Dolby Laboratories (DLB) investor relations material

Executive summary

• Q3 2026 revenue was $305 million, down 3% year-over-year, with licensing comprising 93% of total revenue and products/services 7%.

• Non-GAAP net income was $65 million ($0.69 per diluted share), while GAAP net income was $28.6 million ($0.30 per diluted share), both down from the prior year.

• Major new licensees in the Video Distribution Program include Meta and Alibaba, with 45 licensors and several top streaming platforms now participating.

• Dolby Atmos and Dolby Vision adoption is expanding across automotive, mobile, wearables, and user-generated content platforms.

• Confidence remains high in long-term growth, supported by innovation, new partnerships, and expanding addressable markets.

Financial highlights

• Licensing revenue was $282.4 million, down 3% year-over-year, with products and services revenue at $22.6 million.

• Gross margin for Q3 2026 was 87%, with licensing at 92% and products/services at 22%.

• Operating income was $34.3 million, down from $47.6 million in Q3 2025.

• Operating cash flow was $167 million for Q3 and $314.8 million year-to-date.

• Dividend declared at $0.36 per share, up 9% year-over-year; cash and investments totaled $756 million.

Outlook and guidance

• Q4 2026 revenue expected between $362 million and $392 million; licensing revenue between $335 million and $365 million.

• Q4 non-GAAP EPS expected between $1.13 and $1.28; GAAP EPS between $0.78 and $0.93.

• FY26 revenue guidance: $1.41 billion–$1.44 billion; licensing revenue $1.31 billion–$1.34 billion.

• FY26 non-GAAP EPS expected between $4.25 and $4.40; annual operating margin improvement of ~100 basis points.

• Restructuring actions expected to yield $2 million in pre-tax operating income savings in 2026 and $12 million in 2027.