Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dolby Laboratories Inc (DLB, Financial) reported a 5% year-over-year increase in revenue for the quarter, reaching $305 million.
- Non-GAAP earnings per share rose by 25% year-over-year, driven by a lower tax rate and higher gross margins.
- The company saw strong growth in Dolby Atmos and Dolby Vision, with revenue from these technologies growing approximately 14% for the year.
- Dolby Laboratories Inc (DLB) expanded its automotive partnerships, more than doubling its OEM partners for Dolby Atmos to over 20.
- The acquisition of THEO is expected to accelerate growth in the emerging Dolby.io business, broadening the company's customer base and product portfolio.
Negative Points
- Global Consumer Electronics sales were underwhelming throughout the year, impacting overall performance.
- The cinema business continued to be affected by last year's strikes, leading to a soft performance in this segment.
- Foundational audio technologies revenue declined approximately 10%, presenting a headwind for the company.
- Broadcast revenue was weaker than expected, down 9% due to weaker set-top box shipments and lower recoveries.
- Products and services revenue decreased by 13% year-over-year, indicating challenges in this segment.
Q & A Highlights
Q: With recent technology acquisitions like THEO, are you entering new revenue-generating verticals, or will this be part of the traditional licensing model?
A: Kevin Yeaman, CEO: The acquisition broadens our ability to deliver solutions for real-time interactive experiences, enhancing audience engagement. THEO's customer base in sports and entertainment complements our efforts, allowing us to expand existing accounts and win new customers.
Q: How do expectations on tariffs impact foundational revenue, considering potential effects on prices and shipping volumes?
A: Kevin Yeaman, CEO: It's too early to speculate on tariffs' impact. However, foundational revenue is stabilizing, and customers are expressing more confidence. We continue to monitor the environment for any changes.
Q: Can you confirm the organic growth outlook, excluding acquisitions, and provide perspective on sustainable growth?
A: Kevin Yeaman, CEO: We target low single-digit growth in foundational revenue, with Dolby Atmos and Dolby Vision expected to grow 15% organically. Our strategy aims for double-digit growth, supported by Dolby.io and a strong innovation pipeline.
Q: What is the growth profile for Dolby.io, and when can it significantly contribute to overall results?
A: Kevin Yeaman, CEO: Dolby.io is expected to see strong growth, focusing on expanding customer accounts and cross-selling with THEO. While starting from a smaller base, we aim to grow the customer base significantly in FY25.
Q: Can you provide insight into the split in the patent business between tough comps and GE licensing?
A: Kevin Yeaman, CEO: Dolby Atmos and Dolby Vision are growing 15% organically. Imaging patents will be down due to a tough comp, but with GE licensing, the category is up about 15% overall. Organically, imaging patents are down mid- to high single digits.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
