Q4 2023 Dolby Laboratories Inc Earnings Call
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Speaker 1: Please stand by, we're about to begin.
Please standby we're about to begin.
Ladies and gentlemen, thank you for standing by and welcome to the Dolby Laboratories conference call discussing fiscal fourth quarter results.
Speaker 1: Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories conference call discussing fiscal fourth quarter results.
Speaker 1: 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 do have a question, you will need to press star 1 on your telephone.
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 do have a question you will need to press star one on your telephone as a reminder, this call is being recorded Thursday November six T 2023, I would now like to turn the conference over to.
Speaker 1: As a reminder, this call is being recorded Thursday, November 16th, 2023. I would now like to turn the conference over to Mr. Peter Goldmacher, Vice President of Investor Relations. Peter, please go ahead.
Mr. Peter Goldmacher, Vice President of Investor Relations Peter Please go ahead.
Speaker 2: Good afternoon. Welcome to Dolby Laboratories' fourth quarter 2023 earnings call. Joining me today are Kevin Yehman, Dolby Labs CEO , and Robert Park, Dolby Labs CFO .
Good afternoon, welcome to Dolby Laboratories' fourth quarter 2023 earnings call. Joining me today are Kevin Yeaman, Dolby Labs, CEO and Robert Park, Dolby Labs CFO.
Speaker 2: As a reminder, today's discussion will include forward-looking statements, including our fiscal 2024 first quarter and full-year outlook and our assumptions underlying that outlook. These statements are subject to risks and uncertainties that may cause actual results to differ materially from the statements made today, including, among other things, the impact of current macroeconomic events, ongoing supply chain issues.
As a reminder, today's discussion will include forward looking statements, including our fiscal 2020 for first quarter and full year outlook and our assumptions underlying that outlook. These statements are subject to risks and uncertainties that may cause actual results to differ materially from the statements made today, including among other things the impact of current MACRA.
Economic events ongoing supply chain issues.
Speaker 2: inflation rates, changes in consumer spending, and geopolitical instability on our business.
Inflation rates 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 that we issued today under the section captioned forward looking statements as well as in the risk factors section of our most recent annual report on Form 10-K.
Speaker 2: A discussion of these and additional risks and uncertainties can be found in the earnings press release that we issued today under the section captioned forward-looking statements, as well as in the risk factor section of our most recent annual report on Form 10-K .
Dolby assumes no obligation and does not intend to update any forward looking statements made during this call as a result of new information or future events during.
Speaker 2: Dolby assumes no obligation and does not intend to update any forward-looking statements made during this call as a result of new information or future events.
Speaker 2: During today's call, we'll discuss certain non-GAAP financial measures. A reconciliation between GAAP and non-GAAP financial measures is available in our earnings press release and on the Interactive Analyst Center on the Investor Relations section of our website. With that, I'd like to turn the call over to Kevin. Thank you, Peter, and thanks to everyone.
During today's call, we will discuss certain non-GAAP financial measures a reconciliation between GAAP and non-GAAP financial measures is available in our earnings press release and on the interactive Analyst Center on the Investor Relations section of our website with that I'd like to turn the call over to Kevin. Thanks.
Thank you Peter and thanks to everyone for joining us today.
Speaker 3: Today I'd like to cover three topics. First, I'm going to make some brief comments on the macro.
Today I'd like to cover three topics.
First I'm going to make some brief comments on the macro.
Speaker 3: Second, I will revisit the fundamental premise underlying our business model to help you understand why we remain so bullish on our opportunity.
Second I will revisit the fundamental premise underlying our business model to help you understand why we remain so bullish on our opportunity in.
Speaker 3: And third, I'll make a few comments about our fourth quarter and share our outlook and priorities for fiscal year 24 before turning the call over to Robert.
And third I'll make a few comments about our fourth quarter and share our outlook and priorities for fiscal year 'twenty four before turning the call over to Robert.
I know the macro is top of mind for many of you there.
Speaker 3: The demand environment hasn't changed noticeably since the last time we spoke in August .
The demand environment hasn't changed noticeably since last time, we spoke in August.
Speaker 3: Our partners and customers still want to bring the best audio and video experiences to their consumers, and we continue to have strong engagement.
Our partners and customers still want to bring the best audio and video experiences to their consumers and we continue to have strong engagement.
Speaker 3: At the same time, many of our partners and customers continue to rebalance their priorities to reflect the current economic reality.
At the same time, many of our partners and customers continue to rebalance their priorities to reflect the current economic realities.
The impact on Dolby from a topline perspective is it some new partnerships and design wins are taking more time and.
Speaker 3: The impact on Dolby from a top line perspective is that some new partnerships and design wins are taking more time, and when you layer in the amount of time it takes to go from an agreement to a Dolby enabled device reaching the market, things are just taking longer.
And when you layer in the amount of time. It takes to go from an agreement to a Dolby enabled device, reaching the market things are just taking longer.
Speaker 3: I'll talk more about our outlook and the progress we are making on our long term growth opportunities in a few minutes. But before I do that, I'd like to spend a few minutes revisiting our business model to help you all understand why we remain confident in our long term growth opportunities. We generate over 90%.
I'll talk more about our outlook and the progress we are making on our long term growth opportunities in a few minutes, but before I do that I'd like to spend a few minutes revisiting our business model to help you all understand why we remain confident in our long term growth opportunities.
We generate over 90% of our revenues from licensing.
Speaker 3: Today, roughly two-thirds of our licensing revenue comes from our foundational audio technology.
Today, roughly two thirds of our licensing revenue comes from our foundational audio technologies, which includes our branded audio codecs and our audio patent licensing.
Speaker 3: which includes our branded audio codecs and our audio patent licensing.
These technologies have broad penetration across a diverse set of devices and end markets and we continue to strengthen our position through ongoing innovation.
Speaker 3: These technologies have broad penetration across a diverse set of devices and end markets, and we continue to strengthen our position through ongoing innovation.
Speaker 3: Our revenue from these technologies is primarily driven by device shipments from licensees and is largely correlated with consumer spending over the long term.
Our revenue from these technologies is primarily driven by device shipments from licensees and is largely correlated with consumer spending over the long term.
The remainder of our licensing revenue primarily comes from Dolby Atmos, Dolby vision and our imaging patents.
Speaker 3: The remainder of our licensing revenue primarily comes from Dolby Atmos, Dolby Vision, and our imaging patents.
