023 and lasts through the end of 2027 with an additional two-year extension option for SDC. Under this agreement, the Company is being paid a license fee, which includes quarterly and annual payments over the agreement term. The agreement conveys to SDC the non-exclusive right to use certain of the Company's intellectual property assets for a limited period of time that is less than the estimated life of the assets.\n\nAt the same time the Company entered into the current commercial license agreement with SDC, the Company also entered into a new supplemental material purchase agreement with SDC, which lasts for the same term as the license agreement and is subject to the same extension option. This new material purchase agreement replaced a previous purchase agreement that had been in place since 2018. Under the supplemental material purchase agreement, SDC agrees to purchase red and green phosphorescent emitter materials from the Company for use in the manufacture of licensed products. This amount purchased is subject to SDC’s requirements for phosphorescent emitter materials and the Company’s ability to meet these requirements over the term of the supplemental agreement.\n\nIn 2015, the Company entered into an OLED patent license agreement and an OLED commercial supply agreement with LG Display Co., Ltd. (LG Display). In 2021, the Company and LG Display entered into new agreements that extended the terms of these agreements at least through the end of 2025. The patent license agreement provides LG Display a non-exclusive, royalty bearing portfolio license to make and sell OLED displays under their patent portfolio. The patent license calls for minimum annual license fees and additional incremental license fees based on LG Display’s volume of sale of licensed products. The OLED commercial supply agreement provides for the sale of dopant and host materials for use by LG Display.\n\nIn 2023, the Company entered into new long-term, multi-year agreements with BOE Technology Group Co., Ltd. (BOE). Under these agreements, the Company has granted BOE non-exclusive license rights under various patents owned or controlled by the Company to manufacture and sell OLED display products. The Company supplies phosphorescent OLED materials to BOE for use in its licensed products.\n\nIn 2019, the Company entered into an evaluation and commercial supply relationship with Wuhan China Star Optoelectronics Semiconductor Display Technology Co., Ltd. (CSOT). In 2020, the Company entered into long-term, multi-year agreements with CSOT. Under these agreements, the Company has granted CSOT non-exclusive license rights under various patents owned or controlled by the Company to manufacture and sell OLED display products. The Company also supplies phosphorescent OLED materials to CSOT for use in its licensed products.\n\nIn 2024, the Company entered into new long-term, multi-year agreements with Visionox Technology, Inc. (Visionox). Under these agreements, the Company has granted Visionox non-exclusive license rights under various patents owned or controlled by the Company to manufacture and sell OLED display products. Additionally, the Company supplies phosphorescent OLED materials to Visionox for use in its licensed products.\n\nIn 2025, the Company entered into long-term, multi-year OLED patent license and material purchase agreements with Tianma Micro-electronics Co., Ltd. (Tianma). Under the agreements, the Company has granted Tianma non-exclusive license rights under various patents owned or controlled by the Company to manufacture and sell OLED display products. Additionally, the Company supplies phosphorescent OLED materials to Tianma for use in its licensed products.\n\nAll material sales transactions that are not variable consideration transactions are generally billed and due within 90 days and substantially all are transacted in U.S. dollars.\n\nF-15\n\n \n\nCost of Sales\n\nCost of sales consists of labor and material costs associated with the production of materials processed at the facilities of the Company's manufacturing partner, PPG Industries, Inc. (PPG) and at the Company's internal facilities. The Company’s portion of cost of sales also includes depreciation of manufacturing equipment, as well as manufacturing overhead costs and inventory adjustments for excess and obsolete inventory.\n\nResearch and Development\n\nExpenditures for research and development are charged to expense as incurred.\n\nRestructuring\n\nThe Company has participated in restructuring initiatives in the past and it is possible that the Company may engage in future restructuring activities. Identifying and calculating the cost to exit operations requires certain assumptions to be made, the most significant of which are anticipated future liabilities, including leases and other contractual obligations, and the adjustment of property and equipment to net realizable value. Significant judgment is required, and estimates and assumptions may change as additional information becomes available and facts or circumstances change.\n\nIn June 2020, the Company formed a wholly-owned subsidiary, OVJP Corp in California, as a Delaware corporation, which was founded to advance the commercialization of the Company's proprietary OVJP technology, which the Company now refers to as Universal Vapor Jet Printing (UVJP). In December 2024, the Company announced that the OVJP Corp facility in California would be closing and UVJP operations would be relocated to the Company's newly formed subsidiary, UVJC in Singapore, as well as continued operations in the Company's Tech and Innovation Center in New Jersey. As a result of the closure of OVJP Corp's location in California, the Company determined to record $2.2 million and $8.9 million of restructuring costs for the years ended December 31, 2025 and 2024, respectively. The OVJP Corp restructuring costs are included in the research and development expense line item on the Consolidated Statements of Income.\n\nPatent Costs\n\nCosts associated with patent applications, patent prosecution, patent defense and the maintenance of patents are charged to expense as incurred. Costs to successfully defend a challenge to a patent are capitalized to the extent of an evident increase in the value of the patent. Costs that relate to an unsuccessful outcome are charged to expense.\n\nAmortization of Acquired Technology\n\nAmortization costs primarily relate to technology acquired from Merck KGaA, Darmstadt, Germany (Merck KGaA) and BASF SE (BASF). The Merck KGaA acquisition was completed on April 28, 2023 and the BASF acquisition was completed during the year ended December 31, 2016. Acquisition costs are being amortized over a period of 10 years for the Merck KGaA and BASF patents.\n\nAmortization of Other Intangible Assets\n\nOther intangible assets from the Adesis acquisition are being amortized over a period of 10 to 15 years. See Note 7 for further discussion.\n\nTranslation of Foreign Currency Financial Statements and Foreign Currency Transactions\n\nThe Company’s reporting currency is the U.S. dollar. The functional currency for the UDC Ireland, UDC Korea and UDC Chengdu subsidiaries are also the U.S. dollar and the functional currency for the OMM subsidiary and each of the Company's other Asia-Pacific foreign subsidiaries is its respective local currency. The Company translates the amounts included in the Consolidated Statements of Income from OMM and its other Asia-Pacific foreign subsidiaries into U.S. dollars at weighted-average exchange rates, which the Company believes are representative of the actual exchange rates on the dates of the transactions. The Company's OMM subsidiary and each of the Company's other Asia-Pacific foreign subsidiaries' assets and liabilities are translated into U.S. dollars from the local currency at the actual exchange rates as of the end of each reporting date, and the Company records the resulting foreign exchange translation adjustments in the Consolidated Balance Sheets as a component of accumulated other comprehensive income (loss). With the exception of the Korean withholding tax receivable denominated in Korean Won (see Note 20), the overall effect of the translation of foreign currency and foreign currency transactions to date has been insignificant.\n\nF-16\n\n \n\nIncome Taxes\n\nIncome taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount of which the likelihood of realization is greater than 50%. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties, if any, related to unrecognized tax benefits as a component of tax expense.\n\nOn July 4, 2025, the U.S. enacted H.R. 1 \"A bill to provide for reconciliation pursuant to Title II of H. Con. Res. 14.\" The bill includes several changes to federal tax law that generally allow for more favorable treatment of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic research and development expenditures. H.R.1 also includes certain changes to the international tax framework and permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act. During the year ended December 31, 2025, the Company evaluated H.R 1 and estimated its impact on the Consolidated Financial Statements to be immaterial. The Company will continue to evaluate the full impact of the legislative changes as additional guidance becomes available.\n\nShare-Based Payment Awards\n\nThe Company recognizes in the Consolidated Statements of Income the grant-date fair value of equity-based awards such as shares issued under employee stock purchase plans, restricted stock awards, restricted stock units and performance unit awards issued to employees and directors.\n\nThe grant-date fair value of stock awards is based on the closing price of the stock on the date of grant. The fair value of share-based awards is recognized as compensation expense on a straight-line basis over the requisite service period, net of forfeitures. The Company issues new shares upon the respective grant, exercise or vesting of the share-based payment awards, as applicable.\n\nPerformance unit awards are subject to either a performance-based or market-based vesting requirement. For performance-based vesting, the grant-date fair value of the award, based on fair value of the Company's common stock, is recognized over the service period based on an assessment of the likelihood that the applicable performance goals will be achieved, and compensation expense is periodically adjusted based on actual and expected performance. Compensation expense for performance unit awards with market-based vesting is calculated based on the estimated fair value as of the grant date utilizing a Monte Carlo simulation model and is recognized over the service period on a straight-line basis.\n\nRecent Accounting Pronouncements\n\nAdoption of New Accounting Standards\n\nIn March 2024, the FASB issued ASU No. 2024-01, Compensation - Stock Compensation (Topic 718). The standard provides guidance to reduce complexity and diversity in practice in determining whether a profits interest award is accounted for as a share-based payment. Early adoption is permitted. This guidance can be applied either retrospectively to all prior periods presented in the financial statements or prospectively to profits interest or similar awards granted or modified on or after the effective date for our application of this guidance. The adoption of ASU 2024-01, beginning on January 1, 2025, did not have an impact on the Consolidated Financial Statements and related disclosures.\n\nIn December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The standard enhances the annual income tax disclosures to address investor requests for more information about the tax risks and opportunities present in an entity's worldwide operations. The adoption of ASU 2023-09, during the annual period ended December 31, 2025, resulted in enhanced income tax disclosures included in Note 20.