Dolby Q1 2026 Dolby Laboratories Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q1 2026 Dolby Laboratories Inc Earnings Call
Speaker #1: Ladies and gentlemen, thank you for standing by. Welcome to the Dolby Laboratories conference call discussing first quarter 2026 results. During the presentation, all participants will be in a listen-only mode.
Speaker #1: Afterwards, you will be invited to participate in a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad.
Speaker #1: And if you'd like to withdraw your question, again, press star one. As a reminder, this call is being recorded. Thursday, January 29th, 2026. I would now like to turn the conference over to Mr. Peter Goldmacher, Vice President of Investor Relations.
Operator: I would now like to turn the conference over to Mr. Peter Goldmacher, Vice President of Investor Relations. Peter, please go ahead.
Operator: I would now like to turn the conference over to Mr. Peter Goldmacher, Vice President of Investor Relations. Peter, please go ahead.
Speaker #1: Peter, please go ahead.
Speaker #2: Good afternoon, and welcome to Dolby Laboratories' first quarter fiscal year 2026 earnings conference call. Joining me today are Kevin Yeaman, Dolby Laboratories CEO, and Robert Park, CFO.
Peter Goldmacher: Good afternoon, and welcome to Dolby Laboratories' Q1 fiscal year 2026 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 2026 Q2 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 macroeconomic events, supply chain issues, 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-Q.
Peter Goldmacher: Good afternoon, and welcome to Dolby Laboratories' Q1 fiscal year 2026 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 2026 Q2 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 macroeconomic events, supply chain issues, 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-Q.
Speaker #2: As a reminder, today's discussion will include forward-looking statements, including our fiscal 2026 second quarter and full year outlook, and our assumptions underlying that outlook.
Speaker #2: 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 macroeconomic events, supply chain issues, inflation rates, changes in consumer spending, and geopolitical instability on our business.
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 factors section of our most recent annual report on Form 10Q.
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.
Peter Goldmacher: 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 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. With that, I'd like to turn the call over to Kevin.
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 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. With that, I'd like to turn the call over to Kevin.
Speaker #2: 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.
Speaker #2: With that, I’d like to turn the call over to Kevin.
Speaker #3: Thanks, Peter, and thanks to everyone for joining us on the call today. FY26 is off to a good start. Revenue and non-GAAP earnings came in above the high end of the range of guidance.
Kevin Yeaman: Thanks, Peter, and thanks to everyone for joining us on the call today. FY 2026 is off to a good start. Revenue and non-GAAP earnings came in above the high end of the range of guidance. We are making meaningful progress on the growth initiatives we discussed last quarter, and we're raising our guidance for the year. Robert will share more details on the financials and guidance in a few minutes. Just a few weeks ago at CES, we showed how Dolby Atmos and Dolby Vision are shaping how people watch, listen to, and enjoy their favorite entertainment content across movies, TV, music, sports, and user-generated content. We hosted hundreds of customers and partners at Dolby Live, where we had demonstrations primarily focused on the in-car entertainment experience and Dolby Vision 2 for TVs.
Kevin Yeaman: Thanks, Peter, and thanks to everyone for joining us on the call today. FY 2026 is off to a good start. Revenue and non-GAAP earnings came in above the high end of the range of guidance. We are making meaningful progress on the growth initiatives we discussed last quarter, and we're raising our guidance for the year. Robert will share more details on the financials and guidance in a few minutes. Just a few weeks ago at CES, we showed how Dolby Atmos and Dolby Vision are shaping how people watch, listen to, and enjoy their favorite entertainment content across movies, TV, music, sports, and user-generated content. We hosted hundreds of customers and partners at Dolby Live, where we had demonstrations primarily focused on the in-car entertainment experience and Dolby Vision 2 for TVs.
Speaker #3: We are making meaningful progress on the growth initiatives we discussed last quarter, and we're raising our guidance for the year. Robert will share more details on the financials and guidance in a few minutes.
Speaker #3: Just a few weeks ago, at CES, we showed how Dolby Atmos and Dolby Vision are shaping how people watch, listen to, and enjoy their favorite entertainment content across movies, TV, music, sports, and user-generated content.
Speaker #3: We hosted hundreds of customers and partners at Dolby Live, where we had demonstrations primarily focused on the in-car entertainment experience and Dolby Vision 2 for TVs.
Speaker #3: Automotive has become a major focus of CES. And we were excited to have partners highlight how Dolby is helping them transform the future of in-car entertainment.
Kevin Yeaman: Automotive has become a major focus of CES, and we were excited to have partners highlight how Dolby is helping them transform the future of in-car entertainment. Attendees were able to experience Dolby Atmos in cars ranging from a 2-seat Porsche 911 to a Mercedes-Benz SUV, an Audi e-tron, and a full-size Cadillac Escalade. We also showed how Dolby is playing an important role in expanding the scope of high-quality entertainment in the car. Smash Labs demonstrated its immersive multi-channel games in Dolby Atmos vehicles, and attendees got a chance to listen to Audible's fully immersive Harry Potter audiobook series featuring Dolby Atmos. The Neo Horizon, featuring Dolby Atmos and Dolby Vision, demonstrated how the bar is being raised on the in-car experience well beyond music to include movies, TV, gaming, audiobooks, and more.
Automotive has become a major focus of CES, and we were excited to have partners highlight how Dolby is helping them transform the future of in-car entertainment. Attendees were able to experience Dolby Atmos in cars ranging from a 2-seat Porsche 911 to a Mercedes-Benz SUV, an Audi e-tron, and a full-size Cadillac Escalade. We also showed how Dolby is playing an important role in expanding the scope of high-quality entertainment in the car. Smash Labs demonstrated its immersive multi-channel games in Dolby Atmos vehicles, and attendees got a chance to listen to Audible's fully immersive Harry Potter audiobook series featuring Dolby Atmos. The Neo Horizon, featuring Dolby Atmos and Dolby Vision, demonstrated how the bar is being raised on the in-car experience well beyond music to include movies, TV, gaming, audiobooks, and more.
Speaker #3: Attendees were able to experience Dolby Atmos in cars ranging from a two-seat Porsche 911 to a Mercedes SUV, an Audi e-tron, and a full-size Cadillac Escalade.
Speaker #3: We also showed how Dolby is playing an important role in expanding the scope of high-quality entertainment in the car. Smash Labs demonstrated its immersive, multi-channel games in Dolby Atmos vehicles, and attendees got a chance to listen to Audible's fully immersive Harry Potter audiobook series featuring Dolby Atmos.
Speaker #3: The Neo Horizon featuring Dolby Atmos and Dolby Vision demonstrated how the bars being raised on the in-car experience well beyond music to include movies, TV, gaming, audiobooks, and more.
Speaker #3: In addition, we announced that we are partnering with Qualcomm to integrate Dolby Atmos and Dolby Vision into Qualcomm's Gen 5 Snapdragon automotive platform, further extending our reach into the auto ecosystem.
Kevin Yeaman: In addition, we announced that we are partnering with Qualcomm to integrate Dolby Atmos and Dolby Vision into Qualcomm's Gen 5 Snapdragon Automotive Platform, further extending our reach into the auto ecosystem. Also during the quarter, Mahindra released the first SUV in India with Dolby Atmos and Dolby Vision, and Hyundai launched its first car with Dolby Atmos, a crossover SUV in China. Overall, we continue to be excited about the momentum in automotive, where we now have partnerships with over 35 OEMs, up from 20 OEMs this time last year. Moving on to TVs. Dolby Vision 2 was on full display at CES and was met with enthusiasm from partners, press, and attendees. Building on the success of Dolby Vision, Dolby Vision 2 is designed to meet the evolving expectations of today's viewers and unlock the full potential of modern televisions, from mainstream sets to top-of-the-line models.
In addition, we announced that we are partnering with Qualcomm to integrate Dolby Atmos and Dolby Vision into Qualcomm's Gen 5 Snapdragon Automotive Platform, further extending our reach into the auto ecosystem. Also during the quarter, Mahindra released the first SUV in India with Dolby Atmos and Dolby Vision, and Hyundai launched its first car with Dolby Atmos, a crossover SUV in China. Overall, we continue to be excited about the momentum in automotive, where we now have partnerships with over 35 OEMs, up from 20 OEMs this time last year. Moving on to TVs. Dolby Vision 2 was on full display at CES and was met with enthusiasm from partners, press, and attendees. Building on the success of Dolby Vision, Dolby Vision 2 is designed to meet the evolving expectations of today's viewers and unlock the full potential of modern televisions, from mainstream sets to top-of-the-line models.
Speaker #3: Also during the quarter, Mahindra released the first SUV in India with Dolby Atmos and Dolby Vision, and Hyundai launched its first car with Dolby Atmos across over SUV in China.
Speaker #3: Overall, we continue to be excited about the momentum in automotive, where we now have partnerships with over 35 OEMs, up from 20 OEMs this time last year.