Dolby Atmos and Dolby vision are earlier in the adoption and licensing cycle than our foundational audio technologies.
Speaker 3: Dolby Atmos and Dolby Vision are earlier in the adoption and licensing cycle than our foundational audio technologies.
Speaker 3: So our opportunity for growth is more driven by increased adoption from current partners and the addition of new licensees.
So our opportunity for growth is more driven by increased adoption from current partners and the addition of new licensees.
Speaker 3: Top line growth for Dolby Atmos and Dolby Vision is more about getting on more devices that are shipping than about how many devices are shipping.
Topline growth for Dolby Atmos, and Dolby vision is more about getting on more devices that are shipping then about how many devices are shipping.
Speaker 3: I'd like to spend the next few minutes discussing our ecosystem and the growth opportunity for Dolby Atmos and Dolby Vision, since that is the most dynamic part of our business.
I'd like to spend the next few minutes discussing our ecosystem and the growth opportunity for Dolby Atmos and Dolby vision since that is the most dynamic part of our business.
Okay.
Speaker 3: The Dolby ecosystem is built on three pillars, creators, distributors, and device manufacturers.
The Dolby ecosystem is built on three pillars creators distributors and device manufacturers.
Speaker 3: Creators are the people like a movie director, a musician, or a social media influencer that use Dolby technology to make content.
Creators of the people like a movie director, a musician or a social media influencer, they use Dolby technology to make content.
Speaker 3: Distributors are companies that deliver Dolby-enabled content to consumers, like a Netflix, Apple Music or Comcast.
Distributors are companies that deliver Dolby enabled content to consumers like a Netflix Apple music or Comcast.
Device manufacturers are the companies that make consumer hardware and pay us royalties when they sell devices that include Dolby technology.
Speaker 3: Device manufacturers are the companies that make consumer hardware and pay us royalties when they sell devices that include Dolby technology.
Speaker 3: Some examples would include a Sony or LG TV, an Apple iPhone, a Sonos speaker or soundbar, or a Mercedes.
Some examples would include a Sony or L. G. T V, an apple iPhone or Sotho speaker sound bar or a Mercedes.
Creators and distributors are a critical part of the ecosystem because they create and distribute the content that is ultimately enjoyed by consumers on their devices.
Speaker 3: Creators and distributors are a critical part of the ecosystem because they create and distribute the content that is ultimately enjoyed by consumers on their devices.
Dolby generate substantially all of its licensing revenue from device manufacturers.
Speaker 3: Dolby generates substantively all of its licensing revenue from device manufacturers.
Speaker 3: The amount and availability of great content created in Dolby continues to grow and this is the first step in a virtuous cycle.
The amount and availability of great content created in Dolby continues to grow and this is the first step in a virtuous cycle.
Speaker 3: As more creators create high-quality content in Dolby, that content attracts more distribution and device partners.
As more creators create high quality content in Dolby that content attracts more distribution and device partners.
Speaker 3: The virtuous cycle for Dolby is that as more devices support the Dolby experience, the more content creators want to create in Dolby and the more distributors want to deliver that content.
The virtuous cycle for Dolby as it is more devices support the Dolby experience the more content creators want to create in Dolby and the more distributors want to deliver that content.
Speaker 3: We remain excited about our business because we see the momentum from our creators and strong engagement from our distributors and device manufacturers, which we expect to drive long-term growth.
We remain excited about our business because we see the momentum from our creators and strong engagement from our distributors and device manufacturers, which we expect to drive long term growth.
These days there just more content more types of content and more ways to enjoy that content.
Speaker 3: These days there's just more content, more types of content, and more ways to enjoy that content.
The top 10 global movie and TV streaming providers all offer an ongoing flow of Dolby enabled content with several of them carrying thousands of movies and TV episodes source from a large range of major and independent studios, who create and Dolby.
Speaker 3: The top 10 global movie and TV streaming providers all offer an ongoing flow of Dolby-enabled content, with several of them carrying thousands of movies and TV episodes sourced from a large range of major and independent studios who create in Dolby.
Speaker 3: The top 20 grossing movies in the United States for the last two years were created in Dolby Atmos and Dolby Vision, including two of the biggest movies this summer, Barbie and Oppenheimer, as well as this fall's Taylor Swift, The Heiress Tour.
The top 20 grossing movies in the United States for the last two years were created in Dolby Atmos and Dolby vision, including two of the biggest movies. This summer Barbie and Oppenheimer as well as this fall's Taylor Swift the era's tour.
Over 85% of the global Billboards top 100 artists of 2023 have one or more tracks available in Dolby Atmos.
Speaker 3: Over 85% of the Global Billboard's Top 100 Artists of 2023 have one or more tracks available in Dolby Atmos.
Speaker 3: All three major record labels and hundreds of indies are delivering Dolby Atmos tracks to 16 music services in over 160 countries.
All three major record labels and hundreds of N DS are delivering Dolby Atmos tracks to 16 music services in over 160 countries.
Speaker 3: We have growing support for Dolby Vision Capture so that anyone can create and share high quality videos.
We are growing support for Dolby vision capture so that anyone can create and share high quality videos.
Speaker 3: And in sports, the U.S. Open, Bundesliga, Men's World Cup soccer, Major League Baseball, the Super Bowl, and the Premier Cricket League all delivered content in Dolby technology.
And in sports the U S Open Bundesliga men's World Cup Soccer Major League baseball the Super Bowl and the Premier Cricket League all delivered content in Dolby technologies.
These content stories highlight that Dolby Atmos, and Dolby vision are becoming a de facto standard across a wide variety of content and we believe this sets us up very well to continue to drive partnerships with device manufacturers to drive long term growth.
Speaker 3: These content stories highlight that Dolby Atmos and Dolby Vision are becoming a de facto standard across a wide variety of content, and we believe this sets us up very well to continue to drive partnerships with device manufacturers to drive long-term growth.
Speaker 3: Our top areas of focus are TVs and living room devices driven by movie, TV, and sports content, automotive driven by Dolby Atmos music, and mobile devices driven by user-generated content.
Our top areas of focus are Tvs and living room devices, driven by move the T V and sports content automotive driven by Dolby Atmos music and mobile devices driven by user generated content.
With that context, I'd like to transition to some of our Q4 highlights.
Speaker 3: With that context, I'd like to transition to some of our Q4 highlights.
Speaker 3: We had some great wins this quarter. We signed up BYD, the Chinese car manufacturer, who has already launched its first car with Dolby Atmos.
