Dolby Laboratories Inc. Q2 2023 Earnings Call
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Okay.
Ladies and gentlemen, thank you for standing by and welcome to the Dolby Laboratories conference call discussing fiscal second quarter results.
During the presentation, all participants will be in a listen only mode.
Afterwards, you will be invited to participate in a question and answer session at that time. If you have a question you will need to press star one on your telephone.
As a reminder, this call is being recorded Thursday February .
Thursday may 4th 2023.
I would now like to turn the conference over to Maggie O'donnell head of Investor Relations for Dolby Laboratories. Please go ahead Becky.
Good afternoon, and welcome to Dolby Laboratories' second quarter 2023 earnings Conference call. Joining me today are Kevin Yeaman, Dolby Laboratories', CEO and Robert Park CFO .
As a reminder, today's discussion will include forward looking statements, including our fiscal 2023 outlook and our assumptions underlying that outlook. These statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today, including among other things the impact of current macroeconomic issues COVID-19.
<unk> ongoing supply chain initiatives inflation changes in consumer spending and geopolitical instability on our business.
A discussion of these and additional risks and uncertainties can be found in the earnings press release issued today under the section captioned forward looking statements as well as in the risk factors section of our most recent quarterly report on Form 10-Q.
Dolby assumes no obligation does not intend to update any forward looking statements made during this call as a result of new information or future events.
During today's call, we will discuss non-GAAP financial measures a reconciliation between GAAP and non-GAAP financial measures is available in our earnings press release and in the interactive Analyst Center on the Investor Relations section of our website.
So with that introduction behind Us I will now turn the call over to Liz Krakowski, who is going to be leading the conversation with Kevin. Thanks.
Thanks Maggie.
So let's get started.
Thinking about the business in context of the macro environment.
Well first and foremost we're going to continue to focus on what we until we can control we continue to execute well against each of our growth areas. There do continue to be questions about the macro environment. What I can say with confidence is that there has never been greater demand for entertainment content. There has never been greater demand for content.
To be more engaging.
And our consumers and partners want high quality immersive experiences.
This is our passion of Dolby, we have a proven track record of being able to adapt to a world of change and focus on the pursuit of those inspiring experiences and that's where we're going to stay focused.
So Kevin we're halfway through the year How's the business progressing.
Well the first half of the year has come in stronger than we expected and we continue to see some transactions closing earlier in the year and as it relates to our foundational audio technologies and underlying business trends.
The first quarter, you'll remember we saw tv's come in a little bit stronger than we had expected in the second quarter, we saw <unk> sound bars, coming a little lighter than we'd expected although for the year overall, we see things playing out within the range of what we expected.
Our foundational audio technologies importantly continue to be essential to the way entertainment content is delivered.
It is true that these areas are more sensitive to the macro environment.
We continue to expect that when the economy stabilizes. These areas all returned to growth.
For Dolby Atmos, Dolby vision and imaging patents, we see all the signs that give us confidence that we can double these revenues in the next three to five years and we're on track to hit our growth target of 15% to 25%. This year and we expect to do this by continuing to focus on expanding our ecosystems around movies and TV music and automotive.
And user generated content.
You just mentioned that Youre seeing signs that give you confidence that you can achieve your long term goals with Dolby Atmos Dolby vision can you talk about what youre seeing.
Yes sure.
Dolby Atmos, Dolby vision and imaging patents grew 30% last year and one of the largest contributors to that growth was Dolby Atmos Dolby vision at our movies and TV ecosystem and we continue to expect that to be a big driver. This year, the movies and television ecosystem drives growth across Tvs.
Set top boxes smart speakers. It also drives revenue across each of our end markets, whether it's Pcs or mobile devices.
Growing ecosystem that Dolby means being a part of more and more of the content that people love and then becoming a part of all the ways that people experience that content.
In the case of movies and TV Dolby vision and Dolby Atmos are included on roughly a quarter of <unk> Tvs.
It's a significant position for consumers to enjoy that experience, but it also leaves a significant opportunity for growth. So we're focused on driving deeper adoption into TD lineups with our existing partners. We talked about this last quarter with partners like Tcl, Hisense and others announcing their lineups at CES.
We're also focused on increasing our presence with regional streaming partners and local Oems, which addresses a large part of the market and so for example, we had some good wins this quarter in India Disney.
Disney Star NGL cinema announced that all of their 2023 Indian Premier League cricket matches will be available in Dolby Atmos and we also had a number of local OEM wins.