Speaker #3: Moving on to TVs. Dolby Vision 2 was on full display at CES and was met with enthusiasm from partners, press, and attendees. Building on the success of Dolby Vision, Dolby Vision 2 is designed to meet the evolving expectations of today's viewers and unlock the full potential of modern televisions, from mainstream sets to top-of-the-line models.
Speaker #3: Dolby Vision 2 has a variety of features that are designed to enhance all the content consumers enjoy, including movies, sports, and gaming, with even more vivid pictures and brighter colors.
Kevin Yeaman: Dolby Vision 2 has a variety of features that are designed to enhance all the content consumers enjoy, including movies, sports, and gaming, with even more vivid pictures and brighter colors. When you see it, it just looks better. We got an enthusiastic response at CES from the content providers, with Peacock announcing its support for Dolby Vision 2 across movies, originals, and live sports, joining Canal+ as an early launch partner. TP Vision, the maker of the Philips brand, announced support for Dolby Vision 2 across a variety of upcoming models, joining Hisense and TCL as launch partners. The first Dolby Vision 2 TVs will be available by the end of the year, increasing our revenue opportunity from TVs. Additionally, in the quarter, we continued to make progress on our other growth initiatives, including mobile, our video distribution program for imaging patents, and Dolby OptiView.
Dolby Vision 2 has a variety of features that are designed to enhance all the content consumers enjoy, including movies, sports, and gaming, with even more vivid pictures and brighter colors. When you see it, it just looks better. We got an enthusiastic response at CES from the content providers, with Peacock announcing its support for Dolby Vision 2 across movies, originals, and live sports, joining Canal+ as an early launch partner. TP Vision, the maker of the Philips brand, announced support for Dolby Vision 2 across a variety of upcoming models, joining Hisense and TCL as launch partners. The first Dolby Vision 2 TVs will be available by the end of the year, increasing our revenue opportunity from TVs. Additionally, in the quarter, we continued to make progress on our other growth initiatives, including mobile, our video distribution program for imaging patents, and Dolby OptiView.
Speaker #3: When you see it, it just looks better. We got an enthusiastic response at CES from the content providers, with Peacock announcing its support for Dolby Vision 2 across movies, originals, and live sports, joining Canal+ as an early launch partner.
Speaker #3: TP Vision, the maker of the Philips brand, announced support for Dolby Vision 2 across a variety of upcoming models, joining Hisense and TCL as launch partners.
Speaker #3: The first Dolby Vision 2 TVs will be available by the end of the year, increasing our revenue opportunity from TVs. Additionally, in the quarter, we continue to make progress on our other growth initiatives, including mobile, our video distribution program for imaging patents, and Dolby Optiview.
Speaker #3: Meta, which announced support for Dolby Vision on Instagram in November, has now begun supporting Dolby Vision on Facebook. Douyin, the Chinese version of TikTok, has been supporting Dolby Vision on iOS and started rolling out support for Android devices this quarter.
Kevin Yeaman: Meta, which announced support for Dolby Vision on Instagram in November, has now begun supporting Dolby Vision on Facebook. Douyin, the Chinese version of TikTok, has been supporting Dolby Vision on iOS and started rolling out support for Android devices this quarter. Content captured and played back in Dolby Vision drives higher engagement for social media providers and, in turn, increases demand for Dolby Vision on mobile phones. In imaging patents, Roku became a licensee of the video distribution patent pool, marking the first US-based streamer to sign up for the pool. As we discussed last quarter, this pool increases the addressable market for imaging patents by expanding the available licensees from device manufacturers to also include streamers of content. On Dolby OptiView, we continued our partnership with the NFL, with OptiView delivering RedZone through the NFL Plus app and achieving record levels of streaming quality for the service.
Meta, which announced support for Dolby Vision on Instagram in November, has now begun supporting Dolby Vision on Facebook. Douyin, the Chinese version of TikTok, has been supporting Dolby Vision on iOS and started rolling out support for Android devices this quarter. Content captured and played back in Dolby Vision drives higher engagement for social media providers and, in turn, increases demand for Dolby Vision on mobile phones. In imaging patents, Roku became a licensee of the video distribution patent pool, marking the first US-based streamer to sign up for the pool. As we discussed last quarter, this pool increases the addressable market for imaging patents by expanding the available licensees from device manufacturers to also include streamers of content. On Dolby OptiView, we continued our partnership with the NFL, with OptiView delivering RedZone through the NFL Plus app and achieving record levels of streaming quality for the service.
Speaker #3: Content captured and played back in Dolby Vision drives higher engagement for social media providers and, in turn, increases demand for Dolby Vision on mobile phones.
Speaker #3: In imaging patents, Roku became a licensee of the video distribution patent pool, marking the first US-based streamer to sign up for the pool. As we discussed last quarter, this pool increases the addressable market for imaging patents by expanding the available licensees from device manufacturers to also include streamers of content.
Speaker #3: On Dolby Optiview, we continue our partnership with the NFL, with Optiview delivering Red Zone through the NFL+ app and achieving record levels of streaming quality for the service.
Speaker #3: And we continue to bring new customers onto the service, including Veikkaus, Finland's national lottery and sports betting operator, and SIS—short for Sports Information Solutions—a service provider to over 300 sports betting companies.
Kevin Yeaman: We continued to bring new customers onto the service, including Veikkaus, Finland's national lottery and sports betting operator, and SIS, short for Sports Information Solutions, a service provider to over 300 sports betting companies. Veikkaus is using Dolby OptiView to reduce latency for live horse racing, improving the real-time betting experience and strengthening customer engagement. SIS has adopted our video player and has made the ability to deliver content in sub-second latency available to its customers. We're encouraged by how Dolby OptiView is enabling our partners to increase audience engagement and revenue. So to wrap up, we have continued momentum in automotive, new growth drivers for Dolby Vision and TVs, and growing adoption of Dolby Vision in social media, an important use case for mobile devices.
We continued to bring new customers onto the service, including Veikkaus, Finland's national lottery and sports betting operator, and SIS, short for Sports Information Solutions, a service provider to over 300 sports betting companies. Veikkaus is using Dolby OptiView to reduce latency for live horse racing, improving the real-time betting experience and strengthening customer engagement. SIS has adopted our video player and has made the ability to deliver content in sub-second latency available to its customers. We're encouraged by how Dolby OptiView is enabling our partners to increase audience engagement and revenue. So to wrap up, we have continued momentum in automotive, new growth drivers for Dolby Vision and TVs, and growing adoption of Dolby Vision in social media, an important use case for mobile devices.
Speaker #3: Vacos is using Dolby Optiview to reduce latency for live horse racing, improving the real-time betting experience and strengthening customer engagement. SIS has adopted our video player and has made the ability to deliver content in sub-second latency available to its customers.
Speaker #3: We're encouraged by how Dolby Optiview is enabling our partners to increase audience engagement and revenue. So to wrap up, we have continued momentum in automotive, new growth drivers for Dolby Vision in TVs, and growing adoption of Dolby Vision in social media, an important use case for mobile devices.
Speaker #3: And while it's early days, we continue to expand our addressable market to new customers with Dolby Optiview and the video distribution program. We're confident in our ability to grow Dolby Atmos, Dolby Vision, and imaging patents at 15 to 20 percent per year over the next few years, and now that Dolby Atmos, Dolby Vision, and imaging patents is approaching 50 percent of our licensing revenue, it is having a greater impact on our overall growth rate.
Kevin Yeaman: While it's early days, we continue to expand our addressable market to new customers with Dolby OptiView and the video distribution program. We're confident in our ability to grow Dolby Atmos, Dolby Vision, and imaging patents at 15 to 20% per year over the next few years. Now that Dolby Atmos, Dolby Vision, and imaging patents is approaching 50% of our licensing revenue, it is having a greater impact on our overall growth rate. We remain excited about our position in the market and confident in our growth opportunities. With that, I'll turn it over to Robert, who will take you through the financials in a bit more detail.
While it's early days, we continue to expand our addressable market to new customers with Dolby OptiView and the video distribution program. We're confident in our ability to grow Dolby Atmos, Dolby Vision, and imaging patents at 15 to 20% per year over the next few years. Now that Dolby Atmos, Dolby Vision, and imaging patents is approaching 50% of our licensing revenue, it is having a greater impact on our overall growth rate. We remain excited about our position in the market and confident in our growth opportunities. With that, I'll turn it over to Robert, who will take you through the financials in a bit more detail.
Speaker #3: We remain excited about our position in the market and confident in our growth opportunities. With that, I'll turn it over to Robert, who will take you through the next section.
Speaker #3: Financials in a bit more detail. Thank you.
Speaker #2: you, Kevin. And thanks to everyone joining us on the call today. Revenue for the quarter came in at $347 million, above the high end of the guidance we shared last quarter, primarily driven by the timing of deals coming in earlier than expected and a $7 million favorable throw-up for Q4 shipments.