We had some great wins this quarter.
We signed up BYD, the Chinese car manufacturer, who has already launched its first car with Dolby Atmos.
Speaker 3: BYD is our fifth automotive OEM win this year and our tenth OEM win to date.
BYD is our fifth automotive OEM win this year and our 10th OEM win to date.
Speaker 3: These manufacturers are in various stages of rolling out their first models and in some cases, like Mercedes, rolling out multiple follow-on models.
These manufacturers are in various stages of rolling out their first models and in some cases like Mercedes rolling out multiple follow on models.
Speaker 3: Bringing Dolby Atmos music to automotive represents one of our most compelling growth opportunities and momentum continues to build.
Bringing Dolby Atmos music to automotive represents one of our most compelling growth opportunities and momentum continues to build.
Sports came to the four this summer as events all over the world leveraged Dolby technology to broadcast high quality content to Dolby enabled devices.
Speaker 3: Sports came to the fore this summer as events all over the world leveraged Dolby technology to broadcast high-quality content to Dolby-enabled devices.
Speaker 3: Comcast is broadcasting ESPN's College Football Game of the Week in Dolby Vision and Dolby Atmos.
Comcast is broadcasting ESPN College football game of the week in Dolby vision and Dolby Atmos.
Speaker 3: Sky TV in the U.K. showed the U.S. Open Tennis Tournament in Dolby Atmos. And in India, the French Open was available in Dolby Atmos and Dolby Vision.
Sky T V in the U K showed the U S open tennis tournament in Dolby Atmos.
And in India. The French open was available in Dolby Atmos Dolby vision.
Speaker 3: and Disney Star delivered the Indian International Cricket Council World Test Championships in Dolby Atmos.
And Disney Star delivered the Indian International Cricket Council World Test Championships in Dolby Atmos.
This fall Max streamed it's baseball playoff games in Dolby.
Speaker 3: This fall, MACS streamed its baseball playoff games in Dolby.
We've enjoyed strong adoption for movie and TV enthusiasm for a long time and now sports enthusiasts are able to enjoy the Dolby experience and this represents a new opportunity for us to drive more adoption and more Tvs over time.
Speaker 3: We've enjoyed strong adoption for movie and TV enthusiasts for a long time. And now sports enthusiasts are able to enjoy the Dolby experience. And this represents a new opportunity for us to drive more adoption on more TVs over time.
We also had a very active quarter for speakers and headphones, including wins with a variety of household names, including Tcl Giambra Yamaha N L. G.
Speaker 3: We also had a very active quarter for speakers and headphones, including WINS with a variety of household names, including TCL, Jabra, Yamaha, and LG. These partnerships are driven both by our strength in movie and TV content, as well as our fast growing presence in music.
These partnerships are driven both by our strength in movie and TV content as well as our fast growing presence in music.
Speaker 3: and in mobile honor a Chinese smartphone manufacturer adopted Dolby Vision playback.
And in mobile honor, a Chinese smartphone manufacturer adopted Dolby vision playback.
Four of the top five mobile phone Oems and the leading social media platforms in China are leveraging Dolby technology, an indication of our strong and growing presence, enabling user generated content.
Speaker 3: Four of the top five mobile phone OEMs and the leading social media platforms in China are leveraging Dolby technology, an indication of our strong and growing presence enabling user-generated content.
Speaker 3: We also had continued momentum in the quarter from long-time partners shipping new products with Dolby Atmos and Dolby Vision, including Apple and the iPhone 15, Microsoft's latest version of the Surface, and Amazon's new Fire TV 4K.
We also had continued momentum in the quarter from longtime partners shipping new products with Dolby Atmos, and Dolby vision, including Apple and the iPhone 15, Microsoft's latest version of the surface and Amazon's New fire TV for Kay.
Some other highlights for the quarter includes <unk> and Indian P. C. O M now shipping products with Dolby Atmos, indicating momentum down market and poly trial, and the largest TV OEM in Indonesia, introducing Dolby technology in all of its Tvs over 32 inches.
Speaker 3: Some other highlights for the quarter include Zebronics, an Indian PC OEM, now shipping products with Dolby Atmos, indicating momentum downmarket, and Polytron, the largest TV OEM in Indonesia, introducing Dolby technology in all of its TVs over 32 inches.
Speaker 3: Turning to innovation, this quarter, we introduced Dolby Atmos FlexConnect, a new solution that enables consumers to place wireless speakers paired with a TV anywhere in a room and automatically get an immersive Dolby Atmos experience. TCL is our first partner to announce this product. And speaking of innovation, Dolby Atmos FlexConnect is the first Dolby Atmos-enabled TV in the world. And speaking of innovation, Dolby Atmos FlexConnect is the first Dolby Atmos-enabled TV in the
Turning to innovation this quarter, we introduced Dolby Atmos flex connect a new solution that enables consumers to place wireless speakers paired with the TV anywhere in a room and automatically get an immersive Dolby Atmos experience.
T C L as our first partner to announce this product.
And speaking of innovation I'd like to touch on Dolby I O.
Speaker 3: Since its introduction, we've released several technologies with the aim of enabling higher quality experiences across a broader range of audio and video use cases.
Since its introduction, we've released several technologies with the aim of enabling higher quality experiences across a broader range of audio and video use cases.
We now have enough market feedback to consolidate our efforts around the biggest opportunities like the ability to stream high quality audio video and hundreds of milliseconds in area, where we are seeing demand in sports and entertainment for more real time interactive experiences.
Speaker 3: We now have enough market feedback to consolidate our efforts around the biggest opportunities, like the ability to stream high-quality audio-video in hundreds of milliseconds, an area where we are seeing demand in sports and entertainment for more real-time, interactive experiences.
The net result is a streamlined organization and a clear path to drive growth and margin over time.
Speaker 3: The net result is a streamlined organization and a clear path to drive growth and margin over time.
Speaker 3: In addition, we've sharpened our focus across the organization to find efficiencies, to prioritize processes and projects that deliver meaningful benefit.
In addition, we've sharpened our focus across the organization to find efficiencies to prioritize processes and projects that deliver meaningful benefit.
And to scale back or eliminate activities, where the benefits aren't as compelling.
Speaker 3: and to scale back or eliminate activities where the benefits aren't as compelling.
So moving on to FY 'twenty four or.
Our guidance for FY 'twenty four is for revenue to be roughly flat.
