Dolby Laboratories, Inc. (NYSE:DLB) Q3 2024 Results Conference Call August 7, 2024 5:00 PM ET Company Participants Peter Goldmacher - VP, IR Kevin Yeaman - CEO Robert Park - CFO Conference Call Participants Ralph Schackart - William Blair Jim Goss - Barrington Research Operator Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories Conference Call discussing Fiscal Third Quarter Results. During the presentation, all participants will be in a listen only mode [Operator Instruction ...

Dolby Laboratories (DLB) came out with quarterly earnings of $0.71 per share, beating the Zacks Consensus Estimate of $0.59 per share. This compares to earnings of $0.55 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 20.34%. A quarter ago, it was expected that this creator and licensor of audio, video and voice technologies would post earnings of $1.17 per share when it actually produced earnings of $1.27, delivering a surpr ...

Licensing Revenue - As of June 28, 2024, Dolby Laboratories had approximately 20,700 issued patents, significantly contributing to its licensing revenue[155] - The revenue composition from licensing business shows Broadcast at 36%, Mobile at 24%, CE at 11%, PC at 10%, and Other at 19% for the quarter ended June 28, 2024[159] - The licensing revenue recognized may include recoveries from previous periods, which have become a recurring element of Dolby's business[165] - Licensing revenue for the quarter ended June 28, 2024, was $267,082 thousand, a decrease of $6,026 thousand or 2% compared to $273,108 thousand for the same quarter in 2023[195] - The total licensing revenue by market showed a significant contribution from the Broadcast segment, which accounted for $95,430 thousand or 36% of total licensing revenue for the quarter ended June 28, 2024[195] Technology and Products - Dolby's key technologies include Dolby Atmos, which provides an immersive audio experience, and Dolby Vision, enhancing imaging quality with high dynamic range[157] - The company generates revenue through various licensing models, including a two-tier model and a patent licensing model, which allows for efficient patent licensing arrangements[160][164] - Dolby's products include digital cinema servers and audio processors, distributed in approximately 90 countries, enhancing content creation and playback quality[168] - Dolby's audio and imaging technologies are increasingly adopted across major streaming platforms, with significant events like the 2024 Olympics coverage in Dolby Vision and Atmos[173] - Over 8,000 Dolby Atmos screens are installed or committed globally, with more than 3,200 theatrical titles announced or released as of Q3 fiscal 2024[188] Financial Performance - Gross margin for the quarter ended June 28, 2024, was $249,696 thousand, down from $257,498 thousand in the same quarter of 2023, reflecting a decrease of $7,802 thousand or 3%[195] - Products revenue for the quarter ended June 28, 2024, was $21,736 thousand, down $3,526 thousand or 14% from $25,262 thousand in the same quarter of 2023[201] - Services revenue for the quarter ended June 28, 2024, was $69,826 thousand, a decrease of $6,629 thousand or 9% compared to $76,455 thousand in the same quarter of 2023[201] - The gross margin percentage for products and services increased to 16% for the quarter ended June 28, 2024, compared to a gross margin of (3)% in the same quarter of 2023[201] Market Challenges - The current macroeconomic environment has negatively impacted revenue, influenced by inflation, heightened interest rates, and reduced consumer spending[171] - The company continues to face challenges in licensing revenue due to global supply constraints and difficulties in enforcing IP rights in certain countries[176] - The mobile market is heavily concentrated, relying on a small number of partnerships, which poses a risk if key relationships are not maintained[179] - The automotive industry is experiencing revenue challenges due to a decline in vehicles with optical disc playback and semiconductor shortages[184] - Dolby Cinema has over 630 theatrical titles in Dolby Vision and Atmos, but faces competition and challenges related to box office performance and COVID-19 impacts[185] Strategic Initiatives - Dolby's strategy focuses on advancing audio and imaging technologies to improve user experiences and expand market reach[152][154] - The company emphasizes collaboration with content creators to promote the use of its technologies as creative tools, driving market demand[153] - The company is focused on expanding its leadership in audio and imaging solutions to drive revenue growth across various markets[172] - Dolby.io is expanding its addressable market by providing solutions for real-time digital experiences, enhancing audience engagement with ultra-low latency streaming[190] - The company noted that the success of Dolby.io will depend on adoption from companies building real-time digital experiences, which is still uncertain as it is an early-stage business[191] Expenses and Cost Management - Research and Development expenses for the quarter ended June 28, 2024, were $65,501 thousand, a decrease of $3,195 thousand or 5% compared to $68,696 thousand in the same quarter of 2023[206] - Sales and marketing expenses decreased by $8.1 million (9%) to $77.5 million for the quarter ended June 30, 2024, compared to $85.6 million in the prior year[208] - Year-to-date sales and marketing expenses decreased by $16.9 million (6%) to $246.6 million compared to $263.5 million in the previous year[208] - General and administrative expenses decreased by $0.7 million (1%) to $69.3 million for the quarter ended June 30, 2024, compared to $70.0 million in the prior year[211] - Year-to-date general and administrative expenses increased by $9.3 million (5%) to $201.2 million compared to $191.9 million in the previous year[211] Cash and Investments - Cash and cash equivalents as of June 28, 2024, were $741.6 million, a slight decrease from $745.4 million as of September 29, 2023[227] - The company had cash and cash equivalents of $741.6 million and investments of $245.2 million as of June 28, 2024, focusing on capital preservation and liquidity[243] - Cash generated from operations was $211.1 million for the year-to-date period ended June 28, 2024, a decrease of $71.0 million compared to $282.1 million for the same period in the prior year[235] - Net cash used in financing activities was $(227.7) million for the year-to-date period ended June 28, 2024, compared to $(194.0) million for the same period in the prior year[237] - The company has completed approximately $2.9 billion in stock repurchases since the program's initiation in fiscal 2010[232] Acquisitions and Restructuring - The company announced a definitive agreement to acquire GE Licensing for an aggregate cash purchase price of $429 million, pending regulatory approvals[230] - The company recorded restructuring charges of $4.1 million for the quarter ended June 28, 2024, down from $16.7 million in the prior year[214] - Estimated gross pre-tax operating income savings from restructuring activities are projected to be approximately $40 million to $45 million within fiscal 2024[216] - The company acquired MPEG LA during fiscal 2023 and is integrating it into the internal control framework[253] Risk Management - The company faces foreign currency exchange risk due to operations in multiple countries, with significant exposure to fluctuations in exchange rates[245] - As of June 28, 2024, the total notional amounts of outstanding foreign currency forward contracts were $120.4 million[248] - A hypothetical 1% change in interest rates would impact the carrying value of the investment portfolio by approximately $2.0 million[244] - A 10% increase in the value of the U.S. dollar would increase the fair value of financial instruments by $1.7 million, while a 10% decrease would decrease it by the same amount[249] - The pre-tax effective portion of cash flow hedges recognized in AOCI was a $0.9 million loss in the third quarter of fiscal 2024[247] Internal Controls and Legal Proceedings - There were no changes in internal control over financial reporting that materially affected the company during the fiscal quarter ending June 28, 2024[253] - The company does not expect ongoing legal proceedings to have a material adverse impact on its operating results or financial condition[255]

