Dolby Laboratories (DLB) 46th Annual William Blair Growth Stock Conference summary

Business overview and ecosystem

• Embedded in billions of devices, Dolby partners with content creators, distributors, and device manufacturers globally to deliver immersive audio and visual experiences across movies, music, TV, gaming, and social media.

• Generates most revenue from device manufacturers via royalties on Dolby-enabled products, maintaining a high-margin, defensible business model.

• Holds a robust intellectual property portfolio, making its model difficult to replicate and supporting long-term market leadership.

Growth drivers and product innovation

• Automotive growth accelerated by Dolby Atmos for music, with 35 OEMs globally, expanding from China to Europe and the US, and early adoption of Dolby Vision in vehicles.

• TV segment sees high-end penetration with Dolby Vision and Atmos on 30% of TVs; Dolby Vision 2 aims to drive broader adoption in mid- and low-end markets.

• Mobile and social media adoption led by Chinese platforms and global brands like Apple and Xiaomi, with Instagram and Facebook recently supporting Dolby Vision.

• Patent licensing now includes content platforms such as ByteDance and Roku, expanding revenue opportunities beyond device manufacturers.

Financial performance and revenue mix

• Foundational audio technologies, once 80% of revenue, declined post-pandemic but stabilized; Dolby Atmos and Vision now approach 50% of revenue, growing 20% annually.

• New content platform initiatives, including imaging patents and Dolby OptiView, are expected to contribute 10% of revenue within three years.

• Since 2020, about $2 billion has been returned to shareholders through dividends and stock buybacks, with increased buybacks year-to-date.