Speaker 3: Our guidance for FY 24 is for revenue to be roughly flat.
Speaker 3: As I said at the start of the call, our pipeline remains strong, but given the persistence of current economic conditions, some of our new partnerships and design wins are taking longer.
As I said at the start of the call our pipeline remains strong, but given the persistence of current economic conditions. Some of our new partnerships and design wins are taking longer.
Speaker 3: We expect a slight decline in foundational, and while we continue to expect a multi-year CAGR of 15 to 25 percent in Dolby Atmos, Dolby Vision, and imaging patents over the medium term, we do not expect to achieve our targeted growth of 15 to 25 percent this year.
We expect a slight decline in foundational and while we continue to expect a multi year CAGR of 15% to 25% in Dolby Atmos, Dolby vision and imaging patents over the medium term, we do not expect to achieve our targeted growth of 15, 25% this year.
In light of these conditions, we are sharpening our priorities to drive margin growth faster than sales growth. This year, Robert will take you through the outlook in more detail in a few moments.
Speaker 3: In light of these conditions, we are sharpening our priorities to drive margin growth faster than sales growth this year. Robert will take you through the outlook in more detail in a few moments.
We have three priorities for FY 'twenty for the.
Speaker 3: We have three priorities for FY24. The first priority is to drive long-term growth by continuing to work within the three pillars of our ecosystem to drive the virtuous cycle we discussed earlier.
The first priority is to drive long term growth by continuing to work within the three pillars of our ecosystem to drive the virtuous cycle, we discussed earlier.
Speaker 3: The second priority is continuous innovation to bring more Dolby experiences to more people around the world.
The second priority is continuous innovation to bring more dolby experiences to more people around the world.
Speaker 3: And the third priority is growing earnings faster than revenue while we continue to navigate economic headwinds.
And the third priority is growing earnings faster than revenue, while we continue to navigate economic headwinds.
Speaker 3: I'm enormously proud of all the people that work at Dolby to bring great experiences to market.
I'm enormously proud of all the people that work at Dolby to bring great experiences to market.
Speaker 3: We will continue to drive the creation of Dolby-enabled content in the market, engage with distributors to keep the channels that deliver that content vibrant, and innovate with our device partners and customers to bring Dolby experiences to more people around the world.
We will continue to drive the creation of Dolby enabled content in the market engage with distributors to keep the channels that deliver that content vibrant.
And innovate with our device partners and customers to bring Dolby experiences to more people around the world.
There's never been a stronger demand in the market for entertainment content and for that content to be more and more immersive.
Speaker 3: There's never been a stronger demand in the market for entertainment content and for that content to be more and more immersive.
Speaker 3: All of this gives me confidence in our long-term growth opportunity and our ability to execute on it. With that, I'd like to turn the call over to Robert to discuss our financials before we open the line for questions.
All of this gives me confidence in our long term growth opportunity and our ability to execute on it with that I'd like to turn the call over to Robert to discuss our financials before we open the line for questions.
Thanks, Kevin before I dig into the numbers I'd like to share three thoughts first results for Q4 and the full year came in as expected for both the topline and bottom line perspective.
Speaker 4: Thanks, Kevin. Before I dig into the numbers, I'd like to share three thoughts. First, results for Q4 and the full year came in as expected from both the top-line and bottom-line perspectives.
Second we're streamlining the business to best support our top line priorities, which will deliver margin expansion and.
Speaker 4: Second, we're streamlining the business to best support our top-line priorities, which will deliver margin expansion. And third, despite the economy, we feel good about our long-term prospects as our value proposition remains strong and our financials are solid.
Third despite the economy, we feel good about our long term prospects as our value proposition remains strong and our financials are solid.
Q4 revenue was $291 million up 4% compared to the year ago quarter, and just above the midpoint of guidance. We shared with you on the last earnings call.
Licensing revenue of $265 million was up 6% year over year products and services revenue was 25 million down 13% year over year, driven by lower cinema product sales.
Speaker 4: Products and services revenue was 25 million, down 13% year over year, driven by lower cinema product sales.
For the full year 2023, we grew the business, 4% to $1.3 billion, our foundational technologies revenue was down approximately 5% year over year.
Speaker 4: full year 2023, we grew the business 4% to 1.3 billion dollars. Our foundational technologies revenue was down approximately 5% year-over-year. Revenue from our Dolby Atmos, Dolby Vision, and imaging patents category was up 20% year-over-year and represented just over one-third of our licensing revenue. We break out licensing
Revenue from our Dolby Atmos, Dolby vision and imaging patents category was up 20% year over year and represented just over one third of our licensing revenue.
We break out licensing revenue into five markets broadcast, which includes Tvs and set top boxes.
Speaker 4: broadcast, which includes TVs and set-top boxes, mobile, consumer electronics, PC, and other.
Mobile consumer electronics P C and other.
Speaker 4: Detailed performance by category is on our IR website, but I'd like to point out some noteworthy details.
Detailed performance by category is on our IR website, but I'd like to point out some noteworthy details.
Speaker 4: Broadcast, our largest end market, was down 6% year over year in the quarter, but was up 4% for the full year with Dolby Atmos, Dolby Vision, and imaging patents more than offsetting declines in foundational revenue due to lower ship.
Broadcast our largest end market was down 6% year over year in the quarter, but was up 4% for the full year with Dolby Atmos, Dolby vision and imaging patents more than offsetting declines in foundational revenue due to lower shipments.
Consumer electronics was up 15% year over year in the quarter, but was down 9% for the full year, primarily due to lower device shipments.
Speaker 4: Consumer electronics was up 15% year over year in the quarter, but was down 9% for the full year, primarily due to lower device shipments.
Speaker 4: PC sales remained sluggish and our other category grew 52% year over year in the quarter and was up 35% for the full year, driven primarily by growth and imaging patent admin fees and Dolby Atmos in auto.
PC sales remains sluggish and our other category grew 52% year over year in the quarter and was up 35% for the full year driven primarily by growth in imaging patent admin fees and Dolby Atmos in auto.
Moving to the bottom line in Q4, we earned 65 cents per diluted share on a non-GAAP basis above the high end of our guidance, primarily due to a lower tax rate.
Speaker 4: Moving to the bottom line, in Q4 we earned $0.65 per diluted share on a non-GAAP basis, above the high end of our guidance, primarily due to a lower tax rate.
Speaker 4: We generated $85 million in operating cash flow, repurchased $25 million of stock, and have $212 million remaining on our repurchase plan off the Brazilian market.