Robert Park: Thank you, Kevin, and thanks to everyone joining us on the call today. Revenue for the quarter came in at $347 million, above the high end of the guidance we shared last quarter, primarily driven by the timing of deals coming in earlier than expected and a $7 million favorable true-up for Q4 shipments. Non-GAAP earnings per share was $1.06, also above the high end of guidance, driven by higher revenue and lower OpEx. Licensing revenue was $320 million, and product and services revenue was $27 million. We generated approximately $55 million in operating cash flow, repurchased $70 million of common stock, and have approximately $207 million remaining on our share repurchase authorization.
Robert Park: Thank you, Kevin, and thanks to everyone joining us on the call today. Revenue for the quarter came in at $347 million, above the high end of the guidance we shared last quarter, primarily driven by the timing of deals coming in earlier than expected and a $7 million favorable true-up for Q4 shipments. Non-GAAP earnings per share was $1.06, also above the high end of guidance, driven by higher revenue and lower OpEx. Licensing revenue was $320 million, and product and services revenue was $27 million. We generated approximately $55 million in operating cash flow, repurchased $70 million of common stock, and have approximately $207 million remaining on our share repurchase authorization.
Speaker #2: Non-GAAP earnings per share was $1.06, also above the high end of guidance, driven by higher revenue and lower OPEX. Licensing revenue was $320 million, and product and services revenue was $27 million.
Speaker #2: We generated approximately $55 million in operating cash flow, repurchased $70 million of common stock, and have approximately $207 million remaining on our share repurchase authorization.
Speaker #2: We declared a $0.36 dividend, up 9 percent from our dividend a year ago, and ended the quarter with cash and investments of approximately $730 million.
Robert Park: We declared a $0.36 dividend, up 9% from our dividend a year ago, and ended the quarter with cash and investments of approximately $730 million. GAAP operating expenses in Q1 include a $10 million restructuring charge as we continue to streamline operations and align resources with our business priorities. Detailed licensing performance by end market can be found on our IR website. As we share with you every quarter, trends are typically smoother on an annual basis as the timing of recoveries, minimum volume commitments, and true-ups can drive quarterly volatility. In terms of end-market performance for the quarter, it's worth noting that mobile grew by over 20% year-over-year, and broadcast revenue was down mid-teens year-over-year, both primarily driven by timing of deals. We still expect mobile and broadcast to be up mid-single digits for the full year.
We declared a $0.36 dividend, up 9% from our dividend a year ago, and ended the quarter with cash and investments of approximately $730 million. GAAP operating expenses in Q1 include a $10 million restructuring charge as we continue to streamline operations and align resources with our business priorities. Detailed licensing performance by end market can be found on our IR website. As we share with you every quarter, trends are typically smoother on an annual basis as the timing of recoveries, minimum volume commitments, and true-ups can drive quarterly volatility. In terms of end-market performance for the quarter, it's worth noting that mobile grew by over 20% year-over-year, and broadcast revenue was down mid-teens year-over-year, both primarily driven by timing of deals. We still expect mobile and broadcast to be up mid-single digits for the full year.
Speaker #2: GAAP operating expenses in Q1 included a $10 million restructuring charge as we continue to streamline operations and align resources with our business priorities. Detailed licensing performance by end market can be found on our IR website.
Speaker #2: As we share with you every quarter, trends are typically smoother on an annual basis, as the timing of recoveries, minimum volume commitments, and throw-ups can drive quarterly volatility.
Speaker #2: In terms of end market performance for the quarter, it's worth noting that mobile grew by over 20 percent year over year, and broadcast revenue was down mid-teens year over year.
Speaker #2: Both primarily driven by timing of deals. We still expect mobile and broadcast to be up mid-single digits for the full year. Turning to guidance, for full-year fiscal 26 guidance, we are raising the revenue range to $1.4 billion to $1.45 billion.
Robert Park: Turning to guidance. For full-year fiscal 2026 guidance, we are raising the revenue range to $1.4 to 1.45 billion. This reflects the Q1 true-up and some of our deals coming in earlier and stronger than forecasted, partially offset by slight revisions to our outlook for the year, including potential impact of memory pricing, which varies by end market and customer. We expect fiscal year 2026 licensing revenue to be between $1.295 and 1.345 billion, and we are targeting non-GAAP operating expenses between $780 and 800 million. This guidance implies operating margin improvement of between 50 and 100 basis points.
Turning to guidance. For full-year fiscal 2026 guidance, we are raising the revenue range to $1.4 to 1.45 billion. This reflects the Q1 true-up and some of our deals coming in earlier and stronger than forecasted, partially offset by slight revisions to our outlook for the year, including potential impact of memory pricing, which varies by end market and customer. We expect fiscal year 2026 licensing revenue to be between $1.295 and 1.345 billion, and we are targeting non-GAAP operating expenses between $780 and 800 million. This guidance implies operating margin improvement of between 50 and 100 basis points.
Speaker #2: This reflects the Q1 throw-up and some of our deals coming in earlier and stronger than forecasted. Partially offset by slight revisions to our outlook for the year, including potential impact of memory pricing, which varies by end market and customer.
Speaker #2: We expect fiscal year 2026 licensing revenue to be between $1.295 billion and $1.345 billion, and we are targeting non-GAAP operating expenses between $780 million and $800 million.
Speaker #2: This guidance implies operating margin improvement of between 50 and 100 basis points. We expect non-GAAP earnings per share to be between $4.30 and $4.45.
Robert Park: We expect non-GAAP earnings per share to be between $4.30 and $4.45. Our expectations for foundational and Dolby Atmos, Dolby Vision, and imaging patents' full year growth rates are relatively unchanged from what we communicated at the beginning of the year. With Dolby Atmos, Dolby Vision, and imaging patents growing roughly 15% and comprising nearly half of our licensing revenue. We expect foundational revenue to be down slightly. We also expect end market growth rates for the full year to be similar to what we communicated last quarter, with growth in other mobile and broadcast, and declines in PC and CE. For Q2 2026, we expect revenue to be between $375 million and $405 million.
We expect non-GAAP earnings per share to be between $4.30 and $4.45. Our expectations for foundational and Dolby Atmos, Dolby Vision, and imaging patents' full year growth rates are relatively unchanged from what we communicated at the beginning of the year. With Dolby Atmos, Dolby Vision, and imaging patents growing roughly 15% and comprising nearly half of our licensing revenue. We expect foundational revenue to be down slightly. We also expect end market growth rates for the full year to be similar to what we communicated last quarter, with growth in other mobile and broadcast, and declines in PC and CE. For Q2 2026, we expect revenue to be between $375 million and $405 million.
Speaker #2: Our expectations for foundational and Dolby Atmos, Dolby Vision, and imaging patents full-year growth rates are relatively unchanged from what we communicated at the beginning of the year.
Speaker #2: With Dolby Atmos, Dolby Vision, and imaging patents growing roughly 15 percent and comprising nearly half of our licensing revenue. We expect foundational revenue to be down slightly.
Speaker #2: We also expect end market growth rates for the full year to be similar to what we communicated last quarter, with growth in other, mobile, and broadcast, and declines in PC and CE.
Speaker #2: For Q2 26, we expect revenue to be between $375 million and $405 million. Within that, we expect licensing revenue to be between $350 million and $380 million, and includes a large recovery that settled in Q2.
Robert Park: Within that, we expect licensing revenue to be between $350 million and $380 million, and includes a large recovery that settled in Q2. Gross margins should be approximately 91% on a Non-GAAP basis, and we expect Non-GAAP operating expenses to be between $195 million and $205 million. Non-GAAP earnings per share is expected to be between $1.29 and $1.44. In summary, we are off to a strong start in Q1, and we are encouraged by the progress we are making across our growth initiatives. Our financials remain solid with organic revenue growth, high gross margins, expanding operating margins, healthy cash flows, and a strong balance sheet. With that, we'll open the line for your questions.
Within that, we expect licensing revenue to be between $350 million and $380 million, and includes a large recovery that settled in Q2. Gross margins should be approximately 91% on a Non-GAAP basis, and we expect Non-GAAP operating expenses to be between $195 million and $205 million. Non-GAAP earnings per share is expected to be between $1.29 and $1.44. In summary, we are off to a strong start in Q1, and we are encouraged by the progress we are making across our growth initiatives. Our financials remain solid with organic revenue growth, high gross margins, expanding operating margins, healthy cash flows, and a strong balance sheet. With that, we'll open the line for your questions.
Speaker #2: Gross margins should be approximately 91 percent on a non-GAAP basis, and we expect non-GAAP operating expenses to be between $195 million and $205 million.
Speaker #2: Non-GAAP earnings per share is expected to be between $1.29 and $1.44. In summary, we are off to a strong start in Q1, and we are encouraged by the progress we are making across our growth initiatives.
Speaker #2: Our financials remain solid, with organic revenue growth, high gross margins, expanding operating margins, healthy cash flows, and a strong balance sheet. With that, we'll open the line for your questions.
Speaker #2: questions. Thank you.
Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad, and if you'd like to withdraw your question, again, press star one. Your first question comes from the line of Steven Frankel with Rosenblatt. Please go ahead.
Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad, and if you'd like to withdraw your question, again, press star one. Your first question comes from the line of Steven Frankel with Rosenblatt. Please go ahead.
