Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $347 million, exceeding the high end of guidance, driven by earlier-than-expected deal closures and a $7 million favorable true-up for Q4 shipments [14][17] - Non-GAAP earnings per share was $1.06, also above guidance, attributed to higher revenue and lower operating expenses [14][17] - Operating cash flow generated was approximately $55 million, with $70 million of common stock repurchased [15][16] Business Line Data and Key Metrics Changes - Licensing revenue reached $320 million, while product and services revenue was $27 million [14] - Mobile revenue grew over 20% year-over-year, while broadcast revenue declined in the mid-teens year-over-year [16] Market Data and Key Metrics Changes - The automotive sector is a major focus, with partnerships increasing from 20 OEMs to over 35 OEMs year-over-year [7] - Dolby Vision 2 received positive feedback at CES, with support from content providers like Peacock and TP Vision [9][53] Company Strategy and Development Direction - The company is raising its full-year fiscal 2026 revenue guidance to $1.4 billion-$1.45 billion, reflecting strong Q1 performance and earlier deal closures [17] - Dolby aims to grow Dolby Atmos, Dolby Vision, and imaging patents at 15%-20% per year, which now comprise nearly half of licensing revenue [13][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in growth opportunities despite macroeconomic uncertainties, noting that the timing of deals has improved [21][58] - The company is optimistic about the adoption of Dolby Vision 2 and the expansion of its addressable market through new partnerships and technologies [26][32] Other Important Information - A dividend of $0.36 was declared, representing a 9% increase from the previous year [16] - The company ended the quarter with cash and investments of approximately $730 million [16] Q&A Session Summary Question: Impact of deal timing on the environment - Management noted that while some deals came in earlier than expected, it should not be generalized to indicate a broader change in the macro environment [21] Question: Details on the large true-up - The $7 million true-up was primarily in gaming and broadcast sectors [23] Question: Growth in mobile revenue - Mobile growth was attributed to a combination of new deals and renewals, with expectations for slight full-year growth [24] Question: Update on patent monetization strategy - The company aims for 10% of revenue from content service providers within three years, with Roku as a significant new licensee [32] Question: Guidance for the quarter - The guidance was influenced by a combination of favorable true-up and strong deal timing, with overall performance aligning closely with expectations [44][46] Question: Feedback from CES - Positive feedback was received regarding the automotive experience and Dolby Vision 2, with significant interest from partners and customers [50][51]

Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $347 million, exceeding the high end of guidance, driven by earlier-than-expected deal closures and a $7 million favorable true-up for Q4 shipments [11][12] - Non-GAAP earnings per share was $1.06, also above guidance, attributed to higher revenue and lower operating expenses [11] - Licensing revenue reached $320 million, while product and services revenue was $27 million [11] - Operating cash flow generated was approximately $55 million, with $70 million of common stock repurchased [11][12] Business Line Data and Key Metrics Changes - Mobile revenue grew over 20% year-over-year, while broadcast revenue declined in the mid-teens year-over-year, primarily due to timing of deals [12] - The automotive sector is a major focus, with partnerships increasing from 20 OEMs last year to over 35 this year [6][10] - Dolby Vision 2 was well-received at CES, with support from partners like Peacock and TP Vision, enhancing revenue opportunities from TVs [7][8] Market Data and Key Metrics Changes - The mobile market is expected to see mid-single-digit growth for the full year, despite quarterly fluctuations [12] - The automotive market remains the highest growth area, with diversification geographically, including partnerships with major manufacturers like Mercedes and Audi [60][62] Company Strategy and Development Direction - The company is focused on expanding its addressable market through new growth initiatives, including Dolby OptiView and video distribution programs [10][29] - Dolby Vision 2 aims to enhance viewer experience across various content types, with plans to launch new TVs by the end of the fiscal year [7][10] - The company is optimistic about growth in Dolby Atmos, Dolby Vision, and imaging patents, projecting a growth rate of 15%-20% per year [10][15] Management's Comments on Operating Environment and Future Outlook - Management noted that the early closure of deals does not indicate a broader change in the macro environment but provides confidence in the outlook for the year [18] - The company remains cautious about potential impacts from memory pricing and geopolitical factors but has not seen significant adjustments in guidance [58][59] - The automotive sector continues to thrive, with no immediate impacts from U.S. policy changes observed [62] Other Important Information - A dividend of $0.36 was declared, representing a 9% increase from the previous year [12] - The company ended the quarter with cash and investments of approximately $730 million [12] Q&A Session Summary Question: Impact of deal timing on revenue - Management indicated that earlier deal closures do not suggest a macro trend but help de-risk the outlook for the year [18] Question: Details on the $7 million true-up - The true-up was primarily in gaming and broadcast sectors [19] Question: Growth in mobile revenue - Growth was attributed to new deals and renewals, with expectations for slight increases over the full year [21] Question: Potential market share gains from Sony's spin-off - Management expressed optimism about strong relationships with both TCL and Sony, focusing on increasing TV attach rates [22][23] Question: Cash flow generation comparison - Cash flow can fluctuate based on deal timing, but it typically tracks closely with non-GAAP net income [24] Question: Update on patent monetization strategy - The company aims for 10% of revenue from content service providers within three years, with progress in the video distribution program [29][30] Question: OEM responses to macro issues - Management noted that while there are adjustments, they are not material, and the mobile market is most affected [58][59] Question: Adoption of in-car offerings amid policy changes - No significant impact observed; the automotive sector remains a high-growth area [62]