We generated $85 million in operating cash flow repurchased 25 million of stock and have $212 million remaining on our repurchase plan authorization.
Speaker 4: We declared a 30 cent dividend, up 11% from our dividend a year ago, and ended the year with cash and investments of just under $1 billion.
We declared a 30 cent dividend up 11% from our dividend a year ago and ended the year with cash and investments of just under $1 billion.
During the fourth quarter in order to realign resources with our strategic priorities, we adopted a restructuring plan that we completed in November.
Speaker 4: During the fourth quarter, in order to realign resources with our strategic priorities, we adopted a restructuring plan that we completed in November .
In the fourth quarter, we recorded a non-GAAP restructuring charge of about $30 million comprised of 13 million for severance and related benefits for impacted employees.
Speaker 4: In the fourth quarter, we recorded a non-gap restructuring charge of about $30 million, comprised of $13 million for severance and related benefits for impacted employees, and an impairment loss of approximately $17 million associated primarily with internally developed software that is no longer aligned with our priorities.
And an impairment loss of approximately $17 million associated primarily with internally developed software that is no longer aligned with our priorities and.
Speaker 4: In Q1, we expect to record an additional non-gap charge of approximately $5 million for severance and related benefits for actions taken in November .
In Q1, we expect to record an additional non-GAAP charge of approximately $5 million for severance and related benefits for actions taken in November.
Speaker 4: For the things we can't control, we are focusing internally on activities that will have the greatest near-term impact, and they're delaying or eliminating projects that don't offer compelling payback.
For the things we can control we are focusing internally on activities that will have the greatest near term impact and they're delaying or eliminating projects that don't offer compelling payback.
Speaker 4: Speaking about R&D specifically, we continue to invest in technologies that we believe will shape the future of content and entertainment.
Speaking about R&D, specifically, we continue invest in technologies that we believe will shape the future of content and entertainment.
Turning to guidance as Kevin discussed at the outset of this call. There is still uncertainty in market and our guidance assumes no material change in the macroeconomic environment.
Speaker 4: Kevin discussed at the offset of this call, there's still uncertainty in the market and our guidance assumes no material change in the macroeconomic environment.
Speaker 4: As Kevin mentioned in his comments, while we continue to see steady growth of content created and distributed in Tobii technology and strong engagement from our partners, device shipments remain soft and some design wins are taking longer to get to market.
As Kevin mentioned in his comments, while we continued to see steady growth of content created and distributed and Toby technology and strong engagement from our partners device shipments remain soft and some design wins are taking longer to get to market.
Speaker 4: For Q124, we expect revenue to be between $300 million and $330 million.
For Q1, 'twenty four we expect revenue to be between $300 million and $330 million.
Speaker 4: Within that, licensing revenue is estimated to range from 275 million to 305 million.
Within that licensing revenue is estimated to range from 275 million to $305 million.
Speaker 4: Q1 is down year over year, largely due to true ups last year and timing of revenue associated with minimum volume commitments and recovery.
Q1 is down year over year, largely due to true ups last year and timing of revenue associated with minimum volume commitments and recoveries.
Speaker 4: Gross margins should be between 89 and 90% on a non-gap basis.
Gross margins should be between 89, and 90% on a non-GAAP basis.
Speaker 4: We expect non-GAAP operating expenses to be between $180 million and $190 million.
We expect non-GAAP operating expenses to be between $180 million and $190 million.
Speaker 4: Our effective tax rate for Q1 is projected to be around 20% on a non-gap basis.
Our effective tax rate for Q1 is projected to be around 20% on a non-GAAP basis.
Speaker 4: So, based on the combination of factors I just covered, we estimate that non-GAAP EPS should be between 80 cents and 95.
So based on the combination of factors I just covered we estimate that non-GAAP EPS should be between 80 and 95 cents.
Turning to the full year guidance for fiscal year 'twenty four we are expecting roughly flat revenue.
Speaker 4: Turning to the full year guidance for fiscal year 24, we are expecting roughly flat revenue.
Embedded in this guidance is an assumption of a mid single digit decline in foundation of audio licensing revenue offset by high single digit growth in Dolby Atmos, Dolby vision and imaging patents licensing revenue.
Speaker 4: Embedded in this guidance is an assumption of a mid-single-digit decline in foundational audio licensing revenue, offset by high single-digit growth in Dolby Atmos, Dolby Vision, and Imaging Patents licensing revenue. And flat price.
And flat products and services revenue.
Speaker 4: We expect the timing of licensing revenue to be more evenly distributed than the last two years, with a slight waiting towards the first half of the year.
We expect the timing of licensing revenue to be more evenly distributed than the last two years with a slight weighting towards the first half of the year.
Speaker 4: Looking at our licensing by end market, we see solid growth in other markets, and PC should benefit from slightly higher units. Higher revenue from engineering.
Looking at our licensing by end market, we see solid growth in other markets and P. C should benefit from slightly higher units.
Higher revenue from edging patents and recoveries.
Speaker 4: This increase will be offset by declines in broadcast, consumer electronics, and mobile.
This increase will be offset by declines in broadcast consumer electronics and mobile.
While we see growth in Dolby Atmos and Dolby vision in these markets. This year. The overall revenue declines are primarily due to tough comps in terms of the timing and size of deals, including minimum volume commitments and recoveries and true ups and foundational and Jimmy patents last year.
Speaker 4: While we see growth in Dolby Atmos and Dolby Vision in these markets, this year, the overall revenue declines are primarily due to tough comps in terms of the timing and size of deals, including minimum volume commitments and recoveries, and true ups in foundational engineering patents last year.
Speaker 4: we continue to expect a multi-year CAGR of 15 to 25% in Dolby Atmos, Dolby Vision, and imaging patents over the medium term.
We continue to expect a multi year CAGR of 15% to 25% and Dolby Atmos, Dolby vision and imaging patents over the medium term.
Yeah.
non-GAAP gross margin should be roughly 89%.
Speaker 4: non-GAAP operating expenses for the full year should be in the $740 to $750 million range.
non-GAAP operating expenses for the full year should be in the $740 million to $750 million range.
Speaker 4: which will result in about a one to two percentage point improvement in operating margins on a full year basis.
Which will result in about a 1% to two percentage point improvement in operating margins on a full year basis on.
Speaker 4: On the bottom line, we are expecting non-GAAP EPS of between $3.60 and $3.75.