Speaker #3: If you would like to ask a question, please press star one on your telephone keypad. And if you'd like to withdraw your question, again, press star one.
Speaker #3: Your first question comes from the line of Stephen Frankel with Rosenblatt. Please go ahead.
Speaker #4: Good afternoon. So on this notion of some of the upside was driven by deal timing, with deals coming in earlier than expected—do you read into that any change in the environment or customers' sense of urgency, or is this just the other side of the coin that you experienced over the last couple of years, where deals tended to—
Steven Frankel: Good afternoon. So on this notion of some of the upside was driven by deal timing, with deals coming in earlier than expected, do you read into that any change in the environment or customers', you know, sense of urgency, or this is just, you know, the other side of the coin that you experienced over the last couple of years where deals tended to slip?
Steven Frankel: Good afternoon. So on this notion of some of the upside was driven by deal timing, with deals coming in earlier than expected, do you read into that any change in the environment or customers', you know, sense of urgency, or this is just, you know, the other side of the coin that you experienced over the last couple of years where deals tended to slip?
Speaker #4: slip? Yeah.
Speaker #5: Thanks, Steve. I wouldn't extrapolate to any generalization in the macro. I think that we're pleased to have had some of our deals come in earlier.
Kevin Yeaman: Yeah, thanks, Steve. I wouldn't extrapolate to any de-generalization in the macro. I think that we're pleased to have had some of our deals come in earlier. It you know has the effect of kind of de-risking some of the outlook for the year. But things are coming in, you know, about what we expected, raising guidance some to reflect the true-up in Q1, one of the deals coming in a lot bigger, and that's you know all the normal adjustments we typically do as we come into a new quarter.
Kevin Yeaman: Yeah, thanks, Steve. I wouldn't extrapolate to any de-generalization in the macro. I think that we're pleased to have had some of our deals come in earlier. It you know has the effect of kind of de-risking some of the outlook for the year. But things are coming in, you know, about what we expected, raising guidance some to reflect the true-up in Q1, one of the deals coming in a lot bigger, and that's you know all the normal adjustments we typically do as we come into a new quarter.
Speaker #5: It has the effect of kind of de-risking some of the outlook for the year. But things are coming in about what we expected. Raising guidance some to reflect the true up in Q1, one of the deals coming in a little bit bigger, and that's all the normal adjustments we typically do as we come into a new
Speaker #5: quarter. And on that
Steven Frankel: And on that large true-up, could you help us understand, was that in mobile, and that's part of the mobile upside, or was it in another area?
Steven Frankel: And on that large true-up, could you help us understand, was that in mobile, and that's part of the mobile upside, or was it in another area?
Speaker #6: large true up, could you help us understand, was that in mobile and that's part of the mobile upside or was it in another
Speaker #6: Area? The true-up was about $7.
Kevin Yeaman: The true-up was about $7 million. And, Robert, do you wanna cover-
Kevin Yeaman: The true-up was about $7 million. And, Robert, do you wanna cover-
Speaker #5: million.
Speaker #5: And Robert, do you want to cover? Yeah.
Speaker #6: It was primarily gaming and broadcast, Steve.
Robert Park: Yeah, it was primarily gaming and broadcast, Steve.
Robert Park: Yeah, it was primarily gaming and broadcast, Steve.
Speaker #4: Okay. And the strong growth in mobile, was that in part, again, due to signing of new deals or renewals that drove that?
Steven Frankel: Okay. And the, you know, strong growth in mobile, was that in part again due to signing of new deals or renewals that drove that?
Steven Frankel: Okay. And the, you know, strong growth in mobile, was that in part again due to signing of new deals or renewals that drove that?
Speaker #5: Hi, Steve. Yeah. The mobile, you tend to want to look at these end markets for the full year because the timing of deals, recoveries, minimum volume commitments, particularly in mobile, can fluctuate quarter to quarter.
Robert Park: Hi, Steve. Yeah, the mobile, you know, you tend to wanna look at these end markets for the full year because the timing of deals, recoveries, minimum and commitments, particularly in mobile, can fluctuate quarter to quarter. We still expect the full year, for mobile to be up slightly.
Robert Park: Hi, Steve. Yeah, the mobile, you know, you tend to wanna look at these end markets for the full year because the timing of deals, recoveries, minimum and commitments, particularly in mobile, can fluctuate quarter to quarter. We still expect the full year, for mobile to be up slightly.
Speaker #5: We still expect the full year for mobile to be up.
Speaker #5: slightly. Okay.
Steven Frankel: Okay. And then, one big picture question, Kevin: that the spin-off of the Sony TV venture into a partnership with TCL, does that present an opportunity over the next couple of years for you to gain some material share, if Sony ends up behaving like TCL, where you're basically on every SKU?
Steven Frankel: Okay. And then, one big picture question, Kevin: that the spin-off of the Sony TV venture into a partnership with TCL, does that present an opportunity over the next couple of years for you to gain some material share, if Sony ends up behaving like TCL, where you're basically on every SKU?
Speaker #4: And then one big-picture question, Kevin: The spin-off of the Sony TV venture into a partnership with TCL—does that present an opportunity over the next couple of years for you to gain some material share, if Sony ends up behaving like TCL, where you're basically on every SKU?
Speaker #6: Yeah. I mean, I don't want to comment on their pending transaction or where they might go with it, but we have very strong relationships with TCL.
Kevin Yeaman: Yeah, I mean, I don't wanna comment on their pending transaction or where they might go with it, but we have very strong relationships with TCL. We also have a strong relationship with Sony, so they're both good partners. And of course, we're really focused across the board on increasing attach for televisions. And you know, we're very excited about Dolby Vision 2 and the reception it got at CES from content providers, OEMs, really everybody who came by. And we're looking to bring those first Dolby Vision 2 televisions to market by the end of this fiscal year. So as we go into next year, that's when we see that adoption cycle beginning, and that's a good opportunity for us, as you know, adopting Dolby Vision 2.
Kevin Yeaman: Yeah, I mean, I don't wanna comment on their pending transaction or where they might go with it, but we have very strong relationships with TCL. We also have a strong relationship with Sony, so they're both good partners. And of course, we're really focused across the board on increasing attach for televisions. And you know, we're very excited about Dolby Vision 2 and the reception it got at CES from content providers, OEMs, really everybody who came by. And we're looking to bring those first Dolby Vision 2 televisions to market by the end of this fiscal year. So as we go into next year, that's when we see that adoption cycle beginning, and that's a good opportunity for us, as you know, adopting Dolby Vision 2.
Speaker #6: We also have a strong relationship with Sony. So they're both good partners. And of course, we're really focused across the board on increasing attached for televisions and we're very excited about Dolby Vision 2 and the reception it got at CES from content providers, OEMs, really everybody who came by.
Speaker #6: And we're looking to bring those first Dolby Vision 2 televisions to market by the end of this fiscal year. So as we go into next year, that's when we see that adoption cycle beginning and that's a good opportunity for us as adopting Dolby Vision 2 for those who already have Dolby Vision.
Kevin Yeaman: For those who already have Dolby Vision, that's increased royalties. But we also think that it's a real opportunity to bring Dolby Vision 2 and the Dolby experience to those mid-range TVs, because there's a lot of discrete features of Dolby Vision 2, which upgrade the experience. But when you see two mid-range TVs, like at CES, we had $300 TVs side by side, it's just significantly better. So we're excited about that as we approach the end of the year here.
For those who already have Dolby Vision, that's increased royalties. But we also think that it's a real opportunity to bring Dolby Vision 2 and the Dolby experience to those mid-range TVs, because there's a lot of discrete features of Dolby Vision 2, which upgrade the experience. But when you see two mid-range TVs, like at CES, we had $300 TVs side by side, it's just significantly better. So we're excited about that as we approach the end of the year here.
Speaker #6: That's increased royalties. But we also think that it's a real opportunity to bring Dolby Vision 2 and the Dolby Experience to those mid-range TVs because there's a lot of discrete features of Dolby Vision 2, which upgrade the experience, but when you see two mid-range TVs, like at CES, we had $300 TVs side by side.
Speaker #6: It's just significantly better. So we're excited about that as we approach the end of the year here.
Speaker #4: Great. And one more quick one for Robert. Cash flow generation this Q1 looked more like Q1 of 2024 than 2025. Is this just timing and we shouldn't read anything into it in the expectations for full year cash flow generation should be what we're used
Steven Frankel: Great. And one more quick one for Robert. You know, cash flow generation, this Q1 looked more like Q1 of 2024 than 2025. Is this just timing, and we shouldn't read anything into it, and the expectations for full year cash flow generation should be what we're used to?
Steven Frankel: Great. And one more quick one for Robert. You know, cash flow generation, this Q1 looked more like Q1 of 2024 than 2025. Is this just timing, and we shouldn't read anything into it, and the expectations for full year cash flow generation should be what we're used to?
Speaker #4: to? Yeah.