Revenue Performance - Total revenue for the fiscal quarter ended December 26, 2025, was $346.7 million, a decrease of 2% from $357.0 million for the same period in 2024[161]. - Licensing revenue accounted for 92% of total revenue at $319.8 million, while products and services contributed 8% at $26.9 million[161]. - Dolby generated 92% of its revenue in Q1 fiscal 2026 through licensing technology, brand, and patents, primarily to device manufacturers[201]. - Licensing revenue for Q1 2026 was $319,771, a decrease of 3% from $330,479 in Q1 2025, representing 92% of total revenue[242]. - Products and Services revenue increased by 2% to $26,935 from $26,520, accounting for 8% of total revenue[246]. Licensing and Patents - Dolby holds approximately 29,000 issued patents related to licensed technologies, which significantly contribute to licensing revenue[163]. - The company generated over 90% of its revenue from licensing agreements with around 1,000 electronic device manufacturers[163]. - Dolby's patent licensing primarily comes from standard essential patents associated with AAC, AVC, and HEVC codecs, which are critical for media technologies[182]. - Dolby's patent licensing revenue is primarily driven by royalty shares within patent pools, licensee penetration, and device shipments[208]. - Revenue from patent licensing is also influenced by the success of patent pools and the negotiation of licenses with companies using the relevant standards[213]. Technology and Innovation - Dolby Atmos and Dolby Vision are key branded technologies driving revenue growth, enabling immersive audio and video experiences[167]. - The company is exploring the use of artificial intelligence in the development of next-generation audio and video codecs[180]. - Dolby's branded technology licensing includes rights to software, patent rights, and know-how, with revenue driven by device shipments and consumer spending[205]. - Dolby Atmos and Dolby Vision have seen increased adoption, with major streaming services enhancing content using these technologies[207]. Market Dynamics - The company aims to expand the reach of its technologies to new content, media, devices, and audiences[159]. - Dolby's licensing customers typically enter into per unit royalty arrangements, which can lead to revenue variability[172]. - The company collaborates with content creators and device manufacturers to create a virtuous cycle of product development and demand for its solutions[158]. - The company faces challenges from macroeconomic conditions, including inflation and tariffs, which may impact revenue from licensing and product sales[202]. - The automotive industry's cyclical nature and long development cycles may affect revenue growth from automotive-related technologies[227]. Financial Performance - Gross profit for Products and Services decreased by 35% to $4,489, with a gross margin of 17%, down from 26%[246]. - Research and Development (R&D) expenses increased by $2,439 million, or 4%, from $66,638 million in Q1 2025 to $69,077 million in Q1 2026, representing 20% of total revenue[249]. - Sales and Marketing (S&M) expenses decreased by $2,847 million, or 3%, from $94,399 million in Q1 2025 to $91,552 million in Q1 2026, maintaining 26% of total revenue[252]. - General and Administrative (G&A) expenses slightly increased by $151 million, remaining stable at 20% of total revenue, from $70,092 million in Q1 2025 to $70,243 million in Q1 2026[254]. - Restructuring charges rose significantly by $5,250 million, or 101%, from $5,216 million in Q1 2025 to $10,466 million in Q1 2026, accounting for 3% of total revenue[257]. Cash Flow and Investments - Cash and cash equivalents decreased from $701,893 million as of September 26, 2025, to $643,845 million as of December 26, 2025[269]. - Net cash provided by operating activities decreased by $52.0 million, from $106,779 million in Q1 2025 to $54,799 million in Q1 2026, primarily due to higher accounts receivable[276]. - Net cash used in financing activities increased by $64.3 million, from $57,571 million in Q1 2025 to $121,834 million in Q1 2026, mainly due to higher common stock repurchases[278]. - The company has returned approximately $3.1 billion to stockholders through stock repurchases since the program's initiation in fiscal 2010[273]. - As of December 26, 2025, the company had cash and cash equivalents of $643.8 million and short-term and long-term investments of $85.8 million[282]. Foreign Currency Exposure - The company maintains exposure to foreign currency exchange risk due to operations in countries like Australia, China, Germany, Ireland, Poland, and the U.K.[283]. - The majority of revenue from international markets is denominated in U.S. dollars, while operating expenses are primarily in local currencies, leading to potential increases in expenses when the U.S. dollar weakens[283]. - The company uses forward currency contracts as cash flow hedges with maturities of thirteen months or less to mitigate currency volatility impacts on operating expenses[284]. - A sensitivity analysis indicated that a 10% increase in the U.S. dollar value would decrease the fair value of financial instruments by $3.7 million, while a 10% decrease would increase it by the same amount[289].

