Dolby Laboratories (DLB) 19 Nov 242024 Q4 Earnings call transcript

Hello, ladies and gentlemen. Thank you for standing by. Welcome to the Dolby Laboratories Conference Call discussing fiscal fourth quarter results. [Operator Instructions] As a reminder, this call is being recorded Tuesday, November 19, 2024.

I would now like to turn the conference over to Mr. of President Vice Goldmacher, Investor Relations. Peter go please ahead. Peter,

Laboratories Good Earnings XXXX welcome Dolby afternoon, to Fourth Conference Quarter and Call.

Joining me Park, Robert Laboratories CEO; today are Kevin Dolby Yeaman, Laboratories Dolby and CFO.

our discussion outlook. are year expectations subject These our for and forward-looking reminder, plans, and among performance, Management's statements will future other to cause statements actual changes results a differ made first quarter today's risks statements, As today, statements including other changes fiscal our uncertainties opportunities the including, of XXXX full macroeconomic demand, regulations expectations. that include may customer business. regarding events and and on and things, impact materially in to laws our from in the and

in Risk press in no our well as A Dolby section and any Factors as forward-looking earnings statements. and of discussion and found additional release the these our to update assumes risks XX-Q. Forms of obligation XX-K be uncertainties can

will considered available our reconciliation the Relations These and Center we earnings measures. Analyst measures. A financial discuss between financial to call, and release of press Investor substitute our GAAP on Interactive a website. is measures addition section today's not non-GAAP in the During for non-GAAP be in GAAP should in measures and

With to the that, call like turn Kevin. I'd to over

cover financial Thank I'll about to review talk some you, joining start we're for the to the details. Robert Peter, today. in and and and call expecting before the year, turning highlights I'll thanks the with then of call what to the FY everyone over QX, quarter an 'XX overview in

wins, imaging never time, position business. automotive. gives made momentum acquisition music, many our momentum areas, year, the underwhelmed expect Global the year, The a licensing At solid progress partner Consumer creation stronger patents, Dolby the TIO forward. and We're Dolby good particularly strong same and business sales we back GE Looking quarter footing. excited growth to on including us content the Dolby for new office box IO seeing and and its and about the in and all in we going and important found We're opportunities the Atmos accelerate Vision. sports emerging Electronics

spend to I few growing of drive FY ecosystem, aspects are some with the of on to some Starting 'XX. the before QX share sports one perspectives and highlights forward. content, most like ability I'd on in a important minutes business our their music

Dolby the Atmos Baseball live Series to was sports, Atmos Dolby This Olympics, fall, sports broadcast Wimbledon, Dolby content in we broadcast in both Vision with and and including the stream amount in were last events, with Cricket series sports on Dolby and First, Max, the spoke soccer League on Dolby Dolby Vision of about content the quarter all Vision. its MAX increasing decision major Fox. World by well as and in of Championship Major as available

continue We regional China Apple. Netflix, premiering Battlegrounds also Final of and in on Atmos and have Disney had with Star. Dolby Dolby Disney more Atmos in the markets, including e-gaming we in in strong streaming and grand live including wins Atmos to in TV Dolby important League with and Dolby and finals eGaming And in movies, India, Legends Vision the traction

automotive. with in device multiple Top XXX The with Dolby Global having X,XXX Billboard's to big adoption over for music. driver over categories studios capabilities music the is driver and for a equipped continues to Dolby is on Turning Atmos. momentum and of Music build globally Atmos Atmos XX% artists #X Dolby released

to into Dolby continue automotive, We good with year of progress. Speaking the we Atmos. XX for OEM make came partners

we During more the that. year, than doubled

The crossovers fourth quarter, up Way, that car Geely. strong and SUVs In priority XX a for and forward. between automotive experience going a the and and Smart, is partners spot a than in X venture more a for us remains pipeline. an investment premium specializes Chinese more have bright in-car Mercedes we XXXX, entering signed OEMs company partners, we entertainment So joint and

In midrange complementing continue higher-end and while and in Xiaomi, Indonesia Dolby to adoption in TVs, grow Dolby their TVs, growth out Dolby TVs. on more BPL India TCL of and Vision strong like Atmos Vision we're rolling and TVs. adoption are in Dolby Polytron brands in Philips, Hisense, seeing Atmos affordable

partners first new Our Sharp Atmos. products bar Yamaha, speaker sound TCL, and the sound announced And to than VIZIO $XXX. retail bar with for Dolby JBL, and Dolby Klipsch Atmos-enabled including less announced

in announced the mixed-reality that Meta its MediQuest, Dolby Atmos. include will headset,

device cinema world. while the business, amount and last bringing Dolby number soft experience around the to advantage taking recap we strikes Dolby consumer devices, more So people quarter the to and continue continue and of content and year's Atmos Vision, the of remained just of to the Dolby to the sales the year, impact increase