Okay.
Going beyond movies and television we're really excited about the progress, we're making within our user generated content and music ecosystems, while they're both at early stages, they're shaping up to be significant growth contributors going forward. So I want to start with user generated content, because we had some great wins this quarter.
Abo became our newest partner for Dolby vision capture launching their flagship phone.
Let me now has half a dozen Dolby vision capture both models in China and this quarter. They started shipping phones to India Southeast Asia, Europe , and the Middle East Vivo began shipping Dolby vision capture phones in China and.
<unk> one of China's largest social media platforms now supports Dolby vision Dolby Atmos, joining the likes of Wechat, Billy Billy and QQ, So what's driving the demand in the user generated content ecosystem.
Well consumers are passionate about those experiences that they can create and share with Dolby vision and thats, our focus to make the content that people care, most about more engaging and as we've talked about before the camera as a major reason people upgrade their phones and so as we progress throughout the year, we expect more phones to be available with Dolby.
As you capture and playback and more services with the ability to capture our share of that content.
Personally really enjoy having Dolby vision capture on my phone and sharing memories and pictures and things, especially my two little kids, So Kevin let's move on.
What do you think.
We continue to see tremendous momentum across content streaming services and devices, particularly in wireless speakers and automotive.
This quarter Sandoz launched there are premium smart speaker, the <unk> era 300, with Dolby Atmos and this product comes at a time when studios streaming service and artists are all coming together to embrace the Dolby Atmos music experience.
As it relates to automotive and just under two years, we've gone from announcing our first partner to today, having cars in market from multiple manufacturers, including Mercedes Who's releasing additional models. This year and all those cars will be available early next year.
Just a few weeks ago, Guangzhou automobile group, which is the fourth largest auto manufacturer in China announced that they're launching Dolby Atmos and their news sports sedan. So.
So we continue to see strong demand across the automotive market and we are working to bring more partners on board during the rest of this year.
On the services side.
Amazon began streaming to a wider set of devices, including more wireless speakers sound bars and <unk>.
Music is one of the largest music streaming services in China, and they began streaming to more devices, including mobile PC and automobile.
It's great to see these services are continuing to add more and more content Apple music. This quarter launched Apple music classical which is a new classical music app or listeners can enjoy thousands of recordings and Dolby Atmos ever.
Every day, there's more and more content available top artists across genres and generations are creating in Dolby Atmos and whether that's the Billboard top 100 artists.
Or a favorite song from a special moment in your life, you are more likely than ever to find your favorite songs in Dolby Atmos.
Beyond music, you can enjoy audiobooks and podcasts in Dolby Atmos audible is now streaming a number of their most popular audio books and podcasts and Dolby Atmos, They joined <unk> and regional services in India, South Korea, and the Middle East, So more and more ways to enjoy Dolby, it's very relevant.
<unk> in the car and on the go.
And we're excited to continue to make stories more immersive and more experiential so as it relates to continued growth in Dolby Atmos Dolby vision and imaging patents, we continue to make progress across each of these focus areas movies and television automotive and music user generated content and beyond that we remain focused on <unk>.
Dolby to a far wider range of use cases with Dolby Io, we continue to see strong interest from developers who are creating the next generation of online immersive experiences.
We bring is unparalleled audio quality and ultra low latency for large scale environments and we continue to see an increase in the number of developers and customers that are using Dolby Io.
So Kevin before.
Hi, Robert anytime.
Okay.
So as long as people want to watch movies and television listen to music or connect with each other through social media apps and gaming there continues to be a big opportunity for Dolby to make a difference.
We're confident about our growth opportunities and we're making progress across each of our ecosystems that focus areas. We're coming at this from a position of strength with a strong business model strong profitability and strong cash flow.
We're going to continue to be agile in responding to changes in the market.
And we're going to focus on the opportunities to bring Dolby Atmos and Dolby vision to all the ways that people experience their content.
Thanks for that context, Kevin.
Okay. So let's turn it over to Robert Robert can you start us off with some highlights for the quarter.
Yes, Thanks Liz.
Yes, before we get into the details I wanted to point out a couple of things.
First total revenue of $376 million was higher than the guidance. We provided last quarter. We saw transactions closed earlier than anticipated and we benefited from higher imaging patent royalty revenue in our broadcast and Marvel markets, partially offset by lower unit shipments than expected and our PC and consumer electronic markets.