\n\nIn July 2025, the FASB issued ASU No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The standard reduces the cost and complexity of applying Topic 326 (credit losses) to current accounts receivable and current contract assets arising from transactions accounted for under Topic 606 (revenue from contracts with customers). The Company chose to early adopt ASU 2025-05 during the annual period ended December 31, 2025, and elected the practical expedient. This practical expedient permits the Company to assume the current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets. The adoption of ASU 2025-05, during the annual period ended December 31, 2025, did not have an impact on the Consolidated Financial Statements and related disclosures.\n\nF-17\n\n \n\nAccounting Standards Issued But Not Yet Adopted\n\nIn November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (DISE). The standard requires new financial statement disclosures disaggregating information about prescribed categories underlying any relevant income statement expense caption. ASU 2024-03 becomes effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is evaluating the potential impact of this standard on the Consolidated Financial Statements and related disclosures.\n\nIn September 2025, the FASB issued ASU No. 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The standard updates the accounting for internal-use software by eliminating the concept of development stages. Under this updated guidance, software costs are capitalized once management has authorized and committed funding to the project, and it is probable the project will be completed and the software used as intended. ASU 2025-06 becomes effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods. The Company is evaluating the potential impact of this standard on the Consolidated Financial Statements and related disclosures.\n\n \n\n3.\nCASH, CASH EQUIVALENTS AND INVESTMENTS:\n\nThe Company’s portfolio of marketable fixed income securities consists of U.S. Government bonds. The Company considers all highly liquid debt instruments purchased with an original maturity (maturity at the purchase date) of three months or less to be cash equivalents. The Company classifies its remaining debt security investments as available-for-sale. These debt securities are carried at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. Gains or losses on securities sold are based on the specific identification method.\n\nCash and Cash Equivalents\n\nThe following table provides details regarding the Company’s portfolio of cash and cash equivalents (in thousands):\n\n \n\n \n\n \n\nCost or\n\n \n\n \n\nUnrealized\n\n \n\n \n\nAggregate\n\n \n\nCash and Cash Equivalents Classification\n\n \n\nAmortized Cost\n\n \n\n \n\nGains\n\n \n\n \n\n(Losses)\n\n \n\n \n\nFair Value\n\n \n\nDecember 31, 2025\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash accounts in banking institutions\n\n \n\n$\n\n110,892\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n110,892\n\n \n\nUS Government bonds\n\n \n\n$\n\n26,479\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n$\n\n26,479\n\n \n\nMoney market accounts\n\n \n\n \n\n982\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n982\n\n \n\n \n\n \n\n$\n\n138,353\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n138,353\n\n \n\nDecember 31, 2024\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash accounts in banking institutions\n\n \n\n$\n\n96,318\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n96,318\n\n \n\nMoney market accounts\n\n \n\n \n\n2,662\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n2,662\n\n \n\n \n\n \n\n$\n\n98,980\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n98,980\n\n \n\nShort-term Investments\n\nThe following table provides details regarding the Company’s portfolio of short-term investments (in thousands):\n\n \n\n \n\n \n\nCost or\n\n \n\n \n\nUnrealized\n\n \n\n \n\nAggregate\n\n \n\nShort-term Investments Classification\n\n \n\nAmortized Cost\n\n \n\n \n\nGains\n\n \n\n \n\n(Losses)\n\n \n\n \n\nFair Value\n\n \n\nDecember 31, 2025\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nU.S. Government bonds\n\n \n\n$\n\n453,812\n\n \n\n \n\n$\n\n1,592\n\n \n\n \n\n$\n\n(6\n\n)\n\n \n\n$\n\n455,398\n\n \n\nMarketable equity securities (1)\n\n \n\n \n\n4,677\n\n \n\n \n\n \n\n3,943\n\n \n\n \n\n \n\n(14\n\n)\n\n \n\n \n\n8,606\n\n \n\n \n\n \n\n$\n\n458,489\n\n \n\n \n\n$\n\n5,535\n\n \n\n \n\n$\n\n(20\n\n)\n\n \n\n$\n\n464,004\n\n \n\nDecember 31, 2024\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nU.S. Government bonds\n\n \n\n$\n\n392,778\n\n \n\n \n\n$\n\n758\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n393,536\n\n \n\nMarketable equity securities (1)\n\n \n\n \n\n142\n\n \n\n \n\n \n\n12\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n154\n\n \n\n \n\n \n\n$\n\n392,920\n\n \n\n \n\n$\n\n770\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n393,690\n\n \n\n(1)\nChanges in aggregate fair value recorded in other income (loss), net on the Consolidated Statements of Income.\n\nF-18\n\n \n\nLong-term U.S. Government Bond Investments\n\nThe following table provides details regarding the Company’s portfolio of long-term investments (in thousands):\n\n \n\n \n\n \n\nCost or\n\n \n\n \n\nUnrealized\n\n \n\n \n\nAggregate\n\n \n\nLong-term Investments Classification\n\n \n\nAmortized Cost\n\n \n\n \n\nGains\n\n \n\n \n\n(Losses)\n\n \n\n \n\nFair Value\n\n \n\nDecember 31, 2025\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nU.S. Government bonds\n\n \n\n$\n\n351,125\n\n \n\n \n\n$\n\n1,873\n\n \n\n \n\n$\n\n(11\n\n)\n\n \n\n$\n\n352,987\n\n \n\n \n\n \n\n$\n\n351,125\n\n \n\n \n\n$\n\n1,873\n\n \n\n \n\n$\n\n(11\n\n)\n\n \n\n$\n\n352,987\n\n \n\nDecember 31, 2024\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nU.S. Government bonds\n\n \n\n \n\n434,766\n\n \n\n \n\n \n\n1,302\n\n \n\n \n\n \n\n(595\n\n)\n\n \n\n$\n\n435,473\n\n \n\n \n\n \n\n$\n\n434,766\n\n \n\n \n\n$\n\n1,302\n\n \n\n \n\n$\n\n(595\n\n)\n\n \n\n$\n\n435,473\n\n \n\n \n\nAs of December 31, 2025, 100% of the Company's long-term U.S. Government bonds had maturities between one and three years.\n\nMinority Equity Investments and Convertible Notes\n\nThe Company’s portfolio of minority equity investments and convertible notes consists of investments in privately held early-stage companies primarily motivated for the Company to gain early access to new technology and are passive in nature in that the Company typically does not seek to obtain representation on the boards of directors of the companies in which it invests. Minority equity investments and convertible notes are included in investments on the Consolidated Balance Sheets. As of both December 31, 2025 and 2024, the Company had minority equity investments in six entities, with a total carrying value of $22.0 million and $18.6 million, respectively, accounted for as equity securities without readily determinable fair values. As of both December 31, 2025 and 2024, the Company had two convertible note investments, with a total fair value of $2.0 million and $3.5 million, respectively, accounted for as available-for-sale debt securities without readily determinable fair values. During the years ended December 31, 2025 and 2024, the Company did not recognize an impairment in the value of its minority equity investments.\n\n4.\nFAIR VALUE MEASUREMENTS:\n\nThe following table provides the assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2025 (in thousands):\n\n \n\n \n\n \n\n \n\n \n\nFair Value Measurements, Using\n\n \n\n \n\n \n\nTotal Carrying Value\nas of December 31,\n 2025\n\n \n\n \n\nQuoted Prices in\nActive Markets\n(Level 1)\n\n \n\n \n\nSignificant Other\nObservable Inputs\n(Level 2)\n\n \n\n \n\nSignificant Unobservable\nInputs\n(Level 3)\n\n \n\nShort-term U.S. Government bonds\n\n \n\n$\n\n455,398\n\n \n\n \n\n$\n\n455,398\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\nLong-term U.S. Government bonds\n\n \n\n \n\n352,987\n\n \n\n \n\n \n\n352,987\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nCash equivalents\n\n \n\n \n\n27,461\n\n \n\n \n\n \n\n27,461\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nShort-term marketable equity securities\n\n \n\n \n\n8,606\n\n \n\n \n\n \n\n8,606\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nConvertible notes\n\n \n\n \n\n2,000\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n2,000\n\n \n\n \n\nThe following table provides the assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2024 (in thousands):\n\n \n\n \n\n \n\n \n\n \n\n \n\nFair Value Measurements, Using\n\n \n\n \n\n \n\nTotal Carrying Value\nas of December 31,\n 2024\n\n \n\n \n\nQuoted Prices in\nActive Markets\n(Level 1)\n\n \n\n \n\nSignificant Other\nObservable Inputs\n(Level 2)\n\n \n\n \n\nSignificant Unobservable\nInputs\n(Level 3)\n\n \n\nShort-term U.S. Government bonds\n\n \n\n$\n\n393,536\n\n \n\n \n\n \n\n393,536\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nLong-term U.S. Government bonds\n\n \n\n \n\n435,473\n\n \n\n \n\n \n\n435,473\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nCash equivalents\n\n \n\n \n\n2,662\n\n \n\n \n\n \n\n2,662\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nShort-term marketable equity securities\n\n \n\n \n\n154\n\n \n\n \n\n \n\n154\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nConvertible notes\n\n \n\n \n\n3,500\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n3,500\n\n \n\n \n\nF-19\n\n \n\nLevel 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on management’s own assumptions used to measure assets and liabilities at fair value. A financial asset’s or liability’s classification is determined based on the lowest level input that is significant to the fair value measurement.\n\nChanges in fair value of the debt investments are recorded as unrealized gains and losses in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets and any credit losses on debt investments are recorded as an allowance for credit losses with an offset recognized in other income (loss), net on the Consolidated Statements of Income. There were no credit losses on debt investments as of December 31, 2025 or 2024.\n\n5.\nINVENTORY:\n\nInventory consisted of the following (in thousands):\n\n \n\n \n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nRaw materials\n\n \n\n$\n\n144,300\n\n \n\n \n\n$\n\n106,795\n\n \n\nWork-in-process\n\n \n\n \n\n24,102\n\n \n\n \n\n \n\n16,374\n\n \n\nFinished goods\n\n \n\n \n\n72,510\n\n \n\n \n\n \n\n59,769\n\n \n\nInventory\n\n \n\n$\n\n240,912\n\n \n\n \n\n$\n\n182,938\n\n \n\n \n\nThe increase in inventory during the year ended December 31, 2025 was primarily due to purchases of certain strategic raw materials. The Company recorded an increase in its inventory reserves of $376,000, $3.1 million and $8.5 million for the years ended December 31, 2025, 2024 and 2023, respectively, due to excess inventory levels in certain products.\n\n6.\nPROPERTY AND EQUIPMENT:\n\nProperty and equipment, net consist of the following (in thousands):\n\n \n\n \n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nLand\n\n \n\n$\n\n12,230\n\n \n\n \n\n$\n\n12,230\n\n \n\nBuilding and improvements\n\n \n\n \n\n166,250\n\n \n\n \n\n \n\n131,288\n\n \n\nOffice and lab equipment\n\n \n\n \n\n180,473\n\n \n\n \n\n \n\n159,448\n\n \n\nFurniture, fixtures and computer related assets\n\n \n\n \n\n16,875\n\n \n\n \n\n \n\n16,858\n\n \n\nConstruction-in-progress\n\n \n\n \n\n28,445\n\n \n\n \n\n \n\n45,292\n\n \n\n \n\n \n\n \n\n404,273\n\n \n\n \n\n \n\n365,116\n\n \n\nLess: Accumulated depreciation\n\n \n\n \n\n(189,326\n\n)\n\n \n\n \n\n(169,877\n\n)\n\nProperty and equipment, net\n\n \n\n$\n\n214,947\n\n \n\n \n\n$\n\n195,239\n\n \n\n \n\nDepreciation expense was $28.4 million, $25.9 million and $27.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. During the year ended December 31, 2025, the Company disposed of $7.0 million in property and equipment with no net book value. These assets were previously impaired as of December 31, 2024, in connection with the closure of the OVJP Corp facility in California.\n\n \n\n7.\nGOODWILL AND INTANGIBLE ASSETS:\n\nThe Company monitors the recoverability of goodwill annually or whenever events or changes in circumstances indicate the carrying value may not be recoverable. Purchased intangible assets subject to amortization consist of acquired technology and other intangible assets that include trade names, customer relationships and developed intellectual property (IP) processes.