Dolby Laboratories, Inc. (NYSE:DLB) Q4 2023 Earnings Call Transcript November 16, 2023 5:00 PM ET Company Participants Peter Goldmacher - VP of IR Kevin Yeaman - CEO Robert Park - CFO Conference Call Participants Steven Frankel - Rosenblatt Securities Ralph Schackart - William Blair James Goss - Barrington Research Operator Ladies and gentlemen, thank you for standing by, and welcome to the Dolby Laboratories Conference Call discussing Fiscal Fourth Quarter Results. During the presentation, all participants ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended September 29, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From To Commission File Number: 001-32431 DOLBY LABORATORIES, INC. (Exact name of registrant as specified in its charter) Delaware 90-0199783 (State or other ju ...

Dolby Laboratories, Inc. (NYSE:DLB) Q3 2023 Earnings Conference Call August 3, 2023 5:00 PM ET Company Participants Liz Krukowski - Vice President, Communications & People Experience Kevin Yeaman - Chief Executive Officer Robert Park - Chief Financial Officer Conference Call Participants Ralph Schackart - William Blair Steven Frankel - Rosenblatt Securities Jim Goss – Barrington Research Operator Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories' Conference Call discussing F ...

Licensing Revenue - As of June 30, 2023, Dolby Laboratories had approximately 19,000 issued patents, contributing significantly to its licensing revenue [156]. - Revenue from the Broadcast market accounted for 38% of total licensing revenue for the fiscal quarter ended June 30, 2023, up from 37% in the same quarter of 2022 [158]. - The Mobile market's contribution to licensing revenue decreased to 18% in Q2 2023 from 23% in Q2 2022 [158]. - Dolby's licensing revenue is derived from approximately 500 electronics product OEMs and software developers [156]. - Dolby's collaboration arrangements, such as Dolby Cinema, generate revenue through a share of box office receipts recognized as licensing revenue [166]. - The company has various licensing models, including a two-tier model and a patent licensing model, to optimize revenue generation [159][164]. - Licensing revenue is primarily driven by the adoption of foundational audio technologies, with significant contributions from DD+, Dolby Atmos, and HE-AAC, reflecting market trends in device shipments [174]. - Licensing revenue for Q3 2023 was $273.1 million, a 1% increase from $269.3 million in Q3 2022, contributing 92% to total revenue [205]. Technology Adoption - The company is expanding its leadership in audio and imaging solutions by broadening its technologies into new content types, including music, gaming, and live sports [173]. - Major streaming partners like Netflix and Disney+ continue to enhance content in Dolby formats, driving strong adoption across devices [176]. - Dolby's technologies are widely adopted in mobile ecosystems, with Motorola recently shipping its first Dolby Vision playback phone globally [181]. - The automotive industry is expanding its adoption of Dolby Atmos, with companies like NIO and Mercedes-Benz launching models that support this technology [189]. - In Q3 fiscal 2023, over 7,500 Dolby Atmos screens were installed or committed, with more than 2,700 theatrical titles announced or released [196]. Financial Performance - Cost of licensing increased by 13% to $15.6 million in Q3 2023 from $13.8 million in Q3 2022, resulting in a gross margin of $257.5 million, up 1% year-over-year [205]. - Products and services revenue rose by 24% to $25.3 million in Q3 2023 compared to $20.3 million in Q3 2022, accounting for 8% of total revenue [210]. - Research and development expenses increased by 9% to $68.7 million in Q3 2023 from $62.9 million in Q3 2022, representing 23% of total revenue [214]. - Sales and marketing expenses decreased by 2% to $85.6 million in Q3 2023 from $87.1 million in Q3 2022, making up 29% of total revenue [218]. - General and administrative expenses increased by 22% to $70.0 million in Q3 2023 from $57.1 million in Q3 2022, representing 23% of total revenue [222]. - Restructuring charges surged to $16.7 million in Q3 2023, a 1,609% increase from $1.0 million in Q3 2022, accounting for 6% of total