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This article first appeared on GuruFocus.
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Revenue: $347 million, above the high end of guidance.
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Non-GAAP Earnings Per Share: $1.06, exceeding guidance.
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Licensing Revenue: $320 million.
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Product and Services Revenue: $27 million.
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Operating Cash Flow: Approximately $55 million.
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Share Repurchase: $70 million of common stock repurchased.
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Dividend: $0.36, up 9% from the previous year.
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Cash and Investments: Approximately $730 million.
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Restructuring Charge: $10 million in GAAP operating expenses.
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Mobile Revenue Growth: Over 20% year over year.
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Broadcast Revenue: Down mid-teens year over year.
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Full Year Revenue Guidance: Raised to $1.4 billion to $1.45 billion.
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Licensing Revenue Guidance: $1.295 billion to $1.345 billion.
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Non-GAAP Operating Expenses Guidance: $780 million to $800 million.
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Operating Margin Improvement: 50 to 100 basis points.
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Non-GAAP Earnings Per Share Guidance: $4.30 to $4.45.
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Q2 Revenue Guidance: $375 million to $405 million.
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Q2 Licensing Revenue Guidance: $350 million to $380 million.
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Gross Margin: Approximately 91% on a non-GAAP basis.
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Q2 Non-GAAP Operating Expenses Guidance: $195 million to $205 million.
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Q2 Non-GAAP Earnings Per Share Guidance: $1.29 to $1.44.
Release Date: January 29, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Revenue and non-GAAP earnings exceeded the high end of guidance, indicating strong financial performance.
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Dolby Laboratories Inc (NYSE:DLB) is making significant progress on growth initiatives, leading to an increase in annual guidance.
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The company showcased its innovations at CES, highlighting Dolby Atmos and Dolby Vision’s impact on entertainment experiences, particularly in automotive and TV sectors.
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Partnerships with over 35 automotive OEMs, up from 20 last year, demonstrate strong momentum in the automotive sector.
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Dolby Vision 2 received enthusiastic responses at CES, with new partnerships and support from content providers like Peacock and TV manufacturers like TP Vision, Hisense, and TCL.
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The company faces risks from macroeconomic events, supply chain issues, inflation, and geopolitical instability, which could impact future results.
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Broadcast revenue declined mid-teens year over year, primarily due to timing and deals.
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The foundational revenue is expected to decline slightly, indicating potential challenges in some core areas.
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PC and consumer electronics markets are expected to decline, impacting overall revenue growth.
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GAAP operating expenses included a $10 million restructuring charge, reflecting ongoing efforts to streamline operations.
Q: Some deals came in earlier than expected. Does this indicate a change in the environment or customer urgency? A: Kevin Yeaman, CEO: The earlier deal timing doesn’t suggest a broader macroeconomic trend. It helps de-risk our outlook for the year, and we’re raising guidance to reflect this and other adjustments.
Q: Was the $7 million true-up related to mobile, and did it contribute to the mobile segment’s growth? A: Robert Park, CFO: The true-up was primarily in gaming and broadcast. Mobile growth was driven by timing of deals and commitments, and we expect mobile to be up slightly for the full year.
Q: How does the Sony and TCL partnership impact Dolby’s market share in TVs? A: Kevin Yeaman, CEO: We have strong relationships with both TCL and Sony. We’re focused on increasing TV attach rates and are excited about Dolby Vision 2, which enhances mid-range TVs and offers increased royalties.
Q: Can you update us on the patent pool monetization strategy and its impact on revenue? A: Kevin Yeaman, CEO: The video distribution program and Dolby Optiview aim to expand our market to content service providers, targeting 10% of revenue from this segment in three years. The pool has signed its first US streamer, Roku, and offers pricing incentives for early sign-ups.
Q: What were the key takeaways from CES, and how did partners respond to Dolby’s innovations? A: Kevin Yeaman, CEO: CES was a great opportunity to engage with partners. The focus was on automotive in-car entertainment and Dolby Vision 2, which received positive feedback. We’re working to release the first Dolby Vision 2 TVs by the end of the year.
Q: What is the significance of Peacock adopting Dolby’s full suite of technologies? A: Kevin Yeaman, CEO: Peacock’s adoption of Dolby technologies, including Dolby Atmos and Dolby Vision 2, is significant as it spans movies, TV, and sports. It enhances the streaming experience and sets a precedent for future partnerships.
Q: How is Meta’s support for Dolby Vision on Facebook and Instagram influencing Dolby’s mobile strategy? A: Kevin Yeaman, CEO: Meta’s support for Dolby Vision on Facebook and Instagram boosts demand for Dolby on mobile devices. It aligns with our strategy to enhance mobile experiences and engage with partners like Meta across various platforms.
Q: How are macroeconomic factors like tariffs and memory pricing affecting Dolby’s OEM partners? A: Kevin Yeaman, CEO: While there are macroeconomic challenges, adjustments to our outlook were not significant. Memory pricing impacts mobile more directly, but many of our mobile deals are based on minimum volume commitments, mitigating the effect.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.