\n\nF-20\n\n \n\nAcquired Technology\n\nAcquired technology primarily consists of acquired license rights for patents and know-how obtained from Merck KGaA, BASF and Fujifilm. These intangible assets consist of the following (in thousands):\n\n \n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nMerck KGaA\n\n \n\n \n\n66,012\n\n \n\n \n\n \n\n66,012\n\n \n\nBASF\n\n \n\n \n\n95,989\n\n \n\n \n\n \n\n95,989\n\n \n\nFujifilm\n\n \n\n \n\n109,462\n\n \n\n \n\n \n\n109,462\n\n \n\nOther\n\n \n\n \n\n5,712\n\n \n\n \n\n \n\n5,712\n\n \n\n \n\n \n\n \n\n277,175\n\n \n\n \n\n \n\n277,175\n\n \n\nLess: Accumulated amortization\n\n \n\n \n\n(220,392\n\n)\n\n \n\n \n\n(203,621\n\n)\n\nAcquired technology, net\n\n \n\n$\n\n56,783\n\n \n\n \n\n$\n\n73,554\n\n \n\nAmortization expense related to acquired technology was $16.8 million, $16.8 million and $14.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. Amortization expense is included in amortization of acquired technology and other intangible assets expense line item on the Consolidated Statements of Income and is expected to be $12.0 million in the year ending December 31, 2026, $7.2 million in each of the years ending December 31, 2027 and 2028, $7.1 million in each of the years ending December 31, 2029 and 2030, and $16.2 million in total thereafter.\n\nMerck KGaA Patent Acquisitions\n\nIn April 2023, UDC Ireland entered into a Patent Sale and License Agreement with Merck KGaA. Under this agreement, Merck KGaA sold to UDC Ireland all of its rights, title and interest to over 550 of its owned and licensed OLED-related patents and patent applications in exchange for a cash payment of $66.0 million. The Patent Sale and License Agreement contains customary representations, warranties and covenants of the parties. UDC Ireland recorded the payment of $66.0 million as acquired technology, which is being amortized over a period of 10 years.\n\nIn October 2025, UDC Ireland entered into an Intellectual Property Sales Agreement with Merck KGaA. Under this agreement, UDC Ireland agreed to acquire from Merck KGaA all of its rights, title and interest to more than 300 of its OLED-related patents and patent applications in exchange for cash payments totaling $50.0 million. The Intellectual Property Sale Agreement contains customary representations, warranties and covenants of the parties. In November 2025, an initial payment of $10.0 million was made toward the purchase price and is included in other current assets on the Consolidated Balance Sheets as of December 31, 2025. The transaction closed during January 2026 and the acquired assets will be amortized over a period of 10 years.\n\nBASF Patent Acquisition\n\nOn June 28, 2016, UDC Ireland entered into and consummated an IP Transfer Agreement with BASF. Under the IP Transfer Agreement, BASF sold to UDC Ireland all of its rights, title and interest to certain of its owned and co-owned intellectual property rights relating to the composition, development, manufacture and use of OLED materials, including OLED lighting and display stack technology, as well as certain tangible assets. The intellectual property includes knowhow and more than 500 issued and pending patents in the area of phosphorescent materials and technologies. These assets were acquired in exchange for a cash payment of €86.8 million ($95.8 million). In addition, UDC Ireland also took on certain rights and obligations under three joint research and development agreements to which BASF was a party. The IP Transfer Agreement also contains customary representations, warranties and covenants of the parties. UDC Ireland recorded the payment of €86.8 million ($95.8 million) and acquisition costs incurred of $217,000 as acquired technology, which is being amortized over a period of 10 years.\n\nOther Intangible Assets\n\nAs a result of the Adesis acquisition in June 2016, the Company recorded $16.8 million of other intangible assets, including $10.5 million assigned to customer relationships with a weighted average life of 11.5 years, $4.8 million to internally developed IP, processes and recipes with a weighted average life of 15 years, and $1.5 million to trade name and trademarks with a weighted average life of 10 years.\n\nF-21\n\n \n\nAt December 31, 2025, these other intangible assets consist of the following (in thousands):\n\n \n\n \n\n \n\nDecember 31, 2025\n\n \n\n \n\n \n\nGross Carrying\nAmount\n\n \n\n \n\nAccumulated\nAmortization\n\n \n\n \n\nNet Carrying\nAmount\n\n \n\nCustomer relationships\n\n \n\n$\n\n10,520\n\n \n\n \n\n$\n\n(8,632\n\n)\n\n \n\n$\n\n1,888\n\n \n\nDeveloped IP, processes and recipes\n\n \n\n \n\n4,820\n\n \n\n \n\n \n\n(3,028\n\n)\n\n \n\n \n\n1,792\n\n \n\nTrade name/Trademarks\n\n \n\n \n\n1,500\n\n \n\n \n\n \n\n(1,418\n\n)\n\n \n\n \n\n82\n\n \n\nOther\n\n \n\n \n\n448\n\n \n\n \n\n \n\n(191\n\n)\n\n \n\n \n\n257\n\n \n\nTotal identifiable other intangible assets\n\n \n\n$\n\n17,288\n\n \n\n \n\n$\n\n(13,269\n\n)\n\n \n\n$\n\n4,019\n\n \n\n \n\nAmortization expense related to other intangible assets was $1.4 million for each of the years ended December 31, 2025, 2024, and 2023. Amortization expense is included in amortization of acquired technology and other intangible assets expense line item on the Consolidated Statements of Income and is expected to be $1.4 million for the year ending December 31, 2026, $1.3 million for the year ending December 31, 2027, $426,000 for the year ending December 31, 2028, $366,000 for each of the years ending December 31, 2029 and 2030, and $219,000 in total thereafter.\n\nGoodwill\n\nAs a result of the Adesis acquisition, the Company recorded $15.5 million of goodwill. The Company performs its annual assessment of goodwill during the fourth quarter of the fiscal year unless events suggest an impairment may have been incurred in an interim period using Adesis’ standalone financial operating performance information. Application of the goodwill impairment test requires the exercise of judgment, including the determination of the fair value of each reporting unit, as Adesis is the reporting unit. As part of the annual assessment of goodwill completed during the fourth quarter ended December 31, 2025, there were no significant indicators to conclude that an impairment of the goodwill associated with the acquisition of Adesis had occurred.\n\n8.\nOTHER ASSETS:\n\nOther assets consist of the following (in thousands):\n\n \n\n \n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nLong-term taxes receivable\n\n \n\n$\n\n53,842\n\n \n\n \n\n$\n\n52,899\n\n \n\nLong-term unbilled receivables\n\n \n\n \n\n45,600\n\n \n\n \n\n \n\n24,943\n\n \n\nRight-of-use assets\n\n \n\n \n\n19,925\n\n \n\n \n\n \n\n19,867\n\n \n\nLong-term contract assets\n\n \n\n \n\n3,338\n\n \n\n \n\n \n\n6,528\n\n \n\nOther long-term assets\n\n \n\n \n\n6,227\n\n \n\n \n\n \n\n2,578\n\n \n\nOther assets\n\n \n\n$\n\n128,932\n\n \n\n \n\n$\n\n106,815\n\n \n\nSee Notes 9 and 20 for further explanation on right-of-use assets and long-term taxes receivable, respectively.\n\n9.\nLEASES:\n\nThe Company has entered into operating leases to facilitate the expansion of its manufacturing, research and development, and selling, general and administrative activities. For purposes of calculating operating lease liabilities, lease terms may be deemed to include options to extend or terminate the lease when those events are reasonably certain to occur. The interest rate implicit in lease contracts is typically not readily determinable and as such the Company uses the appropriate incremental borrowing rate based on information available at the lease commencement date in determining the present value of the lease payments. Current lease agreements do not contain any residual value guarantees or material restrictive covenants. As of December 31, 2025, the Company did not have any finance leases and no additional operating leases that have not yet commenced.\n\nF-22\n\n \n\nThe following table presents the Company’s operating lease cost and supplemental cash flow information related to the Company’s operating leases (in thousands):\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nOperating lease cost\n\n \n\n$\n\n3,992\n\n \n\n \n\n$\n\n4,343\n\n \n\n \n\n$\n\n4,639\n\n \n\nNon-cash activity:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nRight-of-use assets obtained in exchange for lease obligations\n\n \n\n$\n\n4,979\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n1,072\n\n \n\nThe following table presents the Company’s operating lease right-of-use assets and liabilities (in thousands):\n\n \n\n \n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nRight-of-use assets\n\n \n\n$\n\n19,925\n\n \n\n \n\n$\n\n19,867\n\n \n\nShort-term lease liabilities\n\n \n\n \n\n4,752\n\n \n\n \n\n \n\n3,848\n\n \n\nLong-term lease liabilities\n\n \n\n \n\n19,217\n\n \n\n \n\n \n\n19,135\n\n \n\n \n\nFor the years ended December 31, 2025 and 2024, the Company determined to record a right-of-use impairment of $1.6 million and $1.4 million, respectively, due to the closure of OVJP Corp's California location and related restructuring.\n\nThe following table presents weighted average assumptions used to compute the Company’s right-of-use assets and lease liabilities:\n\n \n\n \n\n \n\nDecember 31, 2025\n\n \n\nWeighted average remaining lease term (in years)\n\n \n\n \n\n5.2\n\n \n\nWeighted average discount rate\n\n \n\n \n\n3.9\n\n%\n\nAs of December 31, 2025, current operating leases had remaining terms between one and six years with options to extend the lease terms.\n\nUndiscounted future minimum lease payments as of December 31, 2025, by year and in the aggregate, having non-cancelable lease terms in excess of one year were as follows (in thousands):\n\n \n\n \n\n \n\nMaturities of\n\n \n\n \n\n \n\nOperating Lease Liabilities\n\n \n\n2026\n\n \n\n$\n\n5,342\n\n \n\n2027\n\n \n\n \n\n5,310\n\n \n\n2028\n\n \n\n \n\n5,012\n\n \n\n2029\n\n \n\n \n\n3,628\n\n \n\n2030\n\n \n\n \n\n3,396\n\n \n\nThereafter\n\n \n\n \n\n3,313\n\n \n\nTotal lease payments\n\n \n\n \n\n26,001\n\n \n\nLess: imputed interest\n\n \n\n \n\n(1,758\n\n)\n\nPresent value of lease payments\n\n \n\n$\n\n24,243\n\n \n\n \n\nF-23\n\n \n\n10.\nACCRUED EXPENSES:\n\nAccrued expenses consist of the following (in thousands):\n\n \n\n \n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nCompensation\n\n \n\n$\n\n29,160\n\n \n\n \n\n$\n\n28,744\n\n \n\nPPG Industries, Inc. agreement\n\n \n\n \n\n12,104\n\n \n\n \n\n \n\n7,759\n\n \n\nConsulting\n\n \n\n \n\n1,492\n\n \n\n \n\n \n\n1,718\n\n \n\nProfessional fees\n\n \n\n \n\n919\n\n \n\n \n\n \n\n1,292\n\n \n\nResearch and development agreements\n\n \n\n \n\n836\n\n \n\n \n\n \n\n852\n\n \n\nRoyalties\n\n \n\n \n\n504\n\n \n\n \n\n \n\n1,048\n\n \n\nOther\n\n \n\n \n\n7,549\n\n \n\n \n\n \n\n4,613\n\n \n\nAccrued expenses\n\n \n\n$\n\n52,564\n\n \n\n \n\n$\n\n46,026\n\n \n\n \n\n11.\nRESEARCH AND LICENSE AGREEMENTS WITH ACADEMIC PARTNERS:\n\nThe Company has long-standing relationships with a number of academic institutions that undertake funded research projects, including Princeton University (Princeton) and the University of Southern California (USC).\n\nUnder the current license agreement among the Company, Princeton and USC, the universities have granted the Company worldwide, exclusive license rights, with rights to sublicense, to make, have made, use, lease and/or sell products and to practice processes based on patent applications and issued patents arising out of research performed by the universities for the Company. The Company recorded royalty expense in connection with this agreement of $450,000, $2.0 million and $575,000 for the years ended December 31, 2025, 2024 and 2023, respectively.\n\nThe Company also makes payments under the current research agreement with USC on a quarterly basis as actual expenses are incurred. As of December 31, 2025, the Company was obligated to pay USC up to $6.3 million for work to be performed during the remaining term. The Company recorded research and development expense in connection with work performed under the agreement of $1.6 million, $1.6 million and $1.