Speaker #5: That's a good question, Steve. And you're right. Our cash flow, particularly operating cash flow, can fluctuate quarter to quarter. Depending on the timing of deals, the terms, patent pool collections, and distributions, what you need to look at, if you want to, is go back to the last four quarters.
Robert Park: Yeah, that's a good question, Steve. And you're right, that our cash flow, particular operating cash flow, can fluctuate quarter to quarter, depending on the timing of deals, the terms, patent pool collections, and distributions. What you need to look at, if you want to, is go back to the last four quarters. It tracks very closely to Non-GAAP net income, and if you look at the trailing four quarters, it's right about 100% of that, and that's what we continue to expect for the year. So if you want to peg a proxy for operating cash flow, look at our Non-GAAP net income, and that should be a good proxy for operating cash flow.
Robert Park: Yeah, that's a good question, Steve. And you're right, that our cash flow, particular operating cash flow, can fluctuate quarter to quarter, depending on the timing of deals, the terms, patent pool collections, and distributions. What you need to look at, if you want to, is go back to the last four quarters. It tracks very closely to Non-GAAP net income, and if you look at the trailing four quarters, it's right about 100% of that, and that's what we continue to expect for the year. So if you want to peg a proxy for operating cash flow, look at our Non-GAAP net income, and that should be a good proxy for operating cash flow.
Speaker #5: It tracks very closely to non-GAAP net income. And if you look at the trailing four quarters, it's right about 100% of that. And that's what we continue to expect for the year.
Speaker #5: So, if you want to peg a proxy for operating cash flow, look at our non-GAAP net income, and that should be a good proxy for operating cash flow.
Speaker #4: Great. Thank you so
Ralph Schackart: Great. Thank you so much.
Steven Frankel: Great. Thank you so much.
Speaker #4: much. Your next question comes from
Operator: Your next question comes from the line of Ralph Schackart with William Blair. Please go ahead.
Operator: Your next question comes from the line of Ralph Schackart with William Blair. Please go ahead.
Speaker #3: The line of Ralph Schackart with William Blair. Please go ahead.
Speaker #7: Good afternoon. Thanks for taking the question. Kevin, maybe if you could just give us an update on the new sort of patent pool monetization strategy.
Ralph Schackart: Good afternoon, thanks for taking the question. Kevin, maybe if you could just give us an update on the, the new sort of, patentable monetization strategy. I think last time on the call, you said it could be 10% of revenue, from recollection, maybe within 3 years. Maybe kind of confirm if that's still the, the current view. And maybe more importantly, you know, Roku is obviously a nice, customer to have. They're large, I think 100 million or so active accounts. Maybe kind of give a sense of, after you have Roku here, how those conversations progress as you look to commercialize with other partners. And then, I think there might be some discounts available, if I'm not mistaken, on the market up until, oh, God, midyear, maybe 30 June, from recollection.
Ralph Schackart: Good afternoon, thanks for taking the question. Kevin, maybe if you could just give us an update on the, the new sort of, patentable monetization strategy. I think last time on the call, you said it could be 10% of revenue, from recollection, maybe within 3 years. Maybe kind of confirm if that's still the, the current view. And maybe more importantly, you know, Roku is obviously a nice, customer to have. They're large, I think 100 million or so active accounts. Maybe kind of give a sense of, after you have Roku here, how those conversations progress as you look to commercialize with other partners. And then, I think there might be some discounts available, if I'm not mistaken, on the market up until, oh, God, midyear, maybe 30 June, from recollection.
Speaker #7: I think last time on the call, you said it could be 10% of revenue, from recollection—maybe within three years. Maybe you can confirm if that's still the current view.
Speaker #7: And maybe more importantly, Roku is obviously a nice customer to have. They're large—I think 100 million or so active accounts. Maybe kind of give a sense of, after you have Roku here, how those conversations progressed as you look to commercialize with other partners.
Speaker #7: And then I think there might be some discounts available, if I'm not mistaken, on the market up until, oh, God, mid-year—maybe June 30th from recollection.
Speaker #7: And how is that sort of influencing some of the conversations you're having along those
Ralph Schackart: You know, how is that sort of influencing some of the conversations you're having along those lines?
You know, how is that sort of influencing some of the conversations you're having along those lines?
Speaker #7: lines? Yeah.
Speaker #6: Thanks, Ralph. Let me start with the reference to the 10%. So remember that one of the things that we're excited about is the opportunity to expand our market to content service providers.
Kevin Yeaman: Yeah, thanks, Ralph. Let me start with the reference to the 10%. So, remember that one of the things that we're excited about is the opportunity to expand our addressable market to content service providers. You know, for 60 years, we've provided technology, know-how, experience to content creators, content distributors, and OEMs, monetizing, of course, at the OEM level. And so we have a couple of areas where we're adding new value that we're providing to content service providers, and that's based on more of a consumption-based revenue model. So it was the combination of the video distribution program, which is reported in imaging licenses and Imaging patent licensing, which your-- the rest of your question is about, and Dolby OptiView, which is the 10% of revenue coming from content service providers in 3 years.
Kevin Yeaman: Yeah, thanks, Ralph. Let me start with the reference to the 10%. So, remember that one of the things that we're excited about is the opportunity to expand our addressable market to content service providers. You know, for 60 years, we've provided technology, know-how, experience to content creators, content distributors, and OEMs, monetizing, of course, at the OEM level. And so we have a couple of areas where we're adding new value that we're providing to content service providers, and that's based on more of a consumption-based revenue model. So it was the combination of the video distribution program, which is reported in imaging licenses and Imaging patent licensing, which your-- the rest of your question is about, and Dolby OptiView, which is the 10% of revenue coming from content service providers in 3 years.
Speaker #6: For 60 years, we've provided technology know-how, experience to content creators, content distributors, and OEMs. Monetizing, of course, at the OEM level. And so we have a couple of areas where we're adding new value that were providing to content service providers and that's based on more of a consumption-based revenue model.
Speaker #6: So it was the combination of the video distribution program, which is reported in Imaging, Lights and Image patent licensing—which the rest of your question is about—and Dolby Optiview, which is the 10% of revenue coming from content service providers in three years.
Kevin Yeaman: Now, as it relates to your the video distribution program question, so, yeah. So remember that, you know, the pool was introduced because of the growth of the streaming industry and the recognition that modern video codecs are critical to the future success of these providers. And we feel it's off to a good start with a handful of licensees last quarter, including some large ones in China. As we said, this quarter, the pool signed its first US streamer in with Roku. So that is a, you know, we've obviously seen a lot of these patent pools develop over the years, so we feel good about the progress, good engagement across the industry.
Speaker #6: Now, as it relates to your video distribution program—question—so, yeah, remember that the pool was introduced because of the growth of the streaming industry and the recognition that modern video codecs are critical to the future success of these providers.
Now, as it relates to your the video distribution program question, so, yeah. So remember that, you know, the pool was introduced because of the growth of the streaming industry and the recognition that modern video codecs are critical to the future success of these providers. And we feel it's off to a good start with a handful of licensees last quarter, including some large ones in China. As we said, this quarter, the pool signed its first US streamer in with Roku. So that is a, you know, we've obviously seen a lot of these patent pools develop over the years, so we feel good about the progress, good engagement across the industry.
Speaker #6: And we feel
Speaker #1: off to a It's good start with a handful of Last licensees . quarter , including some large ones in China . As we said this quarter , as we said this the pool quarter , signed its first US streamer in with Roku .
Speaker #1: So, so that is a, you know, we've obviously seen a lot of these patent pools develop over the years, so we feel good about the progress.
Speaker #1: Good engagement across the industry. And yeah, it sounds like you’ve maybe been doing some good, good research on our website or elsewhere.
Kevin Yeaman: And yeah, it sounds like you've maybe been doing some good, good research on our website or elsewhere. There are some pricing incentives to that the pool that we go through offers to incent early sign-ups.
And yeah, it sounds like you've maybe been doing some good, good research on our website or elsewhere. There are some pricing incentives to that the pool that we go through offers to incent early sign-ups.
Speaker #1: There there there are some pricing incentives to that , that the pool that we go through is , is offers to to incent early signups .
Ralph Schackart: Great. Maybe just one for Robert. You know, just in terms of the guide being at the high end, was that just a combination of good stuff going on in the quarter, as well as the favorable true-up, or was that, you know, maybe tilted a little bit more in favor of the favorable true-up getting the revenue to come in towards the high end of the guide? Just trying to get a sense of that. Thank you.
Ralph Schackart: Great. Maybe just one for Robert. You know, just in terms of the guide being at the high end, was that just a combination of good stuff going on in the quarter, as well as the favorable true-up, or was that, you know, maybe tilted a little bit more in favor of the favorable true-up getting the revenue to come in towards the high end of the guide? Just trying to get a sense of that. Thank you.
Speaker #2: Great . Maybe just . You know , one for Robert just in terms of the guide being at the high end , was that just a combination of good stuff going on in the quarter as well as the favorable true up , or was that maybe tilted a little bit more in favor of the favorable true up getting , you know , the revenue to come in towards the high end of the guide , just trying to get a sense of that .
