Yahoo Finance Dolby Laboratories Inc (DLB) Q2 2024 Earnings Call Transcript Highlights: Navigating Market ...
Q2 Revenue: $365 million, down 3% year-over-year
Licensing Revenue: $338 million, down 4% year-over-year
Products and Services Revenue: $26 million, up 8% year-over-year
Non-GAAP EPS: $1.27 per diluted share, above guidance midpoint
Operating Cash Flow: $181 million
Stock Repurchase: $25 million worth of common stock
Dividend: Declared $0.30, up 11% from previous year
Cash and Investments: Just under $1 billion
Q3 Revenue Guidance: Between $270 million and $300 million
Q3 Licensing Revenue Guidance: Between $245 million and $275 million
Q3 Non-GAAP Gross Margin: Approximately 87%
Q3 Non-GAAP Operating Expenses: Between $180 million and $190 million
Q3 Non-GAAP EPS Guidance: Between $0.51 and $0.66 per diluted share
Full Year Revenue Guidance: Roughly flat
Full Year Non-GAAP Gross Margin: Roughly 89%
Full Year Non-GAAP Operating Expenses: Between $740 million and $750 million
Full Year Non-GAAP EPS: Between $3.60 and $3.75
Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Kevin, given the progress with content as outlined, how does that position Dolby in terms of Atmos and Vision penetration in the 4K TV market for holiday 2024 compared to last year? A: Kevin J. Yeaman, President & CEO of Dolby Laboratories, highlighted the strong value proposition of sports content in driving deeper adoption of Atmos and Vision in TV lineups. He noted ongoing sales from previous announcements and expressed excitement about the increasing presence of Dolby Atmos and Dolby Vision in TVs and living room devices, citing the new $99 Dolby Atmos sound bars from VIZIO as a move towards mainstream consumer reach.
Q: With your strong cash generation and cash on the balance sheet, why has the pace of buybacks decreased compared to last year? A: Kevin J. Yeaman explained that Dolby is committed to offsetting dilution from stock-based compensation and aims to keep the share count flat. He mentioned that the company evaluates its buyback strategy quarterly and has returned about $4 billion over the last decade, indicating a cautious but consistent approach to capital allocation.
Q: Can you provide more color on the activity in the auto segment this quarter compared to last, particularly with potential future OEMs? A: Kevin J. Yeaman discussed the robust pipeline and strong engagement in the automotive industry, noting significant developments like Xiaomi launching a car with Dolby Atmos and Hyundai shipping Genesis with Dolby Atmos in Korea. He emphasized the mass market appeal of Dolby Atmos in automotive and highlighted the positive reception of a 4-channel solution aimed at more affordable cars.
Q: How do you frame the opportunity for Dolby IO, especially with the incremental use cases of low latency? A: Kevin J. Yeaman outlined Dolby IO's focus on improving real-time digital experiences through service providers, aiming to increase fan engagement. He mentioned a shift in strategy to support larger-scale digital experiences, with a growing pipeline and several significant deals focused on ultra low-latency streaming, which is particularly relevant in iGaming and sports betting.
Q: On televisions, are you moving beyond the COVID bump in sales, and what is the current Atmos penetration in broadcast and mobile? A: Kevin J. Yeaman acknowledged the stabilization in TV sales post-COVID and remained optimistic about future growth. He detailed strong adoption of Dolby Atmos at the high end of the TV market and increasing penetration in mid-tier models. In mobile, he highlighted significant adoption among major manufacturers and recent moves into more affordable market segments.
Q: What was the impact of true-ups in the quarter? A: Robert J. Park, Senior VP & CFO, reported a negative $6 million impact from true-ups in the quarter, primarily affecting broadcast, consumer electronics, and gaming consoles, offset by higher units of auto shipping with Dolby Atmos.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