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.\n\n12.\nOTHER LIABILITIES:\n\nOther liabilities consist of the following (in thousands):\n\n \n\n \n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nLong-term lease liabilities\n\n \n\n$\n\n19,217\n\n \n\n \n\n$\n\n19,135\n\n \n\nLong-term taxes payable\n\n \n\n \n\n15,749\n\n \n\n \n\n \n\n15,749\n\n \n\nOther long-term liabilities\n\n \n\n \n\n1,280\n\n \n\n \n\n \n\n527\n\n \n\nOther liabilities\n\n \n\n$\n\n36,246\n\n \n\n \n\n$\n\n35,411\n\n \n\nSee Notes 9 and 20 for further explanation on long-term lease liabilities and long-term taxes payable, respectively.\n\n13.\nEQUITY AND CASH COMPENSATION UNDER THE PPG AGREEMENTS:\n\nOn September 22, 2011, the Company entered into an Amended and Restated OLED Materials Supply and Service Agreement with PPG (the New OLED Materials Agreement), which, effective as of October 1, 2011, replaced the original OLED Materials Agreement with PPG. The term of the New OLED Materials Agreement, as amended in February 2021 (the February 2021 amendment), runs through December 31, 2026, and thereafter is automatically renewed for additional one-year terms, unless terminated by the Company by providing prior notice of one year or terminated by PPG by providing prior notice of two years. The New OLED Materials Agreement contains provisions that are substantially similar to those of the original OLED Materials Agreement. Under the New OLED Materials Agreement, PPG continues to assist the Company in developing its proprietary OLED materials and supplying the Company with those materials for evaluation purposes and for resale to its customers.\n\nF-24\n\n \n\nUnder the New OLED Materials Agreement, the Company compensates PPG on a cost-plus basis for the services provided during each calendar quarter. The Company is required to pay for some of these services in all cash. Up to 50% of the remaining services are payable, at the Company’s sole discretion, in cash or shares of the Company’s common stock, with the balance payable in cash. The actual number of shares of common stock issuable to PPG is determined based on the average closing price for the Company’s common stock during a specified number of days prior to the end of each calendar half-year period ending on March 31 and September 30. If, however, this average closing price is less than $20.00, the Company is required to compensate PPG in cash. No shares have been issued for services rendered by PPG since the inception of the contract.\n\nThe Company is also required to reimburse PPG for raw materials used for research and development. The Company records the purchases of these raw materials as a current asset until such materials are used for research and development efforts.\n\nThe February 2021 amendment extended the term of the agreement and specified operation and maintenance services to be provided by PPG affiliate, PPG SCM Ireland Limited (PPG SCM), to UDC Ireland, at the Company’s manufacturing site in Shannon, Ireland that UDC Ireland’s wholly-owned subsidiary, OLED Material Manufacturing Limited (OMM), began leasing at such time for the production of OLED materials. OMM purchased the site in September 2023 and the Company amended and restated the February 2021 amendment to reflect OMM’s ownership and PPG SCM’s updated operation and maintenance services after such purchase. Facility improvements have been completed and operations commenced in June 2022. As with the initial New OLED Materials Agreement, the Company compensates PPG on a cost-plus basis for the services provided at the Shannon manufacturing facility.\n\nThe Company recorded research and development expense of $17.5 million, $19.3 million and $9.1 million for the years ended December 31, 2025, 2024 and 2023, respectively, in relation to the cash portion of the reimbursement of expenses and work performed by PPG, excluding amounts paid for commercial chemicals.\n\n14.\nSHAREHOLDERS' EQUITY:\n\nPreferred Stock\n\nThe Company’s Amended and Restated Articles of Incorporation authorize it to issue up to 5,000,000 shares of $0.01 par value preferred stock with designations, rights and preferences determined from time-to-time by the Company’s Board of Directors. Accordingly, the Company’s Board of Directors is empowered, without shareholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights superior to those of shareholders of the Company’s common stock.\n\n \n\nIn 1995, the Company issued 200,000 shares of Series A Nonconvertible Preferred Stock (Series A) to American Biomimetics Corporation (ABC) pursuant to a certain Technology Transfer Agreement between the Company and ABC. The Series A shares have a liquidation value of $7.50 per share. Series A shareholders, as a single class, have the right to elect two members of the Company’s Board of Directors. This right has never been exercised. Holders of the Series A shares are entitled to one vote per share on matters which shareholders are generally entitled to vote. The Series A shareholders are not entitled to any dividends. As of December 31, 2025, the Company had issued 200,000 shares of preferred stock (consisting of the 200,000 shares of Series A), all of which were outstanding.\n\nCommon Stock\n\nThe Company’s Amended and Restated Articles of Incorporation authorize it to issue up to 200,000,000 shares of $0.01 par value common stock. Each share of the Company’s common stock entitles the holder to one vote on all matters to be voted upon by the shareholders. As of December 31, 2025, the Company had issued 48,916,606 shares of common stock, of which 47,259,748 were outstanding.\n\n \n\nOn April 29, 2025, the Company’s Board of Directors approved a share repurchase program, authorizing the Company to purchase up to $100.0 million of its common stock. The repurchase authorization was effective immediately and permits shares of the Company’s common stock to be repurchased from time to time at management's discretion, through a variety of methods, including a 10b5-1 trading plan, open market purchases, privately negotiated transactions, or transactions otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The repurchase program has no time limit, does not obligate the Company to acquire a specified number of shares and may be modified, suspended or discontinued at any time at the Company’s discretion. During the year ended December 31, 2025, the Company repurchased 291,210 shares of its common stock for $34.1 million. During the year ended December 31, 2024, the Company repurchased no shares of its common stock.\n\nDividends\n\nDuring the year ended December 31, 2025, the Company declared cash dividends of $1.80 per common share, or $86.3 million, on the Company’s outstanding common stock. The Company paid $85.5 million of cash dividends during the year ended December 31, 2025.\n\nF-25\n\n \n\n \n\nOn February 17, 2026, the Company’s Board of Directors declared a first quarter cash dividend of $0.50 per share to be paid on March 31, 2026 to all shareholders of record of the Company's common stock as of the close of business on March 17, 2026. All future dividends will be subject to the approval of the Company’s Board of Directors.\n\n15.\nACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):\n\nAmounts related to the changes in accumulated other comprehensive income (loss) were as follows (in thousands):\n\n \n\n \n\nUnrealized\nGain (Loss) on\nAvailable-for-\nSale-Securities\n\n \n\n \n\nNet Unrealized\n(Loss) Gain on\nRetirement Plan (2)\n\n \n\n \n\nChange in Cumulative\nForeign Currency\nTranslation Adjustment\n\n \n\n \n\nTotal\n\n \n\n \n\nAffected Line items in the\nConsolidated Statements of\nIncome\n\nBalance January 1, 2023, net of tax\n\n \n\n$\n\n(7,887\n\n)\n\n \n\n$\n\n(10,011\n\n)\n\n \n\n$\n\n(554\n\n)\n\n \n\n$\n\n(18,452\n\n)\n\n \n\n \n\nOther comprehensive income\n   before reclassification\n\n \n\n \n\n8,745\n\n \n\n \n\n \n\n7,207\n\n \n\n \n\n \n\n418\n\n \n\n \n\n \n\n16,370\n\n \n\n \n\n \n\nReclassification to net income (1)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n996\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n996\n\n \n\n \n\nSelling, general and administrative,\nresearch and development and\ncost of sales\n\nChange during period\n\n \n\n \n\n8,745\n\n \n\n \n\n \n\n8,203\n\n \n\n \n\n \n\n418\n\n \n\n \n\n \n\n17,366\n\n \n\n \n\n \n\nBalance December 31, 2023, net of tax\n\n \n\n \n\n858\n\n \n\n \n\n \n\n(1,808\n\n)\n\n \n\n \n\n(136\n\n)\n\n \n\n \n\n(1,086\n\n)\n\n \n\n \n\nOther comprehensive income (loss)\n   before reclassification\n\n \n\n \n\n411\n\n \n\n \n\n \n\n(559\n\n)\n\n \n\n \n\n(82\n\n)\n\n \n\n \n\n(230\n\n)\n\n \n\n \n\nReclassification to net income (1)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n261\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n261\n\n \n\n \n\nSelling, general and administrative,\nresearch and development and\ncost of sales\n\nChange during period\n\n \n\n \n\n411\n\n \n\n \n\n \n\n(298\n\n)\n\n \n\n \n\n(82\n\n)\n\n \n\n \n\n31\n\n \n\n \n\n \n\nBalance December 31, 2024, net of tax\n\n \n\n \n\n1,269\n\n \n\n \n\n \n\n(2,106\n\n)\n\n \n\n \n\n(218\n\n)\n\n \n\n \n\n(1,055\n\n)\n\n \n\n \n\nOther comprehensive income (loss)\n   before reclassification\n\n \n\n \n\n1,986\n\n \n\n \n\n \n\n(320\n\n)\n\n \n\n \n\n152\n\n \n\n \n\n \n\n1,818\n\n \n\n \n\n \n\nReclassification to net income (1)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n18\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n18\n\n \n\n \n\nSelling, general and administrative,\nresearch and development and\ncost of sales\n\nChange during period\n\n \n\n \n\n1,986\n\n \n\n \n\n \n\n(302\n\n)\n\n \n\n \n\n152\n\n \n\n \n\n \n\n1,836\n\n \n\n \n\n \n\nBalance December 31, 2025, net of tax\n\n \n\n$\n\n3,255\n\n \n\n \n\n$\n\n(2,408\n\n)\n\n \n\n$\n\n(66\n\n)\n\n \n\n$\n\n781\n\n \n\n \n\n \n\n(1)\nThe Company reclassified amortization of prior service cost, actuarial loss, curtailment charge and plan amendment cost for its retirement plan from accumulated other comprehensive income (loss) to net income of $18,000, $261,000 and $1.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.\n\n(2)\nRefer to Note 17: Employee Retirement Plans\n\nF-26\n\n \n\n16.\nSTOCK-BASED COMPENSATION:\n\nEquity Compensation Plan\n\nOn June 15, 2023, the shareholders of the Company voted to approve the Universal Display Corporation 2023 Equity Compensation Plan (the “Equity Compensation Plan”), which replaced the Universal Display Corporation 2014 Equity Compensation Plan. The Equity Compensation Plan provides for the granting of incentive and nonqualified stock options, shares of common stock, stock appreciation rights and performance units to employees, directors and consultants of the Company. Stock options are exercisable over periods determined by the Company’s Human Capital Committee, but for no longer than 10 years from the grant date. The total number of shares that may be subject to awards under the Equity Compensation Plan is equal to the shares that were available for issuance and not subject to an award under the 2014 Equity Compensation Plan at the time it was replaced by the Equity Compensation Plan, subject to adjustment with respect to shares underlying any outstanding award granted under the Equity Compensation Plan or the 2014 Equity Compensation Plan that may expire, or be terminated, surrendered or forfeited for any reason, without issuance of such shares. As of December 31, 2025, there were 1,094,479 shares available to be granted under the Equity Compensation Plan. The Equity Compensation Plan will terminate on June 15, 2033.\n\nRestricted Stock Award and Units\n\nThe Company has issued restricted stock awards and units to employees and non-employees with vesting terms of one to five years. The fair value is equal to the market price of the Company’s common stock on the date of grant for awards granted to employees. Consistent with the accounting for equity-classified awards issued to employees, our equity-classified non-employee share-based awards are measured at the grant date fair value. Expense for restricted stock awards and units is amortized ratably over the vesting period for the awards issued to employees and using a graded vesting method for the awards issued to non-employees.