Dolby Laboratories (DLB) investor relations material

Executive summary

• Fiscal 2025 revenue grew 6% year-over-year to $1.35 billion, driven by the GE Licensing acquisition and strong performance in Dolby Atmos, Dolby Vision, and imaging patents, with expanded adoption in streaming, automotive, and consumer electronics.

• Operating margins expanded by 1.8 percentage points for the year, with non-GAAP net income at $414 million ($4.24 per share).

• Dolby Vision 2 was announced, with strong industry support and new features for TVs; Instagram and Douyin adopted Dolby Vision.

• New consumption-based revenue models, including a video distribution program for streamers and Dolby OptiView for live sports, are expanding the addressable market.

• Significant partnerships and launches across TV, automotive, mobile, and wearables, including new agreements with automakers in India, China, and Vietnam.

Financial highlights

• Q4 revenue was $307 million, above guidance midpoint; non-GAAP EPS was $0.99, including a $0.28 discrete tax benefit.

• Excluding the tax benefit, non-GAAP EPS was $0.71; full-year non-GAAP EPS was $4.24 ($3.97 excluding tax benefit).

• Full-year GAAP net income was $255 million ($2.62 per share); cash flows from operations for the year were $472 million.

• Dolby Atmos, Dolby Vision, and imaging patents grew just over 14% and represented 45% of licensing revenue.

• Operating cash flow was $123 million in Q4; $35 million in stock repurchases; $783 million in cash and investments at quarter end.

Outlook and guidance

• FY2026 revenue expected between $1.39 billion and $1.44 billion, up 3%-7% year-over-year; Q1 FY2026 revenue guidance: $315-$345 million.

• Licensing revenue guidance: $1.285 billion to $1.335 billion; Dolby Atmos, Dolby Vision, and imaging patents expected to grow ~15%.

• Non-GAAP operating expenses targeted at $780-$800 million; operating margin improvement of 50-100 basis points.

• Non-GAAP EPS expected between $4.19 and $4.34; Q1 non-GAAP EPS projected at $0.79–$0.94.

• Q1 revenue expected to be down ~8% year-over-year due to tough comparison and timing of recoveries.