Robert Park: Hi, are you talking about the full year, Ralph?
Robert Park: Hi, are you talking about the full year, Ralph?
Speaker #2: Thank you .
Speaker #3: Hi . Are you talking about the full year , Ralph .
Ralph Schackart: For the quarter, yeah.
Ralph Schackart: For the quarter, yeah.
Kevin Yeaman: The quarter, Robert.
Kevin Yeaman: The quarter, Robert.
Speaker #2: For the quarter. Yeah.
Robert Park: Oh, for Q2.
Robert Park: Oh, for Q2.
Speaker #1: The quarter Robert .
Speaker #3: O for Q2 .
Kevin Yeaman: Q1. Or was it Q1 or Q2 now? I, I guess I... Now I'm not sure.
Kevin Yeaman: Q1. Or was it Q1 or Q2 now? I, I guess I... Now I'm not sure.
Speaker #1: Q1, or it was a Q1 or Q2. Now, I guess—I know, I'm not sure.
Robert Park: Yeah, the guide, yeah.
Robert Park: Yeah, the guide, yeah.
Kevin Yeaman: Q2, sorry.
Kevin Yeaman: Q2, sorry.
Speaker #3: Yeah, they got it.
Speaker #2: Yeah .
Robert Park: Oh, yeah. Q1, Q1 is the $7 million of favorable true-up and deals coming in earlier than expected, as we talked about before, in terms of the performance for Q1. I'm sorry. I thought you were talking about guidance.
Robert Park: Oh, yeah. Q1, Q1 is the $7 million of favorable true-up and deals coming in earlier than expected, as we talked about before, in terms of the performance for Q1. I'm sorry. I thought you were talking about guidance.
Speaker #1: Q2 sorry .
Speaker #3: Oh , yeah . Q1 Q1 is the 7 million favorable trope . And deals coming in . Earlier than expected . As we talked about before , in terms of the performance for for Q1 , I'm sorry , I thought you were talking about guidance .
Ralph Schackart: No, I said the guidance, but maybe just give a sense, you know, outside of the, if you could, please, favorable true-up, you know, how the, I guess, the quarter shape was relative to expectations. Obviously, products in 6, but maybe how that, how that trend line was in the quarter.
Ralph Schackart: No, I said the guidance, but maybe just give a sense, you know, outside of the, if you could, please, favorable true-up, you know, how the, I guess, the quarter shape was relative to expectations. Obviously, products in 6, but maybe how that, how that trend line was in the quarter.
Speaker #2: No , I said guidance , but maybe just give us a sense outside of the if you could please favorable true up how the quarter shape was relative to expectations .
Speaker #2: But maybe how that how that trend line was in the quarter .
Kevin Yeaman: So, um-
Kevin Yeaman: So, um-
Robert Park: Ralph, you were cutting a little bit choppy on that. Can you repeat that question?
Robert Park: Ralph, you were cutting a little bit choppy on that. Can you repeat that question?
Speaker #1: So Ralph .
Speaker #3: A little bit choppy on that. Can you repeat that question?
Kevin Yeaman: A little bit choppy? Yeah, could you?
Kevin Yeaman: A little bit choppy? Yeah, could you?
Speaker #1: Could Yeah . you .
Ralph Schackart: Sure. Can you give me a sense-
Ralph Schackart: Sure. Can you give me a sense-
Kevin Yeaman: Yeah.
Kevin Yeaman: Yeah.
Ralph Schackart: Yeah, I'm sorry. Can you just give me a sense of how the quarter progressed relative to expectations, absent the true-up? You know, just kind of want to get a sense from the math, but I know Kevin said much hasn't changed, but it would just be helpful. Just a little bit more color there, if you could, please. Thank you.
Ralph Schackart: Yeah, I'm sorry. Can you just give me a sense of how the quarter progressed relative to expectations, absent the true-up? You know, just kind of want to get a sense from the math, but I know Kevin said much hasn't changed, but it would just be helpful. Just a little bit more color there, if you could, please. Thank you.
Speaker #3: Sure .
Speaker #4: give me a sense . Yeah . Yeah . I'm sorry . Can you just give me a sense of how the quarter progressed relative to expectations , absent .
Speaker #2: The true kind of , you know , want to get a sense of the macro ? I know Kevin said much hasn't changed , but just be helpful .
Speaker #2: Just a little bit more color there . If you could , please . Thank you .
Robert Park: Yeah, I would say 7 million shows fairly small. It's nice that it's favorable in terms of units being a little higher than we estimated for last quarter. But the deals coming in earlier than expected, deals can ebb and flow, but it's always nice to have them in earlier. As Kevin said, it does de-risk our pipeline for the full year and gives us a little more confidence about our ability to execute for the rest of the year. But I'd say other than that, it's pretty close to what we thought it would be, and that true-up, of course, is something we don't plan for, so that's more so carried through for the full year.
Robert Park: Yeah, I would say 7 million shows fairly small. It's nice that it's favorable in terms of units being a little higher than we estimated for last quarter. But the deals coming in earlier than expected, deals can ebb and flow, but it's always nice to have them in earlier. As Kevin said, it does de-risk our pipeline for the full year and gives us a little more confidence about our ability to execute for the rest of the year. But I'd say other than that, it's pretty close to what we thought it would be, and that true-up, of course, is something we don't plan for, so that's more so carried through for the full year.
Speaker #5: Yeah .
Speaker #3: Yeah , I say would some fairly small . It's nice that it's favorable in terms of units being a little higher than we estimated for last quarter , but the deals coming in earlier than expected deals can ebb and flow , but it's always nice to have them in earlier .
Speaker #3: As Kevin said, it does de-risk our pipeline for the full year and gives us a little more confidence about our ability to execute for the rest of the year.
Speaker #3: But I'd say other than that , it's pretty close to what we thought it would be , and that of course , true up , is something we don't plan for .
Speaker #3: So that's characters . The full year .
Ralph Schackart: Okay, thank you.
Ralph Schackart: Okay, thank you.
Speaker #4: Okay . Thank you .
Operator: Your next question comes from the line of Vikram Kesavabhotla with Baird. Please go ahead.
Operator: Your next question comes from the line of Vikram Kesavabhotla with Baird. Please go ahead.
Speaker #6: Your next question comes from the line of Vikram Kesava with Baird. Please go ahead.
Vikram Kesavabhotla: Yeah, hey, thank you for taking the questions. I guess I'll start first on CES. I'm curious if you can just talk more about your takeaways from the event this year. Obviously, you talked about all the demos that you had available there. I guess, what was some of the feedback from the partners and customers throughout the event, and what do you think resonated the most from some of your latest innovation?
Vikram Kesavabhotla: Yeah, hey, thank you for taking the questions. I guess I'll start first on CES. I'm curious if you can just talk more about your takeaways from the event this year. Obviously, you talked about all the demos that you had available there. I guess, what was some of the feedback from the partners and customers throughout the event, and what do you think resonated the most from some of your latest innovation?
Speaker #7: Yeah . Hey , thank you for taking the questions . I guess I'll start first on on SES . I'm curious if you can just talk more about your takeaways from the event this year .
Speaker #7: Obviously , you talked about all the demos that you had available there . I guess . What was some of the feedback from the partners and customers throughout the event , and what do you think resonated the most from some of your latest innovation ?
Kevin Yeaman: Yeah. Well, first of all, it's just a great opportunity for us to engage with partners from across our ecosystem. I mean, we, of course, we had OEMs coming through, but also our content service partners and content creators. You know, as you know, we have our own space at Dolby Live, which is pretty well equipped to demo the Dolby experience. And it's just a great opportunity to show them what our, you know, what's new, and we were really focused on the automotive in-car entertainment experience and Dolby Vision, too. But of course, it's also an opportunity to talk to them about what they're seeing, what they're how they see their opportunity and how we can partner together. So we had hundreds of groups of customers and partners coming through.
Kevin Yeaman: Yeah. Well, first of all, it's just a great opportunity for us to engage with partners from across our ecosystem. I mean, we, of course, we had OEMs coming through, but also our content service partners and content creators. You know, as you know, we have our own space at Dolby Live, which is pretty well equipped to demo the Dolby experience. And it's just a great opportunity to show them what our, you know, what's new, and we were really focused on the automotive in-car entertainment experience and Dolby Vision, too. But of course, it's also an opportunity to talk to them about what they're seeing, what they're how they see their opportunity and how we can partner together. So we had hundreds of groups of customers and partners coming through.
Speaker #1: Yeah , well , first of all , it's just a great opportunity for us to engage with partners from across our ecosystem . I mean , of course , we had OEMs coming through , but also our content service partners and content creators and , you know , as you know , we're we have our own space at at Dolby Live , which is pretty well equipped to to demo the Dolby experience .
Speaker #1: And it's just a great opportunity to show them what our , you know , what's new . And we were really focused on the automotive , in-car entertainment experience and Dolby Vision two .