Second we continue to operate in an uncertain environment.
That said based on what we're seeing today, we continue to expect revenue growth our revenue outlook range for the year is 127 billion to $1 33 billion or 1% to 6% year over year growth.
With that as a backdrop, let's get into the Q2 details.
Q2 revenue of $376 million was up 12% year over year with growth in mobile and broadcast primarily from Dolby Atmos, Dolby vision and imaging patents higher box office positively impacting our Dolby cinema and higher products and services revenue. This was partially offset by lower revenue in PC and <unk>.
E markets, primarily from lower unit shipments.
Q2 revenue was comprised of $352 million in licensing revenue and $24 million in products and services revenue.
Now, let's talk about licensing revenue by end market.
As a reminder, our licensing business is based on unit shipments. We also have transactions that reflects revenue from unit shipped in prior periods, which we call recoveries and minimum volume commitments, where all or a portion of the revenue for a given period is recognized upfront.
These transactions are all relates to unit shipments.
Broadcast represented about 37% of total licensing in Q2, 'twenty three of $24 million or 23% on a year over year basis, driven primarily by minimum volume commitments and imaging patents and Dolby Atmos.
Mobile represented about 26% of total licensing in Q2, 23 up $27 million or 41% on a year over year basis, driven by minimum volume commitments, primarily in Dolby Atmos, Dolby vision and imaging patents.
Consumer electronics represented about 12% of total licensing in Q2, 'twenty, three down $15 million or 28% on a year over year basis, driven by lower unit shipments in the first half primarily in <unk> and sound bars related to foundation of audio technologies.
PC represented about 12% of total licensing in Q2, 'twenty, three down $14 million or 25% on a year over year basis, driven by lower unit shipments in the first half primarily related to foundational audio technologies.
Other markets represented about 13% of total licensing in Q2, 23 up $15 million or 48% on a year over year basis drill.
Driven primarily by adoption of Dolby Atmos in auto higher box office for Dolby cinema, and higher unit shipments and gaming.
Beyond licensing our products and services revenue were $24 million in Q2, 'twenty three up 18% on a year over year basis the.
The year over year increase was driven primarily by higher cinema product sales. We also saw growth in Dolby Io.
Let's turn to expenses and margins.
Total non-GAAP gross margin in the second quarter was 89% compared to 90% in the second quarter of fiscal year 'twenty two.
non-GAAP operating expenses in the second quarter were $195 million compared to $187 million in the second quarter of fiscal year 'twenty. Two the increase was driven primarily by timing of marketing program spend.
non-GAAP operating income for Q2 was $141 million or 38% of revenue compared to 34% of revenue in Q2 of last year.
non-GAAP income tax in Q2 was 18% compared to 17% in last year's Q2.
Net income on a non-GAAP basis in the second quarter was $123 million or $1.26 per diluted share compared to $94 million or <unk> 92 per diluted share in Q2 of fiscal year 'twenty two.
During the quarter, we generated $105 million in cash from operations compared to $63 million generated in last year's second quarter. We ended the second quarter with approximately $916 million in cash and investments.
During the second quarter, we bought back about 630000 shares of our common stock and ended the quarter with $262 million of stock repurchase authorization available going forward.
We also announced today a cash dividend of <unk> 27 per share the dividend will be payable on May 23, 2023 to shareholders of record on May 16 2023.
Also our patent pool administrator via completed a small acquisition after the close of the quarter. The financial results of the acquired company are not expected to be material and are included in our guidance.
With that let's get into guidance.
Great.
We continue to operate in a challenging and uncertain environment for fiscal year 'twenty three we expect that our revenue from foundation audio technologies will decline low single digits year over year, reflecting lower unit shipments, particularly in PC, TV CE and mobile consistent with what we've said previously.
We are still targeting 7% to 25% growth in Dolby vision, Dolby Atmos and imaging patents driven by growth in broadcast mobile and other markets. We assume this will more than offset the declines in foundation of audio that we are expecting.
With these assumptions our full year 2020 revenue is expected to range from $1 7 billion to $1 33 billion. Within this we anticipate license revenue to range from $1 7 billion to $1 2 billion.
With growth in mobile broadcast and other markets outpacing the decline in PC and CE.
Products and services revenue is expected to range from $100 million to $110 million.
non-GAAP gross margin is estimated to be roughly 88% we.
We still expect that non-GAAP operating expenses will increase roughly 2% compared to prior year and expect operating margins of roughly 30% on a non-GAAP basis for the year.
