Dolby Laboratories(US:DLB)2022-11-18 02:52Financial 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]