Dolby Laboratories (NYSE:DLB) reported second-quarter financial results on Thursday. The transcript from the company’s second-quarter earnings call has been provided below.
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The full earnings call is available at https://events.q4inc.com/analyst/949487944?pwd=KtjHn6mz
Summary
Dolby Laboratories Inc reported Q2 fiscal 2026 revenue of $396 million and non-GAAP EPS of $1.37, both within prior guidance.
The company is maintaining full-year guidance with expected revenue between $1.4 billion and $1.45 billion, and non-GAAP EPS between $4.30 and $4.45.
Strategic initiatives include expanding Dolby Vision and Dolby Atmos across media platforms and automotive markets, with significant adoption by companies like Meta and BMW.
Notable operational highlights include Dolby’s strong presence in high-profile events like the Super Bowl and the Winter Olympics, and expanding into mass market TVs with partners like Hisense and TCL.
Management emphasized the growth of consumption-based revenue streams, targeting 10% of revenue in three years, and highlighted the potential of Dolby Optiview in live sports streaming.
The company generated a $93 million operating cash flow, repurchased $65 million in stock, and declared a 36-cent dividend, reflecting a 9% increase from the previous year.
Full Transcript
OPERATOR
Ladies and Gentlemen, thank you for standing by. Welcome to the Dolby Laboratories conference call discussing second quarter fiscal year 2026 results. During the presentation, all participants will be in a listen-only mode. Afterwards, you will be invited to participate in a question and answer session. If you would like to ask a question, please press Star one to raise your hand. To withdraw your question, press Star one again. As a reminder, this call is being recorded. I would now like to turn the conference over to Mr. Peter Goldmacher, Vice President of Investor Relations. Peter, please go ahead.
Peter Goldmacher (Vice President of Investor Relations)
Good afternoon. Welcome to Dolby Laboratory’s second quarter fiscal year 2026 earnings conference call. Joining me today are Kevin Yaman, Dolby Laboratory CEO, and Robert park, our cfo. As a reminder, today’s discussion will include forward looking statements including our fiscal 2026, third quarter and full year outlook and our assumptions underlying that outlook. These statements are subject to risks and uncertainties that may cause actual results to differ materially from the statements made today, including, among other things, the impact of macroeconomic events, supply chain issues, inflation rates, changes in consumer spending and geopolitical instability on our business. A discussion of these and additional risks and uncertainties can be found in the earnings press release that we issued today under the section captioned Forward looking Statements as well as in the Risk Factors section of our most recent annual report on Form 10-K. Dolby assumes no obligation and does not intend to update any forward looking statements made during this call as a result of new information or future events. During today’s call we will discuss non-GAAP financial measures. A reconciliation between GAAP and non-GAAP financial measures is available in our earnings press release and in the Interactive Analyst center on the Investor Relations section of our website. With that, I’d like to turn the call over to Kevin.
Kevin Yaman (Chief Executive Officer)
Thanks Peter, and thanks to everyone joining us on the call today. Revenue and non GAAP earnings for the quarter came in consistent with the expectations we provided on the call last quarter and we are maintaining our full year guidance. Robert will share more details on the financials in a few minutes. Dolby occupies a unique position across the creator content platform device ecosystem. We continue to strengthen our position creating growth opportunities across existing and new business areas. Over the last few quarters we have made great progress bringing more Dolby content to more content platforms. Top tier social media companies are increasingly recognizing the value of streaming content in Dolby Vision™. Meta has adopted Dolby Vision™ for content streamed on iOS for both Instagram and Facebook and Douyin in China has enabled Dolby Vision™ for content on both iOS and Android in music. Over 90% of the artists featured on Billboard’s year end top 100 artists for the last three years are creating music in Dolby Atmos®. At the Grammys. Dolby Atmos® was well represented in all major categories including all nominees for Best New Artist in Sports. More and more content is available in Dolby. Just this quarter the super bowl and the Winter Olympics were available in Dolby Vision™ and Dolby Atmos®. The T20 Cricket World cup in India and the 2026 Formula One season streaming on Apple are available in Dolby Vision™. HBO Max is streaming a wide variety of sports content in Dolby Atmos® and Dolby Vision™ and while not exactly sports, they also stream NASA’s Artemis 2 mission in Dolby Vision™ and Peacock is also streaming sports in Dolby Atmos® with plans to begin streaming in Dolby Vision™. We also continue to expand further into mass market tv. Amazon recently announced that it has added support for Dolby Vision™ to its ad supported tier and Azteca TV TV, the second largest mass media company in Mexico, announced that it will bring Dolby Atmos® to free to air, broadcast and finally in the cinema. All of the top 30 grossing films domestically for calendar 2025 were in Dolby Atmos® and Dolby Vision™ and all major category winners at the Academy Awards in March and the baftas in February were in Dolby Atmos® and Dolby Vision™, including Formula 1, the movie Sinners and One Battle After Another (fictional titles, assuming they are correct). All of this is simply to say high quality content matters and more content in Dolby means more reasons to adopt Dolby Atmos® and Dolby Vision™ across end markets and devices. And it was another big quarter for automotive. At the Beijing Auto show last week, BMW announced Dolby Atmos® support in the 7 Series globally and the iX3 in China. Just two weeks before that, at the Paris Auto Show, BYD launched its Denzel line with Dolby Atmos®, BYD’s first car with Dolby Atmos® in the European market. Also this quarter, Lexus announced their first Dolby Atmos® enabled cars and Nio expanded its Dolby Atmos® adoption to the Firefly, a compact EV sub brand for Singapore and Thailand. There is a broader shift across the automotive industry where the vehicle is now a place for high quality entertainment and we continue to benefit from this trend. Turning to mobile the progress we are making in music and with social media platforms continues to strengthen our value proposition across mobile devices. Dolby Vision™ Capture and Playback and Dolby Atmos® are included across Apple’s lineup including the 17e, their latest iPhone. Starting at $599 that was launched this quarter. Xiaomi announced its flagship Redmi Note 15 Pro series with Dolby Vision™, Dolby Vision™ Capture and Dolby Atmos®. Vivo released the X300 Ultra with Dolby Vision™ as well as their iQoo 1500 Ultra, a gaming focused sub brand that has both Dolby Atmos® and Dolby Vision™. We continue to perform well in high end phones and we’re excited that daoyin is now fully supporting Dolby Vision™ on Android which should help us continue to work our way further into mid range Android phones. Moving on to the Living Room As I mentioned earlier, our momentum in sports content is an important driver for new TV sales. In addition, we’re excited about the First Dolby Vision™ 2 TVs coming to market by the end of this fiscal year. Hisense, TCL and Philips have announced plans …
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