\n\nThe following table summarizes the activity related to restricted stock unit (RSU) share based payment awards:\n\n \n\n \n\n \n\nNumber of\nShares\n\n \n\n \n\nWeighted-\nAverage\nGrant-Date\nFair Value\n\n \n\nUnvested, January 1, 2025\n\n \n\n \n\n194,371\n\n \n\n \n\n$\n\n157.58\n\n \n\nGranted\n\n \n\n \n\n122,388\n\n \n\n \n\n \n\n140.87\n\n \n\nVested\n\n \n\n \n\n(104,138\n\n)\n\n \n\n \n\n153.70\n\n \n\nForfeited\n\n \n\n \n\n(6,849\n\n)\n\n \n\n \n\n157.16\n\n \n\nUnvested, December 31, 2025\n\n \n\n \n\n205,772\n\n \n\n \n\n$\n\n149.63\n\n \n\nThe weighted average grant-date fair value per unit of RSU awards granted was $140.87, $177.65 and $136.22 during the years ended December 31, 2025, 2024 and 2023, respectively. The grant date fair value of RSUs that vested during the year was $16.0 million for the year ended December 31, 2025, $17.5 million for the year ended December 31, 2024 and $21.6 million for the year ended December 31, 2023. The fair value of RSUs as of their respective vesting dates was $15.4 million for the year ended December 31, 2025, $19.4 million for the year ended December 31, 2024 and $18.6 million for the year ended December 31, 2023.\n\nThe following table summarizes the activity related to restricted stock award (RSA) share based payment awards:\n\n \n\n \n\n \n\nNumber of\nShares\n\n \n\n \n\nWeighted-\nAverage\nGrant-Date\nFair Value\n\n \n\nUnvested, January 1, 2025\n\n \n\n \n\n—\n\n \n\n \n\n$\n\n—\n\n \n\nGranted\n\n \n\n \n\n2,070\n\n \n\n \n\n \n\n145.02\n\n \n\nVested\n\n \n\n \n\n(2,070\n\n)\n\n \n\n \n\n145.02\n\n \n\nForfeited\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nUnvested, December 31, 2025\n\n \n\n \n\n—\n\n \n\n \n\n$\n\n—\n\n \n\nThe weighted average grant-date fair value per award of RSA awards granted was $145.02, $185.82 and $126.87 during the years ended December 31, 2025, 2024 and 2023, respectively. The grant date fair value of RSAs that vested during the year was $300,000 for the year ended December 31, 2025, $1.3 million for the year ended December 31, 2024 and $3.3 million for the year ended December 31, 2023. The fair value of RSAs as of their respective vesting dates was $300,000 for the year ended December 31, 2025, $1.6 million for the year ended December 31, 2024 and $2.6 million for the year ended December 31, 2023.\n\nF-27\n\n \n\nFor the years ended December 31, 2025, 2024 and 2023, the Company recorded, as compensation charges related to restricted stock awards and units issued to employees and non-employees, selling, general and administrative expense of $7.4 million, $14.8 million and $9.5 million, respectively, cost of sales of $1.7 million, $1.7 million and $1.9 million, respectively, and research and development expense of $4.8 million, $5.3 million and $5.8 million, respectively.\n\nIn connection with the vesting of restricted stock awards and units during the years ended December 31, 2025, 2024 and 2023, 34,073, 38,728 and 53,162 shares, respectively, with aggregate fair values of $5.1 million, $7.0 million and $7.4 million, respectively, were withheld in satisfaction of tax withholding obligations and are reflected as a financing activity within the Consolidated Statements of Cash Flows.\n\nThe Company has granted restricted stock units to non-employee members of the Board of Directors with quarterly vesting over a period of approximately one year. The fair value is equal to the market price of the Company's common stock on the date of grant. The restricted stock units are issued and expense is recognized ratably over the vesting period. For the years ended December 31, 2025, 2024 and 2023, the Company recorded compensation charges for services performed, related to all restricted stock units granted to non-employee members of the Board of Directors, selling, general and administrative expense of $2.2 million, $1.9 million and $1.5 million, respectively. In connection with the vesting of the restricted stock, the Company issued to non-employee members of the Board of Directors 13,660, 10,870 and 13,016 shares during the years ended December 31, 2025, 2024 and 2023, respectively.\n\nAs of December 31, 2025, the total unrecognized expense related to all restricted stock awards and units was $18.9 million, which the Company expects to recognize over a weighted average period of 1.69 years.\n\nPerformance Unit Awards\n\nEach performance unit award is subject to both a performance-vesting requirement (either performance-based or market-based) and a service-vesting requirement. The performance-based vesting requirement is tied to EBITDA and cash flow achievement, as measured over a specific performance period. The market-based vesting requirement is tied to the Company's total shareholder return (TSR) relative to the TSR of companies comprising the Nasdaq US Benchmark Components Index, as measured over a three-year performance period. The maximum number of performance units that may vest based on performance is three times the shares granted. Further, if the Company's performance falls below certain thresholds, the performance units will not vest at all.\n\nThe following table summarizes the activity related to performance unit awards (PSU) share based payment awards:\n\n \n\n \n\n \n\nNumber of\nShares\n\n \n\n \n\nWeighted-\nAverage\nGrant-Date\nFair Value\n\n \n\nUnvested, January 1, 2025\n\n \n\n \n\n226,233\n\n \n\n \n\n$\n\n180.24\n\n \n\nGranted\n\n \n\n \n\n83,073\n\n \n\n \n\n \n\n161.84\n\n \n\nVested\n\n \n\n \n\n(69,302\n\n)\n\n \n\n \n\n258.10\n\n \n\nForfeited\n\n \n\n \n\n(2,883\n\n)\n\n \n\n \n\n161.84\n\n \n\nUnvested, December 31, 2025\n\n \n\n \n\n237,121\n\n \n\n \n\n$\n\n171.84\n\n \n\nDuring the years ended December 31, 2025, 2024 and 2023, the Company granted 83,073, 69,600 and 84,448 performance units, respectively, of which 62,304, 52,199 and 63,335 units, respectively, are subject to performance-based vesting requirements and 20,769, 17,401 and 21,113 units, respectively, are subject to market-based vesting requirements, and which will vest over the terms described above. During the years ended December 31, 2025, 2024 and 2023, there were no incremental performance-based shares. The weighted average grant date fair value per unit of the performance unit awards granted was $161.84, $191.21 and $165.72 during the years ended December 31, 2025, 2024 and 2023, respectively, as determined by the Company’s common stock on date of grant for the units with performance-based vesting and a Monte-Carlo simulation for the units with market-based vesting. The grant date fair value of PSUs that vested during the year was $17.9 million for the year ended December 31, 2025, $4.1 million for the year ended December 31, 2024 and $1.9 million for the year ended December 31, 2023. The fair value of PSUs as of their respective vesting dates was $10.1 million for the year ended December 31, 2025, $3.3 million for the year ended December 31, 2024 and $1.7 million for the year ended December 31, 2023.\n\nFor the years ended December 31, 2025, 2024 and 2023, the Company recorded, as compensation charges related to all performance stock units, selling, general and administrative expense of $7.0 million, $7.4 million and $2.6 million, respectively, cost of sales of $1.7 million, $2.0 million and $770,000, respectively, and research and development expense of $2.7 million, $3.2 million and $1.2 million, respectively.\n\nF-28\n\n \n\nIn connection with the vesting of performance units during the years ended December 31, 2025, 2024 and 2023, 30,875, 8,160 and 5,350 shares, respectively, with aggregate fair values of $4.5 million, $1.4 million and $775,000, respectively, were withheld in satisfaction of tax withholding obligations and are reflected as a financing activity within the Consolidated Statements of Cash Flows.\n\nAs of December 31, 2025, the total unrecognized compensation expense related to performance unit awards was $11.5 million, which the Company expects to recognize over a weighted average period of 1.76 years.\n\nEmployee Stock Purchase Plan\n\nOn April 7, 2009, the Board of Directors of the Company adopted an Employee Stock Purchase Plan (ESPP). The ESPP was approved by the Company’s shareholders and became effective on June 25, 2009. The Company has reserved 1,000,000 shares of common stock for issuance under the ESPP. Unless terminated by the Board of Directors, the ESPP will expire when all reserved shares have been issued.\n\nEligible employees may elect to contribute to the ESPP through payroll deductions during consecutive three-month purchase periods, the first of which began on July 1, 2009. Each employee who elects to participate will be deemed to have been granted an option to purchase shares of the Company’s common stock on the first day of the purchase period. Unless the employee opts out during the purchase period, the option will automatically be exercised on the last day of the period, which is the purchase date, based on the employee’s accumulated contributions to the ESPP. The purchase price will equal 85% of the lesser of the closing price per share of common stock on the first day of the period or the last business day of the period.\n\nEmployees may allocate up to 10% of their base compensation to purchase shares of common stock under the ESPP; however, each employee may purchase no more than 12,500 shares on a given purchase date, and no employee may purchase more than $25,000 of common stock under the ESPP during a given calendar year.\n\nFor the years ended December 31, 2025, 2024 and 2023, the Company issued 17,583, 15,230 and 17,513 shares, respectively, of its common stock under the ESPP, resulting in proceeds of $2.0 million, $2.2 million and $2.0 million, respectively. For the years ended December 31, 2025, 2024 and 2023, the Company recorded charges of $136,000, $130,000 and $136,000, respectively, to selling, general and administrative expense, $246,000, $210,000, $167,000, respectively, to cost of sales and $191,000, $259,000 and $240,000, respectively, to research and development expense, related to the ESPP equal to the amount of the discount and the value of the look-back feature.\n\nScientific Advisory Board Awards\n\nDuring the years ended December 31, 2025 and 2024, the Company granted a total of 2,070 and 1,616 shares, respectively, of fully vested common stock to non-employee members of the Scientific Advisory Board for services performed in 2024 and 2023, respectively. The fair value of the shares issued to members of the Scientific Advisory Board was $300,000 for both years ended December 31, 2025 and 2024.\n\nFor the years ended December 31, 2025, 2024 and 2023, the Company recorded as compensation charges related to all restricted stock units awarded to non-employee members of the Scientific Advisory Board, whose unvested shares are marked-to-market each reporting period, research and development expense of $239,000, $242,000 and $248,000, respectively.\n\n17.\nEMPLOYEE RETIREMENT PLANS:\n\nDefined Contribution Plan\n\nThe Company maintains the Universal Display Corporation 401(k) Plan (the Plan) in accordance with the provisions of Section 401(k) of the Internal Revenue Code (the Code). The Plan covers substantially all full-time employees of the Company. Participants may contribute up to 90% of their total compensation to the Plan, not to exceed the limit as defined in the Code. Once an employee is eligible to participate in the Plan, the Company will make a non-elective contribution equal to 3% of the employee’s total compensation. For the years ended December 31, 2025, 2024 and 2023, the Company contributed $1.5 million, $1.7 million and $1.5 million, respectively, to the Plan.