Steven Abramson: We’re watching the AR, VR market, we find it very interesting. We don’t think it’s going to take market share away from any of the other panel makers. We think there is many, many people, and everybody wants displays in various ways for various use cases and they all seem to want to use OLEDs in it. So we see the market growing. AR, VR is yet again an additional market that’s going to grow and expand the market opportunities. We don’t really think it’s going to take any market share away from anybody else.
Chris Grenga: Thank you, very much.
Operator: Our next question is from Mehdi Hosseini with SIG. Please proceed.
Mehdi Hosseini: Yes, thanks for taking my question, and I apologize if I’m going be repeating questions already asked, I joined the call late. One follow-up for Steven and one for Brian. Steve, how should we think about the dynamics of your conversations with key customers, especially as blue becomes commercially viable? I understand that there needs to be additional contracts to be signed. So what are the key catalysts or milestones that would trigger or help you with getting customers commitment by signing the contract for the blue supply? And I have a follow-up.
Brian Millard: Sure. Thanks, Mehdi. So, on blue and supply of blue, we, as you said, don’t have commercial pricing schemes in place with any of our customers at this point for blue. And we — at the point that we need those in place to be supplying them commercial quantities, we’re confident that we’ll be able to get there. We’ve had varying levels of discussion with certain customers on that at this stage. And so I think that that’s really the key thing is that once we get to the point where we need to have commercial pricing in place, it will be in place, but we’re just not there yet since we don’t yet have the commercial specification performance.
Mehdi Hosseini: Okay. And Brian, did you discuss how much of R&D blue was recognized? Was there any revenue recognized in the quarter?
Brian Millard: Yes, so there was $1.3 million in Q4 and $5.6 million for full year 2023 of blue development sales.
Mehdi Hosseini: Got it. And then, just a quick follow-up for you. How should I model the OpEx in ’24 relative to ’23 OpEx growth?
Brian Millard: Yeah, in my prepared remarks, I referenced 10% to 15% increase in OpEx year-over-year, so that’s the best modeling assumption for now.
Mehdi Hosseini: Okay. Thank you.
Brian Millard: Thanks.
Operator: Our next question is from Martin Yang with Oppenheimer and Company. Please proceed.
Martin Yang: Hi, good afternoon. Thank you for taking my question. If we adjust for the catch-up payments on revenues, did material revenues still decline year-over-year in ’23? If so, what are the key factors that contributed to that year-over-year decline?
Brian Millard: Hey, Martin. So the majority of the cumulative catch-up adjustments actually flow through our royalty and license line, not our material sales line. So that wouldn’t necessarily be the way to adjust for it.
Martin Yang: Got it. What are the key drivers for the year-over-year decline in material sales in ’23?
Brian Millard: Well, we had relatively flat volumes. Our volumes were down less than 1% period-over-period, so you can call that flat. We had — then the remainder would be some certain price differences, customer mix also coming into play, and then that’d be offset by blue development sales, which were increased relative to 2022.
Martin Yang: Thank you, Brian. And did any top customers hit volume pricing milestones in 4Q?
Brian Millard: So, the way we do price — the way that we have to estimate pricing based on our revenue accounting model is we have to estimate over the full five-year term, what the pricing is going to be on an average basis based on volumes and revenues. So there were — every quarter, there are changes in our assumptions related to that, but in Q4 they were normal course changes and those changes in assumptions resulted in that $5 million cumulative catch-up that I referenced.
Martin Yang: Got it. Thank you. Our last question is, is there any 10% customers in 4Q ’23 other than customer A, B, and C?
Brian Millard: No, just those three.
Martin Yang: Thank you very much. That’s it from me.
Brian Millard: Thanks, Martin.
Operator: We have reached the end of our question-and-answer session. I would like to turn the conference back over to Brian for closing comments.
Brian Millard: Thank you all for your time today. We appreciate your interest and support.
Operator: Thank you. This will conclude today’s conference. You may disconnect your lines at this time and thank you for your participation.