revenue [226]. - The company recorded a gross margin of $882.4 million for the fiscal year-to-date 2023, a 1% increase from $870.0 million in the same period of 2022 [205]. - The company anticipates continued growth in licensing revenue driven by higher adoption of Dolby technologies across various markets [206]. Economic and Market Challenges - Macroeconomic conditions, including elevated inflation and rising interest rates, have negatively impacted Dolby's licensees and, consequently, its financial results [172]. - The cinema segment is experiencing challenges due to COVID-19 impacts and strikes affecting film production, which may lead to decreased box office receipts [193]. - Demand for PC technologies is uncertain due to declining PC sales, necessitating continuous collaboration with manufacturers to maintain technology integration [187]. - The company faces challenges in enforcing IP rights in certain countries, which may impact revenue from licensing [174]. - Geopolitical challenges, including trade protection measures and changes in diplomatic relationships, could negatively affect revenue across various markets [180]. Cash and Investments - Cash and cash equivalents as of June 30, 2023, were $765.1 million, an increase from $620.1 million as of September 30, 2022 [238]. - Net cash provided by operating activities decreased by $14.8 million to $282.1 million for the year-to-date period ended June 30, 2023, compared to $267.3 million for the same period in 2022 [246]. - Net cash provided by investing activities increased by $329.1 million to $73.9 million for the year-to-date period ended June 30, 2023, compared to a cash outflow of $255.2 million in the prior year [247]. - Net cash used in financing activities decreased by $174.1 million to $194.0 million for the year-to-date period ended June 30, 2023, compared to $368.1 million in the same period in 2022 [248]. - The company has completed approximately $2.7 billion in stock repurchases since the program's initiation in fiscal 2010 [242]. - A quarterly dividend of $0.27 per share was paid in Q3 2023 to eligible stockholders [244]. - The company’s investment portfolio had a weighted-average credit quality of AA+ and a weighted-average maturity of approximately eleven months as of June 30, 2023 [254]. - A hypothetical 1% change in interest rates would impact the carrying value of the investment portfolio by approximately $2.4 million, while a 0.5% change would impact it by approximately $1.2 million [255]. - The total notional amounts of outstanding foreign currency contracts were $85.9 million as of June 30, 2023, down from $130.8 million as of September 30, 2022 [261]. - A 10% increase in the value of the U.S. dollar would decrease the fair value of financial instruments by $0.9 million, while a 10% decrease would increase it by $0.9 million [262]. Internal Controls and Legal Proceedings - The company is in the process of integrating MPEG LA into its internal control over financial reporting framework [267]. - There were no changes in internal control over financial reporting during the fiscal quarter ending June 30, 2023, that materially affected the company's internal control [267]. - The company is involved in various legal proceedings, but resolution is not expected to materially impact operating results or financial condition [269]. - The company maintains disclosure controls and procedures that were evaluated as effective by the CEO and CFO as of the end of the fiscal period covered by the report [266].

Dolby Laboratories, Inc. (NYSE:DLB) Q2 2023 Earnings Conference Call May 4, 2023 5:00 PM ET Company Participants Maggie O’Donnell – Head-Investor Relations Kevin Yeaman – Chief Executive Officer Robert Park – Chief Financial Officer Conference Call Participants Steven Frankel – Rosenblatt Paul Chung – JPMorgan Ralph Schackart – William Blair James Goss – Barrington Research Operator Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories’ Conference Call discussing fiscal second q ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From To Commission File Number: 001-32431 DOLBY LABORATORIES, INC. (Exact name of registrant as specified in its charter) Delaware 90-0199783 (State or othe ...

