Financial Data and Key Metrics Changes - Q2 revenue was $370 million, in line with the midpoint of guidance and up 1% year over year [16] - Licensing revenue was $346 million, up 2% year over year, while products and services revenue was $24 million, down 10% year over year [16] - Non-GAAP earnings per diluted share for Q2 was $1.34, up 5% year over year, at the high end of guidance [18] - The company generated $175 million in operating cash flow and finished the quarter with $701 million in cash and investments [18] Business Line Data and Key Metrics Changes - Broadcast revenue declined by 11% year over year, while PC revenue increased by 17% year over year [17] - The company expects strong growth in mobile and other markets, with broadcast and PC remaining flat and consumer electronics down mid-single digits for the full year [17] Market Data and Key Metrics Changes - The automotive sector is increasingly important, with high demand for in-car entertainment experiences [7] - New partnerships in the automotive sector include Porsche, Cadillac, and Volvo, among others, adopting Dolby Atmos and Dolby Vision [7][8] - In mobile, Dolby is expanding its presence in the Android ecosystem and has added new partners in China, including Xiaohongshu and Kuaishou [10] Company Strategy and Development Direction - The company is focused on long-term growth drivers, maintaining strong engagement with content creators, distributors, and OEM partners [6][14] - Dolby aims to expand its technologies into more devices and content, particularly in the automotive and mobile sectors [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted significant uncertainty in the macroeconomic environment, leading to a revision of the revenue range for the year to $1.31 billion to $1.38 billion [5] - The company is prepared to operate across a wide range of scenarios and remains focused on controllable factors that drive long-term growth [14][24] Other Important Information - The company declared a dividend of $0.33, up 10% from the previous year [18] - The outlook for Q3 revenue is between $290 million and $320 million, with licensing revenue expected to range from $265 million to $295 million [23] Q&A Session Summary Question: OEM partners' capacity in lower tariff regions - Management indicated that the ability to increase capacity varies by end market, with Mexico being a significant manufacturing location exempt from tariffs [26][28] Question: Clarification on U.S. sales impact - Approximately 25% of licensing revenue from consumer device shipments is from products sold in the U.S. [30][32] Question: Momentum for Dolby Vision and Atmos - Management confirmed strong engagement with partners and ongoing investments in the automotive sector, with new models being announced [34] Question: Adjustments to OpEx in a deteriorating environment - The company is focused on long-term value and is not making immediate changes to operating plans but will adjust if necessary [38] Question: Tipping point for Atmos Music in cars - Management believes that continued engagement with manufacturers and expansion into mainstream models will be key to reaching a tipping point [40] Question: Tariff exposure on products and services - The impact of tariffs on the products business is considered small, as most products are shipped to non-U.S. markets [48]
Dolby Laboratories(DLB) - 2025 Q2 - Earnings Call Transcript