Dolby Laboratories Reports Third Quarter 2024 Financial Results SAN FRANCISCO, August 7, 2024 — Dolby Laboratories, Inc. (NYSE:DLB) today announced the company's financial results for the third quarter of fiscal 2024. "Our third quarter results were in line with expectations," said Kevin Yeaman, President and CEO, Dolby Laboratories. "This quarter we continued to build momentum for the content available in Dolby Vision and Dolby Atmos, especially in sports, with viewers around the world enjoying the T20 Cri ...

SAN FRANCISCO, Aug. 7, 2024 /PRNewswire/ -- Dolby Laboratories, Inc. (NYSE:DLB) today announced the company's financial results for the third quarter of fiscal 2024. "Our third quarter results were in line with expectations," said Kevin Yeaman, President and CEO, Dolby Laboratories. "This quarter we continued to build momentum for the content available in Dolby Vision and Dolby Atmos, especially in sports, with viewers around the world enjoying the T20 Cricket World Cup, UEFA EURO 2024, Wimbledon, the NHL a ...

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Members of Dolby management will lead a conference call open to all interested parties to discuss Q3 financial results for Dolby Laboratories at 2:00 p.m. PT (5:00 p.m. ET) on Wednesday, August 7, 2024. Dolby, Dolby Atmos, Dolby Vision, Dolby Cinema, Dolby.io, and the double-D symbol are among the registered and unregistered trademarks of Dolby Laboratories in the United States and/or other countries. A replay of the call will be available from 5:00 p.m. PT (8:00 p.m. ET) on Wednesday, August 7, 2024, until ...

Acquisition to strengthen Dolby's licensing businesses and create opportunity for future growth "GE Licensing is home to a number of essential innovations that power the modern world" said Andy Sherman, Dolby Executive Vice President, Patent Licensing and General Counsel. "An important part of Dolby's strategy is providing value to our customers, partners, and the industry through open standards and collaborative pool licensing. This acquisition gives us the opportunity to continue to promote and support in ...

Dolby, Dolby Atmos, Dolby Vision, Dolby Cinema, Dolby.io, and the double-D symbol are among the registered and unregistered trademarks of Dolby Laboratories in the United States and/or other countries. Other trademarks remain the property of their respective owners. Investor Contact: Peter Goldmacher Dolby Laboratories [email protected] SOURCE Dolby Laboratories, Inc. SAN FRANCISCO, May 23, 2024 /PRNewswire/ -- Dolby Laboratories, Inc. (NYSE: DLB) today announced that management will present at the followin ...

Dolby Laboratories (NYSE: DLB) is based in San Francisco, California with offices around the globe. From movies and TV shows, to apps, music, sports, and gaming, Dolby transforms the science of sight and sound into spectacular experiences for billions of people worldwide. Dolby partners with artists, storytellers, developers, and businesses to revolutionize entertainment and communications with Dolby Atmos, Dolby Vision, Dolby Cinema, and Dolby.io. Dolby, Dolby Atmos, Dolby Vision, Dolby Cinema, Dolby.io, a ...