Speaker #1: But of course , it's also an opportunity to talk to them about what they're seeing , what they're they see their opportunity , and how we can partner together .
Speaker #1: we So had hundreds of of groups of customers and partners coming through on the floor . It was mostly about the automotive experience .
Kevin Yeaman: On the floor, it was mostly about the automotive experience, a lot of energy, a wide variety of cars and use cases. We also had a Dolby Atmos, Dolby Vision car. So whereas we, you know, you know, started with our story you know, several years ago when we started was music in the car. Now it is fully the complete in-car entertainment experience with Dolby Atmos, early days of Dolby Vision, but you're seeing examples of gaming content in the car, TV, and movies. Audiobook is also a really attractive use case for our Atmos partners. Dolby Vision 2 has just been... We were already getting a good reception, but we got to show it to a lot more people.
On the floor, it was mostly about the automotive experience, a lot of energy, a wide variety of cars and use cases. We also had a Dolby Atmos, Dolby Vision car. So whereas we, you know, you know, started with our story you know, several years ago when we started was music in the car. Now it is fully the complete in-car entertainment experience with Dolby Atmos, early days of Dolby Vision, but you're seeing examples of gaming content in the car, TV, and movies. Audiobook is also a really attractive use case for our Atmos partners. Dolby Vision 2 has just been... We were already getting a good reception, but we got to show it to a lot more people.
Speaker #1: A lot of energy, a wide variety of cars and use cases. We also saw a car that had Dolby Atmos and Dolby Vision.
Speaker #1: So whereas we , you know know , started , you with the our story , what you know , several years ago when we started was music in the car .
Speaker #1: Now it is fully the complete in-car entertainment experience with Dolby Atmos . Early days of Dolby Vision . But you're seeing examples of gaming content in the car , TV and movies .
Speaker #1: Audiobooks is also a really attractive use case for our our Atmos partners . Dolby Vision two was was just has just been . We were already getting good reception , but we got to show it to a lot more people .
Kevin Yeaman: You know, as I said earlier, you can just really see the difference. So there's a lot of excitement about that. So we're, you know, heads down, working with our partners to get those first TVs out the door, toward the end of this year, so that we can then begin to increase the availability of that in the marketplace. So that's kind of what we're seeing. It was a really good show for us.
You know, as I said earlier, you can just really see the difference. So there's a lot of excitement about that. So we're, you know, heads down, working with our partners to get those first TVs out the door, toward the end of this year, so that we can then begin to increase the availability of that in the marketplace. So that's kind of what we're seeing. It was a really good show for us.
Speaker #1: And you know , as I you earlier , can just really see the difference . So there's a lot of excitement about that .
Speaker #1: So we're , you know , heads down working with our partners to get those first TVs out . The door . Toward the end of this year .
Speaker #1: So that so that we can then begin to increase the availability of that in the marketplace . So that's some of what we were that's kind of what we're seeing a good it was a really good show for us .
Vikram Kesavabhotla: Okay, great. Thank you for the color there. And then I also wanted to follow up on some of the recent announcements that you highlighted in the press release. So first, on Peacock, you said that's the first streaming service to integrate your full suite of premium picture and sound innovations. Could you talk more about the significance of that announcement? I mean, what do you think moved the needle in that conversation with Peacock, and what does this mean for your future relationships across the streaming landscape? And then similarly, you also highlighted, you know, Meta now supporting Dolby Vision on Facebook, following the announcement on Instagram recently as well. I guess, could you talk more about how that's influencing your broader efforts in social media and your discussions with the mobile OEMs?
Vikram Kesavabhotla: Okay, great. Thank you for the color there. And then I also wanted to follow up on some of the recent announcements that you highlighted in the press release. So first, on Peacock, you said that's the first streaming service to integrate your full suite of premium picture and sound innovations. Could you talk more about the significance of that announcement? I mean, what do you think moved the needle in that conversation with Peacock, and what does this mean for your future relationships across the streaming landscape? And then similarly, you also highlighted, you know, Meta now supporting Dolby Vision on Facebook, following the announcement on Instagram recently as well. I guess, could you talk more about how that's influencing your broader efforts in social media and your discussions with the mobile OEMs?
Speaker #7: Okay . Great . Thank you for the color there . And then I also wanted to follow up on some of the recent announcements that you highlighted in the press release .
Speaker #7: So first, on Peacock, you said that's the first streaming service to integrate your full suite of premium picture and sound innovations.
Speaker #7: Could you talk more about the significance of that significance of that announcement ? I mean , what do you think needle in moves the that conversation with Peacock ?
Speaker #7: And what does this mean for your future relationships across the streaming landscape ? And then similarly , you also highlighted meta now supporting Vision on Dolby Facebook following the announcement on Instagram recently , as well , I guess .
Speaker #7: Could you talk more about how that's influencing your broader efforts in social media and your discussions with the mobile OEMs? And I'll leave it there.
Vikram Kesavabhotla: I'll leave it there. Thanks.
I'll leave it there. Thanks.
Kevin Yeaman: Yeah, thanks for the question. So, yeah, so Peacock did announce that they're embracing the entire suite of Dolby technologies, AC-4, Dolby Atmos, Dolby Vision 2. They become one of our first 2 launch partners for Dolby Vision 2, which obviously will, you know, come to-- you'll be able to experience when TVs are available later this year. And, with Peacock, that's of course across movies, it's across TV, it's across sports. They've started with Dolby-- they're starting with Dolby Atmos, so you'll be able to experience the Super Bowl and the Winter Olympics in Dolby Atmos through Peacock. So, we're really excited about them leaning into the full Dolby experience. And, yeah, on Meta, we shared last quarter that they had adopted Instagram for iOS users.
Kevin Yeaman: Yeah, thanks for the question. So, yeah, so Peacock did announce that they're embracing the entire suite of Dolby technologies, AC-4, Dolby Atmos, Dolby Vision 2. They become one of our first 2 launch partners for Dolby Vision 2, which obviously will, you know, come to-- you'll be able to experience when TVs are available later this year. And, with Peacock, that's of course across movies, it's across TV, it's across sports. They've started with Dolby-- they're starting with Dolby Atmos, so you'll be able to experience the Super Bowl and the Winter Olympics in Dolby Atmos through Peacock. So, we're really excited about them leaning into the full Dolby experience. And, yeah, on Meta, we shared last quarter that they had adopted Instagram for iOS users.
Speaker #7: Thanks .
Speaker #1: Yeah , thanks for the question . So yeah , so Peacock did announce that they're embracing the entire suite of Dolby Technologies Ac4 , Dolby Atmos , Dolby Vision two .
Speaker #1: They become one of our first two launch partners for Dolby Vision two , which which obviously will , you know , come to you'll be able to experience when TVs are available later this year .
Speaker #1: And with Peacock , that's of course , across movies . It's across TV , it's across sports . They've started with Dolby . They're starting with Dolby Atmos .
Speaker #1: So you'll be able to experience the Super Bowl and the Winter Olympics in Dolby Atmos through Peacock . So so we're we're really excited about them leaning into the Dolby full experience .
Speaker #1: And yeah , on on meta , we shared last quarter that they had adopted Instagram for iOS users . They've now expanded to Facebook and that's important to us for a couple of reasons .
Kevin Yeaman: They've now expanded to Facebook, and, that's important to us for a couple of reasons. I mean, first of all, obviously, it's a primary use case on mobile devices, so having the ability to experience Dolby Vision over your favorite social media and video sharing websites, applications. That creates demand for Dolby on mobile devices. We also mentioned last quarter that Douyin in China, it began supporting Dolby Vision and that they are now expanding support to their Android users, so that's also a really strong development. But yes, we're very excited about Instagram and Facebook, and we're excited about our relationship with Meta. I mean, they now have embraced Dolby Atmos and Dolby Vision on the Oculus headset.
They've now expanded to Facebook, and, that's important to us for a couple of reasons. I mean, first of all, obviously, it's a primary use case on mobile devices, so having the ability to experience Dolby Vision over your favorite social media and video sharing websites, applications. That creates demand for Dolby on mobile devices. We also mentioned last quarter that Douyin in China, it began supporting Dolby Vision and that they are now expanding support to their Android users, so that's also a really strong development. But yes, we're very excited about Instagram and Facebook, and we're excited about our relationship with Meta. I mean, they now have embraced Dolby Atmos and Dolby Vision on the Oculus headset.
Speaker #1: I mean , first of all , obviously it's a primary use case on mobile devices . So having the ability to experience Vision Dolby over your favorite social media and video sharing web sites applications are that's creates demand for Dolby on mobile devices .
Speaker #1: We also mentioned last quarter that Douyin in China began supporting Dolby Vision, and that they are now expanding support to their Android users.
Speaker #1: So that's also a really strong development . But yeah , so we're very excited about Instagram and Facebook , and we're excited about our relationship with meta .
Speaker #1: I mean , there are now embraced Dolby have Atmos and Vision Dolby on Oculus headset and it just being able to engage with with them across multiple aspects of their business is just a great opportunity to to to learn where we can help going forward in terms of new opportunities .