We will continue to be disciplined with our spend review, our resource envelope and allocation on a regular basis.
We anticipate non-GAAP earnings per share of $3 15.
To $3 65 and.
In terms of the full year split we still expect that revenue in the second half will be lower than revenue in the first half at a similar split to what we saw last year.
Let's move on to guidance for the third quarter.
Q3 revenue is expected to range from 285 million to $315 million.
Within that licensing revenue is estimated to range from $260 million to $285 million, while products and services is projected to range from 25 million to $30 million.
Compared to Q3 of last year, we expect growth in Dolby Atmos, Dolby vision and imaging patents, particularly in broadcast mobile and other markets to more than offset lower revenue from foundational audio technologies, driven by lower unit shipment estimates at PC and timing of committed volume transactions and mobile <unk>.
non-GAAP gross margin is estimated to be 86% to 87%.
Operating expenses in Q3 on a non-GAAP basis are estimated to range from $195 million to $205 million our.
Our effective tax rate for Q3 is projected to range from 19% to 21% on a non-GAAP basis.
We estimate that non-GAAP Q3 diluted earnings per share could range from 47 to <unk> 62.
We are pleased with the start to the year while.
While the macro environment remains uncertain, we are making progress on our long term growth opportunities. We continue to believe the fundamentals that Dolby is durable operating model balance sheet and cash flows remain strong.
Now, let's open it up for questions.
Alright, Thanks, Robert Operator, I think we're ready to open up the queue for questions.
Thank you Les.
Ladies and gentlemen, if you wish to register a question for todays question and answer session. You may do so by pressing star one if you would like to withdraw your question. Please press star one again, if you are on speakerphone. Please pick up your handset before entering a request.
To be fair to all participants we ask that you limit yourself to one question at a follow up question until all participants have had a chance in the first round as time allows we will then come back to answer any remaining questions.
One moment please.
Your first question comes from the line of Steven Frankel with Rosenblatt.
Good afternoon, and thanks for the opportunity.
Kevin maybe we could start with some color on this notion that even in this environment you have deals closing faster than.
Than anticipated, which is the opposite of what you experienced over the last couple of years, what could you contribute that to.
Yes, Steve Thanks for the question.
Well first I would say that yes last year, when we were seeing some deals take longer.
What we said and what continues to be true is that we do have strong engagement throughout each of our ecosystems and a strong pipeline of deals and this year. We've started to see that turned to our favor with deals closing earlier than we had forecasted.
I don't think I would attempt to draw any broad macro conclusions from that.
Other than it's a case by case basis.
I have said before that in an environment like this each of our partners is focusing on all the things they have to focus on and so we're pleased that we've been able to get a lot of that business in in the first half of the year.
And you seem fairly insulated from the disastrous PC market.
Is that a function of having exposure to minimum commitments in that business as well like you do in mobile.
I think that it's a function of having a diversified business across a lot of device categories and.
And everything that we do we do to be clear, we do see.
PC shipment estimates being.
Weaker than we thought coming into the year, but as Robert said.
We've had some things that are doing a little better than we had estimated something through a little worse, so as far as the underlying business trends, especially as they are playing out and foundational we see that playing out more or less what we expected and then of course, we continue to focus on driving growth in Dolby Atmos, Dolby vision and imaging patents, which is all about R. R.
Our three focus areas.
And then for Robert what were true ups in the quarter.
Hi, Steve.
<unk> for the quarter was 1 million positive which represented.
Revised estimates for units shipped last quarter in Pcs, and CES, which was a negative true up offset by.
Higher imaging patents related to <unk>.
Patents that were once reported in arrears, which is also a true up.
Okay.
Great. Thanks very much.
We'll take our next question from Paul Chung with Jpmorgan.
Okay.
Hi, Thanks for taking my question. So just on broadcast and a very strong performance there.
It drove the large step up there and could you perhaps provide kind of an update on <unk>.
Vision, and atmos penetration across TV, and how much more kind of incremental runway there is.
Yes, well as it relates to.
Broadcast we are with <unk>.
Dolby vision and Dolby Atmos.
Roughly 25% of <unk> Tvs coming this year, which is a.
A great position and also one that leaves.
A lot of room for growth.
It's also a notable I think that Atmos is now.
Got up to Dolby vision, which is we think a really good development because.
From our perspective from the perspective of content creators.
It's.