Dolby Laboratories, Inc. (NYSE:DLB) Q1 2023 Earnings Conference Call February 2, 2023 5:00 PM ET Company Participants Maggie O'Donnell - Head of Investor Relations Kevin Yeaman - Chief Executive Officer Robert Park - Chief Financial Officer Conference Call Participants Steven Frankel - Rosenblatt Paul Chung - J.P. Morgan 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 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended December 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From To Commission File Number: 001-32431 DOLBY LABORATORIES, INC. (Exact name of registrant as specified in its charter) Delaware 90-0199783 (State or o ...

Financial Data and Key Metrics Changes - Total revenue in Q4 2022 was $278 million, down 2% year-over-year, primarily due to lower unit shipments in PCs, broadcast, consumer electronics, and gaming [49][53] - Fiscal year 2022 revenues were $1.25 billion, a decline of 2% from $1.28 billion in fiscal year 2021, with licensing revenue at $1.16 billion, down 4% year-over-year [54][56] - Non-GAAP net income for Q4 was $53 million or $0.54 per diluted share, compared to $60 million or $0.58 per diluted share in Q4 2021 [66] Business Line Data and Key Metrics Changes - Foundational audio revenue declined nearly 15% year-over-year, making up roughly 70% of licensing revenues [17][55] - Revenue from Dolby Atmos, Dolby Vision, and imaging patents grew approximately 30% year-over-year, driven by increased adoption and box office improvements [19][56] - Products and services revenue increased to $89 million in fiscal year 2022 from $67 million in fiscal year 2021, primarily due to higher product sales in the cinema industry [63] Market Data and Key Metrics Changes - Broadcast revenues represented about 37% of total licensing in fiscal year 2022, declining by $42 million or 9% year-over-year due to lower TV unit shipments [57] - Mobile revenues also declined by $22 million or 9% year-over-year, impacted by timing of deals and lower unit shipments [59] - Consumer Electronics revenues increased by $4 million or 2% year-over-year, driven by growth in Dolby Atmos and Dolby Vision [60] Company Strategy and Development Direction - The company aims to double the size of revenues from Dolby Atmos, Dolby Vision, and imaging patents over the mid-term, targeting 15% to 25% annual growth [22][72] - Focus areas include expanding the movies and TV ecosystem, enhancing music and automotive initiatives, and developing user-generated content with Dolby Vision Capture [14][31] - Dolby.io is seen as a long-term growth factor, expanding the addressable market for immersive experiences [36][81] Management's Comments on Operating Environment and Future Outlook - The management highlighted ongoing challenges from macroeconomic factors, including inflation and supply chain issues, impacting consumer device shipments [9][70] - Despite near-term headwinds, the company remains confident in the long-term demand for entertainment content and immersive experiences [46][81] - Guidance for fiscal year 2023 anticipates low single-digit revenue growth, with foundational audio projected to decline mid-single-digits [72][70] Other Important Information - The company generated $51 million in cash from operations in Q4, down from $110 million in the previous year [67] - A cash dividend of $0.27 per share was announced, an increase of 8% compared to the prior quarter [67] - The company repurchased approximately 2.9 million shares during the fourth quarter [67] Q&A Session Summary Question: Macro outlook and its impact on Dolby - The macro environment remains uncertain, but there is strong demand for immersive experiences, particularly Dolby Atmos and Dolby Vision [84][85] Question: Drivers of mobile revenue decline - Mobile revenues decreased 9% year-over-year due to timing of deals and lower unit shipments [86][87] Question: Growth trajectory for Dolby Vision and Atmos - Demand for adoption remains strong, but engagement cycles are taking longer due to the uncertain environment [91][92] Question: Revenue guidance for Q1 and fiscal year 2023 - Q1 revenue is expected to range from $300 million to $330 million, with licensing revenue estimated between $280 million and $305 million [77][79] Question: Contribution of Dolby.io to product sales - Revenue from Dolby.io is included in the products and services line, contributing to growth but not highlighted as a major growth factor yet [104]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From To Commission File Number: 001-32431 DOLBY LABORATORIES, INC. (Exact name of registrant as specified in its charter) Delaware 90-0199783 (State or other ju ...