On the bottom line, we are expecting non-GAAP EPS of between $3 60, and $3 75.
To wrap things up the creation and distribution of Dolby enabled content continues to grow nicely and our partners are still very engaged our financials are solid and we are well positioned for growth when economic conditions improve.
Speaker 4: To wrap things up, the creation and distribution of Dolby-enabled content continues to grow nicely, and our partners are still very engaged. Our financials are solid, and we are well positioned for growth when economic conditions improve.
Lastly for those of you coming to Vegas in early January for CES, we're going to have some demos for the investment community on January 10th at eight a M.
Speaker 4: Lastly, those of you coming to Vegas in early January for CES, we're going to host some demos for the investment community on January 10th at 8 a.m. Please follow up with Peter for an invitation.
Please follow up with Peter brand invitation.
Speaker 4: This concludes our prepared remarks. Operator, can you please open the line for Q&A?
This concludes our prepaid prepared remarks, operator can you. Please open the line for Q&A.
Speaker 1: Certainly, Mr. Park. Ladies and gentlemen, at this time, if you would like to register for a question for today's question and answer session, you may do so by pressing star one. If you would like to withdraw your question, press star one again. And if you are on a speakerphone, please pick up your handset before entering your request.
Certainly Mr Park, ladies and gentlemen at this time do you Register for a question for todays question and answer session. You may do so by pressing star one if you will.
I'd like to withdraw your question Press Star, one again and if you're on a speakerphone. Please pick up your handset before entering your request to be fair to all participants we ask that you. Please limit yourself to one question and one follow up question until all participants have had a chance in the first round and if time allows we will then come back to the answer.
Any remaining questions.
Speaker 1: We'll take our first question this afternoon from Steven Frankel at Rosenblatt Security.
We'll take our first question this afternoon from Steven Frankel at Rosenblatt Securities.
Speaker 5: Hi, good afternoon. So Kevin, let's explore a little bit this notion that you're gonna have much lower growth in Atmos and Vision. Is that both a function of some deals that you had in the pipeline that are taking longer and your penetration is leveled out until you get another slug of larger customers? Where are we in the adoption cycle? Yeah.
Hi, good afternoon, so Kevin let's explore a little bit this notion that you're.
Youre going to have much lower growth and Atmos and vision.
Is that both a function of some deals that you have in the pipeline that are taking longer and your penetration is leveled out and tell you get.
Another slug.
Larger customers kind of where are we in the adoption cycle.
Yes, Thanks, Steve.
So.
Speaker 3: It varies by type of content and type of device, but what I would say is...
It varies bye bye.
Type of content and type of device, but what I would say is.
Speaker 3: You know, our, our confidence in the growth and Dolby Atmos and Dolby vision is really founded and we continue to see tremendous growth in the content across each of our focus areas. We continue to see more and more content available and we do continue to have strong engagement across our pipeline and, you know, Steve, you've been with us through.
Our confidence in the growth in Dolby Atmos and Dolby vision is really founded and we continue to see tremendous growth in the content across each of our focus areas. We continue to see more and more content available and we do continue to have strong engagement across our pipeline and Steve you've been with us through many adoption side.
Speaker 3: Many adoption cycles and we've done that through many different economic environments and even in the best of times, it's difficult to predict the timing of those adoption cycles. Rarely does it go in a straight line and that's.
<unk> and we've done that through many different economic environments and even in the best of times, it's difficult to predict the timing of those adoption cycles rarely does it go in a straight line and that's particularly true in this environment, where it can take a quarter or two longer to get a device land that could take a quarter or two longer to get for a customer to get from a device win.
Speaker 3: Particularly true in this environment, where it could take a quarter or two longer to get a device when it could take a quarter or two longer to get for a customer to get from a device when to a device in market.
To a device and market.
Speaker 3: And so, we continue to have confidence in our ability to grow at a 15 to 25% CAGR in the midterm. And that's because of the strength we see in the amount of content coming to market, in the distribution of that content, and we continue to get design wins and have great engagement with our partners.
And so we continue to have confidence in our ability to grow at a 15% to 25% CAGR in the midterm and that's because of the strength, we see in the amount of content coming to market in the.
Distribution for that content and we continue to get design wins and have great engagement with our partners.
Speaker 5: Again, just trying to dig in this a little more. So, the traffic jam, so to speak, is that primarily in new customers or new device areas or are you seeing even in your
And again, just trying to taking this a little more so the the the traffic jam so to speak is that primarily in <unk>.
New customers or new device areas or are you seeing even in your.
Current device.
Speaker 5: current device area of customers saying I'm going to stop spreading Atmos and Vision.
Area of customers, saying.
Stops spreading atmos and vision.
Deeper in my product line for now maybe because they are cost conscious.
Speaker 5: deeper in my product line for now, maybe because they're cost conscious.
So.
Speaker 3: It would be hard for us to paint a broad brush across the entirety of our growth opportunities. But if you look at automotive, for instance, we continue to, you know, win partners. We announced BYD this quarter. That's our 10th partner over the last couple of years. Some of those devices are in market. Some of the devices are yet to come to market. And it's a growing part of the business, but coming off a relatively small base.
I'd be hard pressed to paint a broad brush across the entirety of our growth opportunities, but if you look at automotive.
For instance, we continue to win.
Wind partners, we announced BYD this quarter Thats, our 10th partner over the last couple of years.
Some of those devices are end market some of the devices are yet to come to market.
And it's a growing part of the business, but coming off a relatively small base.
Speaker 3: In the TV space, there's a couple of things going on. One is that while overall TV units were largely flat.
In the TV space, there's a couple of things going on one is that while overall TV units were.
Largely flat.
Speaker 3: As you know, we have very high penetration at the high end of the market. We did over the last year see a shift from high end to lower and mid-tier, which is where we continue to work to increase our attach rate. We did see some increases this year based on some of the announcements we've made throughout the year, like TCL moving to 4K, moving to Dolby Atmos and Dolby Vision on all of its North American 4K TVs, and also looking to...
As you know we have very high penetration penetration at the high end of the market we did over the last year.
A shift from high end to lower and mid tier, which is where we continue to work to increase our attach rate. We did see some increases this year based on some of the announcements we've made throughout the year like Tcl move into <unk>.
Moving to Dolby Atmos, and Dolby vision on all of its North American.
<unk> Tvs and also looking to.
Speaker 3: Move that to India as well, but I think that that's an area where we saw a lot of opportunity ahead of us.