"With a good start to the fiscal year, we are optimistic about our position in the market and confident in our growth opportunities," said Kevin Yeaman, President and CEO, Dolby Laboratories. "We continue to have strong momentum with Dolby Atmos and Dolby Vision, while also expanding our addressable market with our imaging patent program for content streamers and Dolby OptiView." First Quarter Fiscal 2026 Financial Highlights A complete listing of Dolby's non-GAAP measures are described and reconciled to th ...

SAN FRANCISCO, Jan. 29, 2026 /PRNewswire/ -- Dolby Laboratories, Inc. (NYSE:DLB) today announced the company's financial results for the first quarter of fiscal 2026. Dividend Today, Dolby announced a cash dividend of $0.36 per share of Class A and Class B common stock, payable on February 18, 2026, to stockholders of record as of the close of business on February 10, 2026. Financial Outlook Dolby's financial outlook relies, in part, on estimates of royalty-based revenue that take into consideration various ...

Group 1: Music Stocks Overview - Seven music stocks to watch include Tencent Music Entertainment Group, NetEase, Warner Music Group, Dolby Laboratories, Madison Square Garden Entertainment, Singing Machine, and Zeta Network Group, as identified by MarketBeat's stock screener tool [2] - Music stocks are categorized as publicly traded companies involved in creating, distributing, monetizing, or supporting recorded and live music, with revenues and valuations influenced by streaming adoption, touring cycles, catalog and licensing income, copyright rules, and consumer listening trends [2] Group 2: Tencent Music Entertainment Group (TME) - Tencent Music Entertainment Group operates online music platforms in China, offering services such as music streaming, online karaoke, and live streaming [3] - The company provides QQ Music, Kugou Music, and Kuwo Music for personalized music discovery, along with long-form audio content and WeSing for karaoke [3] Group 3: NetEase (NTES) - NetEase, Inc. engages in online games, music streaming, online intelligent learning services, and internet content services, operating through segments like Games, Youdao, Cloud Music, and others [4] Group 4: Warner Music Group (WMG) - Warner Music Group operates as a music entertainment company with segments in Recorded Music and Music Publishing, focusing on artist development, marketing, and distribution of music [4] Group 5: Dolby Laboratories (DLB) - Dolby Laboratories creates audio and imaging technologies for various entertainment platforms, developing and licensing audio technologies such as AAC & HE-AAC and Dolby Atmos [5] Group 6: Singing Machine (MICS) - Singing Machine Company develops and sells consumer karaoke audio equipment and accessories, offering products under various brands and karaoke music subscription services [7] Group 7: Zeta Network Group (ZNB) - Color Star Technology Co., Ltd. provides online entertainment performances and music education services, operating an online platform that includes various curricula [8]

Core Viewpoint - Dolby Laboratories, Inc. will announce its financial results for Q1 fiscal year 2026 on January 29, 2026, after market close [1] Group 1: Financial Results Announcement - The financial results for Q1 fiscal year 2026 will be released after the close of regular trading on January 29, 2026 [1] - A conference call will be held at 2:00 p.m. PT (5:00 p.m. ET) on the same day to discuss the financial results [1] Group 2: Teleconference Access - Access to the teleconference can be obtained via the investor relations website or by dialing a specific phone number with a confirmation code [2] - A replay of the call will be available from 5:00 p.m. PT on January 29, 2026, until 8:59 p.m. PT on February 5, 2026 [3] Group 3: Company Overview - Dolby Laboratories is a leader in immersive entertainment, providing experiences across various media including movies, TV, music, and gaming [4] - The company is known for innovations such as Dolby Atmos, Dolby Vision, and Dolby Cinema, enhancing entertainment experiences for billions globally [4]