\n\nF-29\n\n \n\nDefined Benefit Plan\n\nOn March 18, 2010, the Human Capital Committee and the Board of Directors of the Company approved and adopted the Universal Display Corporation Supplemental Executive Retirement Plan (SERP), effective as of April 1, 2010. On March 3, 2015, the Human Capital Committee and the Board of Directors amended the SERP to include salary and bonus as part of the plan. Prior to this amendment, the SERP benefit did not take into account any bonuses. The purpose of the SERP, which is unfunded, is to provide certain of the Company’s key employees with supplemental pension benefits following a cessation of their employment and to encourage their continued employment with the Company. As of December 31, 2025 there were seven participants in the SERP.\n\nThe SERP benefit is based on a percentage of the participant’s annual base salary and in certain cases, the participant's average annual bonus for the most recent three fiscal years ending prior to the participant's date of termination of employment with the Company for the life of the participant. For this purpose, annual base salary means 12 times the average monthly base salary paid or payable to the participant during the 24-month period immediately preceding the participant’s date of termination of employment, or, if required, the date of a change in control of the Company.\n\nUnder the SERP, if a participant resigns or is terminated without cause at or after age 65 and with at least 20 years of service, he or she will be eligible to receive a SERP benefit. The benefit is based on a percentage of the participant’s annual base salary and bonus for the life of the participant. This percentage is 50%, 25% or 15%, depending on the participant’s benefit class.\n\nIf a participant resigns at or after age 65 and with at least 15 years of service, he or she will be eligible to receive a prorated SERP benefit. If a participant is terminated without cause or on account of a disability after at least 15 years of service, he or she will be eligible to receive a prorated SERP benefit regardless of age. The prorated benefit in either case would be based on the participant’s number of years of service (up to 20), divided by 20. In the event a participant is terminated for cause, his or her SERP benefit and any future benefit payments are subject to immediate forfeiture.\n\nThe SERP benefit is payable in installments over 10 years, beginning at the later of age 65 or the date of the participant’s separation from service. Payments are based on a present value calculation of the benefit amount for the actuarial remaining life expectancy of the participant. This calculation is made as of the date benefit payments are to begin (later of age 65 or separation from service). If the participant dies after reaching age 65, any future or remaining benefit payments are made to the participant’s beneficiary or estate. If the participant dies before reaching age 65, the benefit is forfeited.\n\nIn the event of a change in control of the Company, each participant will become immediately vested in his or her SERP benefit. Unless the participant’s benefit has already fully vested, if the participant has less than 20 years of service at the time of the change in control, he or she will receive a prorated benefit based on his or her number of years of service (up to 20), divided by 20. If the change in control qualifies as a “change in control event” for purposes of Section 409A of the Internal Revenue Code, then each participant (including former employees who are entitled to SERP benefits) will receive a lump sum cash payment equal to the present value of the benefit immediately upon the change in control.\n\nCertain of the Company’s executive officers are designated as special participants under the SERP. If these participants resign or are terminated without cause after 20 years of service, or at or after age 65 and with at least 15 years of service, they will be eligible to receive a SERP benefit. If they are terminated without cause or on account of a disability, they will be eligible to receive a prorated SERP benefit regardless of age. The prorated benefit would be based on the participant’s number of years of service (up to 20), divided by 20.\n\nThe SERP benefit for special participants is based on 50% of their annual base salary and bonus for their life and the life of their surviving spouse, if any. Payments are based on a present value calculation of the benefit amount for the actuarial remaining life expectancies of the participant and their surviving spouse, if any. If they die before reaching age 65, the benefit is not forfeited if the surviving spouse, if any, lives until the participant would have reached age 65. If their spouse also dies before the participant would have reached age 65, the benefit is forfeited.\n\nThe Company records amounts relating to the SERP based on calculations that incorporate various actuarial and other assumptions, including discount rates, rate of compensation increases, retirement dates, and life expectancies. The net periodic costs are recognized as employees render the services necessary to earn the SERP benefits.\n\nF-30\n\n \n\nIn connection with the initiation and subsequent amendments of the SERP, the Company recorded cost related to prior service of $2.7 million as accumulated other comprehensive income (loss) as of December 31, 2025. The prior service cost is being amortized as a component of net periodic pension cost over the average of the remaining service period of the employees expected to receive benefits under the plan. The prior service cost expected to be amortized for the year ending December 31, 2026 is $23,000. In December 2022, one of the participants retired and monthly SERP benefit payments commenced in January 2023. The total SERP benefit payments for the year ended December 31, 2025 were $2.0 million.\n\nInformation relating to the Company’s plan is as follows (in thousands):\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nChange in benefit obligation:\n\n \n\n \n\n \n\n \n\n \n\n \n\nBenefit obligation, beginning of year\n\n \n\n$\n\n56,464\n\n \n\n \n\n$\n\n54,263\n\n \n\nService cost\n\n \n\n \n\n901\n\n \n\n \n\n \n\n837\n\n \n\nInterest cost\n\n \n\n \n\n2,785\n\n \n\n \n\n \n\n2,641\n\n \n\nActuarial loss\n\n \n\n \n\n420\n\n \n\n \n\n \n\n737\n\n \n\nBenefit payments\n\n \n\n \n\n(2,014\n\n)\n\n \n\n \n\n(2,014\n\n)\n\nBenefit obligation, end of year\n\n \n\n \n\n58,556\n\n \n\n \n\n \n\n56,464\n\n \n\nFair value of plan assets\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nUnfunded status of the plan, end of year\n\n \n\n$\n\n58,556\n\n \n\n \n\n$\n\n56,464\n\n \n\nCurrent liability\n\n \n\n$\n\n2,015\n\n \n\n \n\n$\n\n2,014\n\n \n\nNon-current liability\n\n \n\n$\n\n56,541\n\n \n\n \n\n$\n\n54,450\n\n \n\n \n\nThe accumulated benefit obligation for the plan was $57.5 million and $54.9 million as of December 31, 2025 and 2024, respectively.\n\nThe components of net periodic pension cost were as follows (in thousands):\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nService cost\n\n \n\n$\n\n901\n\n \n\n \n\n$\n\n837\n\n \n\n \n\n$\n\n951\n\n \n\nInterest cost\n\n \n\n \n\n2,785\n\n \n\n \n\n \n\n2,641\n\n \n\n \n\n \n\n2,898\n\n \n\nCurtailment charge\n\n \n\n \n\n—\n\n \n\n \n\n \n\n312\n\n \n\n \n\n \n\n—\n\n \n\nAmortization of prior service cost\n\n \n\n \n\n23\n\n \n\n \n\n \n\n33\n\n \n\n \n\n \n\n815\n\n \n\nAmortization of loss\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n480\n\n \n\nTotal net periodic benefit cost\n\n \n\n$\n\n3,709\n\n \n\n \n\n$\n\n3,823\n\n \n\n \n\n$\n\n5,144\n\n \n\n \n\nThe measurement date is the Company’s fiscal year end. The net periodic pension cost is based on assumptions determined at the prior year end measurement date.\n\nAssumptions used to determine the year end benefit obligation were as follows:\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nDiscount rate\n\n \n\n \n\n4.58\n\n%\n\n \n\n \n\n5.20\n\n%\n\nRate of compensation increases\n\n \n\n \n\n3.50\n\n%\n\n \n\n \n\n3.50\n\n%\n\n \n\nAssumptions used to determine the net periodic pension cost were as follows:\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nDiscount rate\n\n \n\n \n\n5.20\n\n%\n\n \n\n \n\n4.74\n\n%\n\n \n\n \n\n4.94\n\n%\n\nRate of compensation increases\n\n \n\n \n\n3.50\n\n%\n\n \n\n \n\n3.50\n\n%\n\n \n\n \n\n3.50\n\n%\n\n \n\nF-31\n\n \n\nActuarial gains and losses are amortized from accumulated other comprehensive income (loss) into net periodic pension cost over future years based upon the average remaining service period of active plan participants, when the accumulation of such gains or losses exceeds 10% of the year end benefit obligation. The cost or benefit of plan changes that increase or decrease benefits for prior employee service (prior service cost or credit) is included in the Company’s results of income on a straight-line basis over the average remaining service period of active plan participants.\n\nThe estimated amounts to be amortized from accumulated other comprehensive income (loss) into the net periodic pension cost in 2026 are as follows (in thousands):\n\n \n\nAmortization of prior service cost\n\n \n\n$\n\n23\n\n \n\nAmortization of loss\n\n \n\n \n\n—\n\n \n\nTotal\n\n \n\n$\n\n23\n\n \n\n \n\nBenefit payments, which reflect estimated future service, are currently expected to be paid as follows (in thousands):\n\n \n\nYear\n\n \n\nProjected\nBenefits\n\n \n\n2026\n\n \n\n$\n\n2,015\n\n \n\n2027\n\n \n\n \n\n6,898\n\n \n\n2028\n\n \n\n \n\n6,898\n\n \n\n2029\n\n \n\n \n\n6,898\n\n \n\n2030\n\n \n\n \n\n7,619\n\n \n\n2031-2035\n\n \n\n \n\n34,627\n\n \n\nThereafter\n\n \n\n \n\n12,225\n\n \n\n \n\n18.\nCOMMITMENTS AND CONTINGENCIES:\n\nCommitments\n\nUnder the current research agreement with USC, the Company is obligated to make certain payments to USC based on work performed by it under that agreement, and by the University of Michigan (Michigan) under a subcontractor agreement that Michigan has with USC.\n\nUnder the terms of the current license agreement among the Company, Princeton and USC, the Company makes royalty payments to Princeton. See Note 11 for further explanation.\n\nThe Company has agreements with five executive officers and nine senior level employees which provide for certain cash and other benefits upon termination of employment of the officer or employee in connection with a change in control of the Company. If a covered person’s employment is terminated in connection with the change in control, the person is entitled to a lump-sum cash payment equal to two times (in the case of the executive officers) or either one or two times (in the case of the senior level employees) the sum of the average annual base salary and bonus of the person and immediate vesting of all stock options and other equity awards that may be outstanding at the date of the change in control, among other items.\n\nIn order to manage manufacturing lead times and help ensure adequate material supply, the Company entered into the New OLED Materials Agreement (see Note 13) that allows PPG to procure and produce inventory based upon criteria as defined by the Company. These purchase commitments consist of firm, noncancelable and unconditional commitments. In certain instances, this agreement allows the Company the option to reschedule and adjust the Company’s requirements based on its business needs prior to firm orders being placed. As of December 31, 2025, 2024 and 2023, the Company had purchase commitments for inventory of $40.7 million, $46.5 million and $29.8 million, respectively.\n\nPatent Related Challenges and Oppositions\n\nEach major jurisdiction in the world that issues patents provides both third parties and applicants an opportunity to seek a further review of an issued patent. The process for requesting and considering such reviews is specific to the jurisdiction that issued the patent in question, and generally does not provide for claims of monetary damages or a review of specific claims of infringement. The conclusions made by the reviewing administrative bodies tend to be appealable and generally are limited in scope and applicability to the specific claims and jurisdiction in question.