FY 'XX. to forward Looking

stabilizing. in forecast have we we While TV. about market foundational the adoption We're the and technology are we momentum for do sales automotive, in from the aggregate audio flattish, see are progress making excited revenue mobile growing device in and

of licensing compelling market. adds by product with The portfolio. on and a portfolio great a including bringing the Theo the emerging improves patent IO to strength our in Dolby of roster NFL, GE Sky broader imaging and opportunity And NASCAR a deal customers, our

our slate, is confident which our our cinema business. is industry about generate the to We're about and opportunities long-term office growth. cinema good ability optimistic The box for

call turn our the of With that, performance. I'd like discuss details over financial to Robert to to the

higher tax revenue up for came $X.XX the in quarter rate $X million margins acquisition, up $XXX million, year-over-year, was Kevin. the X% XX% share you, per Non-GAAP Thank million, in X% year-over-year. including year-over-year. and quarter. from by were up licensing of GE earnings Licensing $XXX gross at Revenue the driven lower

dividend million, $XXX of approximately revenue common and share our from We services plan a in $XX repurchase million year dividend, $XXX up declared investments authorization. was generated million the flow. $XXX with of ago our a cash Products and million. XX% remaining and year-over-year. and down ended cash repurchased on quarter have million $X.XX stock XX% We $XX We operating

closed $XXX cost-efficient facility also credit a We for flexibility. financial million additional

on above up year-over-year. high end full the reported of non-GAAP year $X.XX the X% and of For which 'XX, guidance revenues down fiscal billion, earnings of was we X% $X.XX,

the XX%. patents growing little Atmos, revenue and expectations patents revenue Dolby recognition a in with Vision Atmos large coming grew year, a expected expected partner. came a Dolby than approximately imaging came to into with in the than due from better For deal our and year, and Dolby line we earlier-than-anticipated Dolby in Vision imaging stronger

our which XX% for of came the the and license year Vision for revenue revenue Dolby was just revenue, This headwinds by expected, Atmos, approximately patents XX% were Foundational growth licensing and just over under declining Dolby Audio offset XX%. Foundational in we lower than was Technologies year. in of imaging

of IR the Detailed licensing end by performance our is market website. revenue on portion

As of and over time. commitments recoveries, smoother timing drive minimum a can quarterly volatility, true-ups be reminder, to but tend volume trends

as specific for some were deals. performance, PCs, primarily which pretty much expected the full slightly due full performed down year, were we in at to consumer up and end and Looking market the electronics, of XX% year, which mobile for the timing

shipments growth Dolby X% lower line lower by Broadcast as offset due was weaker with Other last and expected, in gaming XX%, recoveries And discussed than as our we in to and strong weaker revenue in set-top expectations was grew Cinema. quarter. auto down partially box

guidance. on to Moving

$XXX $XXX earnings be licensing of range For and Within and $X.XX to between on revenue $X.XX the a $XXX and first that, fiscal expect we million we quarter between non-GAAP million. of XXXX, expect revenue and $XXX expenses margins on million. between be XX% million non-GAAP Gross be $XXX we to expect should million operating between $XXX basis, be and to approximately million. and a non-GAAP

revenue between For the full billion. be we year, and billion $X.XX $X.XX and $X.XX non-GAAP earnings to expect between on $X.XX

$X.XX expect revenue We be and billion and to license operating million. billion to and be expenses $X.XX million $XXX $XXX between between non-GAAP

contribute margin deal points continue as expansion aligning on resources operating The percentage and X of GE operating opportunities. be total to roughly expected we the revenue to margins is to roughly and $XX licensing implies to guidance accretive focus million earnings. non-GAAP most compelling our to This

expectation see from from growth roughly with year the flat, Vision shipments. revenue overall fiscal be XX% Dolby and Atmos, roughly imaging in device consistent expect We technology audio for should patents Foundational market to Dolby 'XX. Revenue

is GE partially acquired Atmos as patents. imaging and to is Dolby imaging XX% is grow tough XX% Vision offset to by in the from roughly the organically patents expected and comp Dolby revenue licensing expected roughly grow

consumer From down market to expect flattish. mid-single be perspective, to PC an we be electronics and digits end and Broadcast

growth by mobile, strength in mid-teens the acquisition and mid-teens Cinema. driven expect in recoveries and Other in licensing Dolby GE We auto on growth and

of. year One I'd comment like make on GAAP aware everyone fiscal our to 'XX results

amortization to expense impact on negatively million licensing no non-GAAP impact approximately to has GE This about GAAP the expect earnings in cash earnings. of intangibles by or $X.XX. acquisition. $XX flow will This We related

our to very partners distribution and of To in wrap things up, our and Dolby-enabled drive continues growth the ecosystem, engaged. content creation are

improve. well financials conditions and when for solid, strong growth Our remain positioned are we economic

that, to like call back Peter some turn comments. to I'd With the over closing for

