Dolby Laboratories(US:DLB)2025-11-18 22:01Revenue Composition - Licensing revenue accounted for 93% of total revenue in fiscal 2025, consistent with 93% in 2024 and up from 92% in 2023[22] - Over 90% of revenue in fiscal 2025 was generated from licensing agreements with approximately 1,000 electronic device manufacturers[23] - In fiscal 2025, 93% of Dolby's revenues were generated from licensing technology, brand, and patents, primarily to device manufacturers[61] - The revenue composition by market for fiscal 2025 included 34% from Broadcast, 22% from Mobile, 12% from CE, 12% from PC, and 20% from Other[62] - In fiscal 2025, 93% of Dolby's revenue came from licensing, while 7% was generated from products and services[22] Technology and Innovation - Dolby Atmos and Dolby Vision are key branded technologies driving revenue growth, enabling immersive audio and video experiences[27] - The amount of content created in Dolby Atmos and Dolby Vision is large and growing, with strong momentum in music, TV shows, movies, user-generated content, audiobooks, and live sports[30] - Dolby's technologies are critical for consumer electronics manufacturers, enhancing product value and allowing for premium pricing[35] - Dolby's strategy includes advancing the science of sight and sound through innovation in emerging categories like user-generated content and podcasts[17] - Dolby Vision and Dolby Atmos technologies enhance image and audio quality, making content more realistic and appealing to consumers[29] Licensing Model - Dolby's licensing model typically involves a per unit royalty arrangement, leading to variability in quarterly revenue based on estimated unit sales[32] - Dolby licenses its technologies through a two-stage model, first to semiconductor manufacturers and then to OEMs, working with approximately 1,000 consumer electronics manufacturers globally[31] - Dolby's patent licensing revenue primarily comes from patent pools, with a minority from bilateral licensing agreements, and includes recoveries from unlicensed or under-reported distributions[49][50] - The company emphasizes the importance of brand recognition and reputation in its licensing business, which is fundamental to a wide variety of devices[24] Research and Development - Dolby's R&D focuses on audio and video technologies for consumer entertainment, with a significant portion of the budget dedicated to forward-looking research[68] - The company actively participates in the development of next-generation standardized audio and video technologies, exploring the use of artificial intelligence in codecs[40] - The company focuses its R&D resources primarily on audio and video technologies for consumer entertainment, dedicating a significant portion of its budget to forward-looking research[68] Patents and Intellectual Property - Dolby holds approximately 28,400 issued patents and 6,100 pending patent applications as of September 26, 2025, with 4,179 new patents issued in fiscal 2025[63] - Dolby's patent licensing revenue primarily comes from licensing standard essential patents for audio and video technologies, which are fundamental to billions of products sold annually[37] - The company has approximately 1,500 trademark registrations globally, which are integral to its technology licensing program[65] Market Position and Competition - The entertainment industry is highly competitive, with some competitors having greater resources and the ability to offer integrated systems at lower prices[70] - The company anticipates ongoing issues with OEMs underreporting shipments of products that incorporate its technologies and plans to continue enforcing its IP rights[66] Employee and Corporate Structure - As of September 26, 2025, Dolby had 2,051 employees worldwide, with 1,020 employees based outside the U.S.[75] - The board of directors provides oversight of human capital matters, including management succession planning[77] - The company offers competitive compensation and benefits packages, including health benefits and personal development opportunities[76] Production and Supply Chain - The company relies on contract manufacturers for the majority of its production capacity and sources components from multiple suppliers, including sole source suppliers for certain components[69] Company History - The company was founded in 1965 and has undergone several reincorporations, with its principal offices located in San Francisco, California[79]