\n\nF-32\n\n \n\nThe Company believes that opposition proceedings are frequently commenced in the ordinary course of business by third parties who may believe that one or more claims in a patent do not comply with the technical or legal requirements of the specific jurisdiction in which the patent was issued. The Company views these proceedings as reflective of its goal of obtaining the broadest legally permissible patent coverage permitted in each jurisdiction. Once a proceeding is initiated, as a general matter, the issued patent continues to be presumed valid until the jurisdiction’s applicable administrative body issues a final non-appealable decision. Depending on the jurisdiction, the outcome of these proceedings could include affirmation, denial or modification of some or all of the originally issued claims. The Company believes that as OLED technology becomes more established and its patent portfolio increases in size, so will the number of these proceedings.\n\n19.\nCONCENTRATION OF RISK:\n\nRevenues and accounts receivable from the Company's largest customers for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nCustomer\n\n \n\n% of Total Revenue\n\n \n\nAccounts Receivable\n\n \n\n \n\n% of Total Revenue\n\n \n\nAccounts Receivable\n\n \n\n \n\n% of Total Revenue\n\n \n\nAccounts Receivable\n\n \n\nA\n\n \n\n43%\n\n \n\n$\n\n69,564\n\n \n\n \n\n43%\n\n \n\n$\n\n37,899\n\n \n\n \n\n36%\n\n \n\n$\n\n38,105\n\n \n\nB\n\n \n\n21%\n\n \n\n \n\n30,378\n\n \n\n \n\n23%\n\n \n\n \n\n25,751\n\n \n\n \n\n23%\n\n \n\n \n\n30,142\n\n \n\nC\n\n \n\n15%\n\n \n\n \n\n3,539\n\n \n\n \n\n16%\n\n \n\n \n\n13,258\n\n \n\n \n\n17%\n\n \n\n \n\n38,529\n\n \n\nRevenues from outside of North America represented approximately 96%, 98%, and 98% of consolidated revenue for the years ended December 31, 2025, 2024 and 2023, respectively. Revenues by geographic area are as follows (in thousands):\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\nCountry\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nSouth Korea\n\n \n\n$\n\n383,500\n\n \n\n \n\n$\n\n397,822\n\n \n\n \n\n$\n\n322,509\n\n \n\nChina\n\n \n\n \n\n238,208\n\n \n\n \n\n \n\n229,439\n\n \n\n \n\n \n\n229,727\n\n \n\nJapan\n\n \n\n \n\n2,818\n\n \n\n \n\n \n\n3,609\n\n \n\n \n\n \n\n6,971\n\n \n\nOther non-U.S. locations\n\n \n\n \n\n1,657\n\n \n\n \n\n \n\n2,456\n\n \n\n \n\n \n\n4,411\n\n \n\nTotal non-U.S. locations\n\n \n\n \n\n626,183\n\n \n\n \n\n \n\n633,326\n\n \n\n \n\n \n\n563,618\n\n \n\nUnited States\n\n \n\n \n\n24,428\n\n \n\n \n\n \n\n14,358\n\n \n\n \n\n \n\n12,811\n\n \n\nTotal revenue\n\n \n\n$\n\n650,611\n\n \n\n \n\n$\n\n647,684\n\n \n\n \n\n$\n\n576,429\n\n \n\n \n\nThe Company attributes revenue to different geographic areas on the basis of the location of the customer.\n\nProperty and equipment, net by geographic area are as follows (in thousands):\n\n \n\n \n\n \n\nDecember 31,\n\n \n\nCountry\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nUnited States\n\n \n\n$\n\n120,835\n\n \n\n \n\n$\n\n117,496\n\n \n\nIreland\n\n \n\n \n\n73,838\n\n \n\n \n\n \n\n63,346\n\n \n\nOther\n\n \n\n \n\n20,274\n\n \n\n \n\n \n\n14,397\n\n \n\nTotal long-lived assets\n\n \n\n$\n\n214,947\n\n \n\n \n\n$\n\n195,239\n\n \n\nSubstantially all finished goods were purchased from one supplier. See Note 13.\n\nF-33\n\n \n\n20.\nINCOME TAXES:\n\nDuring the year ended December 31, 2025, the Company adopted ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The standard enhances the annual income tax disclosures to address investor requests for more information about the tax risks and opportunities present in an entity's worldwide operations.\n\nThe components of income before income taxes are as follows (in thousands):\n\n \n\n \n\n \n\nYear ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nUnited States\n\n \n\n$\n\n95,422\n\n \n\n \n\n$\n\n72,823\n\n \n\n \n\n$\n\n71,514\n\n \n\nForeign\n\n \n\n \n\n199,374\n\n \n\n \n\n \n\n199,305\n\n \n\n \n\n \n\n173,657\n\n \n\nIncome before income taxes\n\n \n\n$\n\n294,796\n\n \n\n \n\n$\n\n272,128\n\n \n\n \n\n$\n\n245,171\n\n \n\n \n\nThe components of income tax expense are as follows (in thousands):\n\n \n\n \n\n \n\nYear ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nCurrent income tax expense:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nU.S. Federal\n\n \n\n$\n\n19,230\n\n \n\n \n\n$\n\n34,199\n\n \n\n \n\n$\n\n15,848\n\n \n\nU.S. State\n\n \n\n \n\n1,965\n\n \n\n \n\n \n\n3,452\n\n \n\n \n\n \n\n3,048\n\n \n\nForeign\n\n \n\n \n\n32,562\n\n \n\n \n\n \n\n31,515\n\n \n\n \n\n \n\n27,030\n\n \n\n \n\n \n\n \n\n53,757\n\n \n\n \n\n \n\n69,166\n\n \n\n \n\n \n\n45,926\n\n \n\nDeferred income tax benefit:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nU.S. Federal\n\n \n\n \n\n(388\n\n)\n\n \n\n \n\n(16,799\n\n)\n\n \n\n \n\n460\n\n \n\nU.S. State\n\n \n\n \n\n179\n\n \n\n \n\n \n\n(2,995\n\n)\n\n \n\n \n\n(3,936\n\n)\n\nForeign\n\n \n\n \n\n(827\n\n)\n\n \n\n \n\n677\n\n \n\n \n\n \n\n(290\n\n)\n\n \n\n \n\n \n\n(1,036\n\n)\n\n \n\n \n\n(19,117\n\n)\n\n \n\n \n\n(3,766\n\n)\n\nTotal income tax expense:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nU.S. Federal\n\n \n\n \n\n18,842\n\n \n\n \n\n \n\n17,400\n\n \n\n \n\n \n\n16,308\n\n \n\nU.S. State\n\n \n\n \n\n2,144\n\n \n\n \n\n \n\n457\n\n \n\n \n\n \n\n(888\n\n)\n\nForeign\n\n \n\n \n\n31,735\n\n \n\n \n\n \n\n32,192\n\n \n\n \n\n \n\n26,740\n\n \n\nTotal income tax expense\n\n \n\n$\n\n52,721\n\n \n\n \n\n$\n\n50,049\n\n \n\n \n\n$\n\n42,160\n\n \n\n \n\nF-34\n\n \n\nA reconciliation of the U.S. federal statutory income tax rate to the Company's effective tax rate is as follows (in thousands, except percentages):\n\n \n\n \n\n \n\nYear-ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\n \n\n \n\nAmount\n\n \n\n \n\nPercent\n\n \n\n \n\nAmount\n\n \n\n \n\nPercent\n\n \n\n \n\nAmount\n\n \n\n \n\nPercent\n\n \n\nU.S. tax effects:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFederal statutory income tax rate\n\n \n\n$\n\n61,907\n\n \n\n \n\n \n\n21.0\n\n%\n\n \n\n$\n\n57,147\n\n \n\n \n\n \n\n21.0\n\n%\n\n \n\n$\n\n51,486\n\n \n\n \n\n \n\n21.0\n\n%\n\nDomestic federal\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nR&D credits\n\n \n\n \n\n(4,295\n\n)\n\n \n\n \n\n-1.5\n\n%\n\n \n\n \n\n(7,842\n\n)\n\n \n\n \n\n-2.8\n\n%\n\n \n\n \n\n(6,239\n\n)\n\n \n\n \n\n-2.5\n\n%\n\nNontaxable and nondeductible items:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nExecutive compensation disallowed under §162(m)\n\n \n\n \n\n4,348\n\n \n\n \n\n \n\n1.5\n\n%\n\n \n\n \n\n4,193\n\n \n\n \n\n \n\n1.5\n\n%\n\n \n\n \n\n4,072\n\n \n\n \n\n \n\n1.7\n\n%\n\nOther\n\n \n\n \n\n887\n\n \n\n \n\n \n\n0.3\n\n%\n\n \n\n \n\n331\n\n \n\n \n\n \n\n0.1\n\n%\n\n \n\n \n\n147\n\n \n\n \n\n \n\n0.1\n\n%\n\nFederal effect of cross-border tax\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nGlobal intangible low-taxed income\n\n \n\n \n\n1,894\n\n \n\n \n\n \n\n0.6\n\n%\n\n \n\n \n\n5,429\n\n \n\n \n\n \n\n2.0\n\n%\n\n \n\n \n\n3,861\n\n \n\n \n\n \n\n1.6\n\n%\n\nSubpart F income\n\n \n\n \n\n462\n\n \n\n \n\n \n\n0.2\n\n%\n\n \n\n \n\n2,835\n\n \n\n \n\n \n\n1.0\n\n%\n\n \n\n \n\n(746\n\n)\n\n \n\n \n\n-0.3\n\n%\n\nOther\n\n \n\n \n\n(89\n\n)\n\n \n\n \n\n0.0\n\n%\n\n \n\n \n\n(406\n\n)\n\n \n\n \n\n-0.1\n\n%\n\n \n\n \n\n(245\n\n)\n\n \n\n \n\n-0.1\n\n%\n\nFederal reconciling items\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nInterest income\n\n \n\n \n\n(3,644\n\n)\n\n \n\n \n\n-1.2\n\n%\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nOther\n\n \n\n \n\n215\n\n \n\n \n\n \n\n0.1\n\n%\n\n \n\n \n\n(1,241\n\n)\n\n \n\n \n\n-0.5\n\n%\n\n \n\n \n\n410\n\n \n\n \n\n \n\n0.2\n\n%\n\nChanges in federal valuation allowances\n\n \n\n \n\n(720\n\n)\n\n \n\n \n\n-0.2\n\n%\n\n \n\n \n\n(67\n\n)\n\n \n\n \n\n-0.1\n\n%\n\n \n\n \n\n(157\n\n)\n\n \n\n \n\n-0.1\n\n%\n\nDomestic state and local income taxes, net of federal effect\n\n \n\n \n\n1,786\n\n \n\n \n\n \n\n0.6\n\n%\n\n \n\n \n\n322\n\n \n\n \n\n \n\n0.1\n\n%\n\n \n\n \n\n(702\n\n)\n\n \n\n \n\n-0.3\n\n%\n\nForeign tax effects:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nIreland\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nStatutory income tax rate differential\n\n \n\n \n\n(16,964\n\n)\n\n \n\n \n\n-5.8\n\n%\n\n \n\n \n\n(16,580\n\n)\n\n \n\n \n\n-6.0\n\n%\n\n \n\n \n\n(13,525\n\n)\n\n \n\n \n\n-5.5\n\n%\n\nForeign tax credits\n\n \n\n \n\n(3,604\n\n)\n\n \n\n \n\n-1.2\n\n%\n\n \n\n \n\n(2,964\n\n)\n\n \n\n \n\n-1.1\n\n%\n\n \n\n \n\n(2,104\n\n)\n\n \n\n \n\n-0.9\n\n%\n\nOther\n\n \n\n \n\n(431\n\n)\n\n \n\n \n\n-0.2\n\n%\n\n \n\n \n\n167\n\n \n\n \n\n \n\n0.1\n\n%\n\n \n\n \n\n(105\n\n)\n\n \n\n \n\n0.0\n\n%\n\nChina\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWithholding tax on license fees and royalties\n\n \n\n \n\n10,587\n\n \n\n \n\n \n\n3.6\n\n%\n\n \n\n \n\n9,225\n\n \n\n \n\n \n\n3.4\n\n%\n\n \n\n \n\n6,185\n\n \n\n \n\n \n\n2.5\n\n%\n\nOther\n\n \n\n \n\n(27\n\n)\n\n \n\n \n\n0.0\n\n%\n\n \n\n \n\n(24\n\n)\n\n \n\n \n\n0.0\n\n%\n\n \n\n \n\n(33\n\n)\n\n \n\n \n\n0.0\n\n%\n\nOther foreign jurisdictions\n\n \n\n \n\n409\n\n \n\n \n\n \n\n0.1\n\n%\n\n \n\n \n\n(476\n\n)\n\n \n\n \n\n-0.2\n\n%\n\n \n\n \n\n(145\n\n)\n\n \n\n \n\n-0.1\n\n%\n\nTotal\n\n \n\n$\n\n52,721\n\n \n\n \n\n \n\n17.9\n\n%\n\n \n\n$\n\n50,049\n\n \n\n \n\n \n\n18.4\n\n%\n\n \n\n$\n\n42,160\n\n \n\n \n\n \n\n17.2\n\n%\n\n \n\nAs of December 31, 2025 and 2024 the Company had $57.0 million and $40.7 million, respectively, of taxes receivable included in other current assets on the Consolidated Balance Sheets. In January 2026, the Company received $39.0 million of the taxes receivable from the United States Treasury.\n\n \n\n \n\n \n\n \n\nThe following table summarizes the Company's cash paid for income taxes, net of refunds received by jurisdiction (in thousands):\n\n \n\n \n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nUnited States:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFederal\n\n \n\n$\n\n33,507\n\n \n\n \n\n$\n\n45,527\n\n \n\n \n\n$\n\n57,263\n\n \n\nState\n\n \n\n \n\n2,629\n\n \n\n \n\n \n\n2,545\n\n \n\n \n\n \n\n2,523\n\n \n\nTotal United States\n\n \n\n \n\n36,136\n\n \n\n \n\n \n\n48,072\n\n \n\n \n\n \n\n59,786\n\n \n\nForeign:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nIreland\n\n \n\n \n\n24,127\n\n \n\n \n\n \n\n13,174\n\n \n\n \n\n \n\n28,110\n\n \n\nChina\n\n \n\n \n\n10,783\n\n \n\n \n\n \n\n9,236\n\n \n\n \n\n \n\n6,161\n\n \n\nOther foreign jurisdictions\n\n \n\n \n\n392\n\n \n\n \n\n \n\n1,491\n\n \n\n \n\n \n\n2,119\n\n \n\nTotal foreign\n\n \n\n \n\n35,302\n\n \n\n \n\n \n\n23,901\n\n \n\n \n\n \n\n36,390\n\n \n\nTotal cash taxes paid\n\n \n\n$\n\n71,438\n\n \n\n \n\n$\n\n71,973\n\n \n\n \n\n$\n\n96,176\n\n \n\n \n\nF-35\n\n \n\n \n\nThe following table summarizes the Company's tax credit carry forwards for tax return purposes as of December 31, 2025 (in thousands):\n\n \n\n \n\n \n\nTax Benefit\n\n \n\n \n\nExpiration Date\n\nTax credit carry forwards:\n\n \n\n \n\n \n\n \n\n \n\nU.S. State research tax credits\n\n \n\n$\n\n9,628\n\n \n\n \n\n2036-2040\n\nTotal credit carry forwards\n\n \n\n$\n\n9,628\n\n \n\n \n\n \n\n \n\nSignificant components of the Company's net deferred tax assets and liabilities are as follows (in thousands):\n\n \n\n \n\n \n\nDecember 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nDeferred tax asset:\n\n \n\n \n\n \n\n \n\n \n\n \n\nCapitalized research expenditures\n\n \n\n$\n\n54,931\n\n \n\n \n\n$\n\n55,277\n\n \n\nRetirement plan\n\n \n\n \n\n14,185\n\n \n\n \n\n \n\n13,633\n\n \n\nTax credit carry forwards\n\n \n\n \n\n9,628\n\n \n\n \n\n \n\n9,542\n\n \n\nAccruals and reserves\n\n \n\n \n\n7,100\n\n \n\n \n\n \n\n6,988\n\n \n\nLease liabilities\n\n \n\n \n\n5,874\n\n \n\n \n\n \n\n6,073\n\n \n\nStock-based compensation\n\n \n\n \n\n1,701\n\n \n\n \n\n \n\n1,475\n\n \n\nDeferred revenue\n\n \n\n \n\n588\n\n \n\n \n\n \n\n655\n\n \n\nOther\n\n \n\n \n\n3,706\n\n \n\n \n\n \n\n2,783\n\n \n\n \n\n \n\n \n\n97,713\n\n \n\n \n\n \n\n96,426\n\n \n\nValuation allowance\n\n \n\n \n\n(9,159\n\n)\n\n \n\n \n\n(10,167\n\n)\n\nDeferred tax assets\n\n \n\n \n\n88,554\n\n \n\n \n\n \n\n86,259\n\n \n\nDeferred tax liability:\n\n \n\n \n\n \n\n \n\n \n\n \n\nLease assets\n\n \n\n \n\n(4,891\n\n)\n\n \n\n \n\n(5,297\n\n)\n\nAcquisition goodwill\n\n \n\n \n\n(2,088\n\n)\n\n \n\n \n\n(1,854\n\n)\n\nOther\n\n \n\n \n\n(2,121\n\n)\n\n \n\n \n\n(788\n\n)\n\nDeferred tax liabilities\n\n \n\n \n\n(9,100\n\n)\n\n \n\n \n\n(7,939\n\n)\n\nNet deferred tax assets\n\n \n\n$\n\n79,454\n\n \n\n \n\n$\n\n78,320\n\n \n\nIn assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent on the Company's ability to generate future taxable income to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credits. As part of its assessment, management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. During the year ended December 31, 2025, based on our previous earnings history, a current evaluation of expected future taxable income and other evidence, we determined to retain the valuation allowance that relates to New Jersey research and development credits. As of December 31, 2025, there is not sufficient evidence to release the valuation allowance that has been recorded for New Jersey research and development credits. Additionally, the Company recognized a gain on available-for-sale securities during the year that, if sold, would offset the capital loss, and, as a result, the valuation allowance on the capital loss was reversed. There are no indicators against the realizability of the remaining net deferred tax asset.