quick the Two before open Robert. things more to turn the to lines Q&A. up for Thanks, the operator call I back

rewritten period, The a for first have XX-K is at of going casual MD&A of investors but we from up there formal a.m. the technology. won't Wednesday, be commentary show X our business, in any section we're enhance key offerings and And opportunity and quiet overview be markets. business CES always the X, remarks We'll so our to the to our or January understanding to X we've second, on to on event appreciate

note reach out to for details to to send like please If ir@dolby.com. you'd or a join me us,

operator, that, can Q&A? we please With for call the open

Instructions] first Research. of [Operator question ] Patrick Your with Sholl Barrington the line comes [ from

technology the verticals licensing which be Theo that some revenue-generating I of able wondering things if just was of or if side just would you're Theo of as with like traditional like extent the part into with the like to the to new model. enter ads such acquisitions recent

as effort so say entertainment -- that companies year vertical, is looking you. specifically. here. to interactive on delivering the What does focused refocused we increasing engagement audio we're solutions Thank are on it audio And this to audience -- a experiences Yes. really ago We real-time lot around this what offer been that about are engagement. -- sports a we've that was and

more Theo separate lot brings complete large do our a space. together customers of focusing names and we're a have The in companies, -- we building also with to as would So ability And solution combined on now what They a and base bear. experiences. it does entertainment a customer the to broadens force, these is often sports it that. see who

or excited last that new their about So of their are volume I some look lot a many If with year, percentage the of starting we're on this we over brought one of entities. perhaps customers combination.

So as make opportunity with And successful an go we with those a to to have opportunity new we have Theo, accounts. and customers. them go we the forward, of we think expand lot

Maybe expectations? shift Foundational I sound with guess the that on administration in potential just volumes. the impact of the informed then has and expectations I extend how to And tariffs your the sort side like prices shipping Okay. revenue like tariffs, and

impact early us Yes, tariffs tariffs. or speculate it's to of the for on those

stabilizing year. Foundational seeing into are We next

in you the FY unit were top has been down. several As tough 'XX, last some we comps. years under shipment of had know, volumes pressure that, into coming On as

are expressing 'XX, our have into to get go stabilized them constructive looking that they're we confidence customers as the that So things more comps stable. and forward. are And for going

the for monitor to too to on early changes, continue environment speculate we for implications. us the but any specific So

Your comes Blair. William Schackart from with question next Ralph

that's growth thinking? know the here I looks growth Looking of maybe sounds like within quickly confirm could And Maybe fiscal want And sort in just single-digit potential you're lot at Kevin, lower Foundational on like the sort had from perspective this growth a assuming and you headwinds the it of what I here? dynamic, products. still year. acquisition, normalizing new the sounds of sustainable from some sort organically. be give then that's there so guide you frame can stabilizing kind help you might it for to as growth true, the us and pretty but the good of well. market as It is of you're exiting like momentum for going

Ralph. Thanks, Yes.

to going low the growth you single-digit targeting And 'XX. highest we're at Foundational. we as see out, that level, point FY in stabilizing still So

improvement the years. that's over So last big a several

at Dolby about at overall imaging growing And about tough see and XX% overcoming is Atmos organically, comp. then But we're patents the Vision a with GE there. deal, Dolby we XX% licensing

that hit we So formula for to is our that around of and and low vision grow XX% patents, target overall imaging XX% double-digit digits single if Foundational mark. us Atmos our gets can

the top opportunity course, On Dolby that, of about have of course, IO. of excited with we are we a innovation strong have pipeline. we And

maybe but forward? coming when start IO, small it's of Great. probably can contribute really perspective Maybe give on off just overall better this base, to I know growth year. on Dolby ask results maybe maybe going is, a some kind a to of it to the profile question

Yes.

in it's Dolby of a strong have services, we So the the is reflected line. And lot the but combined, we -- product for the said, as IO and revenue customers And great a a coming customers growing we've do yes, point FY expect our off like number number, I won last lot of Theo, in expansion and we with and out, on on focus really growth. you as potential services of focused is addition where of 'XX. this year go into cross-selling we're smaller

question with Rosenblatt. comes from next Your Frankel Steven

total? business tough in in split and patent insight Good GE. afternoon, more and comp growth now the implied in organic patent little just into the a plus the that between maybe What's XX% the the business of

Yes.

thanks, Steve. So

said one Dolby we patents the of year for have why at beginning we the is the than we So of that land in remarks, imaging Dolby of Atmos we expected. large were 'XX on transaction prepared earlier said ahead did reasons Robert as and his what Vision, a

comp that's the we're overcoming. So

XX% Dolby that will with down And about result patents Dolby licensing, the category GE be a imaging comp. of Atmos Vision then XX%. Organically, is is growing and organically as up higher.

single more than Down digits or that?

to single mid- high Down digits.

question-and-answer This for as call. Thank as joining. today's you session conclude will today's well

You now disconnect lines. may your