I move that to India as well.
But I think that that's an area where.
We sell a lot of opportunity ahead of us and one of the things. We're excited about there is the continued momentum you see in sports content, that's really important value proposition, which I think represents a.
Speaker 3: And one of the things we're excited about there is the continued momentum you see in sports content. That's a really important.
Speaker 3: Value proposition, which I think represents a new energy behind our value proposition for the low in the mid tier.
Our new.
Energy behind our value proposition for the low and the mid tier.
Speaker 3: So those are some of the dynamics within each of our focus areas.
So those are some of the some of the some of the dynamics within the within each of our focus areas.
Okay, Let me sneak one last one.
Speaker 5: Let me sneak one last one in. I appreciate the details on I.O. and focusing in on this streaming market.
I appreciate the details on.
Oh and focusing in on this streaming market.
<unk>.
Speaker 5: What's the timeline to get to meaningful revenue? Does this help you ramp up business faster or is this still a multi-year drive to get to where you need to go?
What's the timeline to get to meaningful revenue does this help you ramp that business faster or is this still.
I have a multi year drive to get to where you need to go.
Well.
Speaker 3: Well, so I think that it helps us drive revenue growth faster. I think that it's ultimately Dolby I O stepping back is about bringing the Dolby experience to a far broader range of experiences and audiences and with the goal of increasing the TAM for Dolby. And as you know, we've tried a number of things through our developer platform over the last few years.
So I think that's it.
It helps us drive revenue growth faster I think that it's ultimately Dolby Io stepping back is about bringing the Dolby experience to a far broader range of experiences and audiences and with the goal of increasing the Tam for Dolby and as you know we've tried a number of things through our developer platform over the last few years.
Speaker 3: And what we've done is, is looked at where we're seeing the greatest opportunity and the greatest demand and that is for companies that are looking to build more immersive, more real time or personalized digital experiences and they are drawn to things like our ability to stream high quality audio, video,
Ours.
And what we've done is looked at where we're seeing the greatest opportunity in the greatest demand and that is for companies that are looking to build.
More immersive more real time or personalized digital experiences and they are drawn to things like our ability to stream high quality audio video content and ultra low latency, meaning that there is almost no discernible difference between whats going on live and when Youre seeing it on your screen and we're also seeing Steve.
Speaker 3: In ultra low latency, meaning that there's almost no discernible difference between what's going on live and when you're seeing it.
Speaker 3: on your screen. And we're also seeing, Steve, that that's shifting toward demand from
That shifting toward demand from larger enterprises that want to do this at larger scale. So that's also a shift in the sales model one that we feel well.
Speaker 3: larger enterprises that want to do this at larger scale. So that's also a shift in the sales model, one that we feel well-suited to go after.
Well suited to go after and so that's that's why we've been able to kind of consolidate our activities.
Speaker 3: And so that's that's why we've been able to kind of consolidate our activities, but more importantly, come out with a more focused and organization.
Importantly come out with a more focused in.
Organization.
Great. Thank you I'll jump back in the queue.
Speaker 1: Thank you. We'll go next now to Ralph Shackert at William Blair.
Thank you we'll go next now to Ralph <unk> at William Blair.
Speaker 6: Good afternoon. Thanks for taking the question. Kevin, you talked about the partnerships and design wins maybe being lengthened or delayed because of the macro. Just want to get some more context on that. Is that something that you've seen a little bit more pronounced, you know, this quarter, perhaps last, just any more color you could give, you know, sort of the linearity of the extension of these, you know, partnerships or designs throughout the last fiscal year.
Good afternoon. Thanks for taking my question, Kevin you talked about the partnerships in design wins, maybe they'd like them are delayed because of the background just wanted to get some more context on that is that something that you've seen a little bit more pronounced this quarter, perhaps labs, just any more color you could give sort of the linearity of the extension of these.
Partnerships are designs.
Throughout last fiscal year.
Yeah, I think as we as we said at the top I wouldn't say that we've seen a significant change in the macro since the last time, we talked but obviously we've been operating in this environment for some time now so there is kind of the.
Speaker 3: Yeah, I think as we, as we said at the top, I wouldn't say that we've seen a significant change in the macro since the last time we talked, but, you know, obviously we've been operating this environment for some time now. So there's kind of the.
The cumulative effect of those things and we do continue I do want to emphasize that we continue to great get bring on some great partners like BYD.
Speaker 3: the cumulative effect of those things, and we do continue, you know, I do want to emphasize that we continue to bring on some great partners like BYD.
Speaker 3: like the wins we had on mobile this quarter, adding honor, and
Like the wins we had.
On mobile this quarter, adding honor.
And.
Speaker 3: a number of smart speakers and headphone partners.
A number of smart speakers and headphones partners.
But.
Youll remember Ralph we were seeing some some deals push out.
Speaker 3: You'll remember, Ralph, we were seeing some deals push out about a year, year and a half ago. Then we saw some of them land this last year. It's just
About a year year and a half ago that we saw some of the land. This last year, it's just a little bit harder to predict the timing in this environment and like I said in the end as you know in the best of times. These adoption cycles are not always linear but.
Speaker 3: a little bit harder to predict the timing in this environment.
Speaker 3: And like I said, in the, and as, you know, in the best of times, these adoption cycles are not always linear, but when we have.
When we have.
Speaker 3: The level of momentum we have with content and the amount of adoption we have through distribution, we develop a very high degree of confidence that we can and will get on a much higher number of devices.
The level of momentum, we have with content and the amount of adoption. We have through distribution, we develop a very high degree of confidence that we can and will get on a much higher number of devices.
Speaker 3: But, but predicting that trajectory is not always easy and it's, and it's a little bit harder in this environment that could take the form of the design when taking longer. It could take the form of once we get the design. When the customer is waiting for a chip set to launch that product, it could be that they're moving the, the launch because, you know, around, you know, what, what, how the external environment is affecting them.
But predicting that trajectory is not always easy and it's a little bit harder in this environment that could take the form of the design win taking longer it could take the form of once we get the design win the customer is waiting for a chipset to launch that product it could be that they are moving the launch.
<unk>.
What what how the external environment is affecting them.
Speaker 6: Great, and then if Robert sounds like there was some further cost initiatives in the quarter, maybe just kind of revisit your philosophy around operating expenses and how you're thinking about them for this fiscal year. And kind of maybe your philosophy going forward on, I guess, raining or focusing on. Thank you.