\n\nOn December 27, 2018, the Korean Supreme Court, citing prior cases, held that only royalties paid with respect to Korean registered patents are considered Korean source income and subject to Korean withholding tax under the applicable law and interpretation of the Korea-U.S. Tax Treaty. The Company has incurred Korean withholding tax of $14.9 million for each of the years ended December 31, 2018, through December 31, 2022. Based on the Korean Supreme Court decision, a tax refund request on behalf of the Company was filed with the Korean National Tax Service (KNTS) for the period from January 1, 2018, to December 31, 2022. The Company received a formal rejection from the KNTS; and in May 2022 filed an appeal with the Korean Tax Tribunal. On December 18, 2023, the Company received a formal rejection from the Tax Tribunal. Anticipating the rejection of the appeal, in September 2023 the Company filed a petition to the District Court.\n\nF-36\n\n \n\nOn September 18, 2025, the Korean Supreme Court issued a decision, changing its long-standing position on the taxation of royalties for patents not registered in Korea. The court held that royalties paid for licensing of a patent constitute Korean source income if the patented technology is actually used in the territory of the Republic of Korea. Based on discussions with a prominent Korean law firm, the Company has been advised that there is still a more likely-than-not chance of success, as the manufacturing and sales process occurs within and without the Republic of Korea. During the latest court appearance in November 2025, the judge requested additional information from the Korean Tax Authority regarding what amount of royalties would be considered Korean use. The next court date is scheduled for March 2026.\n\nAs a result, the Company has recorded a long-term receivable of $53.8 million and $52.9 million as of December 31, 2025 and 2024, respectively, for the receipt of the Korean withholding tax. The Company also recorded foreign exchange gain of $935,000, foreign exchange loss of $7.2 million and foreign exchange loss of $732,000 for the years ended December 31, 2025, 2024 and 2023, respectively, due to the fluctuation of the Korean Won to the U.S. Dollar and resulting remeasurement of this Won-denominated receivable. The Company will amend U.S. federal tax returns for the 2018 to 2022 years when the anticipated refund from KNTS is received to offset the additional tax liability. The Company has recorded a long-term payable of $15.7 million as of December 31, 2025 and 2024, for the estimated amounts due to the U.S. federal government based on the amendment of the Company's U.S. tax returns, indicating that lower withholding amounts were required.\n\nThe Company is not subject to examinations by the federal tax authority for the years prior to 2022. The Company is presently undergoing a federal tax audit for the 2023 tax year and a state of California tax audit for the 2021 and 2022 tax years. Both audits are currently in the information-gathering phase.\n\nThe above estimates may change in the future and upon settlement.\n\n21.\nREVENUE RECOGNITION:\n\nThe Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (Topic 606). The standard establishes the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows from a contract with a customer.\n\nFor the years ended December 31, 2025, 2024 and 2023, the Company recorded 97%, 98% and 97%, respectively, of its revenue from OLED related sales and 3%, 2% and 3%, respectively, from the providing of services through Adesis.\n\nContract Balances\n\nThe following table provides information about assets and liabilities associated with the Company's contracts from customers (in thousands):\n\n \n\n \n\n \n\nAs of December 31, 2025\n\n \n\nAccounts receivable\n\n \n\n$\n\n119,953\n\n \n\nShort-term unbilled receivables\n\n \n\n \n\n19,338\n\n \n\nShort-term contract assets\n\n \n\n \n\n3,070\n\n \n\nLong-term unbilled receivables\n\n \n\n \n\n45,600\n\n \n\nLong-term contract assets\n\n \n\n \n\n3,338\n\n \n\nShort-term deferred revenue\n\n \n\n \n\n21,011\n\n \n\nLong-term deferred revenue\n\n \n\n \n\n1,943\n\n \n\nShort-term and long-term unbilled receivables and contract assets are classified as other current assets and other assets, respectively, on the Consolidated Balance Sheets. Contract assets represent consideration related to the renewal of customer contracts which is recognized over the contract term based on material units sold. The deferred revenue balance as of December 31, 2025 will be recognized as materials are shipped to customers over the remaining contract periods. As of December 31, 2025, the Company had $14.6 million of backlog associated with committed purchase orders from its customers for phosphorescent emitter material. These orders are anticipated to be fulfilled within the next 90 days.\n\nF-37\n\n \n\nSignificant changes in unbilled receivables, contract assets and deferred revenue balances associated with the Company's contracts from customers for the years ended December 31, 2025 and 2024, are as follows (in thousands):\n\n \n\n \n\nYear Ended December 31, 2025\n\n \n\n \n\n \n\nAssets\n\n \n\n \n\nLiabilities\n\n \n\nBalance at December 31, 2024\n\n \n\n$\n\n64,876\n\n \n\n \n\n$\n\n(33,611\n\n)\n\nRevenue recognized that was previously included in deferred revenue, net\n\n \n\n \n\n—\n\n \n\n \n\n \n\n65,423\n\n \n\nIncreases due to cash received\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(68,897\n\n)\n\nCumulative catch-up adjustment arising from changes in estimates of\n   transaction price, net\n\n \n\n \n\n—\n\n \n\n \n\n \n\n14,131\n\n \n\nUnbilled receivables recorded, net\n\n \n\n \n\n210,719\n\n \n\n \n\n \n\n—\n\n \n\nContract assets recorded, net\n\n \n\n \n\n(3,053\n\n)\n\n \n\n \n\n—\n\n \n\nTransferred to receivables from unbilled receivables\n\n \n\n \n\n(201,196\n\n)\n\n \n\n \n\n—\n\n \n\nNet change\n\n \n\n \n\n6,470\n\n \n\n \n\n \n\n10,657\n\n \n\nBalance at December 31, 2025\n\n \n\n$\n\n71,346\n\n \n\n \n\n$\n\n(22,954\n\n)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nYear Ended December 31, 2024\n\n \n\n \n\n \n\nAssets\n\n \n\n \n\nLiabilities\n\n \n\nBalance at December 31, 2023\n\n \n\n$\n\n42,134\n\n \n\n \n\n$\n\n(59,719\n\n)\n\nRevenue recognized that was previously included in deferred revenue, net\n\n \n\n \n\n—\n\n \n\n \n\n \n\n98,223\n\n \n\nIncreases due to cash received\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(82,928\n\n)\n\nCumulative catch-up adjustment arising from changes in estimates of\n   transaction price, net\n\n \n\n \n\n—\n\n \n\n \n\n \n\n10,813\n\n \n\nUnbilled receivables recorded, net\n\n \n\n \n\n165,781\n\n \n\n \n\n \n\n—\n\n \n\nContract assets recorded, net\n\n \n\n \n\n(2,516\n\n)\n\n \n\n \n\n—\n\n \n\nTransferred to receivables from unbilled receivables\n\n \n\n \n\n(140,523\n\n)\n\n \n\n \n\n—\n\n \n\nNet change\n\n \n\n \n\n22,742\n\n \n\n \n\n \n\n26,108\n\n \n\nBalance at December 31, 2024\n\n \n\n$\n\n64,876\n\n \n\n \n\n$\n\n(33,611\n\n)\n\nThe cumulative catch-up adjustment recorded to revenue arising from changes in estimates of transaction price, net was an increase $14.1 million for the year ended December 31, 2025 as compared to an increase of $10.8 million for the year ended December 31, 2024. For each of the years ended December 31, 2025 and 2024, the adjustment resulted from an increase in the average price per gram that was primarily due to the decrease in anticipated demand by several of the Company's customers over the remaining lives of their contracts.\n\n22.\nNET INCOME PER COMMON SHARE:\n\nThe Company computes earnings per share in accordance with ASC Topic 260, Earnings per Share, which requires earnings per share (EPS) for each class of stock to be calculated using the two-class method. The two-class method is an allocation of income between the holders of common stock and the Company's participating security holders. Under the two-class method, income for the reporting period is allocated between common shareholders and other security holders based on their respective participation rights in undistributed income. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in computing earnings per share pursuant to the two-class method.\n\nBasic net income per common share is computed by dividing net income allocated to common shareholders by the weighted-average number of shares of common stock outstanding for the period excluding unvested restricted stock units and performance units. Net income allocated to the holders of the Company's unvested restricted stock awards is calculated based on the shareholders proportionate share of weighted average shares of common stock outstanding on an if-converted basis.\n\nFor purposes of determining diluted net income per common share, basic net income per share is further adjusted to include the effect of potential dilutive common shares outstanding, including restricted stock units, performance units and the impact of shares to be issued under the Company's Employee Stock Purchase Plan.\n\nF-38\n\n \n\nThe following table is a reconciliation of net income and the shares used in calculating basic and diluted net income per common share for the years ended December 31, 2025, 2024 and 2023 (in thousands, except share and per share data):\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nNumerator:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n$\n\n242,075\n\n \n\n \n\n$\n\n222,079\n\n \n\n \n\n$\n\n203,011\n\n \n\nAdjustment for Basic EPS:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nEarnings allocated to unvested shareholders\n\n \n\n \n\n(153\n\n)\n\n \n\n \n\n(526\n\n)\n\n \n\n \n\n(993\n\n)\n\nAdjusted net income\n\n \n\n$\n\n241,922\n\n \n\n \n\n$\n\n221,553\n\n \n\n \n\n$\n\n202,018\n\n \n\nDenominator:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWeighted average common shares outstanding – Basic\n\n \n\n \n\n47,548,046\n\n \n\n \n\n \n\n47,548,931\n\n \n\n \n\n \n\n47,559,669\n\n \n\nEffect of dilutive shares:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCommon stock equivalents arising from ESPP\n\n \n\n \n\n1,905\n\n \n\n \n\n \n\n1,780\n\n \n\n \n\n \n\n2,173\n\n \n\nRestricted stock awards and units and performance units\n\n \n\n \n\n108,344\n\n \n\n \n\n \n\n101,951\n\n \n\n \n\n \n\n60,921\n\n \n\nWeighted average common shares outstanding – Diluted\n\n \n\n \n\n47,658,295\n\n \n\n \n\n \n\n47,652,662\n\n \n\n \n\n \n\n47,622,763\n\n \n\nNet income per common share:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBasic\n\n \n\n$\n\n5.09\n\n \n\n \n\n$\n\n4.66\n\n \n\n \n\n$\n\n4.25\n\n \n\nDiluted\n\n \n\n$\n\n5.08\n\n \n\n \n\n$\n\n4.65\n\n \n\n \n\n$\n\n4.24\n\n \n\nFor the years ended December 31, 2025, 2024 and 2023, the combined effects of unvested restricted stock awards, restricted stock units and performance unit awards of 63,999, 18,015 and 36,345, respectively, were excluded from the calculation of diluted EPS as their impact would have been antidilutive.\n\nF-39"}