The Dolby experience, the combined experience and we want more and more consumers to be able to enjoy it that way.
The key to continuing to drive that forward is as I've talked about before is continuing to work with our existing partners to drive the combined experience further and further into their TV lineups and we talked about a lot of our partner or partners I should say talked a lot about their lineups at CES.
And then also.
A pretty large part of the market is also regional.
White label brands from Big box retailers served by often regional streaming services and so that's a big focus area of ours.
I said earlier.
Was it was a market where we add some progress this quarter. We also had a OEM win in Brazil. So that's what's going to continue to drive that and we're also.
Paul.
Switching market is a little bit on you, but as it relates to driving progress on the value of the movies and TV ecosystem, we continue to see good strength across sound bars, and other areas as well.
Gotcha, and then on other revenues Youre seeing a very nice rebound there talked about the contra.
Contribution across cinema.
And the car, what's driving some of that nice rebound there and does this kind of new.
Quarterly run rate, we should be thinking about here.
Kind of.
Growth from these levels.
So.
On on.
On the other category I'll, let Robert speak to kind of what we're guiding to that for the second half of the year, but I will say generally speaking, yes, we look at that as a.
That is a growth area two of the growth drivers have been gaming, where I think they are starting to come out the other side of some of the supply chain challenges that we were experiencing last year and I think even the year before.
And then of course automotive and.
We are.
Of course, beginning to see revenue from automotive with.
Neo having been in market for over a year now had the opportunity to experience one of their cars yesterday, it's absolutely spectacular experience with Mercedes to begin shipping last year, they've announced more models underway, although will begin shipping next year.
So.
Those are the those are the standouts in terms of what's been driving the growth.
This quarter and we absolutely see those as.
Driver in particular automotive is that's one of our key focus areas with music.
That's not limited automotive we talked today about Thanos.
<unk> 300 product.
We also announced yesterday that the JBL boom box three Dolby Atmos.
So music reaches a lot of categories, but automotive is a big focus for us.
Yes, Paul in terms of the full year, where we said.
Where we would see growth. This year is really in broadcast mobile and other as Kevin said, primarily around gaming and auto to more than offset the declines we're seeing in consumer electronics in the PC space. So that's kind of what we're seeing and that's sort of what we're expecting here.
Okay, Great and then last on cash flow very very nice start to fiscal year.
How should we think about kind of.
The back half and where your targets are for the full year. Thank you.
Yes, Paul good question on the cash flow of $105 million.
<unk>.
Just if you take a step back there are timing differences between when we recognize revenue when we bill and collect from our customers, particularly for transactions like recoveries in these large minimum volume commitments.
Time, so depending on the agreements we recognized in a given quarter, we could see fluctuations on a quarterly basis, Paul it's going to always be lumpy, but given our business model. If you look back on an annual basis. You can expect that net income to correlate very closely to our operating cash flows and you can see that on average over the last few quarters.
Excellent. Thank you.
We will take our next question from Ravi Shanker with William Blair.
Good afternoon. Thanks for taking the question, Kevin maybe just kind of circle back on the macro.
Question that you had earlier in the prepared remarks.
Can you give us some perspective on the macro environment this quarter versus what you saw last quarter any sort of trend line you draw between that or sort of rate of change Thats first question that follow up.
Okay.
But I think what's consistent is that.
Is that there continues to be a lot of uncertainty about the macroeconomic environment, but.
As it relates to our foundational audio technologies.
As we've said we saw some things come in a little better in some things come in a little lighter PC is notable category where.
I would say.
The data points throughout the quarter pointed to a weaker environment.
For Pcs, but on the whole, it's playing out for foundational about the way we laid it out at the beginning of the year. So.
And then of course as it relates to Dolby vision, Dolby Atmos and imaging patents, it's about continuing to drive wins across each of our key growth areas.
Yes.
Great. Thanks in the earnings call. This season would be complete without a question on AI. So just curious.
Potential ways to implement that Adobe just sort of your general thoughts on it.
Yes, I thought we might get a question on AI.
So thanks for the question.
I'd start by saying Ralph.
I want to be clear that AI is not a new topic for us at Dolby.
But of course, there is a lot of energy and change in the space and Thats, particularly true as it relates to generative language models like chat GPT. So one area. We focus on is how does this impact the ecosystems, we serve and the partners we serve that come together to form those ecosystems.
And.
I think it's safe to say that most if not all companies are adopting AI in some shape or form in and looking closely at their strategies.