Kevin Yeaman: Being able to engage with them across multiple aspects of their business is just a great opportunity to learn where we can help going forward in terms of new opportunities.
Being able to engage with them across multiple aspects of their business is just a great opportunity to learn where we can help going forward in terms of new opportunities.
Vikram Kesavabhotla: Okay, great. Thank you.
Vikram Kesavabhotla: Okay, great. Thank you.
Speaker #7: Okay, great. Thank you.
Operator: Your next question comes from the line of Patrick Sholl with Barrington Research. Please go ahead.
Operator: Your next question comes from the line of Patrick Sholl with Barrington Research. Please go ahead.
Speaker #7: .
Speaker #6: next Your question comes from the line of Patrick Scholl with Barrington Research . Please go ahead .
Patrick Sholl: Hi, thank you. Maybe just another question on the guidance. Can you talk about, like, whether on the foundational or the Atmos and Vision side of things, just how you're seeing OEMs respond to any kind of the macro issues, whether it's on tariffs or on the, on memory, in terms of how they're kind of adjusting their supply shipment views?
Patrick Sholl: Hi, thank you. Maybe just another question on the guidance. Can you talk about, like, whether on the foundational or the Atmos and Vision side of things, just how you're seeing OEMs respond to any kind of the macro issues, whether it's on tariffs or on the, on memory, in terms of how they're kind of adjusting their supply shipment views?
Speaker #8: Hi . Thank you . Maybe just another question on the the guidance . Can you talk about like whether on the foundational or the atmos and vision side of things , just how you're seeing OEMs respond to any kind of the macro issues , whether it's on tariffs or on the on memory , in terms of how they're kind of adjusting their device shipment views .
Kevin Yeaman: Yeah, yeah, thanks for that. I think—Look, I think, you know, everybody is probably on a daily basis trying to find the signal through the noise, because there's obviously a lot of things going on. As it relates to our adjustments, you know, there weren't material adjustments, but we update our outlook every quarter. The reference to memory pricing, in particular, obviously that's a hot topic. I would say, that was some... Like I said, it wasn't a significant adjustment, and we ended up raising guidance, given the true up and some of the strength in the pipeline. But as it relates to memory pricing in our end markets, it looks to us like the mobile end market is the one that's most directly impacted.
Kevin Yeaman: Yeah, yeah, thanks for that. I think—Look, I think, you know, everybody is probably on a daily basis trying to find the signal through the noise, because there's obviously a lot of things going on. As it relates to our adjustments, you know, there weren't material adjustments, but we update our outlook every quarter. The reference to memory pricing, in particular, obviously that's a hot topic. I would say, that was some... Like I said, it wasn't a significant adjustment, and we ended up raising guidance, given the true up and some of the strength in the pipeline. But as it relates to memory pricing in our end markets, it looks to us like the mobile end market is the one that's most directly impacted.
Speaker #1: Yeah , yeah , thanks for that . I think , look , I think , you know , everybody is probably on a daily basis trying to fill trying to find the signal through the noise because there's obviously a lot of things going on as it relates to our adjustments .
Speaker #1: You know , there weren't it not material adjustments , but we update our outlook every quarter . The reference to pricing memory in particular , obviously that's a hot topic .
Speaker #1: I would say that was some . Like I said , it wasn't a significant adjustment and we ended up raising guidance given the true up and some of the strength in the pipeline .
Speaker #1: But as it relates to memory pricing and our end markets , it looks to us like the mobile end market is the one that's most directly impacted .
Kevin Yeaman: As that relates to us, it varies quite a lot by customers. Some customers have done more forward purchasing or other things to kind of hedge the impact. And then, of course, most of our mobile business is driven by minimum volume commitment, so the timing of renewal cycles also plays into that. So it's not a material effect overall, but there were some adjustments there. In terms of TVs, memory is not as much of a percentage of the BOM, so we don't see a lot of impact. And one other area where we've heard more noise around what the impact would be would be PC, and that's one of the markets that Robert highlighted as being down for the year for us.
As that relates to us, it varies quite a lot by customers. Some customers have done more forward purchasing or other things to kind of hedge the impact. And then, of course, most of our mobile business is driven by minimum volume commitment, so the timing of renewal cycles also plays into that. So it's not a material effect overall, but there were some adjustments there. In terms of TVs, memory is not as much of a percentage of the BOM, so we don't see a lot of impact. And one other area where we've heard more noise around what the impact would be would be PC, and that's one of the markets that Robert highlighted as being down for the year for us.
Speaker #1: As that relates to us, it varies quite a lot by customer. Some customers have done more forward purchasing or other things to kind of hedge impact.
Speaker #1: And then, of course, most of our mobile business is minimum by volume-driven commitments. So the timing of renewal cycles also plays into that.
Speaker #1: So it's not a material effect overall . But there were some adjustments there . The of in terms TVs , memory is not as much of a percentage of the bomb .
Speaker #1: So we don't see a lot of impact . One other area where we've heard more , more noise around what the impact would be , would be PC .
Speaker #1: And that's one of the markets that Robert highlighted as being down for the year. For us.
Patrick Sholl: Okay, thank you. And then I-- you, you addressed in, in the press release that, you know, the continued progress on, on adoption and, automate from auto manufacturers. So I'm just kind of curious if with changes around US policy, if you're seeing any sort of impact and how that flows through to, like, or like around EVs, if that has any impact on the adoption of the various, in-car offerings.
Patrick Sholl: Okay, thank you. And then I-- you, you addressed in, in the press release that, you know, the continued progress on, on adoption and, automate from auto manufacturers. So I'm just kind of curious if with changes around US policy, if you're seeing any sort of impact and how that flows through to, like, or like around EVs, if that has any impact on the adoption of the various, in-car offerings.
Speaker #8: Okay . Thank you . And then I you addressed in the press release that , you know , the continued progress on on adoption and automated from manufacturers .
Speaker #8: So I'm just kind of curious with changes around US policy , if you're seeing any sort of impact in how that flows through to around EVs , if that has any impact on the adoption of the various in-car offerings .
Kevin Yeaman: Well, because of the stage of the opportunity we're at, which is, you know, getting a lot of new wins and getting a lot of new models, we haven't noticed any impact. It's still, it's one of... it's our highest growing area and, within the other licensing. And I would also say that, you know, we are beginning to see more diversification geographically. You know, we were, you know, we started very strong in China with EVs. We've expanded to Mercedes-Benz, Audi, Porsche, Cadillac, and the top three manufacturers in India. And we're also beginning to see more gas-powered vehicles coming with Dolby Atmos as well. So, so far, that's not been top of mind for us.
Kevin Yeaman: Well, because of the stage of the opportunity we're at, which is, you know, getting a lot of new wins and getting a lot of new models, we haven't noticed any impact. It's still, it's one of... it's our highest growing area and, within the other licensing. And I would also say that, you know, we are beginning to see more diversification geographically. You know, we were, you know, we started very strong in China with EVs. We've expanded to Mercedes-Benz, Audi, Porsche, Cadillac, and the top three manufacturers in India. And we're also beginning to see more gas-powered vehicles coming with Dolby Atmos as well. So, so far, that's not been top of mind for us.
Speaker #1: Well , because of the stage of the opportunity we're at , which is , you know , getting a lot of new wins and getting a lot of new models , we haven't noticed any impact .
Speaker #1: It's still it's one of it's our highest growing area . And within the other licensing . And I would also say that , you know , we are beginning to see more diversification geographically .
Speaker #1: You know , we were you know , we started very strong in China with EVs . We've expanded to to Mercedes , Audi , Porsche , Cadillac and the top three manufacturers in India .
Speaker #1: And we're also beginning to see more gas-powered vehicles coming with Dolby Atmos as well. So, so far, that's not been top of mind for us.
Kevin Yeaman: We're continuing to focus on getting more manufacturers, help them get deeper into lineups, and as I said earlier, really excited about the opportunity now to expand into the full in-car entertainment experience with Dolby Vision and all the types of content that people are gonna enjoy in their car.
We're continuing to focus on getting more manufacturers, help them get deeper into lineups, and as I said earlier, really excited about the opportunity now to expand into the full in-car entertainment experience with Dolby Vision and all the types of content that people are gonna enjoy in their car.
Speaker #1: We're continuing to focus on getting more manufacturers, helping them get deeper into lineups. And as I said earlier, we're really excited about the opportunity now to expand into the full entertainment experience with Dolby and Vision types of content that people are going to enjoy in their car.
Patrick Sholl: Okay, thank you.
Patrick Sholl: Okay, thank you.
Speaker #8: Okay . Thank you .
Operator: Ladies and gentlemen, that does conclude our question-and-answer session, and that does conclude today's conference call. Thank you for your participation, and you may now disconnect.
Operator: Ladies and gentlemen, that does conclude our question-and-answer session, and that does conclude today's conference call. Thank you for your participation, and you may now disconnect.
Speaker #6: Ladies and gentlemen , that does conclude our question and answer session . And that does conclude today's conference call . Thank you for your participation .
