Dolby Laboratories, Inc. Q4 FY2024 earnings call

Q4 Highlights - Sports: Major events like Wimbledon, Olympics, MLB Championship series, World Series were broadcast in Dolby Atmos/Vision; e-gaming wins in China and India. - Music: Over 1,200 studios globally equipped with Dolby Atmos, 90% of Billboard's global Top 100 artists released music in Dolby Atmos. - Automotive: Entering 2025, over 20 OEM partners for Dolby Atmos, with new partners Wey and Smart signed in Q4. - TV: Growth in Dolby Atmos/Vision on mid-range and affordable TVs; speaker/soundbar partners announced new products. - Meta Quest included Dolby Atmos. ### FY ‘25 Expectations - Market forecast for aggregate device sales flattish, but revenue from foundational audio technology stabilizing. - Strong momentum in automotive, mobile, and TV. - GE deal strengthens imaging patent licensing portfolio; THEO acquisition accelerates Dolby IO business. - Cinema industry optimistic about box office slate.

Revenue for the quarter was $305 million, up 5% year-over-year. Licensing revenue was $283 million (including $7 million from GE licensing acquisition), up 7% year-over-year. Products and services revenue was $22 million, down 13% year-over-year. For full year '24, licensing revenue from Dolby Atmos, Dolby Vision, and imaging patents grew ~14%, while foundational audio technologies revenue declined ~10%. Dolby Atmos and Dolby Vision, and imaging patents were just over 40% of licensing revenue for the year, and foundational was just under 60%.

First Quarter 2025 - Non-GAAP earnings between $0.96 and $1.11 - Revenue between $330 million and $360 million - Licensing revenue between $305 million and $335 million - Gross margins ~90% non-GAAP - Non-GAAP operating expenses between $190 million and $200 million ### Full Year 2025 - Non-GAAP earnings between $3.99 and $4.14 - Revenue between $1.33 billion and $1.39 billion - License revenue between $1.22 billion and $1.28 billion - Non-GAAP operating expenses between $765 million and $775 million - GE deal expected to contribute ~$55 million to total revenue, accretive to margins/earnings - Revenue from foundational audio technology roughly flat - Dolby Atmos, Dolby Vision, and imaging patents expected to grow ~15% - Consumer electronics down mid-single digits, broadcasting/PC flattish, mobile mid-teens growth, other on strength in Auto and Dolby Cinema

• Changes in customer demand - Changes in laws and regulations - Impact of macroeconomic events on business

Q: Some recent technology acquisitions like Vizio, extent to which entering new revenue-generating verticals such as CEO ads side or traditional licensing model?

A: THEO acquisition broadens ability to deliver real-time interactive experiences for sports and entertainment, brings large customer base in sports and entertainment space, allows combined force to build experiences and win new customers.

Q: Shift in administrations and tariffs impact on foundational revenue?

A: Early to speculate on tariffs, but foundational is stabilizing into next year, customers expressing more confidence, comps stable.

Q: Organic growth perspective and Dolby IO contribution?

A: Foundational expected low-single digit growth, Dolby Atmos and Dolby Vision ~15% organic growth, Dolby IO has strong growth potential with new customers and expansion opportunities.

Q: Split in patent business between tough comp and GE, organic growth of patent business?

A: Dolby Atmos and Dolby Vision organic growth 15%, imaging patents down mid to high-single digits organically, but with GE licensing, category ~15% higher overall