Group 1 - Dolby Laboratories showcased technological innovations at CES 2026, enhancing entertainment experiences from home to in-car environments [1] - Peacock, in partnership with NBCUniversal, will be the first streaming platform to adopt Dolby's full suite of audio and visual technologies, marking a significant upgrade in streaming entertainment [1] - The integration of Dolby Vision and Dolby Atmos into Peacock will enhance live sports broadcasts, including popular events like Sunday Night Football, NBA, and MLB [1] Group 2 - Dolby partnered with LG to launch the LG Sound Suite, a modular home audio system featuring Dolby Atmos FlexConnect, offering up to 27 different speaker configurations for a cinema-like experience [2] - Several TV manufacturers, including Hisense, TCL, and TP Vision, announced the incorporation of Dolby Vision 2.0 technology into their latest TV models, enhancing picture quality beyond HDR [2][3] - Hisense plans to apply Dolby Vision 2.0 to more MiniLED TV products through OTA updates, while TCL and TP Vision will also support this technology in their upcoming models [3] Group 3 - Over 35 automotive manufacturers have adopted Dolby Atmos in more than 150 vehicle models, including NIO ET9 and Mahindra XUV 7XO [5] - Mercedes-Benz announced its support for Dolby Atmos spatial audio through Apple CarPlay in its new electric models, enhancing the in-car audio experience [6] - Dolby and Qualcomm are collaborating to integrate Dolby's latest innovations into Qualcomm's 5th generation Snapdragon automotive platform, which will help reduce audio data transmission costs by up to 60% [6]

Core Viewpoint - Dolby Laboratories (DLB) is positioned well to continue its trend of beating earnings estimates, particularly in the upcoming quarterly report [1]. Earnings Performance - Dolby Laboratories has a strong track record of exceeding earnings estimates, with an average surprise of 24.88% over the last two quarters [2]. - In the most recent quarter, the company reported earnings of $0.99 per share, surpassing the expected $0.70 per share by 41.43%. In the previous quarter, it reported $0.78 per share against an estimate of $0.72 per share, resulting in a surprise of 8.33% [3]. Earnings Estimates and Predictions - There has been a favorable shift in earnings estimates for Dolby Laboratories, indicated by a positive Zacks Earnings ESP (Expected Surprise Prediction), which is a strong sign for potential earnings beats [6]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [7]. Earnings ESP Analysis - Dolby Laboratories currently has an Earnings ESP of +4.44%, indicating that analysts are optimistic about the company's earnings prospects [9]. - A positive Earnings ESP combined with a Zacks Rank of 3 suggests that another earnings beat may be imminent [9]. Importance of Earnings ESP - The Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions, which can be more accurate than earlier predictions [8]. - It is crucial for investors to check a company's Earnings ESP before quarterly releases to enhance the likelihood of successful investment decisions [10].

Core Insights - Dolby Laboratories will showcase its latest innovations at CES 2026, focusing on how Dolby technology redefines the creation, transmission, and experience of entertainment content [1] - The company aims to enhance visual quality, immersive in-car entertainment, and streaming services to provide unprecedented experiences for viewers [1] Group 1: Partnerships and Innovations - Dolby has partnered with NBCUniversal to make Peacock the first streaming platform to adopt Dolby's full suite of advanced imaging and sound technologies, marking a significant milestone in the streaming entertainment sector [3] - Peacock will expand the use of Dolby Vision and Dolby Atmos in live sports broadcasts, including major events like Sunday Night Football and NBA games [4] - Dolby and LG have launched a modular home audio system, LG Sound Suite, featuring Dolby Atmos FlexConnect, which offers up to 27 different speaker configurations for a flexible cinematic audio experience [5] Group 2: Technology Expansion - Dolby Vision 2 and Dolby AC-4 will be integrated into new television models from Hisense, TCL, and TP Vision, enhancing the viewing experience with more realistic visuals and clearer dialogue [6][7] - Over 35 automotive brands have adopted Dolby Atmos, with more than 150 vehicle models featuring this immersive audio experience [8] - Dolby is collaborating with Mercedes-Benz to support Dolby Atmos spatial audio through Apple CarPlay in their latest vehicle lineup, enhancing in-car entertainment [8][10] Group 3: Future Outlook - CES 2026 marks a pivotal year for Dolby as the company focuses on leading future trends in the entertainment industry, emphasizing the development of more immersive, intuitive, and interconnected experiences [12]