Dolby Laboratories (DLB) Baird 2024 Global Consumer, Technology, & Services Conference summary

Business overview and strategy

• Operates as a $1.3 billion IP licensing business, with technology embedded in nearly all consumer devices worldwide.

• 90% of revenue comes from IP licensing, while 10% is from the lower-margin cinema business, which helps build brand recognition.

• Maintains relevance through continuous innovation and strong relationships with the creative community, ensuring adoption of new standards.

• Focuses on making new technologies like Dolby Atmos and Dolby Vision the next industry standards.

• Provides creative tools for free to artists, charging device manufacturers for playback capability.

Revenue mix and growth drivers

• Two-thirds of licensing revenue is from foundational technologies now considered industry standards, deeply penetrated in the market.

• Foundational revenue growth is tied to overall device sales, with high margins due to low incremental costs.

• Dolby Atmos and Dolby Vision represent the main growth opportunity, aiming to expand adoption across devices and content.

• Currently present in 25% of high-end 4K TVs, with plans to expand to mid- and low-end segments.

• Significant opportunities exist in automotive and mobile sectors, especially with Android and global OEMs.

Market adoption and competitive landscape

• 92 of the top 100 Billboard artists record in Dolby, and most major movies use Dolby Atmos and Dolby Vision.

• Adoption in live sports streaming is accelerating, with Max (formerly HBO) now streaming all live sports in Dolby formats.

• Competitive landscape is limited, as non-adopters use traditional technologies rather than direct alternatives.

• Brand awareness is driven by partnerships with artists and visible branding in cinemas and devices.