Especially as it relates to generative models and <unk> in our ecosystem content creation is where we're seeing the most activity and so whether that is purely AI generated content or whether it's the application of AI to help creators improve their creation process.
We want to make sure that we're in a position to meet their evolving needs.
Look I would say at the end of the day, if anything all the roads continue to point to more and more content and more immersive content.
And of course, we're focused on how AI applies to what we do at Dolby and.
For us that means continuing to bring more dolby experiences to more types of content to more people around the world and we've been working with AI models, not limiting the discussion to generate of AI for many years now and we bring unique knowledge and perspective to our use of AI and that comes from our decades of experience where.
Looking across content distribution and playback. So we've been integrating many aspects of AI into our innovation processes, and we expect that to be increasingly so in the future. So.
We're excited about the potential for that to accelerate the innovation process and.
Create opportunities to bring new Dolby experiences to life.
Okay. Thank you Kevin.
Thank you our next question from James Goss with Barrington Research.
Okay.
Thanks.
It appears that.
At least in this quarter broadcasting and mobile are separating themselves from CE and PC.
As others become big enough with gaming and automotive that you could even consider breaking out one of the categories. I'm just wondering about it somewhat of a reshaping of the business.
While these trends continue in your view is this is <unk>.
How we ought to look at the future, especially with three quarters of the TV market is still to go.
And is any of the.
Is any of what has been reported a shift from sort of a pull forward from Q3 to Q2, because Q3 is a little weaker Q2 is bigger.
Maybe you talked about those sort of things.
Well I think to the last part of your question Jim Yes, we did see that say that we saw some transactions coming in earlier than we had initially forecasted but if you step back look at the at the first half the growth rate is kind of within the range of what we're expecting for the full year and we're seeing kind of a.
Composition.
<unk> of revenue first half to second half, which is pretty consistent with what we've seen.
In prior years.
As it relates to.
Our revenue by end market.
I'd remind you that's always important not to.
Over index on the results for any given quarter, but to step back and look at the trends over the year.
And what we would expect is.
Im going to be consistent with what we've been saying about our key growth drivers so with movies and television and continued growth in TV and set top boxes that points to a broadcast end market.
The movies and TV efforts in that ecosystem also do we do continue to expect that to drive adoption in other end markets down bars, which are in CE.
And even in Pcs and mobile devices.
Music of course, a big focuses on the car that's what's driving the growth in other markets and of course.
When we talk about our ability to double revenues from Dolby Atmos, Dolby vision and imaging patents. That's one of the that's one of our focus areas and so we would expect that to be a growth driver in the future.
And.
And then user generated content I talked about.
Some of the wins we.
We added this quarter.
Thats.
Primarily about.
Focused on mobile devices.
Again, it can also have benefits to other markets, but that's the those are the I would Matt the those focus areas, we talk about too.
Where we're expecting to see growth from those from those efforts.
Okay and one.
About music.
There's the.
The share of electronic vehicles or electric vehicles, increasing have any impact on penetration or does that is that really not a factor.
And can you also talk about the number of speakers you require in a car to create the atmos experience.
Obviously with the JBL speakers you can do with one speaker.
So.
Are there any framework you have to work with them.
Yes, so the first part of your question.
I would say that today given the stage we're at in the ecosystem.
It's really about getting our getting partners onboard and they're usually starting with one or two models and then getting them to adopt in additional models.
As it happens we tend we do have a lot of.
AV EV models.
But.
I think that debt.
But I don't think that I would look to the percentage of EDI is something thats significant while our goal is to be a part of the way.
All consumers experience.
In all of their cars and.
Which leads to your second question, which is that.
Most of our wins so far are at the high end you know that across each of our ecosystems. Our partners want to start at the high end because this is such an amazing experience and that means that for the most part the carbon market.
Quite a lot of speakers.
Of course from the very beginning our team has been looking at.
How to do that with.
With the number of speakers you would expect to have in as we go further into these lineups just as we've done with taking Dolby Atmos from the cinema to the sound bar to the TV to the mobile device to the smart Speaker. We're always thinking ahead to how we continue to bring this experience to the mainstream.
Alright, thanks very much.
And that concludes the question and answer session I would like to turn the call back over to Maggie O'donnell for closing remarks.
Thank you everybody for joining us today have a great afternoon.
Thank you.
And that does conclude todays presentation. Thank you for your participation and you may now disconnect.
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