Great and then.
If Robert sounds like there was some further cost initiatives in the quarter, maybe just kind of revisit your philosophy around operating expenses and how youre thinking about them.
For this fiscal year and kind of maybe your philosophy going forward.
I guess rounding error focusing on opex. Thank you.
Okay.
Speaker 4: Yeah, in terms of operating incentives, as Kevin said, we're always looking at ways we can be more efficient and more effective in meeting our top-line priorities, which is growing revenue in the most efficient way possible.
Yeah in terms of operating expenses as Kevin said, we're always looking at.
Ways, we can be more efficient and more effective in <unk>.
Meeting our top line priorities, which is growing revenue in the most efficient way possible. We've seen that what we've done in Q3 and in Q4 and and finishing those actions here in November and we're going to continue doing that I don't think you have.
Speaker 4: You've seen that, what we've done in Q3 and in Q4, and finishing those actions here in November , and we're going to continue doing that. I don't think you ever stop looking and make sure that you can be as effective and efficient as possible. And the result of that, as you see, is expansion of the operating margins between one and two percentage points for the year. And that's how we're looking at it for this next year.
Ever stop looking at make sure that you can be as effective and efficient as possible.
And the result of that as you see is is expansion of the operating margins between one and two percentage points for the year and that's how we're looking at it for this next year.
Okay. Thanks Robert.
Speaker 1: Thank you. We go next now to James Goss at Barrington Research.
Thank you we'll go next to James Goss Barrington Research.
Alright. Thank you I was wondering first then TV. If you think there's enough runway in terms of greater penetration with Atmos and vision in the domestic.
Speaker 7: All right, thank you. I was wondering first on televisions, if you think there's enough runway in terms of greater penetration with Atmos and Vision in the domestic markets, domestic manufacturers, for that to be your priority? Or do you think to the extent you've mentioned a couple of international television makers that that could provide some opportunity that could rival whatever you're doing domestically?
Markets domestic manufacturers for that to be your priority or do you think to the extent you've mentioned a couple of international TV makers that that could provide some opportunity that could rival whatever you're doing domestically.
Yes, I think.
Speaker 3: Yeah, I think we have had some great wins internationally over the last couple of quarters.
We have had some great wins internationally over the last couple of quarters.
Speaker 3: I think the way to think about it, Jim, is that we have a very high penetration across the high end of the market.
I think the way to think about it Jim is that we have very high penetration across the high end of the market.
Speaker 3: And there's a larger amount of televisions in the low to mid tier, and we're really confident in our ability to bring the Dolby experience to those devices given the momentum we have with movies and TV and given the increasing momentum we have with live sports.
And there is a larger amount of televisions in the low to mid tier and we're really confident in our ability to bring the Dolby experience to those devices given the momentum we have with movies and TV and given the increasing momentum we have with live sports.
Speaker 3: And that part of the market is going to be also about getting more of those international providers like the ones we've won. There's also quite a bit of big box retailers and white label brands. And we've had design wins coming in, but the opportunity is still in front of us.
Part of the market.
<unk> is going to be.
Also about getting.
More of those international providers like the ones. We've won is also quite a bit of.
Box retailers and white label brands, and we've had design wins coming in but.
The opportunity is still in front of us.
Okay, but the international probably still more.
Speaker 7: Okay, but international probably still won't be significant to be a meaningful factor dollar wise.
Through significant to be a meaningful factor dollar wise.
Speaker 3: No, I would say the way to think about it is that we have high penetration at the high end, and so where that falls geographically is largely about consumption. We have high penetration in the high end in Europe , in China, and in many other markets.
No I would say it is.
Way to think about it is that we have high penetration at the high end.
So where that where that.
Paul's geographically is largely about consumption, we have high penetration in the high end.
In Europe in China and in many other markets.
Speaker 3: So, you have you have seen some wins from us the last couple of quarters in India this quarter in Indonesia. So certainly.
You have you have seen some wins from us.
Last couple of quarters in India. This quarter in Indonesia. So certainly there is more opportunity there, but I think in terms of.
Speaker 3: There is more opportunity there, but I think in terms of the, the, the growth opportunity that we're excited about, we're really thinking for 1st and foremost about increasing our penetration on the low to mid tier devices.
The growth opportunity that we're excited about we're really thinking for first and foremost about increasing our penetration.
Low to mid tier devices.
Speaker 3: And sports is a really important value proposition for that, and we've we've really increased our presence in sports and we're excited about where that's going to go going forward. Okay.
And.
Sports is a really important value proposition for that and we've really increased our presence in sports and we're excited about where that's going forward.
Okay.
Okay and to the extent that Dolby is rare.
Speaker 7: revenue generation has tended to be a sort of a rolling cycle of new initiatives over time with that most envision the key ones at the moment. And to the extent that I.O. has taken some time to gain some traction, do you think there's a chance?
Revenue generation.
<unk> has tended to be a survey a rolling cycle of new initiatives over time with that bus envision the key one on ones.
At the moment.
And to the extent that I O has taken some time to gain some traction do you think there's a chance that there are some royalty initiatives, they're not in the mix that we noticed right now that could wind up being emerging as significant for you before I O becomes significant.
Speaker 7: that there are some royalty initiatives that are not in the mix that we noticed right now that could wind up emerging as significant for you before I.O. becomes significant.
Yes, it's a great question I mean.
Speaker 3: Yeah, it's a great question. I mean, um, we've, uh, you know, we've been clear, I think about our, our top focus areas. Um, but yes, we continue to see, um, uh, we continue to innovate. We continue to, uh, bring new technologies to market. Um, and there are, there are other areas that that, uh, certainly in the midterm, uh, could could produce, uh, growth and Dolby Atmos and Dolby vision.
We've.
We've been clear I think about our top focus areas.
But yes, we continue to see.
We continue to innovate we continue to bring new technologies to market.
And there are there are other areas that that.
Certainly in the midterm.
It could produce growth in Dolby Atmos Dolby vision.
Okay I'll leave it there.
Fair enough.
Thank you and gentlemen, it appears we have no further questions. This afternoon. So we would like to thank everyone for joining the Dolby Laboratories' fourth quarter results Conference call. We wish you all a great evening you may now disconnect.
Speaker 1: Thank you. And gentlemen, it appears we have no further questions this afternoon. So we would like to thank everyone for joining the Dolby Laboratories fourth quarter results conference call. We wish you all a great evening. You may now disconnect.
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Okay.
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